today. i should tell you if we take a look at the indices, you have the ftse 100 bouncing back a little bit from last week's weakness putting in the worst week in performance given the

clues about. the dax is up this morning now overall europe is doing pretty well. also thanks to the psi 20. the portuguese index not an index that will usually focus on it's up by roughly 1.6%. port few gall has returned be to investment grading after 5.5 very long years. take a look at the portuguese yield tumbling roughly the lowest in the year s&p the first of the big three credit ratings or agencies to look portugal back to an investment grade now deutsch bank ceo says market volatility may be higher than people think and low interest rates will keep hurting bank profits he spoke exclusively to nancy.

volatility is actually higher so when you price an option or the market prices an option, it's using applied volatility that's been very low for technical factors, just buying and selling futures options. actual volatility has been much higher, it just hasn't been reflected in those prices. volatility manifests itself in different ways, in a number of leading stocks have fallen quite a long way so if you were holding certain stocks that have been subject to big price limits, you might think, wait a minute there's a lot of volatility here it's just not been into the market so nevertheless, with that in mind, volatility given some of the things in the macro world is still quite low. from the market's perspective, it's this implied volatility

we've seen a little increase but it isn't back to the levels it used to trade at so, yes, i think some of our friendly american colleagues in the past week, i think there was a banking conference and i read some of what they said they're guiding against the markets being lower than they were last year i would agree with that position the markets do seem to be lower. >> when you said last quarter, in fact, your results deep in the expectations, you said they're good but perhaps not good enough. will it be a different story this coming quarter? >> i never want to give away too much and the quarter is not over in the third quarter september is the key month august is the summer months in the west it's difficult to say for the quarter as a whole, but the markets haven't changed that much from the second quarter i think we see a continuing pattern. so we do see relatively little volume and volatility in the

markets so that weighs a little bit on revenue. >> also the ecb equation here. you spoke recently talking about some risk of the lingering monetary policies. a day after you ecb president mario draghi said it doesn't see evidence of the evaluations in the euro area. is he wrong? >> no, not necessarily a lot of the over bought nature of the credit market is more of a u.s. phenomenon. that will spill over into other markets. i don't disagree with him in europe my point about europe is do we have that stability that the european central bank has been seeking or in 2012, have we achieved that level of equilibrium and is it, therefore, now time to move rates a little bit i was very carefuling to say i think it should be done cautiously but i do think the market is pricing that in.

that's a relatively gentle progression towards more positive or less negative interest rates. >> there's the issue of raising rates and also winding down quantitative easing as well. >> that's right. >> when it comes to the rates themselves, when the cost/benefits, are they still helping the bank >> the rates are not helping the bank i think bond purchasing doesn't directly affect the bank the banks that had problematical loans and assets on their books, it's been helpful when it's high that positive yields have been created by very, very low risk rates. it's otherwise difficult assets without very, very low interest rate environment the purchasing of bonds, obviously at that puts money back into the market that can be recycled into higher yielding assets so i think the policies have probably proceeded in many respects the negative rates don't hurt

banks. banks such as ours, we haven't had a credit problem in fact, our credit performance at the moment looks extremely strong not getting carried away by it, but running 11 basis points long plus our entire book that's very, very low for banks but we -- i think we've been hurt more, the deutsch bank, which the negative rate. >> and when you called for this gradual normalization, i'm not trying to call it that, does that mean you're more closely aligned? >> yes i think we've been able to exchange views i think we are fairly aligned with that view i think it's more of a german view it reflects the high quality of credit markets in germany and the fact that germany is a wealthy society. >> well, that was a very inciteful interview with the president of deutsche bank

kicking things off with what's going on in the third quarter. we've heard the u.s. banks like citi, bank of america, maryland, worrying about the tough calm to last year. last year we saw the brexit effects and see weaker revenues. they see a 15 to 20% slide in q3 trading overall. how bad is it going to be for european banks are they going to mirror what the u.s. is doing? >> that's a very good point, carolyn. if you look at the third quarter, the fixed income trading is almost quiet. it's talking about the american banks with an equity of 14%, much higher than the european banks. if you look across europe the likes of deutsche bank, credit swi swiss they didn't have great

credit trading and goldman goldman, i think it didn't attack any big change between q1 and q2 it indicates it's going to be impressed for the fixed income trading. >> what do you think would kick start fixed income trading we've heard mr. cryan talking about the volatility of the market it all comes down to market volatility is it currently high enough to kick start some of the activity in the market? >> i think the -- other states, the s&p, and i guess that's all there is he was pointing out the ecb raising rates very sharply and frequently very few people expected that.

it would kick start fixed income trading but probably on the wrong side of things. >> on the other hand, it could hurt the book values of some of the bond ratings how much if we see too much or too drastic of a tightening move that would hurt the books. >> it could. in france and spain where the banks, they do have a lot of government bonds about 15 to 50%. it's a sharp increase in the ecp over there. >> if we cast our minds back to one year ago we saw deutsch bank and perceived capital short falls. we're looking a lot healthier overall when it comes to the european banking sector. that's also being shown in the rally that we've been through for the start of the year. some of the peripheral banks

have certainly outperformed. are we in the clear now or are there still any problem children out there that you think, especially italian banks >> we would agree with you a lot has changed especially deutsche from one year ago $15 billion. and i think deutsche was good to close these with a relatively decent amount. they have to pay that. for the european banks it's really a question of possibility, not quality caps getting better and the epa started 55 and rubber stamp the capital. the shape of the curve, so the flashish curb, you have

negative, it's actually taking the profitability on the value of the bmi it's very traditional. and this costs them a lot. i've talked about the great performance in banking stocks when it comes to equities, but what about the credit side of the equation, something that you look at. how have they performed so far is it still a buying opportunity? >> still pockets of value. if we think in terms of some of the banks with the balance sheet, like the u.s., they're not over promising in terms of the valuation going far beyond 100% it's still about accruing capital to some extent and this is, i think, very positive. >> still some buying opportunity in bank credit thank you so much for that senior credit analyst at m fund managers. let's hope you're not flying

with ryanair they hit the bottom of the chart. they will be canceling 50 flights a day until the end of october. the move is a bid to make flights more punctual also blaming mid managed schedules. ryanair has been hit by strikes and weather disruptions. passengers impacted by the change can choose between a refund or a different flight ryanair up by 3.5%. qatar's defense minister has signed a letter of intent. a representative from dae says talks have gone on for several years. the move could anger qatar's neighbors, many of whom have cut trade and diplomatic ties over the summer. 2017 will be an expensive year for natural catastrophes. the company's ceo says the industry can cope.

the insurer estimated that net claims from hurricane harvey would hit $150 million the company said that an estimate of net claims for hurricane irma would be made once the impact of the storm became clearer it added that hurricane harvey had highlighted the lack of flood cover for a large part of the u.s. market shares and the company off by 1.6% here in the u.k. staying with the topic caribbean islands are preparing for another major hurricane strike as cleanup continues from irma hurricane maria is forecast to hit the leeward islands. meanwhile, hurricane who he si is expected to remain off the east coast or bring tropical storm conditions along the eastern seaboard i hope everyone stays safe if they are in the area do e-mail the show the address is "street signs" @cnbc you can find us on twitter and you can tweet me directly as well @carolyncnbc.

we are going for a quick break still coming up on the show, after signaling that a hike in raise is on the horizon, all eyes will be on veorgorn mark carney steve foley joins us after the break.

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one year quick look at the fs markets we've seen a strong rise in the dollar against the yen we've seen it up by roughly 2.7% last week supported by higher yields also better than expected data again, all eyes on the fed we've got the dollar at 111.34

first we're still seeing jazz band playing quite colorful we'll see whether that speech is going to be equally colorful i'm sure it will be full of praise for the long standing mr. schaeuble. happy birthday speaking of german elections, the far right d party could take third place in the general election it shows support for the afd at 11% followed by the far left at 10%. chancellor angela merkel would be well ahead with 36% of the votes and with her main rivals spd close to a record low at 22%. meanwhile, germany's fdp ruled out joining a coalition with merkel if she pushes for a

eurozone budget. we have been talking to the leader of the liberals what else is he saying on that >> reporter: well, he is saying that they will push for digitalization, of course they will push for more investment in education here in germany, but he's also quite clear about the point that he's not signing up for a common budget in europe or say at least in the eurozone he's saying that it's not in the interests of german taxpayers, of course, to send money elsewhere without any control on where it will be spent and how it will be spent so in essence that's the line we know already from wolfgang scheuble they want to have the finance ministry for his party in case they will be the king maker for angela merkel's party, meaning in case they will form a coalition with angela merkel's party. so it will be a very interesting

outcome for that election. also, i think it will sort of dominate or design the eurozone policy going forward for angela merkel's government because as we were saying, christian lintner, he is pro european. to a certain extent only he wouldn't go as far as angela merkel seems at least -- seems to go -- seems to be willing to go in the next four years. so as you were saying, i have been speaking to him on saturday evening here on the ground in berlin about his idea and his vision for europe. take a listen. >> the fdp is and always has been the european party in germany. for us it is perfectly clear that the future is europe, but it has to be a europe of law,

liability, clear rules and responsibility for us it is beyond dispute that the european union has to be strengthened in major areas such as the protection of the external borders, the realization of a digital single market, the cooperation between security authorities and energy policy for example i am also open to strengthening the investment condition and also to joint european initiatives in this context. but what is unimaginable for us are the proposals for a eurozone budget that are currently discussed, which would be fed by money pipelines from germany from which the consumption of other countries would be financed so to form a financial compensation would not make europe stronger but on the contrary would increase the centrifugal forces it would become losers and they would stand up against us. >> in other words, that would be also more or less wolfgang scheuble and if you make it into

government there's not a bigger change against less austerity and more solidarity when it comes to debt? >> translator: you speak of wolfgang scheuble, i speak of angela merkel. in 2015 mr. scheuble supported the leaving of greece. miss merkel was against that mr. scheuble is not clearly understandable in his positions. mrs. merkel, on the other side, has shown openness for a eurozone budget that mr. macron has suggested. when mr. macron needs money for investment, this can be discussed. the european bank budgets can be made and much more an automatic financial equalization in europe through a eurozone budget does not work. other proposals such as a european finance minister is interesting. if it's an independent institution it monitors

compliance with the treaties. >> one last question on greece would you say that we have to bail out greece in the coming years again and again? >> translator: no. greece must fulfill its commitments. the international monetary fund says with the current programs this is not possible a debt restructuring would be required this needs to be discussed if greece fails to meet its reform targets a deal could be that greece would receive a haircut. then it would be able to become competitive in tourism for the devaluation of the new currency. it would no longer be disguised as a european loan but as a genuine subsidy. >> annette, a bit of a cheeky question to you, but why would any party want to form a

coalition with angela merkel whenever the parties did so in the past they got badly hurt in the next round of elections, the liberals not even having any access to parliament the last four years why would they want to do it >> reporter: because they want to be in power in fact, i think that's the easy answer if you're in a position you can sort of set policy, debate, but you couldn't decide anything if you go into a coalition with angela merkel's cdu, you could get some of the ministries and the ministries up for grab are quite interesting. interestingly the coalition partner would up for the foreign ministry that would give them the title to be the wise chancellor but in times of the eurozone i wouldn't say crisis, but in times of where we are, that means you can really decide something in terms of budget, et cetera, more

european integration the finance ministry is far more interesting. that's what we're hearing also for the weekend from the liberals, not directly from christian lind ner interestingly but from someone else that if there will be a coalition between angela merkel's party and the liberals, the ftp, the fdp wants to have the finance industry meaning christian lind ner wantsto be the next financ menster. that'sthe reason why someone would form a coalition with angela merkel's party. it will be the last term of her so you never know what's next. back to you. >> you make a good point i'm not sure mr. when scheuble will want to give up at this point. head to cnbc dolt c.com for explainer on the german system. cabinet ministers have accused boris johnson of back seat driving on brexit after he

set out his own plan for leaving the e.u. in a column for "the telegraph newspaper" johnson said the country will take control of roughly 350 pounds per week after brexit didn't he make those claims a couple of months ago before brexit his comments have been criticized as undermining prime minister theresa may ahead of a crucial speech she is set to deliver in florence at the end of this week. amid the ongoing brexit uncertain uncertainty, international banks have been setting out their plans for moving out of the city of london. speaking to cnbc, the ceo of mitsubishi said his bank would be moving out of the u.k. in the covering years take a look. >> so we chose the answer where we had already, you know, 100%

subsidy owned. and then we wanted to put the securities companies function to that 100% subsidy. we do not run big sales on trading book rather, we like to keep the book in the middle so i don't think that's the answer. so it depends on it. >> will there be job losses from the london office? >> of course there should be some move on the talents of salespeople because under the regulation conducting the sales from u.k. to the area is not allowed so we are moving a part

of the sales team focused on the eopm to not only -- so that we can be better from the office. still coming up on the show, new kid on the block will be speaking to jeremy allaire whose company is using block chain to undercut the world's biggest banks. that's coming up in a few minutes. thanks for loading, sweetie.

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they wanted the benefits of this infrastructure they wanted to bring value around the internet the same way they've been bringing content and photos and other things. as an underlying infrastructure these crypto tokens and assets are incredibly powerful. they are like digital assets d and. jpmorgan's jamie diamond said this is the currency of the dark web, drug dealers

how would you explain that it's not too far away from the truth. there's simply not enough compliance in this market. >> i think jamie's comments reflect really a lack of understanding. i think he's certainly not a very tech focused executive and i don't think he understands the technology space very well with all of that said, there's been an incredible effort to take care of the public, auditable, trackable nature of these assets, work closely with law enforcement, operating in a regulating fashion, working with the secret service, fbi and actually assist in stopping criminal activity more so than banks who have been responsible for enormous amounts of money laundering all around the world. it's a hard criticism to hear. hopefully he'll spend time better understanding that. >> take that, jamie dimon. i don't know if you're watching

or listening or not. it might be too early for him. china's crackdown on the ico, that was a bit of a shock and led to the big selloff do you think other regulators will follow suit and ban trades? >> krip tow graphic tokens and assets and the mechanisms that allow them to move create a capital formation and incentive advise technologies. we've seen this in the birth of protocols like the etherium and we're seeing a lot of interesting projects as a break through in how capital formation can happen in technology, it's irreversible. the question is if these tokens are really behaving like securities and sort of don't pass the howie test as they say, then they ought to be treated as securities you know, in that case government regulators are going

to be involved and there will need to be regulated exchanges and the like. >> very quickly, 20 seconds. what's the plan for your company? where is it going? >> our core business circle pay is a free service for consumers. it's an app that lets people send and receive e-mails instantly, globally. we're taking advantage to make money work the way the rest of the internet does. >> thank you very much for that. ceo of circle. quick look at u.s. futures and we'll wrap up this show. looking quite positive again dow jones up 15 points that's it for today's show i'm carolin ross "worldwide exchange" is up next. see you tomorrow, bye-bye.

the rally goes global. stocks push higher around the world following another record week on wall street. we put your market setup straight ahead. show me the money. tech darling slack now worth more than $5 billion after a new round of funding the details straight ahead plus, a big sign of the times as history's made at last night's emmy awards. we'll explain later. it's monday, september 18th, 2017 "worldwide exchange" begins right now. ♪ ♪