hello welcome to "street signs." i'm carolin roth these are your headlines mark carney says brexit will push up inflation, but sterling falls as the boe governor dials back the hawkish tilt in his imf speech saying any interest rate rises would be gradual and limited. heineken shares sink after mexico's femsa sells a 5% stake in the brewer for 2.5 billion euros. ocado slumps to the bottom of the stoxx 600, as the online grocer warns of rising costs, despite bagging stronger sales in the third quarter

good morning glad you're with us. let's take you to the markets. the stoxx 600 roughly one hour into the trading session, it's slightly underwater. off by just a smidge, to the tune of 0.1% seems like we're treading water ahead of that fed meeting where we expect the first clues when it comes to the reduction of the balance sheet. we have financials doing better today when it comes to the sectors. before we get to those sectors, let me show you the indices one by one the ftse 100 is up by 0.1% this is an inverse movement to what the currency is doing we'll get to the currency in a second we had quite a roller coaster ride for pound sterling over the last couple of days in response to the hawkishness, the dialing back of the hawkishness coming from mr. carney. the xetra dax is up by 0.1%.

the cac 40 is off by 3.5 points. now we talk about the sectors. there you go you have autos, oil, gas, banks, some finals doing better in anticipation of more tightening by the central banks food and beverages, household goods and telecoms trading to the down side. let's get back to sterling sterling rebounding a bit this morning. it is up by a quarter of a percent after it slid from post-brexit highs yesterday. this is as bank of england governor mark carney argued for an increase in tighter monetary policy conditions. but he added that any bank rate hike must happen gradually >> in a global world, the case for modest monetary tightening is reinforced by that possibility that global r star may be rising, meaning that monetary policy has to move in order to standstill. now, here's where i need to caution, any perspective

increase in bank rate would -- increases in bank rate would be expected to be at a gradual pace and to a limited extent and to be consistent with monetary policy continuing to provide substantial support for the economy. >> speaking at the imf in washington, carney said britain's decision to leave the european union will hurt the country's short-term growth prospects and push inflation brexit supporters criticized his statement saying the freedom to forge new trade deals is a big advantage of leaving the bloc, the boe governor warned post brexit trade agreements will not be offset with new ties in other countries in the short-term. >> brexit is is an example of, if i may, christine, step back to jump forward better that's because any reduction in openness with the eu is unlikely to be immediately compensated by new ties of a similar magnitude with other trade partners.

even if those new agreements with other partners could be struck instantly, the reorientation of business relationships will take some time >> all right let's talk more about these comments and specifically about tightening by the boe with the head of interest rates for janice henderson investors the way i'm reading yesterday's comments, more of a dovish slant than what we saw from the boe last week. was maybe carney thinking this 3% rise in the pound sterling against the u.s. dollar last week, that was excessive let me dial it back a bit. is that how you see it >> no, i think carney was always going to say rate rises need to be limited that was the mantra for quite some time. hiking twice a year perhaps is gradual, that's what the markets expect in terms of limited, as he

eluded to, r star is pretty limited. so that's baked into the price, that's what the markets are expecting. there are some comments he made that suggested there are some hawkish things, such as the eurasian capacity, the potential for wage pressures to start building as we deglobalize and the pressures that might bring on inflation it seemed like this would note necessarily be a one and done rate hiking cycle but the potential for some more. >> you and i talked about this off camera, rbc put out a note saying mr. carney tried this hawkish instance before. once in 2014 once in 2015 it didn't lead anywhere this time might be different because the whole mpc is behind mark carney. do you think this time will be more different this is the start of a real tightening cycle >> you already have a couple of dissenters on the mpc, so the

focus is what happens thursday and if dissenters join the ranks. some members thought some form of tightening would be warranted in the coming months so if they were to go for a rate hike or if carney were to push that forward, he would have the support of some members of the committee. i think that messages has been clear. the rates markets have adjusted for that we were pricing in the first rate hike in 2019 a week ago, now two prices hiked for 2018 from that perspective in terms of guidance, they've been clear. the interest rate messaging is out there. what he's focusing on is justifying why they will start with the tightening cycle. that comes back to the discussion about globalization, de-globalization, what brexit means for that, and initially the view is that brexit will be inflationary for the economy >> let me pick up on that point.

i talked ed ted to rababank ye and they had the view that maybe carney wanted to put a cap on inflation. maybe that wasn't so much focused on the tightening schedule going forward maybe he wanted to keep inflation in check is that something you believe in >> we're still seeing the impacts of the weakness in sterling part of that weakness is due to the starts of the bank of england. sounding more hawkish is reducing those inflationary pressures going forward. we think we are around the peak of inflation now so come november we'll have to wait and see whether some of those inflationary pressures have abated, and whether that leads to them turn iing hawkish. >> gilts market reacted strongly last week. we saw gilt yields jumping when it came to the front end of the curve. when it comes to the ten-year,

we're at 1.3%. how much further do we have go or is this the cap >> i think the market is readjusted to price in nearer term rate hikes, but it's not pricing in a cycle at the moment if we did put the rate hikes in the way, it does feel like yields could go further in addition to that, it feels like the bank of england at some point will need to revisit balance sheet policy the fed will have discussed reducing the size of their balance sheet and interest rate at 1.25% and the current guidance by the bank of england is that won't happen until 2%. so we'll have to see more news on that. >> one thing that caught my attention in the statement yesterday was that he referred to the global r star and the fact that globally neutral rates everywhere are rising. that's something that draghi said back at sintra if that were real, wouldn't we expect long yields also rising with that >> yes

real interest rates have risen in the uk. we've seen the inflation expectations alongside this rise in nominal gilt yields it's difficult to get an economic signal from those yield levels, but it is the case we have seen slightly rising real yields, though still pretty low from a historical context. >> what's the trade here any trade in guilts? >> i think the trade is at the moment pricing in more one and done or a few rate hikes the risks are we don't get to the point of delivering those rate hikes, or it's the cycle. i think the yield curve should be steeper here to reflect that. >> all right thank you very much for that we've got some breaking news when it comes to the bayer money

instant monsanto takeover they had hoped this would be under wraps by the end of the year this is the $66 billion takeover of the u.s. seeds group, money sant monsanto bayer saying in a statement they had asked the regulator for an extension to january 22nd. so not a luhuge deal of a delay maybe a little bit the commission last month started this in-depth investigation because it was worried about competition in various pesticide and seeds markets. by the way, bayer is also holding a media event on its prop science business today, it said the division would face global volatile markets for the rest of the year but it's troubled brazilian business will return to growth in 2018 bayer off just modestly to the tune of 0.2% heineken is one of the biggest fallers on the stoxx 600 this morning after femsa

announced it sold 5.24% of its shares the mexican bottler and retailer which sold its brewing business to heineken in 2010 in exchange for shares received 2.5 billion euros. femsa's chief executive said the sale did not reflect the positive long-term view on heineken shares in ocado slumped after the firm warned of rising costs in the short-term. cost increases are expected as it looks to expand investment in customer fulfillment centers, this ocado posting a sales growth in the third quarter we are going for a quick break. e-mail the show with any questions you may have, streetsignseurope@cnbc.com, tweet me directly at @carolincnbc. i love reading your tweets still coming up, shu shg, ss

speculation. angela merkel is keeping mum over the future of her finance minister plenty more news after this short break.

welcome back theresa may appointed the top official at the brexit ministry, oliver robbins as her eu adviser. this as she tightens her grip ahead on negotiations on friday. she also responded to boris johnson's famous newspaper article over the weekend in which he said this government is being run from the front and we all have the same destination in our sights take that as rebuttal.

the rolls royce chairman wants the brexit outcome to be as close as possible to the current status quo davis said there is an increasing understanding of realism about the practical aspects of brexit at industry level. he also rejected suggestions that rolls royce was involved in an alleged letter government had sent asking for ftse 100 support. >> didn't get involved in that no letter appeared there is often dialogue between countries and companies. but coming back to brexit, rolls royce made it clear before brexit that we favored staying inside europe for a business point of view. we felt that our interests at the time our position is still that we recognize the democratic decision that's been made, absolutely we'll deal with it but our position is we would like the outcome to be as closes a possible to the current status

quo. we have big orders in continental europe a big supply chain in continental europe it's crucial we keep those >> how would rate the government's response on this so far. >> they're learning their way. frankly you read the papers everybody has their views. it's a difficult situation politically. you can sense that but i do think that there's increasing understanding of realism about the practical aspects, at industry level you can talk about brexit in ideological sense, but the hard work, you know, is when you get down to specific sectors, specific regulations there's an increasing realization of what's involved >> theresa may is getting ready for a reset of her brexit stance, getting ready for a big speech if you had a meeting with her one-on-one, what would your advice be? what's the single most important thing for your company when it comes to negotiation >> i think the single most important thing from us, which i think is what government is doing, to listen to our point of

view, understand what it's like for us, whether you're a brexiter or remainder, listen to the perspective of business is important. we feel we are getting better heard. >> when you talk about the trade rolls royce does, sending engines to airbus in france, is there any other way than having some sort of customs union as you see it that would protect against tariffs? >> i mean, there are ways. you can figure it out. as i said, status quo is something that we've all tried and tested it would be helpful to us and our suppliers. a lot of our supply chain is continental europe keeping the status quo from a narrow point of view would be by far the best outcome >> going back to what you were saying about the overall look at rolls royce, where you are today, there's still work to be done what do you think is the biggest objective? >> internally we have had a massive program of new product introductions. that's one of the reasons we had

to deal with difficult issues. delivering those dealing with the teething problems, making sure customers get what they want is number one. second is more operational issues, getting cost efficient as new engines mature. i would say our biggest priority is internal. really delivering on the fantastic growth we've had in orders and in sales. the order book is strong the market is strong our challenges are to focus on the consequences of that >> staying with the topic, british prime minister theresa may says she will press her u.s. counterpart on a trade challenge by bowing that could put thousands of bombardier jobs in northern ireland in danger the uk prime minister already raised the issue with donald trump in a previous call boeing has accused canada's bomb bar barr bombard area

bombardier of violating trade laws ryanair's ceo says the company is ready to pay up to 0 $20 million euros in compensation fares they have cited a shortage of pilots among the causes of the delays the carrier also could be hit by reputational damages. iag the owner of british airways is trading higher on reports that it is among the bidders for air berlin according to reuters, it's not clear how much of the insolvent carrier iag is interested in a number of companies including lufthansa and easyjet have confirmed their interest in air berlin ♪ let's get back to the german elections, just a few days away, german chancellor ank gela merk remains silent over the future

of her finance minister. speaking at schauble's birthday celebration yesterday, merkel praised him for his service and said they're fighting together to win the elections annette is in berlin the key question in berlin is will he stay or will he go what's the talk on the ground? >> well, actually it's increasingly unlikely that he will stay. that's the talk on the ground given that traditionally the smaller coalition partner can pick a ministry of his likes traditionally that was always the foreign ministry now there is a clear conviction among all the martiy parties, was wrong to leave the cdu to angela merkel's party. it could still be amerimerkel's negotiation power in the end

will yield another year for w f wolfgang schauble, but what is clear is that his job is in danger there are many other themes as well we have some voices from the ground to give you an overview of what's hot here in berlin take a listen. >> i think this is an important election for the future of europe my personal view is there's a time window opening, where germany and france could kind of renew this french/german axis, which did drive the european agenda for quite some time in the past think it's important that we continue with the reforms in the states that have too high debt and reduce debt, and we need to be prepared also for increasing interest rates i mean, many, many governments are in favor of low interest rates, but they might increase then we have to be prepared to cover that >> yes

i think it will be the question, what will be the legacy of angela merkel. in my view, it's whether she manages in the next four years to really transform germany into an open society that is integrating not just refugees, but a lot of europeans who have come to germany over the last few years into the labor market, into society that's the key question. >> there's still a sense of nervousness on the ground in berlin as to -- for example, what force can the afd, the populist party, the right wing party actually garner. because there's so many voters undecided, 15% of voters are saying they don't know at all who they'll vote for another 15% tend to vote for the center, but they don't know yet which party they are voting for. in total 30% of voters seem not to have made their mind up

it will be a last-minute decision even the cdu is not really relaxed with their strong showings in the polls. any way, the big topic as well is here on the ground which coalition is actually possible looking at merkel's party f she's really getting some 36% to 38% she needs another partner to reach the majority in parliament it could be the liberals if they're gaining traction, but most likely that won't be enough they would need another party for that the sort of coalition it could be the so-called jamaica coalition, but they are already arguing with each other strongly about very relevant topics, lowering the likelihood that this kind of coalition is viable another outcome, of course, would be the grand coalition, not really very much liked here by anybody also not by the spd party base

shultz would go into such a party, but the party base doesn't want that again. even though this seems to be like a very easy election going forward, there's so many unknowns it makes it interesting. >> what would be the future of martin shultz given that, yes, from the beginning he drove the shultz train through germany he caused a lot of enthusiasm, now that's tapered off, now he's been leading the social democrats towards a record low in the polls he would have a future in a government if they were to form a grand coalition with the cdu once again >> that's big question i think he's actually quite power oriented so he wouldn't probably give away any potential job easily. but having said that, if he's really driving home a record historic low result for the

social democrats, the speculation here on the ground is that he will not be in a position to actually claim for himself a very good job. it could well be she's going to end up like an ordinary lawmaker in parliament just behind me back to you. >> a guy who wanted to be chancellor thank you very much for that if you think the american electoral system was complicated, think again head to cnbc.com for an explanation on how the german electoral system works pretty complicated back with more "street signs" after this short break whuuuuuat?rtgage offer from the bank today. you never just get one offer. go to lendingtree.com and shop multiple loan offers for free! free? yeah. could save thousands. you should probably buy me dinner.

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hello. welcome back to "street signs" i'm carolin roth these are your headlines heineken shares sink after mexico's femsa sells a 5% stake in the brewer for 2.5 billion euros. ocado slumps to the bottom of the stoxx 600, as the online grocer warns of rising costs, despite bagging stronger sales in the third quarter game over. shares in mattel and hasbro tumble as toys "r" us files for bankruptcy protection.

can the dow make it to another record close today for the sixty tisixth time in a row? let's look at futures. we're looking positive again the dow jones seen up by 26 points, after it posted the fifth straight record close yesterday. financials doing pretty well ahead of that widely anticipated fed meeting. the s&p 500 and the nasdaq also seen just a smidge higher. when it comes to the european markets, not quite at record levels, but not doing badly. still close to six-week highs. the ftse 100 up by 0.19%. dax is off by 0.1% the dcac 40 is shedding three points

japan is back online after yesterday's holiday but not reacting to the potential snap election this fall the pound continuing yesterday's weakness when we saw some dialing back of the hawkishness of mr. carney in washington. all eyes on the fed. the federal meeting will kick off today with steps to unwind its 4$4.5 trillion balance sheet investors will look for clues of fed tightening the fed is expected to keep rates steady with a chance for the next raet hite hike in dece. let's talk about the effect of the fed.

when we look at some returns for markets like brazil, they're up 30%. will that be dented if the fed gives us more clues about the reduction of the balance sheet >> not really if they do what people think they will be doing. some announcement on the unwinding of the balance sheet should be okay for emerging markets. if they say something which is more hawkish than the markets expect, emerging markets could go down on that. >> do you think the fed is the biggest driver when it comes to the emerging market outperformance everyone was expecting a stronger dollar on the back of the relation trade under trump did not happen the dollar is one of the worst performing g10 currencies year to date. is it still the fed or is it other drivers which are really at play here for the emerging markets? >> i think the good performance this year is driven partly by expectations of the fed. we expected more action by the monetary authorities in the u.s. that's been priced out

that helped meaniideastern emers at the same time, the chinaies hack come down commodity prices could rise. as you said, there's other reasons why emerging markets look better. growth is picking up emerging markets, credit growth is strengthening for the first time in six years. there's been improvements on the structural side for some key companies, india, brazil, russia overall the picture has been goo good >> when we hear about strength in the emerging markets, that's good, but immediately you're worried about rising inflationary pressures, how the central banks will get a grip on that are you concerned about overheating in the emerging markets and some markets like brazil and india >> not at all. growth is just recently starting to pick up on the domestic side. we have had many years of weak growth, so there's no capacity

constraints whatsoever in fla inflation has been coming down for now, there's -- the growth is not strong enough to be worried about overheating. >> i saw an interesting report by credit suisse reporting that on the way up correlations are low. on the way down, correlations converge quite a bit isn't that worrisome at some point this cycle will turn >> yeah. >> not so much >> no, not so much it's also too early really to worry aboutrelations have movedd down the past few years. currently they're lower. for sure, when there's a shock and everything comes out at the same time, correlations will rise again but that in itself is not a problem. >> let's talk about some of your top picks. you like india

this is a market with a good run. up 30% when it comes to the equities you like argentina and russia. russia is up about 3% or so. what's the rational for russia >> russia has been a clear la r laggard all year oil prices came down for the first half of the year sanctions maybe linked to the problems we have in the geopolitical relationship. overall i think russia now, growth is improving. interest rates are coming down inflation is at record lows. central bank is doing a reasonable job structurally nothing is improving much but technically this looks like a market that could catch up a bit. that's why i put that trade on >> sure. finally, when it comes to underweights, you don't like south africa, turkey, mexico is a surprise i guess all of these are

idiosyncratic stories rather than the big em trade? >> yeah. south africa and turkey, clear policy risk, political risk in south africa, that does -- i think there's more uncertainty about policy direction for coming years turkey is an explosive mix growth is too strong they probably have to stop at some point mexico is really a market that has done quite well, and is quite expensive. i think the protectionism is still there. and it's not priced. >> thank you very much for that. let's talk about iraq's oil minister he said it is premature to reach a conclusion over a potential extension to oil cuts beyond march 2018 speaking in the uae, he defended iraq's compliance in the cuts saying the country exceeded its share in curbs the minister said while did he

not think there's an imminent need for more output reductions, iraq would support the consen s consensus. >> norway's oil fund has officially hit $1 trillion. world's largest sovereign wealth fund said it surpassed all expectations and called growth in the market value stunning it said strengthening of major currencies against the dollar and strong equity markets were the reasons behind the rapid increase in 2017 now let's turn to our ongoing coverage from the singer to summit where cnbc has been speaking with global business leaders. we sat down with the former chairman of the chinese oil and gas company sinopec for his view of china >> international, i'm asking the same questions however, i do understand some of the friends, the former partners

coming to china when we talk about they have a high expectation to come out to congress, and how china can continue to push globalization, free trade, and openness to international investors in china, all those areas will be addressed by the party congress. >> it's interesting you say the focus will be globalization and openness, when by contrast in the united states you have president trump who is being more protectionist just this past week mr. trump blocked the purchase by a chinese private equity company of lattice semiconductor what do you think about the trade tensions between the u.s. and china?

>> i think if you look back in the last 20 years, china's progress was because we are open for the foreign investment, and we are supporting the globalization and free trade so, for those countries who are supporting this, they are benefiting so i believe whatever the country, when they have closed their door they eventually themselves will be harmed. so, this will take time. i believe when people have been hurt and then they will be rethinking what are we doing right? so, i don't believe that the u.s. and led by trump, doing so be benefiting the u.s., but this

will take time i think eventually they will find out cooperation is the way to lead the whole global economy going forward. clariant shares are edging higher after white tail acquired a 5% stake in the company making it the largest shareholder it's maintaining the opposition with huntsman white tail said it is open to joining the board. and basf agreed to buy a business unit of solvay. the deal will close in the third quarter of 2018 and is worth 1.6 billion euros excluding debt basf says the deal will help the plastics portfolio and help growth in asia and south america. the agreement helps solvay focus on specific sectors that offer higher margins the firm says it expects a hit

to the core profit growth as a result hurricane maria barrelled across the caribbean island of dominica downgraded to a category 4 storm with sustained winds of 155 miles per hour. maria's current course means it is expected to hit the u.s. virgin islands and puerto rico later in the week. in a post on facebook the dominica prime minister said initial reports were of widespread devastation and that they had lost all what money can buy and replace. hurricane jose is moving north in the atlantic, but it is expected to stay well offshore gabe gutierrez reports from san juan, puerto rico. >> reporter: tonight already lashing the caribbean island of martinique, hurricane maria a powerful category 4 storm is now barrelling towards puerto rico >> we are very, very, very worried.

>> reporter: today in san juan, a frantic scramble for supplies. again, just days after irma, maria has rapidly intensified. the government now declaring a state of emergency rationing basic provisions like water and baby formula >> there's no water anywhere i can't find water i can't find ice >> reporter: while irma decimated islands like barbuda, it only grazed puerto rico but still knocked out electricity on 75% of the island, more than 60,000 customers still in the dark. this spree of storms exposing problems with its fragile power grid and crumbling infrastructure among the hardest hit areas by irma, the coastal town of louisa, debris still piled on the street nancy pizzaro rode out irma in her home when a tree fell through her roof now she's terrified of what maria might bring. the island hasn't seen a category 4 or 5 storm since 1932 today, puerto rico's governor

ricardo roseo, urged people in flood prone areas to get out >> it's the difference between life and death it's that simple >> reporter: puerto rico was the safe haven for some 3500 evacuees from other caribbean islands. some on dialysis still in the shelter. others like gabriel williams from st. thomas desperately trying to find a flight to the u.s. mainland. >> i'm thinking how much more does my home have to take, you know >> reporter: puerto rico the island helping those devastated by irma now in maria's direct path. back to corporate news an update on the extension that bayer asked for with the european commission when it comes to the $66 billion takeover of monsanto it says now that the european commission has put out a statement saying that a decision on the bayer request from monsanto on antitrust deadline will be made shortly

they requested an extension of ten days, so the deal may close in 2018 rather than late 2017. still coming up, president trump will address world leaders at the united nations where he is expected to go on the offensive. his plans to make the u.n. great coming up on "street signs."

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now, president trump was full of praise for i had french counterpart emanuel macron ahead of the u.n. general assembly meeting. speaking following a bilateral sitdown in new york, trump said macron was doing terrific job and he was respected by people on both sides of the atlantic. trump added he was so impressed by france's military parade in

july he was considering something similar for next year's independence day sell breaks >> i was your guest at bastille day, it was one of thegreatest parades i had seen it was two hours on the button and military might and a tremendous thing for france and the spirit of france people don't know what great warriors they are in france, but when you see that, it's tremendous to a large extent because of what i witnessed, we may do something like that on july 4th in washington down pennsylvania avenu avenue >> get ready for thesecelebrati president trump will plan to ratchet up the pressure on north korea by urging world leaders to join him in isolating the regime he's also expected to criticize the iranian nuclear deal and the

political turmoil in venezuela kristen welker looks ahead to the day of diplomacy >> reporter: with a critical test on the world stage now underway, president trump engaging in a day of diploma si israel and france, but it's north korea that's front and center >> as far as north korea is concerned, i think most of you know how i feel. >> reporter: mr. trump's message, the global community has to come together to counter the mounting nuclear provocations tonight defense secretary james mattis adding to the tough talk, saying military options exist that wouldn't put nearby seoul at grave risk. over the weekend, the president mocking leader kim jong-un with a new nickname, "rocket man" as the u.s., japan and south korea unleashed a new show of force over the korean peninsula. another flash point, the iran nuclear deal with a crucial deadline approaching will president trump uphold the deal orchestrated by the obama administration

>> you'll see very soon. >> reporter: today the leader of iran unleashing this stern warning. >> such an agreement would carry a high cost for the united states of america. >> reporter: and as he grapples with global threats, the president is trying to shake things up at the u.n., long a critic >> when do you see the united nations solving problems they don't they cause problems. >> reporter: today holding a meeting focused on ways to improve it, later the president putting a new twist on his old campaign slogan. >> the main message is make the united nations great make the united nations great. >> i think the president has to show the rest of the world egs interested in the world's problems and demonstrating concern for our other allies as he wants to be concerned about our north korea problem. >> i'm glad we have mike jakeman for further naanalysis

let's kick off about the comments with the u.n. he criticized them for being a bloated organization, for mismanagement. maybe that's not the right tone when you actually are trying to make friends within the u.n., no >> he also said some nice things about the u.n. perhaps more so than before. this is trump participating in the global order he will be addressing the general assembly today he had a nice thing to say about antonio gutierrez. this is trump operating within the u.n. he wants to leave his own stamp on it and to improve areas he thinks need improving. but this will be a relatively controlled trump this week if that turns out to be true, we won't know until 10:30 local time in the u.s., if he is more mellow and doesn't lash out against all kinds of organizations like the u.n., what do you think has made him

more mellow? do you think it's days like today when he speaks in front of the world? not specifically to americans that he is more presidential or is it actually the fact that over the past couple of weeks and days,he's been able to reach across the party aisle and has made some progress when it comes to being more presidential >> i think it's the latter i think trump is simple to understand in these terms. he's been, you know, almost all of his presence was attacked in the media. he didn't like it at all then he struck the debt ceiling with democrats, got praise and figured this is more fun, and we don't have to deal with mitch mcconnell. why don't i trust my own instincts more and he's been in a better mood since then some of this will be carried out this week. >> when it comes to the meat on the bone, when it comes to north korea, singling out north korea for stable iilizing hostile behavior, will that signal a

policy shift or anything you think will come out of this u.n. address today? because nikki haley said hey, at the u.n. security council we're pretty much done, let's hand this over to the pentagon. >> i think the u.s. already used the phrase running out of road there will be symbolic value, trump is addressing an important body in this subject this will not change the fundamental fact that the u.s. and china want different things on north korea trump probably wants the end of the kim regime china doesn't. trying to get common policy on this will be difficult we've seen that in the time trump escalated rhetoric, talking about fire and fury, north korea continued to set off missiles the u.s. is in a difficult position on this >> let's talk about iran we have an october deadline to re-certify that iran deal. do you think he'll try to end it or plenty of tough talk?

>> it is difficult to say. i think that what we can say is that there's clearly more international agreement behind trump on north korea than iran i think if trump tries too closely to tie these two states together as threats to the global order that will be received more luke warmly than if he focused purely on north korea. he had lots of word force m he had lots of word force m morn yesterday. macron doesn't want the u.s. to pull out of the deal >> coming back to macron what do you make of that bromance between trump and macron first we saw that contentious handsha handshake, now all the praise about the military parade, how real is that bromance? >> well, i think macron is taking what he can get it's probably unexpected bonus but on the other hand, the way

to get trum onsp on your side i show him your arsenal. he played a shrewd card. >> thank you very much for that analysis we're waiting for that 10:30 address by donald trump ahead of the u.n. a quick look at u.s. futures. looks like the dow could make another run at yet another record high today. that would be the sixth in a row. we're looking at an increase of 24 points when it comes to the futures. the s&p 500 and the nasdaq seen a smidge higher. that's it for today's show i'm carolin roth "worldwide exchange" is up next. see you tomorrow

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breaking news. hurricane maria slams into the caribbean as a category 5 storm. the latest on the storm's path straight ahead. trade has hit the pause button as the fed kicks off two-day meeting and president trump heads to the united nations. a big sign of the times in retail as toys "r" us files for bankruptcy protection. full details coming up it's tuesday, december 19, 2017. "worldwide exchange" begin