welcome to "street signs." i'm willem marx. these are your headlines the eu and the uk break the brexit deadlock. jean-claude juncker announces divorce talks can progress to the next phase after a deal is reached on the irish border issue. >> i believe we now have made the break through we needed. today's result is, of course, a compromise >> sterling hits session highs as theresa may insists it's a good deal for the british taxpayer >> getting to this point has

required give and take on both sides. i believe that the joint report being published is in the best interest of the whole of the uk. >> european banks rally as global supervisors finally sign off on agreements ten years in the making the chair of the basil committee says the compromise reached was worth that long struggle >> it was not so easy to get to the number 72.5, but give than we do have a compromise, everybody has signed off everybody is prepared to implement it in this particular way. a shutdown averted for now president trump will sign a short-term funding bill to keep the u.s. government in motion for another two weeks as the search continues for a political compromise

a positive start across europe this morning. the stoxx 600 up 0.4%. a lot of green on that board alo lot of that driven by marke sentiment about these votes. we can see that the ftse is up nearly 0.2%. the xetra dax strong start to the day, up more than 1% the cac up in 0.3% the ftse mib up more than 1% let's look at the sectors driving the movements, banks there, positive start. autos. insurance up more than 1%. oil and gas flat with food and beverage the major loser so far over the last hour or so let's talk about brexit. the big story of the day, after a number of false starts, a break through in talks speaking in brussels, jean-claude juncker said sufficient progress has been made for talks to progress to the next phase uk prime minister theresa may said compromise was key to the

talks. >> getting to that point has required give and take on both sides. i believe that the joint report being published is in the best interest of the whole of the uk. >> commission president mr. juncker reiterated the prime minister's view. >> we discussed the joint report agreed by the two negotiators. prime minister may has assured me that it has backing of the uk government on that basis, i believe we have now made the break through that we needed. today's result is, of course, a compromise it is the result of a long and intense discussion between the commission and those of the uk >> as in any negotiation, both sides have to listen to each other. adjust their position. and show a willingness to

compromise this was a difficult negotiation for the european union as well as for the united kingdom. >> a few minutes late e the european council president, donald tusk, warned the break through was only a step in the long negotiating process >> being satisfied with today's agreement, which is obviously the personal success of prime minister theresa may, let us remember that the most difficult challenge is still ahead we all know that breaking up is hard but breaking up and building a new relation is much harder. since the brexit referendum, a year and a half has passed so much time has been devoted to the easier part of the task. and now to negotiate a transition arrangement and the

framework for our future relationship, we have less than a year >> we heard from dublin where the prime minister said the focus now turns to the next stage of brexit talks. >> i'm satisfied sufficient progress has been made on the irish issues the parameters have been set and they're good now we can move on to work out the detail of what has been agreed to talk about the transition phase, free trade, and the new relationship between the eu and the uk. this is not the end. it is the end of the beginning we will remain fully engaged and vigilant throughout phase two, the drafting and ratification of the new treaties that will be required between the eu and the uk and their implementation. >> we bring you comments from all of the major players this morning. speaking in brussels, the eu's chief brexit negotiator, michel

barnier set out the sdeadline fr the final withdrawal agreement >> there is still work to be done there are others to take we will need to have the final version of the withdrawal agreement ready by october 2018. >> a lot to work with there. larry hathaway from g.a.m. and famos join us now. we have seen movement in the pound today. it's been tracking these talks over the course of the week. it seems like quite a few cans have been kicked down the road today what does that mean for the currency >> exactly i think sterling can appreciate further. the market position is flat after being short earlier this year as you said, this is a good kick of the can down the road uncertainty remains, but most of it becomes relevant after two or

three years from now this is positive for our markets. the deadline you gave has been good, given the uncertainty. there will remain most likely supportive the bank of england is likely to hike again so from this point of view, sterling may end up being one of the best performing currencies next year. >> larry, we saw a roller coaster this week. there's a bit of uncertainty taken off the table today. there's a lot remaining. that do you see this roller coaster reaction in markets continuing past this next phase >> i think sterling benefits in the short run. risk assets as well. you remove uncertainty jean-claude juncker eluded to the fact this is the will of the british government, but the support of the dup is critical to any deal surrounding the irish question it's not entirely clear that

everybody is on board with the parameters signed. as many leaders have said, the next stage is even more difficult than this one has been what we have seen, whether it was around the brexit bill or the irish question, is an awful lot of one step forward, one step back or maybe 1 1/2 forward or 1/2 back that is also reflected in sterling's value. i think that a lot of investors who might be inclined to look at this as a positive will be reminded it's a difficult environment to engage in markets around this issue in particular. >> i want to stay with that. it seems clear that over the last eight months the theresa may government has not been ready for the complexity and lack of leverage in the talks. they conceded again and again to the issues and the european side do you think there might be a different attitude to that and things might be smoother >> i doubt it. after all, the eu holds the upper hand in negotiations that makes her position difficult because of the

different interest groups within her cabinet, within her government she also has to placate them from that perspective, i see it as a very difficult process for her personally, for her government, and therefore i think for the markets to get a handle on. >> we heard repeatedly from business leaders over the last year and a half what they want is certainty and clarification part of that will come with the transition deal. the next few months will be focused on that. do you think the british government will push again to make concession there's a will make that transition smooth for business. >> for now it's important to get a deal on the transition relatively early that's why it's important that we have this deal today to start discussing the transition. most likely the transition will just extend the current regime i don't think there's much to negotiate there. i think business will focus on what happens in the long-term, what is the trade deal this will take much longer if they agree on a two-year

transition period, even this might not prove to be enough historically trade agreements take 5 to 10 years there is still a lot of uncertainty that remains this is one step in the right direction during a marathon. at least you buy some time the alternative, t would have bn a disaster >> how do you trade sterling with this uncertainty? >> you buy the dips expecting that logic will prevail. this is what we show in the negotiations initially it seemed impossible in the end, it's not exactly compromise i think what happened was much closer to what the eu wanted i think this is what we'll see the eu has much more negotiating power. if this happens, this means that we may not havean ideal scenario for the uk but also avoid extremes >> larry what are the factors driving down the pound over the next few months? >> i think it is the next stage

we're talking about. there are risks, for example, that the dup or perhaps the hard line brexit camp within the government finds fault with. it's about getting to the next stage. the best possible deal that the uk could get out of it is close to the canadian free trade agreement. they're looking for more for that this is where some of the stumbling blocks will be for the uk, in history inflows have been fulfilled to a considerable extent by long-term fdi. people taking a position in the uk as a platform to sell into europe that's the clarity they're looking for. i agree, i don't think they'll get that clarity any time soon from that perspective, while i see a short bounce in sterling, i don't see a sustainable one. >> we'll leave it there.

larry will be staying with us through the show now, coming up on the show, another kind of deal entirely. global regulators agree on rules to prevent financial crisis. we'll hear from the chair of the basel committee next my friend susie cracks me up. but one laugh, and hello sensitive bladder. ring a bell? then you have to try always discreet.

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welcome back european banks trading higher after global banking supervisors signed a deal a decade in the making it's the last piece of the basel 3 puzzle annette is in frank fufrt ffurt this morning what's been happening? >> the compromise was delayed for so much time that they finally reached one is really a good sign for the global banking seen, for the european banks there's now clarity as to what they really need to do when it comes to capital requirements. many banking associations in

europe are saying it's not a good deal for them, european banks are treated more stringently than others. that's what they claim in a way, it's -- because european banks are different from united states ones, u.s. banks traditionally don't have much mortgages on their books, the european ones do have. that leads to the fact that they need probably more capital than the u.s. peers going forward the positive news, though, looking at those new basel iii or iv rules is that they have a long phase-in period that gives them ample room to comply with all the new requirements of course that is a look to the past, and the look into the future is always something different. i spoke about the future with stefan ingves, the chair of the

basel committee, we talked about whether the new banking rules makes it more interesting for investors to look into banking shares but also what fintech, shadow banking and also bitcoin does mean for banking regulation take a listen. >> their valuations go up and down when it comes to individual banks. that, i cannot tell. i do think it's important what we have agreed earlier today from a transparency perspective. we have also agreed that all the banks from 2022 will be reporting their risk weighted capital according to the new standardized approach that means in the future it will be possible to compare the risk weighted capital in a standardized way with your own internal risk weights, and a standardized leverage ratio. i hope that that will make it easier for investors when they look at individual banks, and

when they compare. because the whole system has on purpose been designed in such a way it should be easier to compare in the future than today. >> let's look into the future. it took a while to come up with these rooms. we now have fintech, cryptocurrencies, are there plans to tackle these issues in terms of more regulation >> it's hard to tell we're looking tat frat it from a supervisory and banking sector there are many phenomenon going on outside the banking sector. if you look at the work of the financial stability board, other international institutions and international bodies working on this, there's a high awareness

today that there are many new things going on in the fim senaa sector, including whatever we mean when we talk about fintech. it's too early to say where that will take us when it comes to regulatory frameworks. let me also stress that sometimes there's a bit of a hype when people talk about, let's say, fintech, thinking that almost or describing it as if old-fashioned banking will go away but i don't think that that is going to happen. regardless of the technology available, in most countries we have had banks for hundreds and hundreds of years. and most likely it will continue that way >> another novelty really, of course, the bitcoin wave or whatever you want to call it, hype are you concerned about financial stability issues

related to that cryptocurrency >> first of all, i think it's wrong to call it a cryptocurrency it's a crypto something, maybe a crypto asset but not a currency whatever you call these, they are not backed by central banks or the regulation or by anybody in the public sector side. so it's just dangerous when it comes to investing to those types of instruments and volatility is also high if you look at what has happened in the past, when it comes to those types of hypes, being tulip bulbs or a bunch of other things over the centuries, the odds are against those who think this will be the future. >> as so often, regulation seems to be behind the curve when it comes to new developments in the

final markets, but also to be fair, those new developments are quite recent when it comes to cryptocurrencies, and at least some regulators are looking into it and discussing whether there is a potential destabilizing effect from those new assets generated by the digital world having said that, just one last word on basel iii, looking at the share price reaction of the banks, it's clearly a positive thing to have a clear visibility of where the regulation will actually go to and also the fact that sovereign debt is excluded from that regulation is a net positive for the banking industry there was also talk about having risk-weighted assets or risk provisions for sovereign debt on the balance sheets of the bank, but there was no compromise on that issue

that's why it's positive back to you. >> annette, thank you very much. i'm still joined by larry hathaway it's a good time for banks we've seen profits doing well. a strong period of earnings. is that what has made this easier for this deal to come together seems to me it's difficult for regulators to kind of keep up. some of these deals were started ten years ago. are they still relevant? >> what i think is going on here, yes, behind in the background there is a cyclical improvement in virtually everything, particularly here in europe but also elsewhere in the world which is lifting the demand for credit and we'll see an underlying improvement for bank earnings. that's fine. that's ongoing the news we heard is not about just closing a chapter on bank regulation, we're closing the book on it it's been ten years in the making it is very, very difficult to

come up with these sorts of compromise agreements as we have also just heard. beyond that, we've seen political fortunes change. in the united states, the banking administration is no fan of this. we may see that happen more in the federal with the new appointments in the board which will be forthcoming over the coming months. in a sense the banks know the level playing field they're on th they -- their investors know that too they can focus on how to adapt to those regulatory requirements in place and how to establish growth growth in banking has been largely absent for some time this pays the way for that hence the share price reaction we're seeing >> there's been a very positive story across the globaleconomy at the moment. what do you think could happen early next year to equity markets after this strong run we've seen recently? >> i think the consensus is

after a powerful rally in 2017, 2018 brings more of the same just less of it. in other words, it's 2017 light. and i think that's probably right given where valuations are. given the fact that earnings momentum will slow in the world's largest equity market in the united states. there are some pockets of support from earnings. emerging markets, parts of europe and japan will take up some of that slack i think in the early part of next year we have to also look at what's happening with economic activity relative to consensus expectations surprisingly indexes are peeking and beginning to crest as they come down the environment will be less supportive the friendly tailwinds will become headwinds if you were to marry that with a slowdown in china or a pick up in inflation, i think we would hit a rough spot >> i have to ask you, are you worried that there's a prospect

of inflation lurking in the shadows? >> i think it is lurking in the shadows, but it's deep there are few signs of accelerating inflation even in the economies running red hot. from that perspective, i think we have to wait longer before inflation emerges. because it's so important to portfolio construction to overall wealth management, it is worth watching very, very closely. >> let's talk about construction are we seeing the end of the 60/40 ratio equity and bonds do you think that correlation changed? divergence means investors have to rethink >> the break through probably came post brexit when bond yields stopped falling and rose after the u.s. elections at the same time equity markets performed. that was different than the positive correlation of stronger bond markets and stronger equity markets. 2017 brought equity markets higher, but bond yields basically drifted sideways

i think the concern for investors in the classic 60/40 portfolio is they're no longer going to get that kind of contribution from both sides therefore i think they do need to begin to think about portfolio construction more carefully. marrying equity returns where they're still promising with noncorrelated types of returns that are typically drawn out of long/short types of strategies, alternative risk premium and some other areas that are not correlated to either stock or bond movements >> one quick final question. president trump suggested the u.s. growth rate could hit 6%. you saw that happen last in 1984 what's your reaction to that >> 6% nominal is possible that would take a lot of inflation. 6% real is apart from an averan quarter is impossible. it does not have things like labor force growth or

productivity growth to warrant anything close to that >> thank you very much, larry hathaway joining us in london. coming up, the fallout has continued after president trump recognized jerusalem as israel's capital with hamas calling for a day of rage. more on that when we come back after this break

welcome back to "street signs. i'm willem marx. these are your headlines the eu and the uk break the brexit deadlock. jean-claude juncker announces divorce talks can progress to the next phase after a deal is reached on the irish border issue. >> i believe we now have made the break through we needed. today's result is, of course, a compromise sterling is still in positive territory as uk prime

minister theresa may insists it's a good deal for the british taxpayer >> getting to this point has required give and take on both sides. i believe that the joint report being published is in the best interest of the whole of the uk. >> european banks rally as global supervisors finally sign off on capital agreements that were ten years in the making the chair of the basel committee says the compromise reached was worth that long struggle >> it was not so easy to get to the number 72.5, but given that we do have a compromise, everybody has signed off everybody is prepared to implement it in this particular way. a shutdown averted for now president trump will sign a short-term funding bill to keep the u.s. government in motion for another two weeks as the search continues for a compromise

we are just getting some uk balance of trade numbers out this morning we can see that the adjusted noneu trade deficit was 2.4 billion pounds and that in september there was a non-eu trade balance unrevised at a deficit of 3.0. 3 billion pounds u.s. futures ahead of the market open a positive start looking likely in the u.s the s&p 500, dow jones and nasdaq all looking in terms of the futures in positive territory. we look at european markets this morning. a lot of green there the ftse 100 still trading up 0.5%. the dax up the cac up 0.2%. the ftse mib with a strong start today, up 1.25%.

we saw sterling had a bit of a jump this morning, cable there just very, very slightly up at this point, strengthening against the dollar the dollar is up against the yen. we can see euro weakening against the dollar these brexit negotiations have been playing havoc with sterling over the course of the week. we'll see how that plays out in the coming months. fitch rating says growth in the uk is slowing due to uncertainties weighing on the capex plans. joining us is brian coulton. a lot of news out of brussels this morning what does that mean for the uk economy in the next two, three, 12 months? >> you have to remember, this is just a preliminary this is the negotiations before the negotiations that's all we've seemed to achieve today. none of the naughty problem of ireland has been solved, the can has been kicked down the road.

we don't have a lot of time in 2018 to agree on all these things we need to agree on the longer we go on without significant breakthroughs on how the future relationship will look, we think that will create more and more uncertainties for firms, a bigger risk of a cliff edge and they'll be cautious we think business investment will decline in the uk in 2018 >> it seems the uk is the only advanced economy not seeing positive numbers going into the next year. we've seen some moves today as the deal is struck on phase two. there's a long way to go what do the next 15 months look like in the uk and how heavily will you be tracking these talks on trade >> it's the business investment numbers are the ones we're looking at what we saw in recent business surveys from the cbi is that firms have become a lot more cautious. when we turn back the clock to

immediately after the referendum vote, we thought there would be a quick impact on investment that didn't come through that's where the global picture is influential the uk would have been weaker were it not for the positive surprise on the global economy >> you think that will slow down next year? >> we don't. we think the world economy is in for a couple of good years 2018 slightly better than 2017 this year already the best year since 2010 global conditions will help the uk >> i've opened quite a few chocolates on my advaent calendr now, what are the threats for the new year you must have some concerns what are they >> when we say we don't see a looming threat in the next 12 months, that's quite different to the last few years. there's always been something serious to worry about that could impact growth quickly. the fiscal cliff in the u.s., the eurozone crisis, china hard landing was the big worry in

2015 right now it's hard to see something that could upset this global growth picture in the short-term what we worry about more is 2019, 2020, central banks can't ignore this spare growth capacity, unemployment rates are coming down rapidly, at very low levels now central banks will not ignore that we will see a normalization of monetary policy even if inflation does not pick up that has to raise question marks about 2019 and 2020 when we think central banks will be starting in aggregate, all four of the banks, they will all be shrinking bla ining balance shes >> is the ghost of inflation something that will haunt your christmas? >> it's not something we're expecting to appear in an aggressive way in the near-term. but i don't think that's necessarily the most important thing for central banks. waiting until inflation arrives, it's too late for them to adjust

it as labor markets get tighter, more and more stories about labor shortages and different parts of the economy, i think the central bank also reas will to the risks if that happens, then it's too late and then central banks will be behind the curve and that's quite an upsetting scenario. >> you have upgraded the growth forecast, trump says 6% is possible you build economic forecasts fo a living -- >> 6% is for the birds >> clearly not a fan of some of president trump's assertions about economic growth in the united states. hamas has called on palestinians to launch a new uprising against israel in response to president trump's recognition of jerusalem as its capital. the leader of the islamic group said today it would be a day of

rage after pro tests in the west bank and gaza triggered clashes between palestinian and israeli troops richard engel filed this report from jerusalem >> reporter: this was day one of president trump's new plan which he says will foster peace in the middle east. but peace was in short supply today. palestinians rejecting the president's declaration that jerusalem is israel's capital. you can see they've been lighting fires here. they're burning tires using the smoke to provide a smokescreen palestinians threw stones at israeli troops the troops fired rubber bullets and tear gas there's talk of a new uprising starting, what palestinians call an intefadeh they say they tried the peace route for decades but president trump's remarks show it didn't work this could be become an armed conflict said one of the young stone throwers anything is possible clashes are expected here in

jerusalem tomorrow palestinians say they've lost confidence in the united states' ability to be an honest broker so now they're looking for a new way to achieve their goal of a state with east jerusalem as its capital. >> that was richard engel in jerusalem. trump assured the palestinian president over a peace plan before announcing his decision on jerusalem trump called mahmoud abbas ahead of the announcement to stress that a plan was being developed in a bid to limit the fallout from the move. coming up, with brexit talks entering a decisive phase, the l'oreal ceo spells out his hopes for the negotiations >> the best thing that could happen is cancellation of brexit, but i think this is maybe too much to hope for for your heart... your joints... or your digestion...

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another day, another bitcoin headline the price of the cryptocurrency pulled back from record highs after highly volatile trading. this as exchange also have struggled to keep up with the

wild demand. this ahead of the first bitcoin future market this weekend which could fuel more investor interest bitcoin supporters say it's a store of values similar to a precious metal, but critics say it's a speculative bubble. global banking supervisors signed a deal a decade in the making it's the last piece of the basel 3 puzzle a compromise over capital levels and measurement of risk. the swiss re cfo david carl will step down at the end of march. he will be replaced by john dacey who is vice chairman at axo. berkeley is leading the way after half year profits surged 36%. they raised their five-year profit guidance to 3.3 billion pounds they say they delivered 3,170 homes in this period.

l'oreal says it is continuing to benefit from strong behand from uk consumers despite uncertainty in the brexit vote. the company is pushing ahead with brexit contingency planning to ensure it's ready once we hit march 2019 tanya caught up with the l'oreal ceo. i wanted to ask what was the conversation all about when it comes to brexit? >> so interesting. i met up with him in paris yesterday at a globalization conference we didn't have the headline news we have this morning of course about moving forward with the uk divorce deal from the eu and the positive break through happening today. so this is what he had to say yesterda yesterday. >> for the moment everything is fine so far so good the uk market has been a very good market for this year. consumption was really good. of course there was a lot due to tourism and evolution of the

currency but still, very good market. it's an important market for us. the number five market in the world. of course we are getting ready for what could happen, will happen in two or three years time but we will adapt. the good thing at l'oreal, after all, it's a company that can really adapt to many new situations what wou >> what would you like to see happen what happens if there is a hard brexit >> the best thing that could happen is cancellation of brexit i think this is maybe too much to hope for. what i hope will happen is between theuk and europe they find an agreement that allows trade to go on

it's common sense. anything difference from that would be harmful especially for the uk economy >> well, as you can see from yesterday's news, he wanted brexit to be canceled. considering today's news, the break through, i don't think he'll get his wish >> was a question to theresa may from a german journalist saying at any point during these talks, did you think this was a bad idea she stuck to her line, well, no, because that's what the voters said in the uk all those months ago. >> that's what they're saying at the moment but the divorce seems to be going through. >> absolutely. let's stay with beauty we have the global cosmetics and fragrance analyst. i want to ask about growth in the beauty sector. we're looking at maybe 4% next year globally. how great a part -- this is a question i'm always interested in, does social media play in this >> social media plays a critical role we've seen the selfie generation

be quite responsible for the growth in the beauty industry. people are more aware of their appearance, how they look on camera, which is leading them to use more products, try new things we also have the rise of the beauty bloggers who are teaching people how to use products and how to try new techniques which is helping experimentation and more product purchasing in the category >> so interesting, willem, sorry to interrupt, what you're saying is what i -- i visited the l'oreal research center in paris, that's what they were saying in terms of innovation, the whole of social media has been a game changer in the beauty industry. they're saying that people because of selfies, because of that, they wanted to look good the whole time so they have to follow those trends, there's been a huge break through in a lot of innovation to catch up with the social media >> it's also about branding, isn't it a lot of these influences out there are opening up new clannals and nclanna

channels and new audiences which were not so easy to reach in the past >> we've seen the beauty industry as a whole strive for more diversity in terms of age, race and gender. there's a lot of beauty vloggers who are filling a niche area so that is calling on new desires for products, and new techniques from brands to speak to a wider audience and include more people in marketing >> what about sales. apps for shopping, is that changing the way they create sales patterns at the big companies? >> i think it is we just released our beauty trends for 2018, this digital sales strategy is something we targeted for 2018. we have seen a lot of consumer engagement in smartphone apps, digital mirrors in store which are assisting customers, finding

their exact products and matches. >> where do you see it going forward? technology is a huge game changer what are the trends going forward, all of the artificial intelligence, augmented reality that they're now using. >> we've seen a lot of augmented reality, it's teaching people techniques as far as applying makeup to the face we have con attorney generhave cheekbones, we have chat bots and assistants like that being used for customer service. >> if you start watching videos, do you then go out and buy products is that what the data shows you? >> it does we see a lot of people who feel that way they will watch a technique on a video tutorial they will think i didn't know how who do that before this tells me how to do it i can use these products >> it's so much more

personalized, too. it's up close and personal >> it's not just one campaign at the airport. it's on your twitter feed, on facebook >> and l'oreal has a machine that can personalize the foundation for your skin which is incredible moving forward >> i have a question the chemical industry has for days within the crucial secondary beneficiary from the beauty market. do you think chemical companies are looking at ways to go green? is that something you're seeing now from providers to the cosmetic firms >> definitely. we're seen over the past five, ten years a health and wellness movement, making people think more about clean beauty products they pay more attention and have more interest in the ingredients in their products. this is something that manufacturers are responding to. they are looking at heightened desire for naturals and how this can be given to consumers in new ways

consumers are aware of the environmental impact of naturals so we expect more movement in positioning synthetic ingredients in a more natural way and helping people not be so scared from chemicals. >> the question with all of that is the chicken and egg is it the brands introducing these ideas in terms of the more natural products, quote unquote, because i use that term loosely, or consumers demanding it and brands reacting to it? >> i think you're right to say chicken and egg. we see it from a consumer demand perspective. >> i think it is demand again. again, l'oreal is saying they're seeing that and making steps forward to include much more natural products as well >> tanya and charlotte, thank you. thanks for joining us. back to brexit, a break through in the talks speaking in brussels, jean-claude juncker said sufficient progress has been made for talks to progress to

the next phase uk prime minister theresa may said compromise was key to the talks. >> getting to this point has required give and take on both sides. i believe the joint report being published is in the best interest of the whole of the uk. >> european commission chief jean-claude juncker reiterated the prime minister's view. >> we discussed the joint report agr agreed by the negotiators. prime minister theresa may has assured me it has the backing of the uk government. on that basis i believe we have made the break through we needed today's result is, of course, a compromise it is the result of a long and intense discussion between the commission negotiators and those of the uk. as in any negotiation, bot sides have to listen to each

other. adjust their position. and show a willingness to compromise this was a difficult negotiation for the european union as well as for the united kingdom. the european council president, donald tusk, warned the break through was only a step in the long negotiation process. >> with today' agreement, which is obviously the personal success of prime minister theresa may, let us remember that the most difficult challenge is still ahead we all know that breaking up is hard but breaking up and building a new relation is much harder. since the brexit referendum, a year and a half has passed so much time has been devoted to the easier part of the task. and now to negotiate a

transition arrangement and the framework for our future relationship, we have less than a year one of the other major players is prime minister leo vad v varadk varadkar, he said th focus now turns to the next stage of brexit talks. >> i'm satisfied sufficient progress has been made on the irish issues the parameters have been set and they're good now we can move on to work out the detail of what has been agreed to talk about the transition phase, free trade, and the new relationship between the eu and the uk. this is not the end. it is the end of the beginning we will remain fully engaged and vigilant throughout phase two, the drafting and ratification of the new treaties that will be required between the eu and the uk and their implementation. speaking in brussels about an hour ago, the eu's chief

brexit negotiator, michel barnier set out the deadline for the withdrawal agreement >> there is stilt wol work to be done there are others to take we will need to have the final version of the withdrawal agreement ready by october 2018. obviously the reaction from sterling was pretty sizable this morning. we look at the session so far, you can see it's back in negative territory against the dollar cable back in negative territory, earlier on it was at a session high and up at least 0.15% earlier today. pretty significant jump on the back of that break through it looks like now currency traders are not so excited when they realize how many mormons of talks l mother months of talks lie ahead of them.

we cansee deutsche is up 3%. societe generale is up 4%. that's a consistent upwards movement across the board there. turning to the u.s., the latest non-farm payroll data is due out today, just over three hours from now analysts expect 195,000 jobs will have been add in november, that's down from the 261,000 added in october let's look at u.s. futures as well the s&p 500, dow jones and nasdaq all looking to have a positive open. that is it for today's show. i'm willem marx, "worldwide exchange" is up next across the atlantic comfortable you are in it.

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three major breaking stories. the uk reaching a historic brexit deal with the european union. full details ahead congress kicks the can lawmakers pass a two-week spending bill. and burning out of control california on edge as a string of wildfires intensify we're live on the scene. it is friday, december 8, 2018 "worldwide exchange" begins right now. ♪ good morning a warm welcome to "worldwide exchange" on cnbc. i'm wilfred