welcome to "street signs." i'm willem marx. trade turmoil hits stock markets around the globe as president trump threatens more tariffs while beijing vows to fight back stocks in china closed sharply lower with the shanghai near a two-year low as mainland invests pull out of those markets. and europe follows suit by opening deeply in the red. the downturn affects u.s. futures with the dow called

nearly 400 points lower. basic resource stocks lead the european selloff as trade fears weigh on investor sentiment. ecb president mario draghi is expected to be speaking in portugal any moment now. we'll bring you that speech as it happens something to watch over the course of this morning you can see live pictures from portugal where we expect mario draghi to speak any moment now chinese stock markets closed sharply lower. the shin zu.s. has threatened to impose a 10% tariff on 2$200

billion worth of chinese goods beijing blamed washington for initiating a trade war and vowed to respond proportionatproporti. joumanna, how much has this spilled over to europe >> quite a lot the heat map behind me is almost in red we're only an hour into the trading session. we have big moves in asian equities we were looking at the shanghai down more than 3%. also nonchinese equities are trading weaker to the tune of 2%, 3% stoxx 600 is already down more than 1%. this is a market that is gripped a bit by concerns about further escalation of trade wars let's look at individual indices. the picture is not pretty. we have xetra dax leading the down trade down 1.7%, more than 200 points

in germany as well, willem as you've been talking about, lots of focus on angela merkel coming up to a two weeks for the chancellor there let's not forget about the political back drop as far as germany is concerned ftse mib, speaking of political noise, ftse mib is struggling this morning down almost 300 points in trading or 1.3%. the other majors are also trading in the red ftse 100 down 50 points or down 0.7 %. let's move on and look at where the sectors, which sectors have been underperforming you can see the cyclical sectors are the main underperformers, the main baskets leading all of these indices south. technology is down almost 2% basic resources, commodity sector is down 2%. autos is down 1.7% all of those really are names that have been caught in some of the cross hairs of the various

tit-for-tat, whether on the steel or aluminum side or technology side. these are sectors that you would expect to be hit the most. that's what's happening. because of all of this risk off, because of this sea of red, what we're seeing is a bid for safe haven assets what are those we have spot gold. gold prices up $4. not a major move, something is trading green this morning it tells you some money is going into commodity safe haven. gold up 0.3% we have fixed income rallying ten-year treasuries, they're about four, five basis points stronger on the day. the yield is 2.87. the safe haven currencies are trading stronger dollar/yen at 1.80.

>> mario draghi is saying inflation is gradually returning towards the ecb's objectives uncertain permeates the economic outlook. we heard from gjoumanna about that uncertainty monetary policy in the euro area will remain patient, persistent and prudent. these are comments from mario draghi speaking any moment now in sintra. joining us on the line is michael price, and peter seller also joins us in london. this has been a bad day for asian equities u.s. futures pointing well down.

is this all because of mr. tru trump? >> looks like it we were talking about a trade war risk two, three weeks ago, now we're in a trade war we've seen this move from january to march to now following the disastrous g7 meeting, and overnight talking about the chinese trade with the u.s. just in excess of 500 billion. trump said there's potential tariffs of nearly 400 billion of tha that >> in singapore i've seen the yen pretty significantly stronger against the u.s. dollar is that should be a safe haven from where you sit >> i suppose the bigger question is that. many banks have always referred to these trade tensions and all the rhetoric coming out of the trump administration as just noise. if this noise is turn fling inta

trade war, we have a strong market impact. >> you're seeing the dollar, euro and sterling all significantly weaker against the yen. >> if you look at the tariffs applied so far, not those threatened, not the noise, they're not that significant when you look at these countries. why are people reacting the way they are >> the tariffs announced initially on the steel and auto imports, they're not that significant compared to the gdp effect so 0.1% both for the chin and in t china and the states that's what's been announced so far, but what's coming the first is a lower trade effect the second thing is what happens to confidence what are investors

doing with the announcement of these tariffs. the third thing is if these tariffs get worse, if we enter into a full blown -- full-scale trade war, what happens is the stock of euro oversees assets, and those assets and the stock is basically worthless because all the production is brought back on to the shore or the states the fact this is coming out of nowhere and they're ratcheting up tension all the time, it doesn't give space for solution. if you have this trade discussion, you should have it behind closed doors, not out on twitter. it's not an intelligent way of conducting a trade discussion. >> michael price, do you agree with that idea that this is about confidence, sentiment and

the loss there of is that what's driving asian equities >> i agree with this many people agree we're late stage economic cycle we have fiscal stimulus, tax cuts that have come at the wrong time if you have trade sanctions. the trade tensions and so forth, many people thought it was rhetoric mr. trump is talking tough but he may not act now it looks like real conviction behind what they're trying to achieve. that can be destabilizing. that may not be priced in at all because everybody was complacent but everybody who read mr. trump's book, "the art of the deal" it seems to imply in these situations there is room for error and things getting out of hand and mr. trump may go to extremes to prove his point maybe the chinese are not the right people to do this with >> michael price, thank you very

much we will now hear from mr. draghi in central portugal. he's now speaking. let's listen in. regarding the ecb's monetary policy as outlined at last week's press conference, progress towards a sustained adjustment in inflation has been substantial so far with longer term inflation expectations anchored, the underlying strength of the euro economy and continuing monetary accommodation provide grounds that the range will continue in the period ahead and will be maintained even after gradual winding down of our net asset purchases. but this requires monetary policy in the euro area to

remain patient, persistent and prudent. let me review the recent economic developments. in 2017 growth in euro area turned out stronger than we had anticipated. the annual growth rate in the fourth quarter was the fastest for a decade by 2018 growth has moderated, and so far has come in below our expectations in the latest euro projections, growth for to 18 has been revised down by 0.3 percentage points this has prompted some questions about the sustainability of the ongoing expansion, which is unusual at such an early stage of the cycle in historical terms, the current growth period is comparatively short in length and small in

size since 1975 there have been five growth phases in the euro area the average duration from trough to peak is 31 quarters, with gdp increasing by 21% over that period the current expansion has to date lasted just 20 quarters and gdp is less than 10% above the trough to determine whether the moderation has any bearing on medium-term growth, we need to distinguish between the underlying drivers in part the moderation is related to supply side factors some of these are temporary in nature and have already subsided such as the cold winter weather in large parts of the euro area. but it may also be broader supply factors at play

in particular there are increasing signs that capacity constraints are starting to bind in some countries and sectors. capacity utilization is above the long-term average in euro area and large economies the question is how much and how quickly firms will be able to increase supply to relieve these limits adjustment is already taking place in the labor market. the labor force participation rate in the euro area has risen by 1.5 points since the crisis and stands at an all-time high business has been actively trying to expand capacity by increasing labor inputs. employment has risen by 8.4 million since mid 2013 and is growing in nearly every euro area economy

this has, indeed, been a job rich recovery. compared with the previous growth phases going back to 1975, the contribution of labor to growth has been the highest on record. accounting for almost half of average annual growth. the flip side of rising labor utilization has been the lack of capital deepening. whereas capital deepening contributed 0.6% to annual growth in the previous growth phases, contribution to the current phase is approximately zero this could explain why signs of capacity constraints now emerge. growth has largely been achieved by applying more labor to existing capital firms should increasingly turn to capital to lift capacity. this is a process that has

already begun as investment has picked up and now stands above its pre-crisis level certainly conditions are in place to further force the investment including improving profitability and supportive financial conditions this is in line with the latest european commission forecast for potential output which projects an increase in the contribution from capital and a decrease from lane tall over the coming years. all this suggests the supply side factors we're currently seeing are likely to slowly unwind over the medium term. where we need to pay close attention in the near-term is to developments on the demand side. by in large domestic demand is

robust and the circle between employment and consumption is still in place external demand has been less positive, but this may partly reflect a pull back from the strong performance of last year, as well as temporary factors in our main trading partners. yet what is undeniable is that uncertainty surrounding the growth outlook has recently increased. the down side risk to the outlook comes from three main sources. the threat of increased global protectionism prompted by the imposition of steel and aluminum tariffs by the united states, rising oil prices, treated by geopolitical risks in the middle east, and the possibility for persistent heightened financial

market volatility. set against this are some risks to the upside. stemming mainly from the fiscal expansion in the united states and more in the medium term from likely fiscal expansions in several countries in the euro area we will continue to monitor these developments closely, but for now our growth expectations for the medium term remain essentially unchanged and we view the risks around that outlook as broadly balanced. for monetary policy the key issue is how growth feeds into wages and then inflation it is well known the reaction to accelerating growth has been particularly slow in recent years as i have discussed

elsewhere, as a matter of fact here last year there are a variety of factors that could explain this, measurement of slack and a change between slack and wages. all of this has subjected uncertainty into forecasting wage dynamics which persist today. there are signs that slack is now diminishing. and that the relationship between slack and wages is reasserting itself different measures of slack such as broad and headline unemployment appear to give a similar picture of lessening spare capacity, though there is still high unemployment among specific groups and regions. in keeping with this, the unexplained residuals in the standard wage phillips curve for the euro area gradually reduce,

and which growth is beginning to pick up. compensation per employee has lifted from the trough in mid 2016 to now growing at 1.9%. so far the increase has been mainly explained by the wage drift component, which tends to react faster to cyclical improvements in the labor market but annual growth in negotiated wages has already started to move upwards looking ahead, havenrecent wage agreements in germany, france and spain point to a continuation of these wage dynamics there are signs that the restrain in public sector wage growth, which had in the past dragged on aggregate wage growth is starting to relax we are seeing an increase in

domestic cost pressures. domestic price pressures are grower at the highest rates since february 2013. producer price inflation, the services sector where wages represent 40% of costs also picked up. that said, higher wage growth doesn't mechanically translate into higher inflation. even if wages continue to rise as we expect, we cannot exclude that structural factors beyond the central bank's control might hamper the transmission of wages into consumer prices more intense competition through globalization or e-commerce may abili act to compress margins. at present no such factors have influenced inflation in the euro area what is key is that

inflation expectations are well anchored here we are seeing positive signs. the latest ecb survey of professional forecasters showing longer term inflation expectations stable at 1.9%. so, overall there is growing evidence that broad based economic growth is beginning to generate positive price and dynamic bs but uncertainty lingr throughout the various stages of this process so what does this imply for our monetary policy? we have set out three conditions that must be in place for net asset purchases to end we need to see the convergence of inflation towards our aim over the medium term we need to have sufficient confidence that this convergence will be realized and the inflation path needs to

show resilience and be self-sustaining without additional net purchases assessing these conditions is forward looking exercise because the full effects of monetary policy are felt only after long lags we have to rely on our projections, the probability distributions surrounding them, and the extent to which they are dependent on our monetary policy actions. in terms of convergence, the latest projections see headline inflation reaching 1.7% in each of the next three years. inflation excluding food and energy, simple measure of underlying price pressures, is expected to climb to higher levels over the same horizon these are the latest in a series of projections which foresee

inflation converging to our aim over a medium term horizon over the course of the past year that path has held firm, and the timing of when we expect to obtain our objective doesn't appear to have receded further into the future. our confidence in inflation path is also rising on the basis of two indicators we've been using to assess the probability of inflation convergence. the first is our own internal estimates of the distribution of future inflation outcomes. ecb staff have constructed a measure that combines the implied inflation from a variety of sources, model based estimates, market based measures of expectations and surveys such

as the spf these sources are then weighted by their historical ability to accurately forecast inflation. that aggregate probability distribution of two-year head inflation expectations has evolved in three dimensions that provide confidence that inflation adjustment is sustainable. the mean of the distribution has increased. the dispersion of the distribution has narrowed. and the downward skew has declined second, we have been monitoring a range of measures of underlying inflation including model-based statistical measures such as what we refer to as the pcci, an exclusion-based method such as inflation excluding food and energy measures of underlying inflation typically provide some early

information about the rate at which inflation will stabilize in the future once all the noise that is affecting current observed headline measures has faded away though underlying inflation has not yet shown a clear upward trend, the improvement in wage growth, domestic producer prices and inflation expectations gives us more confidence that as resource utilization continues to tighten, underlying inflation will eventually begin to rise. finally, market pricing provides some comfort on the resilience of inflation to the anticipated gradual ending of asset purchases. inflation expectations are influenced not only by economic fundamentals and the cumulative impact of past policies, but also by market expectations of future policy settings including net asset purchases.

ahead of our meeting last week, the medium market expectations for net purchases beyond september 2018 were small. it follows that the contribution to our inflation outlook from expected future net purchases was also modest. as a result of this assessment, last week the governing council concluded that progress towards sustained adjustment in inflation has been substantial so far as we announced, we anticipate that after september 2018 subject to incoming data we will reduce the monthly pace of the net asset purchases to 15 billion euro until the end of december this year, and then end net purchases. that decision, while

acknowledging the increasing uncertainty, shows that we are confident that the projected convergence in the path of inflation will occur with sufficient probable withoibilpro net convergence. monetary policy can accompany the economic recovery. but the projected convergence remains reliant on the substantial cumulative impact of past policies, which are locked into the supportive financial conditions present today significant monetary policy accommodation is still needed to support the further build up of domestic price pressures and headline inflation developments over the medium term

our latest unanimous decision ensures that the necessary monetary policy support remains in place this support has a number of elements, including the net asset purchases until the end of the year, the sizable stock of acquired assets and the associated reinvestments, and our enhanced forward guidance on a key ecb interest rates decisions also reflect the desire of the governing council to retain the ability to react to potential future shocks to ensure the sustained convergence of inflation to our medium term aim. they embed precise elements of state contingency into our forward guidance by clearly specifying and

communicating our reaction function, we are able to act in a consistent and predictable fashion. acting in this way helps reduce any market uncertainty that might rise concerning our future actions. let me restate our recent decisions on policy instruments. first, anticipated ending asset purchases this year is subject to incoming data confirming the medium term inflation outlook. moreover the app can always be used in case contingencies materialize that we do not currently foresee. second, we announced that we intend to maintain our policy of reinvesting the principle payments from maturing securities purchased under the asset purchase program, for an extended time after the end of

net purchases. in any case, it is another element of optionality and in any case for as long as necessary to maintain favorable liquidity conditions and an ample degree of monetary accommodation. third we convey our expectation that the key ecb interest rates will remain at present levels at least through the summer of 2019 and again optionality in any case for as long as necessary to insure that the evolution of inflation remains aligned with our current expectations of a sustained adjustment path. this enhanced forward guidance signals that we will remain patient in determining the timing of the first rate rise, and we will take a gradual approach to adjusting policy

thereafter the path of short-term interest rates that is implicit in the term structure of today's money market interest rates broadly reflects these principles. as indicated at the ecb watchers conference earlier this year after the end of net asset purchases, the main tool for shaping our policy stance will become the path of our key policy rates and the forward guidance about their likely evolution finally we have stated that we stand ready to adjust all of our instruments as appropriate to ensure that inflation continues to move towards our medium term aim of inflation at 2% adjustments to our instruments will remain predictable, and they will proceed at a gradual

pace that is most appropriate for inflation convergence to consolidate taking into account continued uncertainty in the economy. in short monetary policy in the euro area, and this would not surprise you, will remain patient, persistent and prudent. thank you. >> mario draghi making a bit of a joke there about his patience at the end of that speech in sintra, portugal to recap what he was talking about, saying the markets were right in terms of pricing for september of 2019 rate hike. he says they will be gradual and patient when it comes to assessing futd chore decisions in terms of downside risks, global protectionism and oil prices and financial market volatility i'm joined still by peter. in terms of inflation, cpi, this is about so many different factors now.

it seems like he is placing focus on wages in europe >> yes seems the revision last week with inflation estimates, you have a flat inflation projection of 1.7 % for 2018, 2019, 2020. that was reflecting the energy price increase and the euro/dollar effect the underlying wage growth story is more comprehensive. saying we have reducing spare capacity in the labor market, increasing participation rate, it's a job-rich recovery and we're seeing little signs of wage growth. so he's more constructive on wages. probably as constructive on the wage component as i've heard from the ecb for a long time so, that gives me reasonable confidence they'll do what they said they'll do. but we'll have to wait for quite some time before they do anything seems it will be 2019 and september before we talk about a

potential rate hike. >> joumanna bercetche joins me around the desk. none of those downside risks are surprises, but something worth forev focusing on? >> i thought if we go back to last week's meeting, forward guidance eclip clipse everythin else taking one step back, remember the growth and inflation projections. on the inflation side they increased inflation projections for 2018, going up to 1.7% on the growth side they lowered their forecast from 2.4% to 2.1% it does tell you they are getting concerned about some of these downside risks i thought it was interesting in the speech he used that platform, the whole world is watching, to highlight what those risks are. he said global protectionism, not a surprise, rising oil prices, that could change in the

next couple days we have the opec meeting coming up, but then again oil prices have risen significantly, and that's one reason why they upgraded the inflation for this year, and market volatility. all of those are happening this morning. those are present risks at this time bringing it back to monetary policy, it's about keeping optionality. september 2019 is a long time away that's what they want to preserve they want to preserve optionality here >> talking about growth as well. we got some numbers in saying that germany's growth forecast is at 1.8%, down from 2.6% this year, 2.1% in 2019 what is the growth story for europe is that a challenge for draghi >> there's no question it is the ecb have done their growth in a forecast tells you they recognize the growth we've seen thus far and what they see

ahead. the growth should -- we have decent growth now, we should get in around 1.8%, 1.9% for the next two, three years which is still above trend. trend growth in the eurozone is lower than elsewhere in the world. that's still a good story. it's just that we won't get more upside surprises the way we did last year and the last two, three years. that's what's happening in growth >> talk about relationships between wages and slack. that's something we heard about from mr. draghi. he also talked about the impact a changing world is having on economic measurements, on models is it a difficult time to be a central bank governor? >> no question looking at the phillips curve, they have become much flatter in the last 30 years. that relationship between inflation and employment, it's not as strong as it was. there are different reasons for it people say it's automation other people say it's the impact

of globalization and global supply chains. it's also how we calculate and measure inflation. that's not well understood in central banks or elsewhere so we have this conundrum, we have a job-rich recovery but wages are not doing an awful lot. it's a problem for sure. >> peter, thank you very much for coming in. appreciate your input. we are waiting to hear from the ecb's chief economist peter priatt who is due to speak at any moment the u.s. government threatening to impose an additional 10% tariff on 2$200 billion of chinese goods. beijing has vowed to respond po

po proportionately. has that downturn continued in europe >> it has. the board behind me is like 95% in the red versus green this morning. it tells you that almost every single stock in europe is reacting negatively to the headlines crossing overnight and the under-performance in asian equities led by chinese equities shenzhen down almost 6% at one point. bounced back a bit, but still losses of more than 5% or so non-chinese equities down 1%, 2% individual indices are not faring better. xetra dax again having a weak day in trading german index is down 1.75% or 220 points you have the political back drop as well. ftse mib down 1.4% on days like this you would expect periphery names to

underperform the cac 40 down as well. ftse 100 is a relative out-performer. ftse, as many of you know, it's an export-focused index but also exposed to miners. you would think on a day like this it would be doing worse, but relatively outwer forming. only down 0.8% dpoeld h gold has been pushed higher. some key names in this basket are trading weaker we have rio tinto, bhp trading down more than 2%. back to the original tariff sectors that would affected, that's steel and iron. here, arcelormittal, thyssenkrupp, trading down more than 2.5%. 3% concerns there that this

tit-for-tat will keep going, and that we will see more repercussions, not just out of the u.s. but out of eu as well that's not a good thing for some of these steelmakers that's the answer to your question >> thanks. if you have comments or reaction to mr. draghi's statement, you can get in touch on twitte twitter, @streetsignscnbc. kane to the rescue england kicks off its world cup campaign with a win. more football after this break for your heart... your joints... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally found in jellyfish,

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last-minute last-gasp header by harry kane sealed a 2-1 victory in the world cup against a stubborn tunisia side. and belgium is on their way to a comfortable 3-0 win against panama adam reed had a tough afternoon

and evening watching these games. how controversial were some of those decisions involving video assistant referee? >> talking about v.a.r., the video assistant referee. yes. they were controversial. tunisia were given a penalty in the first half either side of -- sorry, in the middle of two harry kane goals the v.a.r. decisions, controversial throughout the world cup. penalty given to sweden thanks to v.a.r. earlier in the day when they beat south korea england, they didn't have v.a.r. on their side. they got the win any way it was harry kane they had to thank for it england started quickly in this game and came out of the blocks with all guns blazing gareth southgate's side got off to the best possible start when harry kane gave them the lead inside 11 minutes. that is satini equalizing.

one minute into added time, there is harry kane strangely unmarked one of the best strikers in europe, but never mind harry kane got the winning goal. it's interesting that england's margin of victory could have been greater because of decisions they didn't get for them v.a.r. comes when a clear and obvious decision is missed by a referee in this tournament there is a team back in moscow in full referees kits, socks, the whole thing, and they're watching for mistakes. this judged not to be a penalty. >> the rugby tackle. >> tunisia got a grip in the game by a penalty. and they got a grip of harry kane whenever they could also not a penalty >> looks well marked there >> absolutely. getting tighter is what the managers say, but not given. so, england felt slightly aggrieved. but they got the win any way

>> i got an important question after watching england play yesterday, do you think they'll win the world cup this time? is it coming home? >> i'm still -- i was around when three lions was released in 1996, we thought it was coming home then. it's not come home since whether they can win the world cup -- i think this is a very open tournament. we have seen brazil, argentina, spain, portugal, of course germany not win their opening games. england are off to a good start. but they still have a long way to go. >> the dutch didn't make it sadly, but the belgium -- >> did they even make it to the world cup? >> they did not. they're my proxy team. the belgium team had a strong start. >> in group "g," they had a strong start but had to work for it against a stubborn and physical panama side look at this griezmann, wonder goal the goal of the tournament,

could be the goal of the tournament by the time we see the end. and romelu lukaku, we've seen him do this for manchester united this season already belgium's all-time goalscorer and opened his account in the world cup with a brace. two for him. two for harry kane england and belgium meet in the final group game england play panama on sunday, belgium play tunisia on saturday >> ahead of today's games, russia playing again already, what's the opportunity for them? >> as far as predictions go, they have gone out the window with what russia did in the first game against saudi arabia. 5-0. everyone thought they would finish bottom of the group the lowest ranked team going into the tournament. they could be the first team into the knockout stages when they play egypt tonight. but there's a man on the screen there who could play a crucial part could we please see mo salah in this tournament? that's what a lot of people have come to see in russia 2018, mo

salah unused substitute, he's been nursing that injured shoulder that happened in the champions league final he could feature in tonight's game and that could mean it could be any sort of outcomed ge egyptians is enormous. >> mo salah do want to see there is somebody that people don't want to see. >> sepp blatter is flying in for the match tomorrow gasps from the studio at the mention of his name. banned from football but not banned from attending football games. if you're requested by vladimir putin to come and watch a game of football, portugal against morocco -- >> hard to say no. >> hard to say no. noticeably he avoided the opening game where he would have had an awkward confrontation

with the current fifa president, but it looks like he will attend the morocco match tomorrow in moscow >> adam, thank you very much we heard from mario draghi this morning in sintra, portugal can you give us a taste of how the reaction has been on the european markets >> absolutely. the story overnight is about the extra tariffs imposed by the u.s. to chinese goods to the tune of 2$200 million spanish index is down n only slightly, perhaps that is on the back of the weaker currency this morning. the dollar is now trading at an 11-month high, that's pushing currency pairs versus euro and versus sterling lower. of course that is helping the ftse 100 index let's look at some of the safe

havens usually in a move like this and risk-off days you will see a bid go into fixed income u.s. treasuries trading stronge stronger, 6 1/2 basis points stronger mario draghi did give a speech, not market moving, but reiterating what he said last week spot gold is up 0.2% not that much. dollar swiss is pairing back some of the gains we saw earlier in the session swiss franc was trading stronger but now is turning dollar/yen continues to be that of a safe haven currency yen is 0.7% stronger that currency pair trades through 1.10 it's a big week for the energy complex. steve is in vienna already for this big opec meeting already that will happen the next couple of days. there is some expectations, we heard from the ecuadorian oil minister yesterday suggesting that saudi and russia agreed to

raise output to the tube ne of million barrels. that's not been confirmed, but we're seeing a reaction in the energy complex crude is trading down 1.3% also brent is trading down two-thirds of a percentage point. it's not all about trade wars this week, it's also about oil i briefly want to draw your attention to the dollar. i talked about it a few moments ago. dollar index trading up slightly, 0.3% and this is back to its strongest level we've been in about 11 months time you can see the big move actually in dollar happened towards the end of april, not many people were expecting this to happen. the beginning of the year there were expectations that dollar would get a bid. didn't materialize, just happened a couple months ago before we move on, let's look at u.s. futures we talked about asian equities we talked about european equities and the picture for

u.s. futures is not pretty dow seen opening down 370 points or 1.5%. similar moves for nasdaq you would expect the tech sector to be hit as well. >> the ecb will continue to be patient when it comes to hiking rates, specifically as uncertainty clouds the central bank's economic outlook. that was the message that president mario draghi delivered in remarks made moments ago. the euro has not seen a massive wobble over the course of the last few minutes annette is live from that ecb forum. what struck out to you, annette? >> actually, mario draghi was more or less explaining the actions they have taken last week in riga when they were giving us revised forward guidance when it comes to rates and also announced the end of their quantitative easing program. given the selloff in the markets

and given the increased uncertainties on trade, that was the most interesting part. mario draghi clearly is also worried about that let's listen first what he had to say about risks >> the downside risk to the outlook comes from three main sources. the threat of increased global protectionism prompted by the imposition of steele and loom tari lo aluminum tariffs by the united states, the possibility for persistent heightened financial market volatility. >> of course heighten t eened volatility can come from the fact that the fed and the ecb, we're forgetting about the boj for the moment, a tightening their policy stance and by that starting to withdraw liquidity

from the markets less liquidity could mean more volatility he was also referring to last week's decision to give us more meat on forward guidance of the interest rates during that speech in sintra >> our latest unanimous decision ensures necessary monetary support remains in place this has many elements including the net asset purchases until the end of the year, the sizable stock of acquired assets and the associated reinvestments and our enhanced forward guidance on a key ecb interest rate. decisions also reflect the desire of the governing council to retain the ability to react to potential future shocks to ensure the sustained convergence

of inflation to our medium term aim. >> so what the ecb is trying to do here on the ground is to say, okay, we gave you that forward guidance, but still look at incoming data. this whole thing could also change to the down side but also to the upside. in another part of that speech he was stressing that they can also unfold more measures in case there's severe deterioration of the consideration coming from all the risks he was referring to. so bottom line that mario draghi wants to keep it flexible when it comes to the policy toolbox they have in their hand. so potentially reacting to a worsening of the situation but also potentially reacting to an improved outlook when it comes to inflation with that, back to you >> annette in sintra, portugal,

thank you very much. let's look quickly at the u.s. futures ahead of the market open you can see all three of those major indices called significantly lower ahead of the open the dow jones in particular looking to open down more than 350 points that is something we'll watch closely over the course of the day. that's it for today's show in london i'm willem marx. brian sullivan is in london again today and coming up next with "worldwide exchange" right here, right now.

live from london, i'm brian sullivan another very busy global day for news and for your money. there is red all over your screens. the markets are selling off. president trump threatens a new, larger round of tariffs against china. that has global investors looking for any safe harbor they can. coming up, reaction and analysis from the jim