i'm joumanna bercetche the spread between italian and bond yields spikes to the widest level in five years, and bank stocks hit a 19-month low as rome strikes a defiant tone on its controversial budget. lega's top economic adviser suggests italy would be better off with its own currency and luigi dimaio accusing french governments of wanting him to

fail. and car americas at the paris motor show tell cnbc multilateral disputes are hurting the industry >> we believe export and global fe fair trade is what we need, and we're coping with the situation, but we need clear, fair and global trade. british conservatives are told to rally around prime minister may, but boris johnson prepares to take the stage amid leadership challenge speculation. we speak to foreign secretary jeremy hunt later in this show good morning there is lots to get through, but i want to start off by talking about the move in global equity markets we had a sentiment hit towards the close of the session in the u.s. yesterday that as some concerns about

global growth started weighing on commenting from christine lagarde. and also front and center, of course, is that of trade concerns and whether or not the nafta agreement will have implications for u.s./china. doesn't seem to be the case at this point in time and in europe our focus is on the italian budget discussions of course the meeting is taking place at this point in time. we have heard from various members suggesting they are not taking kindly to this 2.4% deficit proposal the reaction in markets has been negative all of the european markets are in the red big moves in italian bond yields italian btp's up at 3.37 now the highest on the spread level in about four years time

real big moves in bond space two-year btp at 1.53 this is having an impact on the banking sector european financials are struggling some italian names coming into focus. unicredit down 2%. ubi banca, the name that's underperforming this morning, down about 3%. not as bad as they were an hour ago. a lot of these names opened up 3%, 4% weaker. so we recovered some ground. but the picture is one of a sentiment hit. european markets are trading in the red. the lega party has struck a defiant tone suggesting itsly would italy would be better off if they returned to their own currency luigi dimaio looked to distance himself from the comments saying they did not want to leave the eu or exit from the euro he did hit back at the budget

and deficit goals saying he believes france and germany hope his government would fair. this as the italian economy minister spends his time in luxembourg >> translator: the issue is with the quality of the budget. this budget is a growth budget if we win the bet on growth, everything will be okay. if we do not win the bet on growth, we'll change the budget as we always have to do. >> those comments that we were talk about earlier seem to have injected a bit of fear into the market about italy essentially being tied to a currency and their problems would be sold if they were not part of that currency he said leaving the euro is not in the government's program and it has no plan to do so, so borghi backtracking on comments that came out earlier. the market did not react well to

those comments or any comments coming out of italy suggesting they may want to leave the euro currency willem marx is live from luxembourg the number one question is does the finance minister have any credibility at this point? >> he seems to have credibility with his fellow finance ministers. speaking to a number of them yesterday and this morning after he met with them, he's now returned to rome to try to finalize some budget details, they say we should give the man a chance he has until the 15th of october to submit a budget draft essentially. he has said there are still a number of moving parts in rome in terms of how that budget is constituted. the 2.4% number that they have publicized last week seems to be relatively set in stone. a lot of other elements are not.

obviously his growth assumptions may be different from those we hear from the european commission in the weeks to come. i had a chance to catch up with the commissioner on final affairs and i asked about borghi's comments about the benefit of leaving the eurozone. here's how he responded. >> italy is a core eurozone country. it's in the interest of the eurozone to be strong, to have a strong euro and a strong eurozone so let's work together let's work with the constructive spirits, that's my spirit and that's the only comment i have for these speculations furthermore, the italians themselves are attached to the euro because they know that it protects them. so let's not feed some rumors or i think some thoughts that are really inappropriate >> he talks about them being

rumors and thoughts, but claudio borghi is one of the top members of lega, so they are no longer rumors, this is expressing a long-held view on the euro exit. market action has been severe. i had a chance to talk to a number of finance ministers this morning about a potential conflict, a clash between the italian government and the european commission over this budget the belgian finance minister was asked whether he had a message for investors in the eurozone who might be concerned about a potential clash. here was his telling response. >> we have had some crises before within the eurozone we learned from it a lot of things have been changed. the banking union is there the esm has been strengthened. so i think investors should not be afraid of the eurozone. we're in full discussion with italy. we made clear yesterday that the rules are there to be obeyed by everybody. that's everybody's

responsibility also italy's so i don't see any reason at this point in time for investors to run away from the eurozone. >> you mentioned the word crisis are you concerned this could be a crisis >> i'm referring to what we've seen in the almost 20-year history of the euro area there's no denying that with respect to grease and othe gree countries, we've seen a crisis, we've drawn lessons from that, we're in the process of drawin further lessons from that. it's hard to deny that the eurozone in its institutional format has been strengthened >> now, in his ill policompariso greece, he is no different from jean-claude junker who also made those comparisons who says he doesn't want to see another greek crisis, another threat to the eurozone i should add that not something that a lot of people have been talking about, the idea that this is a crisis it does seem the market has

reacted strongly five-year record spread between the italian and german yields. what's interesting is looking at the details coming out of this budget is what it means for the growth assumptions that geovanni tria has made and whether they will be able to meet those targets. >> all eyes on what happens on october 15th when they are officially submitted to the european commission. thank you for bringing us the latest the new nafta has landed the united states mexico-canada agreement needs to be approved by lawmakers in all three countries but is expected to be signed by enrique pina nieto leaves office. mexico agreed to new rules of origin for the auto industry which will raise the regional auto production from 62.5% to

75%, it improves workers wages and rights u.s. trump administration yielded to a 16-year sunset clause longer than the five-year originally targeted. canada eased restrictions to its agriculture markets giving dairy farmers to 3.5% of its market. speaking after the announcement, president trump hailed the new agreement as a victory for american workers >> once approved by congress, this new deal will be the most modern, up to date and balanced trade agreement in the history of our country with the most advanced protections for workers ever developed >> some of the world's top auto

americas welcomed the new deal between the u.s., canada and mexico however speaking to cnbc at the paris motor show, some warned about the impact of ongoing trade tensions >> our plant is exporting 70% of its product and manufacturing to the world. so we created jobs in south carolina by the export model that's why we believe exporting global fair trade is what we need with that well-balanced distribution we are coping with the situation, but we need clear, fair and global trade >> from toyota's point of view, we are pleased there is now an agreement between america, mexico and canada. a new agreement. and we hope this will now pave the way to stop this type of trade embargoes, activities which were going on. so the detail of that we'll have to see how it's going to unpack,

but we welcome this agreement. >> clearly auto suppliers are also closely monitoring the trade situation. charlotte is in paris and is joined bay keen obser eed by a f trade talks. >> i'm joined by the ceo of michelin in paris. sir, let's have your view on this new nafta deal. >> good morning. i think it's a bit early to give all the details of this deal we have now the agreement. i think it's gently a positive move because when we consider the world today, it's probably a step towards smoothing the tensions in international policies i think it's good. we badly need to smooth down these tensions we are clearly in favor of free

trade. of course on a fair basis, but free trade coming from there, the announcement of this agreement is a positive note we just need to go and understand the consequences will be direct. >> can this be seen as a victory for trump and validating this tough talk approach? >> i wouldn't say it that way. it's clear that the fact that the agreement has been able to be signed is probably a victory for everybody. again i need to look at the details to be sure what i'm telling you there. if we look at trade as a battle every day, getting victories to someone, we'll never get out of that story we need to smooth it down. of course the world is complex, force is sometimes necessary to move but i think the most important part is to look for fair trade

and that is the ultimate goal for every policy in the world. >> are you concerned this kind of deal can put more pressure on china and rubber stamp the trade war rather than ease it? >> yeah. that's a way to see it but there's another way to look at it there's a sense that the agreement is possible. that there is no reason why at some point the mindset should not be appeased. so i look at more positive than negative. >> when you consider the direct impact on michelin, one of your competitors had to issue a profit warning this summer you, however, confirmed your guidance with this year. how concerned are you about tensions carrying on and affecting activity into next year >> if the agreements do not go enforce, and if there's nothing

that can be found between china and north america, we'll have to assess what it means for everybody next year. today is too early of course on the positive side we feel these tensions could smooth down probably in the coming months. then things will be much better. but so far i would say that we do not have too many concerns as far as michelin is concerned early days, obviously. we need to check that in the coming year. >> we are hearing this conference talking about reshaping globalism because of the rise of populism, you co-wrote a report mandated by the french government to talk about the role of cooperations in society you mentioned in the report, you talked about sustainable capitalism, and that maximizing shareholder value should not be

do done can you talk about that? >> these days with the increase of populism across the world, notably in europe, not only in france but countries around us, i think the corporations have a major role to play, to show that there is a way forward notably through what we call sustainable capitalism it's all about more human face capitalism, which will insist on long-term rather than short-term, and we'll try to fight against global financization of the economy what that means is corporations, which they already do most of them, is not focus on profit only -- of course they must generate profit, it's a survival issue, but also consider the stakes, environmental and social

consequences of their activities given that it becomes what we would call a favorable corporate/social responsibility. if you live in that context and you create this ecosystem, then you generate what i would call the sustainable capital. people feel that companies know what you are talking about. if you're consistent with your actions, then people feel much more committed, much more engaged. it's a way to stop the populism which is growing on the fear that this capitalism is going to grow everywhere and crunch everybody. >> on the same topic let me ask you quickly about brexit michelin has two factories one in scotland, one in northern ireland, are you making preparations for potential hard

brick as it becomes more of a reality every day? >> yeah. really we're questioning how we'll finish i don't think it really -- that somebody knows if it were to be a hard brexit, there would be consequences. because there's trade between the continent and great britain, in both ways so the balance is not exactly clear today. honestly we feel it would be much better if we could get to a much softer brexit hard or soft, it's going to take time before the things settle. probably people do not assess exactly how long it will be to settle down. >> thank you very much we'll keep talking about trade war and potential hard brexit later on with angel gurria,

that's in about an hour's time >> looking forward to that thank you for that interview. coming up, we'll head back to the conservative party conference in birmingham where we'll talk brexit with helen dickinson. stay with us - i love my grandma. - anncr: as you grow older, your brain naturally begins to change which may cause trouble with recall. - learning from him is great... when i can keep up! - anncr: thankfully, prevagen helps your brain and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single time. - checkmate! you wanna play again? - anncr: prevagen. healthier brain. better life. my mom washes the dishes... ...before she puts them in the dishwasher. so what does the dishwasher do? cascade platinum does the work for you,

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welcome back to "street signs. theresa may is working tirelessly to convince her own party that her brexit plan is the right one. the staunchest criticism has come from boris johnson who will take stage at the party conference later today earlier nikki morgan told steve sedgwick that the economy will take a hit from brexit >> we are seeing peoples household income has fallen. and remember, brexit has not happened yet but investor sentiment is going down high street is struggling. inflation is running higher than expected wages have not quite caught up i think the governor of the bank

of eng land is doing his job which is reminding us that whatever we do there will be a hit to the economy >> let's get out to steve up in birmingham what can you tell us >> thank you very much well, there was the chair of the treasury select committee answering my question about project fear, have we all been too cautious, too worried about the ramifications of brexit, soft or otherwise? let's get another view on that helen dickinson joins me my question to her was has there been a material field that has not been happening due to brexit or not >> i think retail sales oscillate and have been growing 1% to 2% a year, that has do with how much money people have in their pockets we've seen wages not growing as

quickly as inflation so actually peoples disposable incomes are being squeezed that's having an impact on the industry that's brexit aside. that's real reality. >> that's the point. so regardless of brexit, life will go on on high street. some analysts told me about 20 years ago, say the write off the british consumer peril it's true. the consumer continued to spend money regardless of household debt are we focussing on the wrong thing? are the tories focusing on the wrong thing saying it's all about brexit >> there's a need to get the process done because we have not left yet we have to get to next march the most important thing is making sure we don't end up in a no-deal brexit ways. what are the key ramifications for that >> if that happens, potentially we'll have tariffs on goods that come into the country.

extra taxes on the cost of importing. processes that at ports that could lead to delays in terms of availability of products and could feed into prices for consumers. this is all about what the impact is on us all as consumers. for many voters of brexit this came down too immigration. let's face it, many foreigners do not come from a high skill base they come and work in the service sector, in the retail sector they service the british consumer if they talk about immigration caps, a points based system, high skill get in, low skill don't get in, we have a real problem with costs on high street >> we have we are slightly concerned about what the proposals will look like later today from a retail industry point of view, there is a -- looking in

warehouses, distribution centers, city center stores, there's a reliance on eu workers. we think the focus should be not on the skills that people have, but it should be demand-led system based on what are the needs of the economy? where are the parts of the economy where we need that extra resource, whether it's skilled or lower skilled what about my angry viewers spewing their cereal going hang on, you two, british workers can do those jobs. it would be good to get them into retail and retail distribution, good to get them picking the fruit. what's your response >> look across the economy, we have the highest employment we've had for decades. it's not like there's a huge amount of capacity there any business person i talk to, they understand and recognize there's a need for control that was, as you say, part of a

referendum debate. but actually us about how the system is put in place and how we deliver for what economy needs and what consumers do day in and day out >> let's not talk about brexit for a whole one minute let's talk about real issues for retailers, which i know from my history -- my family were retailers, it's about business rates, it's about their rates for the cost of their premises as well. any movement on those you think would be positive for members? >> well what we're seeing is a sort of real structural transformation, a change that's going on within the industry some of the losses of high street businesses, some restructurings are sharpening the focus on this issue. as you highlight that's being driven by technology, changing the way we shop, and also cost

pressures. many of which are government policy related whether it's the apprenticeship levee or business rates. business rates is the big one. there's been some discussion about business taxation at the conference yesterday the chancellor talked about looking at digital services, of international businesses so the most important thing for me and for the retail industry is making sure we don't have new taxes that impact on the supply of goods to consumers, because that would have an implication >> i have a horrible feeling it's about taxing someone else more but not about taxing the retailers less >> that's the risk that we need to make sure doesn't materialize. >> we'll tax the internet, ladies and gentlemen that's our answer. that will save british high street i'm not sure that's the remedy we did a whole 90 seconds on brexit it's a privilege to speak to you.

helen dickinson. i'll be back on brexit in a short while but talking to jeremy hunt, the uk foreign secretary, especially after his controversial comments comparing the eu to the soviet union yesterday. that's coming up on "street signs. >> comingup in about 15 minute time also coming up, we head back to the paris motor show, we xttch the chairman of gac motors introducing add on advantage, a new way to save on travel. now when you book a flight you unlock discounts on select hotels that you can add on to your trip up until the day you leave. add on advantage. only when you book with expedia. my mom washes the dishes... ...before she puts them in the dishwasher. so what does the dishwasher do? cascade platinum does the work for you, prewashing and removing stuck-on foods, the first time. wow, that's clean! cascade platinum.

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welcome to "street signs." i'm joumanna bercetche the lega party's chief economist says there is no plan for italy to leave the euro after sending shockwaves through market sending the spread between italian and german leads to a five-year high. british conservatives are told to rally around theresa may but boris johnson prepares to take the stage we speak to jeremy hunt in about 15 minutes time.

president trump hales his victory in the trade deal with canada and mexico but some carmakers say multilateral disputes are hurting the industry >> we believe export and global fair trade is what we need, and we're coping with the situation, but we need clear, fair and global trade. the whistle-blower in the money laundering scandal at danske bank will testify we will talk about the bank's issues in about a half hour's time ♪ >> it is not a pretty day for european markets all of the major indices are trading in the red led by the ftse mib, the main underperformer this morning on the back of the slariovarious

headlines we've been getting about the budget willem has been in luxembourg covering that meeting. you can see the geographical map of europe is red today want to draw your attention to what's happening in the fixed income space big moves in the italian yields. two-year yields up 15, 16 basis points en it-ye the ten-year has come c a bit. there is a lot of agitation in fixed market spreads investors are concerned about some of the language coming out of italy, language that puts them at odds versus european counterparts let's look at italian banks as well the banking sector in europe is

the biggest underperformer as far as sectors are concerned italian banks are also struggling down 2% to 3%. they tend to have a correlation with what the italian yields are doing. that's a reflection of some of the angst that people have towards the european and italian story over the next couple of weeks. doesn't look like we'll get more color on how those conversations are going before october 15th, which means the market will be on its toes for the next couple of trading sessions. let's take a look at u.s. futures. yesterday we did have a brief sentiment uptick after the nafta renegotiation occurred we had a positive close for s&p and dow. nasdaq ended in the red. today that picture turned south. dow is opening up about 28

points lower >> the whistle-blower who first revealed alleged money laundering at danske bank has been invited to testify before a committee. the announcement was made on facebook danish media is reporting that the invitation is for november 21st danske bank shares have fallen over 30% in the last 12 months amid the 200 billion euro scandal which led to the ousting of the bank's ceo. we'll speak to vera jourova about danske's issues just at 11:00 central european time. the german government minister also outline a plan today to cut diesel emissions.

the deal includes retrofitting old diesel cars. carmakers will pay for most of the costs of upgrading vehicles. the chairman of gac motors, zeng qinghong is hoping the u.s. and china will reconcile their trade tensions annette has more >> it's a first for a chinese carmaker to have a big wish to be an exporter also to the world. for now the chinese market is the market to be in for all those car makers from the western world, but this one is trying to turn the story around and bring their vehicles to europe and to a later stage to the united states. clearly that plan is not coming at a great time given the volatility of trade relations, especially between china and the

united states. i caught up with the chairman of gac motors and asked how badly his company is affected by the trade war between the u.s. and china. >> translator: the trade war is harmful to both the u.s. and china terms of the economy today we're in an open globalized world we hope china and the u.s. can compliment each other. the trade volume is huge if a trade war occurs, it would adversely affect the world economy. we certainly wish to launch our products in the u.s. market soon we originally planned to launch our cars in the u.s. by the end of next year, but now with the 25% additional tariffs, it's had an impact on our plans >> the chinese market is an interesting one also when it comes to the electrification of

the fleet, and the new word ld carmaking, chinese car producers have big support from the chinese state when it comes to the new smart car, they think they're ahead of the curve and can offer their product at a come prettivpetitive price i asked whether he's trading europe now, preferring europe as a place to market their cars >> translator: speaking of our expansion plans, we're looking at one belt one road countries, europe and russia. we set up sales operation in russia coming to the paris auto show, we want to showcase our products and technology so european consumers get to know us and so that we can enter the european markets soon >> the chinese market is so big, the chinese authorities are

really tough on emissions, that all the big carmakers are moving faster when it comes to the electrification of their fleet to sum it up here at the paris car show, automakers are looking at electrification, autonomous driving as well, but that's the distant future right now they're trying to weather a perfect storm for the industry, trade tensions, a lot of r & d costs and trying to keep their margins as investors are used to. with that, back to you >> thank you for bringing us the latest from the auto show. coming up, we'll cross back to the conservative party conference for a first on cnbc interview with jeremy hunt stay tuned

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welcome back to "street signs. i want to get to our next guest, uk foreign secretary jeremy hunt joins us now thank you for joining us you're the man of the moment in

many ways. you courted a lot of controversy with our friends and people more antagonistic towards great britain with you're speech yesterday. i want to quote you and get your response what you said was the eu was set up to protect freedom. it was the soviet union that stopped people leaving do you want to explain your comments >> any sensible reading of the speech would see this was a passionate request, desire for friendship with our european neighbors going forward i was saying if the at fetitude of thu is that someone who wants to leave the club is punished that's not consistent with ideals the eu was set up to stand up against soviet totalitarianism that's why the eu's attitude does need to change in the negotiations they need to sit down and say over the next 10, 20 years what's mattered for europe is

that strong partnership between the uk and continental europe. that's what's given us peace and prosperity let's not tear that up >> i was told yesterday that the eu didn't feel they were doing anything other than being tough negotiators. he was complimentary about michel barnier are you mistaking tough talk with tough negotiators >> it's the outcome i care about. i want a friendship, a partnership with europe based on an understanding as to what has given us peace and prosperity we've had since 1945 if the eu's attitude is that they want to put us on the naughty step, in the sin bin, british has to be punished that will undermine that friendship that's a bad thing for the whole of europe. >> you're a seasoned politician, sir. you know the value of your words

and actions, and the proximity to eu and the word soviet. the proximity of those words puts you in a similar bracket to mr. tusk, or mr. macron who is calling brexiteers as liars. does that lower the tone >> you have to look at argument i was making it is clear i'm not saying the eu is like the soviet union. i'm saying if their view that the only outcome of the talks that is acceptable for the eu is for the uk to lose out, be punished to take a decision to leave the club, that's against the very ideals that the eu set up to defend that's the wrong step. that's why if it's a negotiating tactic, fine, that's negotiations what i care about is really what the outcome is, what the destination is they're heading to what i want and i think what the british people want is a

friendship and a partnership with europe. >> critics of this conference say it's as much about a beauty pageant as it is about getting policy forward was that part of your audition for a job that may or may not turn up in the future, ie becoming the prime minister of the ik uk? >> absolutely not. i want theresa may to stay for a long time. i said in my speech she's doing an incredibly difficult job. she's doing it well. if there's one mistake that the europeans can make right now, it's to underestimate theresa may, her resolve and her determination. and i think she will get us a great deal i think she's the only person who can really do that now we should all be backing her >> the other strong speech was from dominic raab as well, secretary for leaving the eu i thought he said don't push us, pretty much. we're being polite, but don't push us, we'll walk away is it possible in your mind that the uk will still walk away with

a no deal? >> it's possible because theresa may will not sign any deal that's not compatible with the letter and spirit of the referendum if we are not able to get an agreement, which is what the british people voted for, we would walk away. but it's not our preferred outcome and i don't think it will be the outcome. i >> i have one for question for you. the attitude of rush sharks putting gru agents it appears on the streets of salisbury and committing a murder, that's the accusation leveled against the kremlin. does this make russia our greatest foe in the united kingdom and throughout western europe >> it's aggressive behavior. it's unacceptable behavior it's not just about a bilateral dispute between british and russia, this is the first time that chemical weapons have been used on british soil it's a very, very big thing. for the world to move from the

situation where it was unacceptable for anyone to use chemical weapons to one where chemical weapons use becomes normalized is a tragic step backwards. our response is this is not acceptable, it's against the rules, and the price is too high if do you this >> to confirm, the eu is not like the soviet union. these are your words >> and they have to be careful how they behave in the negotiations, consistent with eu standards. >> that with you jeremy hunt saying no, the eu is not the soviet union, but they got to be careful in how they behave back to you. >> thanks. we did finally get clarification on that point and what the foreign secretary meant by comparing the eu to the soviet union. standard charter has told cnbc it looks forward to resolving its legacy issues with

u.s. authorities following a report that a fine over its sanctions violations could top 1$1.5 billion the bank has been bracing for penalty for breaking sanctions against iran, sudan and libya. the case has been running since 2012. akzonobel says it will return 5$5.5 billion to shareholders after the sale of its chemicalmaker this week, they will deliver on a promise made on march to share the majority of the proceeds of the sale with investors. ge shares closed 7% higher after the company's board ousted john flannery and replaced him with john cult last year flannery announced a

turnaround plan that would return ge to growth. shares have lost more than half of their value since he took the top job. bill griffith has more on this surprise shakeup. >> reporter: the ceo, larry cult, may be new, but ge is facing a lot of familiar problems, like jack welch and jeff immelt before him, john flannery was a company veteran spending 30 years at ge, but his 13-month run saw ge stock decline by half. kulp is the first outside tore take over ge in his 126 d-year history. he ran daniher for 14 years, and with him in charge the stock gained more than 460%, more than four times the s&p's 105% gain over the same period even with ge's poor performance this year, it's a stunning and

unexpected move. >> the people who are there are some of the best people in the world in engineering, science and math this is a jolt to them now. they'll need to be feeling that they're valued, really valued, and that they won't be taken advantage of for quick decisions. >> quick decisions may be in order. today's move comes with news that ge is also taking a $23 billion writedown in its power unit, a division that includes alstom, acquired by immelt in 2015 a move that backfired as global demand for power generation fell ge also plans to shrink its healthcare manufacturing business further and questioned about the stake in baker hughes. >> if you're buying the stock today, you're buying hope. ge has been overpromising and underdelivering for quite some time

>> there are concerns about the dividend that was cut in half a year ago, just where ge is heading and what a new ge will look like are questions that continue to lingerment. >> it was not communicated well to the market. it's a huge disappointment to investors. how long do you let investors twist on the fine, but 13 months is a short window. >> i want to talk about what's happening with european markets today. we are seeing big moves in italy. let's recap what's going on. ftse mib, now trading at the lowest level it's traded since april of 2017. more than a year and a half as the bank selloff continues to pick up speed. yesterday we were talking about the proposal put forward by the italian government, 2.4%

that proposal at odds with what europeans were expecting overnight we had some positive comments from european commission by saying we're willing to engage in dialogue with our italian counterparts, even though what they submitted is not compliant with the stability and growth pact. there is time between now and october 15th for things to be reassessed we also heard from deputy prime minister dimaio who said the markets have been terrorized by speculators. we also heard from borghi, the italian league lawmaker and he sent shivers by suggesting the euro currency is the reason why italy is struggling economically he later backtracked on some of

those comments and suggested there are no plans to pull italy out of the euro. >> as i mentioned, we're hearing different comments coming out of various policymakers as you can see, yields are back to 4.5-year highs. ten-year back at 3.40. two-year italy up to about 1.57. there is some serious concern about how this will play out that is having an impact on the italian banking sector some key name there's down more than 2% to 3%. unicredit down about 3%. given the ftse mib is such a banking and utility-heavy index, no surprise that the italian index is also down about 1.5% with all of these headlines. generally speaking we know that the europeans are looking to have some form of a dialogue

with italy, but dimaio seems to be doubling down on that 2.4% target let's quickly look at energy as well we have oil trading at four-year highs. some of the performance there is on the back of sanctions on iran that go into effect in november. brent crude trading close to the $85 mark wti crude at $75 join us after the break when we will speak to the secretary-general of the oecd. we'll be right back.

. it is 5:00 a.m here are the five most important things that you need to know to start your tuesday crude oil continuing its creep higher. the brexit battle heating up theresa may making some major headlines as the clock ticks towards an exit. a shakeup at google. the man in charge of the most important unit at the company is leaving unexpectedly facebook tapping a company insider to lead instagram. and all those subscription businesses that keep popping up, are they in trouble? the one company that may be signaling yes. it's tuesday, octobe