welcome to "street signs." i'm willem marx. these are your headlines. european equities follow wall street's rally after jerome powell said rates are closing in on neutral levels and signals the central bank is ready to slow down its tightening cycle >> interest rates are still low by historical standards. chinese stocks sell off into the close as trade concerns dampen sentiment ahead of talks

between trump and xi jinping at the g20 summit. paul polman retires after 20 years at the helm of unilever. and eu brexit chief negotiator michel barnier says theresa may's deal is the only one possible as the bank of england warns crashing out of europe could see the uk sink into a recession worse than the final crisis while we're discussing everyone's favorite subject, theresa may is facing some questioning. let's listen in. >> i feel it's the right deal for the united kingdom >> you also told the house of commons on the 15th of november that if we, the house, don't

vote for your deal, there's a risk of no brexit at all could you tell us why you said that and how that could happen >> i said that because some members of the house of commons clearly from their statements to me and other comments they've been making wish to ensure we don't leave the european union there may be various ways people wish to do that, but that, i think, this is -- we're at a point where we have negotiated a deal that people thought we would never be able to negotiate. we negotiated a good deal for the united kingdom there is a clear choice for members of parliament. it's important we deliver on brexit this is a deal that does that. it delivers on what people voted for. it also ensures we can protect jobs, protect peoples livelihoods, protect our union and security. would you accept the only

way there could be no brek xit t all would be through another vote of the people is that the only way you think no brexit could happen >> there's ways in which -- some members of the house want to delay brexit brexit as far as i'm concerned takes place on the 29th of march 2019 you would have heard from individuals within the house who ask about extending article 50 people think the way to avoid brexit on the 29th of march is to extend article 50 what i'm saying is actually what people need to focus on and what i hope people want to focus on is the choice before us of actually ensuring we deliver on the vote of the british people but doing it in a way that protects jobs, security and our union. >> extending article 50 could result in no brexit at all what i'm saying is that -- what i'm saying is that if you listen to members of the house of commons you will hear a variety

of views as to what should be happening on this issue. there are those who are happy to leave without a deal, there are those who don't want to leave at all, there are those who think there could be a second referendum there are those who talk about extending article 50 i think that's an attempt to frustrate brexit i'm focusing on what the british people voted for >> are you looking at staying in the european economic area and the customs union as a potential alternative if your deal is defeated any internal plan going on in number 10? >> as i made clear my focus is on the vote that will take place in the -- here in this house >> i think we understand that, prime minister but is there any planning going

on for that? what i'm f >> what i'm focused on is the votes that will take place december 11th. you want to look at options, ideas. i think it's important that members of parliament focus on the nature of this vote. this is an important point in our history. it's a vote on which we will be deciding whether to deliver on the will of the british people and the good deal that i put forward does that in a way that -- >> i understand that but is there anything the government will be planning in case the deal doesn't go through? is there planning going on for a different approach if the deal is defeated? because it would be strange to us if you said there's no planning going on. >> what's been made clear from the european union and was made clear at the weekend is that this is the deal that's been negotiated this is the deal that people

need to focus on when looking at the vote >> the chancellor said yesterday there will be a cost to leaving the european union because there will be impediments to trade he's right, isn't he the questi this is often put variety of ways, the issue of what happens when we leave the european union there's analysis provided by the bank of england, short-term analysis, short-term forecasts of what would happen in a no-deal scenario the government's analyses sets out a number of potential -- looks at comparcomparisons, no-, the white paper, what that looks at is the impact of trade -- >> we all read that. one thing that is clear from that, no deal is no longer

better than a bad deal >> that depends on what a bad deal looks like. the impact of no-deal has been forecast by the select treasury committee by the bank of england. if you look at the issues raised by this analysis, they show that the deal that we have negotiated is the best deal for jobs and the economy which honors the referendum and enables us to take -- >> but is there a worse deal than no deal >> this deal -- the deal we negotiated is certainly not that it's a good deal >> but you just said no deal might not be the worst outcome because there could be a worse one. what could that be >> there isn't a deal on the table that is in that category >> okay. thank you very much. >> thank you >> thank you very much, prime minister, for presenting your evidence following on from what hillary bend said and given the analysis

by the bank and government yesterday about how catastrophic a no-deal would be, i know the prime minister takes her responsibilities to our country seriously. will therefore the prime minister rule out whatever happens in the vote on the 11th of december that her government would consider leaving the european union without a deal? >> we will be leaving the european yune yn on tunion on tf march. when we come to the vote on the 11th of december it will be for members of parliament to determine if they want to deliver on the vote the british people took, whether they want to do that with a good deal, which does protect peoples jobs into the future. that's -- we are promoting a good deal. >> that wasn't my question i'm asking if you will rule out the possibility that on the 29th of march we could leave the european union without a deal given what we know now from the bank of england, from your government's own analysis, will you rule that out as

possibility? it would be so catastrophic. >> the decision that the house of commons will take on the 11th of december, it will be whether to support, ratify the deal that the united kingdom government negotiated if -- if the house votes down that deal at that point, there will be some steps that will be necessary. obviously we've been doing no deal planning as a government. we've made certain information available to business. at a point in which the -- if the house were to vote down the deal that's been agreed, given the european yun union agrees t is the deal, this is the vote on the table, there would be actions that need to be taken. >> if the deal is voted down on the 11th of december, would you really given what we know from the analysis contemplate taking

britain out of the european union on the 29th of march >> if parliament votes down the deal on the 11th of december, there's a process in the legislation for the leangth of time for government to come back and make statements about the negotiati next steps the timetable is such that people would have to take practical steps in relation to no deal if the parliament were to vote down the deal on the 11th of december. >> let's turn to your deal it's disappointing, prime minister, that your deal, the withdrawal agreement and the political declaration were not modeled in the government's own analysis and insteadthe analysis is on the july white paper rather than your deal. why was that, prime minister is it because frankly there's insufficient detail in the declaration to model it at all >> as you know the political declaration sets a spectrum as to rights and obligations with

regards to access to the market as well as ak spt tacceptance os and checks at the border those details are being negotiated it's still open for frictionless trade. what i said in the house of commons, we have not persuaded everybody in europe yet about frictionless trade the ambition is there to be as near frictionless as possible. what we did do was to set out the sensitivity analysis of that spectrum we took mid point on that spectrum, 50% sensitivity analysis which has been identified if you look at the comments given about the analysis, the chief economist of the ifg has been clear that they set tests that we needed to address to ensure mps and others were able to scrutinize the modeling and determine it appropriately and the published report passes

those tests. >> given in july the white paper had in it frictionless trade and this declaration was not able to achieve that objective, can we assume the outcome of the political declaration without frictionless trade will be a worse economic outcome than what was in the jewuly white paper? >> the analysis has shown a 50% sensitivity point. there's a spectrum in relation to that analysis, which goes alongside the spectrum of checks as well as access to the markets. it is not the case, it's still the government's position that we will be negotiating to achieve frictionless trade what you see in the declaration and in the language around for ambitious customs arrangements is a clear wreckrecognition of e need to reduce that as much as

possible i think it's possible to reduce it to frictionless trade, but some in the european union have failed to be persuaded of that argument >> you said yesterday in the questioning that the analysis does not show we will be poorer in the future, but the government's analysis shows we will be worse off 1,100 pounds per person worse off can you summarize if we will be poorer in the future compared with our current position in the european union >> can i explain what i said in the prime minister's questions, and why i made that point. i think if you went out to a member of the public and said we will be poor other outside the

european union, they assume you mean poorer today. that's not what we're saying we're saying the economy will continue to grow we will be better off in the future the question is about the relative rates of growth in the different models that are identified we have to look at the best option outside the european union because people voted to leave the eu the analysis shows the best option outside the european union which obviously delivers on the vote by being outside the eu, but it is also the best for jobs and the economy is the government's approach. >> i understand that, prime minister, can you confirm under all scenarios modeled by the government we will be poorer in the future compared with our current relationship with the european union >> what the analysis shows is that there will be an impact on the rate of growth in the united

kingdom looking ahead. other things being equal >> that would be negative. >> no but other things will not necessarily be equal this is why i made a slightly -- what some might call a flip comment about forecasts and economic forecasts in response to a question and a statement on monday of last week. the point is that there are many variables that can change that will impact in relation to what happens to our economy outside the european union some of those are in our hands and decisions that we will be taking as a government obviously there are other aspects in terms of the international trade. in 2020 90% of the growth is due to be outside the european union. >> that's all modeled with respect, prime minister -- >> it's not all modeled. >> the trade assumptions about the growth in the rest of the world is modeled the trade assumptions are in the

government's analysis. the government's analysis shows under all scenarios we will be poorer than with our current relationship that's what the government analysis shows >> the government analysis does not deal with all the issues that i've spoken about it doesn't deal with decisions that government might take >> it includes trade, prime minister it assumes we come to trade deals with the united states, australia, new zealand and other countries so that trade assumptions are in the government analysis. >> yes >> thank you >> prime minister, you said austerity is coming to an end, but how will you end austerity >> we are showing how we end austerity in the budget and -- >> that's now. i'm saying what enwe leaen we l. you say austerity is coming to an end there's a lot of demands as my

committee highlights routinely, how will you handle austerity are the financial challenges we'll have. >> we'll ensure we're able to continue to deal with our debt and see our debt falling but there has to be more money put into public services we'll do tha grows into the future. >> prime minister, you said in response to rachel that the economy will grow at a lower rate, so there's less money coming in. so will you be raising taxes or increasing debt? the economic analysis shows the trade impact and that trade impact shows the impact on the rate of growth in the future other things being equal other things not being equal in terms of government decisions. that's why i say you have to be careful when you quote the analysis and looking at what it

is but if you look at the -- in a spending review next year we'll set out the spending path and plans for the government when we're outside the european union. there are many aspects that will go into that there are also many issues -- i could point out to you, not in answer to your question, but i could point out in a separate point that the bank of england analysis shows our deal has that deal dividend. >> the bank of england analysis, mark carney said it would be the worst recession since the '30s there will be less money coming in >> bank of england analysis is in a no-deal situation that's one of the options out there as the chair highlighted we have a very rocky vote coming up in the next 13 days so given where we are at now, given the spending review could be -- it will be the first post-brexit spending set up for the government, there will be less money available under any

analysis, how will you end austerity? >> i won't sit here and tell you what the spending review will have in it before -- >> prime minister, you have two -- >> no. >> you could raise taxes or increase debt. those are simple options there is a lot more to it. >> there is a lot more to it, with due respect let's look at -- let's look at some circumstances back in the summer, there is money no longer being paid to the european union, we also spoke about the fact that at that stage people may need to contribute more into taxes for the national health service. we saw in the budget that we can fund that national health service increase without asking people to raise taxes. these are not absolutes that either do you this or you -- you

do y or x. there are many variables in this >> we get smoke and mirrors about how government finance is going. today we hear the police are not investigating a third of all crimes, we've seen real challenges in the public services if austerity is over, you have to fund that somehow we'll have less money coming in after brexit what's the plan? >> and you will see how we will be funding our public services over the next three years when we announce the spending review. >> on the withdrawal agreement, as my colleague highlighted, that hasn't been properly modeled yet. are there plans of having modeling of that before the vote >> the withdrawal agreement? >> yes >> the political declaration sets up the spectrum i've been clear about what the

government will be aiming to achieve. >> the government cost analysis looked at different options, but not the option before us that's the point >> there is a spectrum -- >> will you be doing that? >> there is a spectrum identified in the political declaration. we will be negotiating in relation to rite rights and obligations as far as checks what we have done in the analysis is accepted things by external bodies and people can see the impact of the variation of where we appear on that spectrum the aim of the political declaration, the clear intent of the political declaration will be as low on that as possible. >> is there anymore information coming to parliament before the vote about the economic impact >> we provided the economic analysis >> can i remove on to the

prepared of 2k3wgovernment there's a real concern that the very best outcome is sub ooptim, especially if we crash out without a deal what will you be doing to make sure there's proper support for business and tax payers generally to deal with the outfall of brexit given we have shown that the government departments won't be ready in time >> government departments -- the treasury put money -- made money available to government departments in preparing for a deal and no-deal >> we know the money is there, but they haven't -- they acknowledge that it's subopted mall, and they won't be able to deliver everything perfectly on the 29th of mar mucch >> what we'll be doing is saying we are leaving the european union but the implementation period will give us that period

of time where we are operating much as today. the issue you're questioning is no-deal preparations, if we have no-deal, what will preparations be we made clear there are key decisions to be taken depending on the outcome of the vote on the 11th of december >> theresa may taking some very confrontational questioning from mps at the parliamentary liaison committee focusing on brexit and at times seeming to struggle to come up with answers to some of those questions. we have breaking news about deutsche bank as well. i'm happy to say that annette is li live for us in frankfurt what we are seeing on the street in front of deutsche bank is many police cars are lights on

the state prosecutor says they are searching the offices at deutsche bank because of money lau laundering suspicion apparently according to reports deutsche bank has offered clients to set up vehicles in jurisdictions which is not okay with the law here in germany that's what we're hearing currently. we have not heard from deutsche. deutsche is apparently working on a statement to have the public informed. the prosecutor is saying they're searching the offices, and that's what i can tell you from now. of course shares are going down quite tremendously because everybody is reminded of all these legal problems that deutsche bank had been fighting for years and years. the last time i seen such a big ra raid at deutsche bank's headquarters was in 2012

back to you. >> thank you very much worth pointing out that last week speaking before the danish and european parliaments a whistle-blower former lly emploe by danske bank said there was a bank involved with cash flows passing through the estonian bank he did not name deutsche bank but reuters says they were involved in that the bank of england says the uk financial system is resilient to the wide range of risks it could face including brexit. the central bank published the results of its latest stress test on wednesday and gave all of the uk's banks a passing grade. financial institutions were tested in scenarios similar to the 2008 global financial crisis the report said the ce capital one ratios would still be double the average levels that had been held before the 2008 crash tom kinmuth is in amsterdam and

has been listening to that back and forth with theresa may what do you think the last 24 hours will mean for brexit based on some comments from the prime minister there >> it's interesting that there was no plans outside of the current discussion i suppose the key thing is the banks did very well yesterday in the stress tests the balance sheets are good. the biggest risk to financial stability is simply brexit at the moment essentially the uk voted to move house, they don't know which house to go to, and they could potentially stay in the house they're in at the moment >> how do you judge the performance of uk banks given all of the confidence problems around brexit at the moment? >> the uk banks are suffering. they have to pay around 20 basis points more for senior debt at the moment when the fundamentals of the banks are quite strong, especially mortgage portfolios are very strong.

we have santander uk, ltv at 39%. the banks have benefited because of the bank of eng forland forcg more capital requirements. it's nice to see banks could fail and it wouldn't have a huge impact on the function of the system so essentially the uk banks are suffering because of brexit when fundamentals would lead to a different scenario >> is there a hypothetical moment, there's a huge amount of uncertainty over the next two weeks about this process, is there a hypothetical moment in the near-term where the cloud of brexit disperses from these british banks? >> no. essentially if we look at every scenario, it could go on for a long time. even, for example, say they said we don't know which choice we'll go for, let's discuss a referendum, then that could take six months at least to december cuss what questions are raised in the referendum. what items then would be discussed by parliament. what would happen with article

50 even despite the vote in a few weeks it could still continue for quite awhile these brexit december cushion discussions. >> one more question o based on the numbers from the treasury yesterday in the uk and the bank of england, the predictions for the worst-case scenarios in particular, do you get the sense that will concentrate the mind of british lawmakers when it comes to this vote on december 11th? >> it definitely rings bells with mps if they now have to vote for a decision that is clearly not in the short-term interest of the country, then that's a very big thing to go for. you can bring your mind back to was the referendum questions correct, you had to leave the efsh eu but there was not a discussion of soft brexit, hard brexit in the end it was marginal

i think both the stress test and the discussion from the government yesterday will bring clarity to what people are voting for and it is essentially what would have been nice to have seen before the referendum on the eu, that we could have had these numbers before people voted. >> one quick final question then about the economic situation across the other side of the english channel. you have the ecb with its financial stability review later on today what do yochlttoday. what do you expect to hear from them >> i think it should be okay previously they raised issues on mpls, profitability, both of which are improved funding is on the radar essentially the monetary transmission is not really working within the eurozone because of italy you can lower interest rates as low as you like, but when the funding costs of banks increase, it will increase mortgage rates in italy, and it doesn't really function in the monetary stimulus

really we've seen unicredit have an expensive issuance of senior non-preferred. it means that the very low rates cannot function straight through the economy. i think that will really be on the mind of the ecb and when the report comes out today they won't have the real under-performance and worst funding conditions that have happened in the last four weeks. it's a real cross roads for the ecb. there's a lot of things happeni happening. the ability they have to stimulate growth is going to be definitely a worry >> tom, thank you very much for joining "street signs" today and thank you for hanging around while we heard those comments from theresa may >> coming up on this program, stocks surge as jerome powell changes his tune more on that rally after this break.

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sharply as frank fofurt prosecus raid offices amid allegations. theresa may faces sharp questions from uk lawmakers. >> some in the house want to delay brexit brexit as far as i'm concerned takes place on the 29th of march, 2019. european equities follow wall street's rally after jerome powell said rates are closing in on neutral levels and signals the central bank is ready to slow down its tightening cycle >> interest rates are still low by historical standards. and they remain just below the range of estimates of that level that would be neutral for the economy, that is neither speeding up or slowing down growth chinese stocks selloff into the close as trade concerns dampen sentiment ahead of talks between trump and xi jinping at the g20 summit. it's been a positive start for the day so far in france and

the uk when it comes to equity trades you can see ftse 100 up almost 1% similar story in paris with the cac 40 in germany the dax is holding up at 0.67 higher the ftse mib also up about a half percent the pound has fallen slightly against the u.s. dollar, down by 0. 0.25%. the euro also trading slightly stronger against the dollar. let's check in on the u.s. market open. you can see the s&p 500 being called slightly lower after yesterday's rally. dow jones also looking to open slightly softer, more than 54 points lower at this stage the nasdaq also looking to open down 27 1/2 points

one of our top stories, deutsche bank shares are trading sharply lower after the frankfurt prosecutors office said it searched six of the lender's offices in the frankfurt area annette is in frankfurt outside one of those offices why are these searches happening? >> the prosecutor is saying that deutsche bank and employees, two of its staff were active in some money laundering exercise and channelled money coming from criminal activities to off-shore vehicles in tax haven jurisdictions. that's the suspicion, and the prosecutor is now raiding these six different offices. among one is the headquarters of deutsche bank in order to gain more evidence for that suspic n suspicion. there are 170 employees or

prosecutors searching those offices. the headquarters of deutsche bank is behind me. in front of the headquarters there's a long row of police cars the last time i seen such an action was back in 2012. of course shares react violently because clearly deutsche bank was having so much problems with litigation affairs, it did cost them so much money and everybody was kind of hoping that this is the past. but it seems not -- that seems to be not the case given the prosecutor now raiding the offices. they only do such a thing because clearly it provokes a lot of publicity if they have serious concerns and also some evidence gained before they actually raid the offices. for now, deutsche bank is not commenting on it i'm hearing that they're trying to prepare a communique or some

commentary for the markets >> annette, thank you. u.s. rates are close to neutral according to jerome powell stocks rallied after he struck a dovish tone. the softened stance marks a turnaround from two months ago when he said neutral was still a long way off it also comes after escalating criticism from president trump of the job that powell is doing. his headline comment to the economic club of new york signals the fed could be nearing the end of its rate hiking cycle. >> interest rates are still low by historical standards and they remain just below the estimates of that level that would be neutral for the economy. >> powell also reiterated that risks were balanced and he was not concerned about the recent

market rout. >> important to distinguish market volatility and events that threaten financial stability. large increases in equity pricing could affect confidence. today we do not see excesses in the stock market >> brokerage reaction was mixed. jpmorgan maintained its call for four rate hikes next year. bmo lowered its forecast to less than two i'm joined by richard kelly from td securities. what are you expecting to see in hikes over the next 12 months? >> i think we're set for a hike in december. i think we get three more next year i think the fed will stop hiking or come to a protracted pause next year. it's difficult to get four i think people might be overreacting to think there's one or two coming. >> how do you think about the reaction in the equity markets yesterday in response to his comments >> we've seen a decent period of

risk coming off now. a lot of that followed september where we had a significant push higher in u.s. yields. throughout that inesthers were tripping over themselves thinking how high rates would go no one was thinking about what this means for equities. as we went into october we've seen risk markets come back. some of this is correcting that overreaction i think having a bit of calming language from powell -- you mentioned before him coming out in october saying we're a long way from neutral that spooked investors this was a much more managed message yesterday. >> let's drill down into the message. what were the key points he made that you felt were new >> i think it's reinforcing the idea from the fed, they're trying to move away from the idea of what is the point estimate of neutral and talk about a range. that's important there's a different of a reaction function. they feel like they're leaving an era where it was easier to make monetary policy because they were far away from neutral. as they get closer they wanted

to acknowledge we don't know where neutral is we're kind of guessing as we get into there we need to be much more reactive to the data and much more reactive to what's going on in productivity. i think there's a different reaction function that we might see. they wanted to give markets a simple message which is we're not going to kill the economy to hike rates we will look at the data and economy and manage this appropriately. >> do you get the sense that this was an acknowledgment and there are a variety of opinions when it comes to the future path >> i think there's not a fed view of where is neutral if you think about the votes, we are used to watching brexit and counting the votes if you look at the fed and think about voters who have a lower estimate of neutral, if those are the voters who think we should not be overshooting neutral, you can think about getting more and more dissents as we cut through this we are getting to a point where you may see an inflection of how

that looks >> do you think investors are over-egging the pudding and seeing ghosts where the fed doesn't see them >> i think you've got ton this period -- q3 data was soft we keep getting that through so investors are looking at a world where all of a sudden the data is getting softer the fed talks about hiking the ecb is talking about ending qe and they're spooked >> is this not just a bit of a parlor game where investors across the world are parsing the view of one man and is the fed trying to talk in a different way rather than communicate a different message? >> we almost always overread what the fed is saying i think they're trying to leave their options open some will think it means four. others think it means two. the fed is saying we'll figure this out as we move along. >> thank you very much for more on why cnbc's jim

cramer says powell blinked in the face of market pressure, head online to cnbc.com. german chancellor angela merkel says a ukrainian city must not be cut off from the sea. she says she will raise the issue with vladimir putin at the g20 meeting. her comments come as the european union raised its utmost concern about the dangerous increase in tensions between russia and ukraine european leaders branding moscow's actions as unacceptable the block stopped short of fresh sanctions despite calls from presideth ukrainian president. and vladimir putin dismissed the event as a minor border issue. >> translator: it's clearly a provocation. a provocation organized by the authorities, and i think the president himself ahead of the presidential elections scheduled to happen in march of next year. >> all of this is happening at

the russia calling business summit in moscow julianna, what has been the focus so far today >> good morning. president putin was the key event yesterday, answering some of those questions around key geopolitical issues, ukraine in particular today the main event has been a panel whereby the deputy prime minister of maxim spoke and spoke about russia's digital economy. a bit of a shift from the geopolitical focus we saw yesterday. i caught up with him after the panel and asked how the strange relationship between russia and the west is impeding their abilities to advance their digital agenda here's what he said. >> for this moment we continue to keep very good relationship with each part of the world. whether it is western partners, and we are trying to construct

good relationships and various bases for relationships in our technological relationship and technological contacts with our partner in the west, in the east, in any part of the world and we didn't feel any discrimination or any restriction in these kinds of activities, ba yecause the digil world was over the borders and so on. and we are going to make a good relationship with each partner from the west to the east. >> and just in the east, are you particularly focusing on china and saudi in terms of those relationships? >> no. we haven't any particular focus on china because -- of course

china is the largest economy of the world, in real gdp and it is within of the global technological centers. and we are allies. >> that was maxim akimov telling us that russia is forging ahead with efforts to advance their digital economy despite pressures from the west. i also asked his view on the selloff in cryptocurrencies to which he said he was not surprised at all and was happy to see the global hype dissipate. he said russia does see a future in blockchain for use in government services, things like registering property rights but does not see it as a stable enough technology to be used with currencies and digital services in the fintech sector as the event here in moscow comes to a close tomorrow, focus will shift to that g20 summit. willem you mentioned how

chancellor merkel plans to address the ukraine clash with president putin at this event, we are also expecting president putin to meet with president trump. that's what president trump said yesterday. we also caught up with the head of the russian sovereign wealth fund yesterday and the expectation is that president putin also meets with the saudi crown prince and the saudi oil minister plenty to look out forg out of deutsche bank it has now acknowledged that the raids today by the frankfurt prosecutors office relate to the panama papers. a number of news organizations revealing some details about off-shore accounts so far the german government brought back well over 100 million euros as a result of that and deutsche confirming that the panama papers is the reason why

german prosecutors are now in their offices in frankfurt we'll take a quick break we'll be back with you soon after that this isn't just any moving day.

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signs. of course there's going to be a lot of attention paid to what's going on with trade globally the trump administration of course is exploring options to raise tariffs on chinese autos u.s. trade representative robert lighthizer said he was examining all available tools to match the 40% duties that china is leveeing against u.s.-produced vehicles presidents trump and xi jinping are set to meet saturday night on the sidelines of the g20 summit in argentina. it will be their first meeting since the summer eamon javers filed this report on what to expect. >> leaders from around the world descending on argentina. so many different international flash points for leaders to talk about, particularly vladimir putin and russia in the wake of

that naval action against ukraine that we've seen over the past several days. also the crown prince of saudi arabia is here in the wake of that murder of jamal khashoggi a lot for diplomats to focus on here at the g20. one relationship front and center is the relationship between donald trump and xi jinping of china the two men are expected to meet and talk face-to-face this week. financial markets have been looking at this meeting as an opportunity for the two sides to come to a deal and break the trade impasse that we've seen throughout 2018. officials on the american side in the run up to the summit have been cautious to dampen expectations suggesting maybe not much is possible here. larry kudlow telling reporters this week that he was disappointeded wi ewith chinese negotiators saying the president himself has been disappointed. that suggests they don't think there may be a significant break through happening here officials in washington talking now not about a trade deal but a

trade cease-fire in argentina, in which all sides agree to simply stop raising tariffs on each other, then try to come back for a trade deal next year. i'm eamon javers in buenos aires, argentina let's check in on european markets and how they're trading. all four major indices across the countinent are trading higher the ftse 100 is up 0.75% the cac is trading 0.81% higher. in germany, despite the controversy around deutsche bank and the fact that the frankfurt prosecutors offices has been raiding deutsche bank properties, their share price has not been too much of a drag on the xetra dax it is trading more than half of a percent up in italy the ftse mib is slightly above the flat line, less than a tenth of a percent

higher checking in on the currency markets. we saw that reaction in cable to theresa may's comments earlier in this hour the pound is still significantly weaker against the u.s. dollar it is trading lower. the euro/dollar is equal at this stage. the dollar weaker against the yen and strengthened against the swiss franc. checking in on the u.s. futures markets ahead of the open in new york you can see all three of the major insdices there are tradin lower. the dow jones down more than 86 points nasdaq looking to open down about 34 points. the s&p 500 also looking to open around 10 points softer. one of our main stories, shares in deutsche bank are trading sharply lower after the frankfurt prosecutor said it searched six of the offices in the frankfurt area

the bank says it will fully corporate with authorities annette is in frankfurt. you predicted the bank would issue a statement a few minutes ago. what does that statement say >> deutsche bank is saying they're fully cooperating with the institutions, and that they are providing all the information which is necessary but they cannot prevented th tho be fair, because there are 170 offices from the general prosecutor's office which are raiding the bank currently and the headquarters the suspicion is that based on what the authorities have found in the so-called offshore leaks or panama papers that deutsche bank channelled money, which was generated from criminal activities to off-shore havens in off-shore vehicles. the prosecutor is saying in a statement that only in 2016 there were some 900 clients

involved with the volume of more than 300 million euros whether they say this is all related to criminal activities or not, that is not very clear as it stands now, there is a clear concern that deutsche bank once again might be entangled in illegal activities, meaning there may be more litigation charges to come. back to you. >> annette, thank you very much. worth pointing out that the german government spent 5 million euros for those papers last summer. this is a consequence of that. that's it for today's program. thank you very much for tuning in "worldwide exchange" coming up right now.

it is 5:00 a.m. at cnbc global head quarters authorities raiding deutsche bank's offices in germany. the fed made investors cheer yesterday, can they keep delivering the president heading to argentina today for the g20 summit. oil alert, crude oil falling below 50 bucks for the first time since october of 2017. and apple giving a big demand update for its newest