♪ good morning and welcome to "street signs" i'm joumanna bercetche. >> i'm julianna tatelbaum. these your headlines >> well, europe stock 600 hits a record high as the u.s. and china announce phase 1 of a trade deal is complete i have the chance to catch up exclusively with steven mnuchin, america's treasury secretary. >> the deal will be signed in early january, and then we'll start phase 2. and phase 2 may be 2a, 2b, 2c. we'll see. but this to itself is a huge

accomplishment for the president. but, mixed global data offers a reality check as both german and french manufacturing figures miss forecast with germany's private sector contracting for the fourth month in a row. shares sink after the home appliance maker warns bigger than expected hit from a plant in south carolina. a tasty deal iff will buy dupont's nutrition and bio science business creating a consumer giant worth $45 billion. well, happy monday, very warm welcome to "street signs. let's kick off the show with a fresh data point that's just crossed the wires. that's the eurozone flash pmi for december for the eurozone as a whole the composite came in unchanged at 50.6 that was the same level we saw

in november. the manufacturing pmi, that flash 1 slipped to 45.9. so slightly lower than the 46.9 seen in november the services pmi, that rose to 52.4 from 51.9 in november so slightly more positive news on the services front, weaker news on the manufacturing front, which is really bang in line with the trend we have seen over the last several months. also largely in line with what we saw from france and germany in those individual pmis out just a little while ago. on that note, let's get out to joumanna for how markets are standing. >> you can see behind me there is a lot of green on the european wall. a very good handover from friday friday a very strong day for european markets uk assets really sending everything higher on friday, but later in the afternoon, we obviously had the very positive news surrounding phase 1 trade deal and the prospect that that actually may be done and signed in the near future

that also gave a boost to markets on friday afternoon, but investors are waiting more detail as to what exactly was agreed between the two sides we should expect to hear hopefully more details in the coming days. one of the reasons why asian equities were trading slightly more cautious and indeed we did see a cautious end to wall street with the three majors briefly hitting new record highs but only closing the day slightly up in the green we also saw some cautiousness overnight in asian equities. but the theme for europe i would say is a continuation of what we had on friday, some strong, strong moves here. the stock 600 up 1% this after being 1% firmer on friday session as well. the picture is still quite positive indeed, we had that macro data still disappointing on the manufacturing side, particularly for germany and france, but the market is trading on optimism, particularly in cyclicals. let's talk about some of the individual boricses. we got just shy of 7,500

1.r5% higher on the session now. even with the strength in the pound, we're seeing money flow in to the ftse 100 ftse 250, the mid cap index making all-time record highs was up 5% after the election outcome came out friday morning. and, of course, the sectors that we have been looking at there, banks are doing very, very well, home builders continue to benefit as well in the uk. in germany, we have the dax up about .6 percentage point. today we have utilities leading here some of the names leading the upswing today. but i should mention as giuliani just broke the manufacturing data in germany came in disapointing relative to expectations the pmi numbers for december not painting a very good picture something to keep in the back pocket to worry about as we head through the last couple trading weeks for the year up about .8 percentage point luxury is having a good rebound this morning as well

italy the italian index up two thirds of a percentage point here, worth bearing in mind, the senate will pass the budget law later today. that is the budget law for 2020 paving the way for that budget to be passed and also worth bearing in mind that there will be another bank bail out to the turn of 900 million euros that was announced over the weekend as well, too keep an eye on the italian banking sector today overall sectors, every single sector in europe is trading up in positive territory. basic resources up 2%. again a sector that is very sensitive to the discussions between chinaened a the u.s. clearly trading up on the phase 1 news household goods, luxury up and banks the likes of rbs, barclays up another 2 to 3% they were up anything from 8% to double digits on friday. banks also having a good session. financial services relatively

underperforming but still positive autos and technology the picture is still quite positive for europe. ♪ u.s. treasury secretary steven mnuchin told cnbc that the interim trade deal with china will boost global growth he added that the next phase of an agreement between the u.s. and china could come in stages let's get out to hadley gamble who joins us live in doha. hadley, you had the first interview, i believe, with a trump administration official since this historic agreement was announced on friday. what did mr. mnuchin have to say? >> reporter: you got it, julianna the very first sbrier you say with a u.s. official following this historic agreement. they were all of the state department folks and treasury secretary steven mnuchin that we heard from over the last couple days here in doha very quick and keen to point out that this is, in fact, a historic, deal, phenomenal deal heading into the

election year, lots of praise across the board but not so much when it got down to details. listen in to what i heard from the treasury secretary this weekend. >> this is an historic deal. we have never had anything like this it addresses very significant irk shoes, technology transfer, intellectual property, structural agricultural issues, financial service and currencies so we couldn't be more excited about the impact that this is going to have on the u.s. economy and u.s. jobs. we're going to go to a very short period of time of having the translation scrubbed the deal will be signed in early january. and then we'll start phase 2 phase 2 may be 2a, 2b, 2c. we'll see. this is a huge accomplishment for the president. >> what do you say to those critics who complain that this phase 1 didn't accomplish anything really? >> well n all fairness, people are just beginning to understand the details of phase 1

we're in the process of putting out fact sheets that go through what it is you know, this has been a long process over the last two yores, and people have seen the ups and downs. i think it will take a little bit of time for people to digest the significance of this >> seemingly all of this resolving around the willingness of the chinese to import more agricultural products from the united states. mr. mnuchin was keen to point out that was a major accomplishment 18 months of u.s./china trade talks. it was interesting i followed up by asking the treasury secretary how crucial it is for president trump to achieve this trade deal before 2020 in order to get re-elected he told me the president will get re-elected with or without this deal for what he's done with the u.s. economy and the health of the u.s. economy i want to take a step back and focus on this. we were talking about sanctions on iran and the more broad question of the safety and

security of global energy supplies in this part of the world. this is a country blo caded by gcc, former allies, america, of course, has a major military base here in qatar now thousands of u.s. troops in saudi arabia, all of this revolving around what's going to happen next with regards to u.s. maximum pressure policy when we talk about iran. i asked the treasury secretary, though, how he's assessing the risk of using the u.s. dollar as a weapon not just when it comes to u.s./china trade talks but also when it comes to sanctions on iran and others. listen in. >> let me be clear, we are not weaponizing the u.s. dollar. if anything, i would say the opposite i take great responsibility that people use the dollar as the reserve currency of the world. and the dollar is quite strong sometimes the president says the dollar is too strong the dollar is strong because the

u.s. economy and because people want to hold dollars and the safety of the u.s. dollar. so because of that we take sanctions responsibility very seriously. matter of fact, i personally sign off on every single sanction that we do, and we have to balance the reason why we're using sanctions is because they are an important form, an alternative, for world military conflicts and i believe it's worked. so whether it's north korea, whether it's iran, whether it's other places in the world, we take this responsibility very seriously. and for the comment this morning the prime minister said, well, there should be international rules, and the u.n. there should be for people's own currencies is people don't have to use the dollar we have the right to put restrictions on people who use the dollar and, you know, over a long

period of time, you're right if we're not careful, people will look at using other kournsys. >> wushing back there mr. mnuchin of the criticism of the u.s. policy with regards to the dollar in the sense he was saying there should be no currency manipulation. the u.n. should have a role saying the americans, the united states, is not using the dollar as a weapon but at the end of the statement you heard him say, you're absolutely right, we have to be careful how we use our currency, how we use sanctions sanctions are the alternative, perhaps the only alternative to military conflict. it's a very interesting place to say that in this part of the world, guys. >> hadley, thank you very much for bringing us that interview we are very much appreciate that let's come back to germany, one of the key countries, of course, in europe, exposed to what's happened in the u.s./china trade war very export oriented economy now we're hearing from the german economy ministry who has come out saying the german economy is more or less stalling

their initial signs that make an end to the industrial downturn and a gradual economic recovery more likely, indicators for private consumption are subdued at the start of sub 4 but disposable incomes still rising. construction fairing well. a mixed picture suggesting that perhaps the german economy is stabilizing or showing some signs of stabilizing just to remind you the manufacturing flash pmi 43.4, deteriorating from november. services much stronger at 52 earlier this month >> the german dax is up on the year so definitely some not encouraging signs come out of the pmi data this morning. now speaking of industrial production data let's talk about chinese industrial production growth which hit its highest level in five months amid signs domestic stimulus is starting to take hold. other key data met or beat expectations retail sales rose 8% in november after another record singles day

and fixed asset investment was steady at 5.2% however, new home prices go at their slowest price in nearly two years. top u.s. trade negotiator robert lighthizer said the phase one u.s./china pact is a, quote, totally done deal, despite a lack of details on timeline and translation. the u.s. trade representative said the agreement which officials aim to sign in early january would nearly double u.s. exports to china over the next two years. beijing has not confirmed the american assertion it has committed to buy $40 billion worth of agricultural products annually. let's get out to eunice from beijing. eunice, it appears as though the agreement is still thin on detail have we learned anything new over the weekend >> reporter: well, i think that we learned that the chinese and the u.s. are not on the same page right now when it comes to this agreement where they are on the same page is that they both believe that

phase 1 trade deal is good for markets, is good for the economy. we heard that reiterated again today when the national statistics bureau released economic data where the official had said that this phase 1 trade deal would improve on market conditions but there's still plenty indications that there are some key points that have been lost in translation so the u.s. says that there's a hard target of $40 billion for agricultural products, that could even go to 50 billion. the chinese have not yet confirmed that number. no mention in the state press or officially and the chinese have said that there's going to be a tariff phase out, step by step. the u.s., though, has said that they have made so such promise then, on a phase 2 negotiation, president trump had said that this phase 2 negotiation is going to start right away. the chinese have said, well, let's just wait until after the

execution of the phase 1 agreement. so still a lot of questions. i talked to several people now on the phone, some government related, some just close to the trade talks and the general feelings is that on the tariff roll back, this is an issue of linguistics. this isn't a major disagreement. the u.s. tariff believes it's conditional and the chinese believe they can meet those conditions so loosely it's the same thing but on the hard targets, that's another challenging one because over and over people were telling me today that the chinese are going to be buying these products based on market needs. and because the number is just so big, it's going to be really, really difficult for the chinese to be able to actually say, yes, we did buy all this stuff and it was because our businesses really needed to do so so that is one big major sticking point one person said to me this is a

best endeavor target this is our best endeavor to get to that target i'm not sure that was the way that it's being interpreted by the u.s. >> very, very interesting insight, eunice, and good to hear the differences in the way this agreement is being portrayed on both sides of the table. thank you very much for joining us, eunice. pushing on, but sticking in the region, chinese president xi jinping has praised hong kong chief executive following a meeting between the two leaders. in comments broadcast on local television, she pledged support for lam saying she has the courage to govern in, quote, exceptional times. it comes after yet another weekend of protests in the chinese territory. police fired tear gas at demonstrators who hurled bricks and smashed traffic lights as the unrest stretched late into sunday night. corporate news, julianna, international flavors and fragrances set to merge with dupont nutrition and bio science business the combined company will be worth more than $45 billion.

dupont will receive $7.3 billion 234 cash and its shareholders will own a majority stake in the new group. feels like this deal has been a long time coming so we're finally getting some light from your analysis, obviously you've studied this sector extensively over the course of your career, would you say it is a surprise to the market that we finally got some clarity on the dupont business and what they decided to do with that? >> it indeed was a long time coming back in 2015 you'll remember dow dupont agreed to this megamerger and that spurred a waive of consolidation in chemicals one of the prized businesses within this combined entity is this nutrition business within dupont a highly coveted asset, really growing very exciting high value part of the chemicals market and a lot of companies were interested in this we learned today that iff, the u.s. flavors and fragrances giant won. they won this deal, creating a

massive $45 billion company. we just saw on the screen there, the givaudan and symrise their shares rising. just an indication of how hot these assets are interesting for european invest everies in the chemical space to think what companies, what they do consolidation wise now that this dupont asset, these nutrition assets have gone away. >> certainly a lot of pressure on them from the industry perspective to actually move towards further consolidation. >> exactly. all right. we're going to squeeze in a quick break. but coming up on "street signs," find out why eelectro lux is warning that earnings at its north american business will take a hit in the fourth quarter. you like camping with us? i sure do! my friends are getting healthier thanks to the breakthrough treatments discovered at st. jude. and we freely share our research to help save kids with cancer everywhere.

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♪ welcome back to "street signs. well, in other corporate news, electrolux issued a profit warning for its north american business the swedish home appliance maker said extra costs linked to manufacturing consolidation and inventory issues will hit fourth quarter earnings by $70 million,

almost triple the previous guidance i'm happy to bring in the strategist at citi who joins us. the group is still bullish on european equities with emphasis on health care autos and financials great to have you with us. >> thank you to be on the show at such interesting times. >> yes, it really is. >> looking at the price action and european equis the, ending the year with a bang, stock 600 up north of 20%, dax up 22%. we were just looking at it this is all coming a a time when european growth has been very disappointing relative to the rest of the world. feels like a reluctant rally at this point, doesn't it >> it has been a reluctant rally on low volume, but we think there's forty go and it would be on bigger volume over the weekend, two bits of positive news, the first the uk election means there's now brexit clarity and secondly the u.s./china trade agreement phase

1 is going to be positive for european exporters but there were already positives for the european market. when you look at the economy, we have been noticing that the economic surprise index has been moving into positive territory and that's usually an indicator of an upcoming straw market. secondly, we had signs of lending growth stabilizing and we think we'll pick up next year on the back of the broad money supply growth and we think that's going to feed through into earnings growth of approaching 10%, which is slightly above the global average. >> big jump from this year also. >> absolutely right. >> you highlighted those positives there, but we can't ignore the fact that this morning we got more manufacturing data come through for europe, in particular germany the manufacturing flash pmi weakened further in december, cyclicals have been a key beneficiary of the european rally that joumanna mentioned there. it is fair to say we are actually seeing signs of stabilization or even a turning point in manufacturing when you're getting numbers like this continue to come through

>> yes, we think it is fair. we look at the consumer first of all and they have been continuing to spend. retail sales growth in germany has been around 5% over the last few months then we look at the manufacturing side, which has been in recession now for two years. there are signs that inventories are about to be rebuilt. then if we look further forward next year, continued trade stabilization, we're likely to get a cap x pickup so we think it's not going to be a v-shaped economic recovery but gradual improvement. supported, we think, also by on going ecb monetary easing and a better mix with increasing emphasis on fiscal spending. >> do you think it's time for investors to start thinking about getting involved in some of the value stocks in europe again? here one section in particular stands out to me and that's financials traded very, very poorly in fact, this year is one of the worst performing sectors compared to everything else. will 2020 be different for value sectors in europe, do you think? >> yes, we like value in europe

and we like the bank sector. if you look at our top five bank stocks, the average dividend yield is 7%, the return on equity on average is 9%. the ratio is 14% so we think that it's an area where you can look at the fundamentals as being firming and the price book value on average is 0.7 so there's further to go outside of that, we also like cyclicals will recover with the manufacturing rebound that's upcoming. >> one sector that fits squarely in both those bucks, autos that sector facing a huge amount of transformation. what gives you the confidence that now is the time to buy into european autos >> well, we think the catalyst will be the 2-3-2 investigation from the united states which is about to conclude. and we think that some of the sanctions will be delayed and become part of broader trade negotiation between the eu and the u.s., including things like

agricultural and lng as well that could be the catalyst and it will unlock value because the average for the sector in multiple terms is 7. and dividend yields are between 6 and 8% >> all right thank you very much for joining us stay with us plenty more to chat after the break. we're also chatting brexit after the break. the returning prime minister doubles down on his promise to leave the eu in january. we'll be right back. another cleaning tip from mr. clean.

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♪ welcome back to "street signs" i'm julianna tatelbaum. >> and i'm joumanna bercetche. these your headlines europe stock 600 hits a record high after the u.s. and china confirm a phase 1 trade deal speaking exclusively with cnbc, u.s. treasury secretary steven mnuchin says a new round of talks will begin soon. >> the deal will be signed in early january, and then we'll start phase 2. and phase 2 may be 2a, 2b, 2c, we'll see. but this in to itself is a huge

accomplishment for the president. >> but mixed global data offers a reality check as both german and french manufacturing figures miss forecasts with germany's private sector contracting for the fourth month in a row. an election bump the ftse 100 surges as british prime minister boris johnson vows to move quickly to secure approval for his brexit deal and president trump faces a historic house impeachment vote this week, likely setting up a trial in the republican-controlled senate ♪ well, it's been a big morning for data we had the pmi data coming out of the eurozone just about half hour ago we're just getting the data out of the uk now. the flash composite pmi number for december has come in at 48.5 this is the preliminary estimate

versus the november number 49.3. and indeed, lower than the estimate of 49.6 going into today. it's the lowest flash pmi number since july, 2016 in terms of the individual components, services pmi came in at 49 and again that was also lower than the flash estimates and lower than the november reading of 49.3. also the lowest number since july 2016 and manufacturing, which, of course, is a sector we have been watching very, very closely, that has come in at 47.4 versus the november reading of 48.9 and significantly lower, big miss relative to estimates of 49.3. the weakest index since july, 2012 ihs market says uk pmi make it more likely that the uk economy will shrink in the fourth quarter. so, that is what boris johnson and his government will have to deal with a shrinking uk economy in the fourth quarter if the data continues like this

worth mentioning, though, that the numbers in november manufacturing side saw a decline mainly due to a fall in export orders and in purchases. that could have been on back of stockpiling in the prior month in october ahead of that october 31 deadline, the original brexit deadline we are continuing to see weakness in the data for the month of december as well as for the preliminary day in the uk. >> getting a check on markets, it's fair to say that european assets off to a roaring start this week on the back of the confirmation from both the u.s. and china of the agreement reached on friday when it comes to trade, this morning, the euro trading about a .1% higher 111.28 just a little lower than it was heading into thursday's meeting. the pound a big move sterling bouncing more than 2% versus the dollar on the heels

of the election results. now next steps on brexit let's take a look at equities this morning this is a very, very strong rally coming together for european stocks. the dax up about half a percentage point here in the uk, ftse 100 strongly outperforming the region that index up about 1.9% you'll remember, of course, on the back of the uk election result, the ftse 250 was the real outperformer. that was on friday as thosed my cap stocks that domestically focussed names got a very strong bid. now this morning, more multinationally focussed names are catching up, just under 2% higher for the ftse 100. overall very strong morning for european equities. joumanna >> fresh on the uk conservative party biggest election win in 30 years boris johnson plans a brexit vote before christmas they could be asked to debate the withdrawal agreement bill as early as friday. te election result gives him an overwhelming mandate to take the

uk out of the eu by january 31st the prime minister also aims to negotiate a trade deal with the eu in just 11 months despite skepticism, they said the timetable is doable. >> it will be concluded next year we'll be in a position, as i say, to leave the european union before the 31st of january of next year and then we'll have concluded our conversations with the eu about the new framework of free trade and friendly cooperation that we will have with them by the end of next year. meanwhile the labour leadership has apologized for the party's worst election results since 1935 writing two articles in the sunday papers, jeremy corbyn said the defeat was, quote, a body blow. he vowed to step down in the new year and the race is on to find a replacement. some of the names being floated includes rebecca long-bailey

lisa nandy and sir keir. european bond yield jumped on friday looking at the uk ten-year in particular, it climbed to the highest level since june on friday head of mixed income capital markets from ramen james joins us now let's pick up off the back of that point with the uk ten-year climbing to the highest level since june on friday what do you think is baked into the ten-year now when it comes to uk politics moving forward. >> yeah. there's some clarity, which helps a lot. and helps the process of getting next trade deal, but there's still a lot of uncertainty out there. i think if you look at the fed funds, the overnight rate currently in this country, it's almost a flat yield curve. and so i think whoever takes over the bank of england is going to have a bigger job probably than boris johnson in trying to both reflorida state

the economy without pushing too high of inflation. >> you're looking at it from an overseas lens but there's a big move in the currency as well, trading up to 135, but not as big a move in fixed income what do you point that down to why have guilds not moved as much as the currency >> continues to be the same pressure against the currency. if you heard the treasury secretary what he said or didn't say was that i think the u.s. would be willing to let that dollar slide a little bit and other currencies push up higher, but you've got slightly less than 1% growth, but you have 1.5% inflation that's going to continue to keep pressure on the long end of the market from going down in yield and keep yields higher so i think the bank of england probably needs to act soon i know there is some dissension in the last vote those that wanted to, but i think it would take something like lowering rates, trying to

maintain inflation before we saw yields in the long end go lower. >> we had an equity guest on a short while and he's quite bullish on cyclicals, on european ek wities >> we kind of think that the whole market is going to do better any way in 2020 if you looked at three of the things that christina le guard said were problem areas that looked to be filled one was brexit and the other is the u.s./china trade deal and third is its own economic growth i think we're going to see better economics and better markets to improve equities in europe. >> you mentioned the u.s. china trade deal and the clarity that we got on friday as one of the key drivers moving forward clearly markets agree, rallying very strongly this morning, but you can'tic nor the fact that there's a huge amount of execution risk when it comes to this deal, not to mention phase

2, which the negotiations are set to start shortly how do you factor that into the fixed income >> in the u.s., most of that was baked in already that's why you didn't see a whole lot of move in the equity market and you actually saw in the u.s. ten years rally in price. so there's one thing there's certainty to have a deal it's still kind of skinny from the details. doesn't deal with intellectual property which may be phase 2 will overall, it's probably good for growth it takes that away so, if we're looking for 1.7 to 2% growth next year, we might be looking for something a little better if they can push for another deal then you have the fed being on hold all year long in the u.s. so, from a yield standpoint, we're not looking for a major move one way or the other unless we got something more robust than what we got on friday >> now, looking at options for

safety within the fixed income world, historically the uk, guilt would be a safe haven of choice do you think that changes in a material way with the current political outlook, with the uk set to exit the european union >> depend on how the negotiations go. 11 months they say it's enough time but really you have to push in pretty hard to try to get a deal done. 40 plus percent of trade in this country is done with the eu, only about 12% is done with the u.s. you also have to cut a trade deal with the u.s. and other countries as well, so depending on how that calendar works, one of the good things is that with a clear mandate, boris johnson has the ability to maybe push that time line out if he wants to without a whole lot of pressure, but 11 months is tricky and we'll have to see how it goes in the first two or three months. >> just one quick question this is really flown a lot under the radar, but maybe people should be talking about it more.

the big package, the fiscal package announced out of japan last week. >> right. >> in the past, people used to say jgbs, pinning all other yields in the world because they traded so negative obviously now the focus has shifted to europe. >> right. >> but do you think there's any room for reflationary impulse this time around >> certainly love to think they could. it's been a 25 or 30 year problem for japan in particular, both trying to get growth up but more importantly get inflation up and it's possible, but i wouldn't be a strong better on it happening. >> we have the ecb meeting last thursday joumanna and i follow it closely here on decision time madame lagarde's innaug rat presentation of the ecb a lot hinges on the monetary policy review that's about to be undertaken how do you think european yields are set up going into 2020 and what's your outlook for bund

specifically >> yeah. it was more about what she didn't say than what she said. i think everyone was concerned in this transition that she was going to come out with either a more aggressive or less aggressive plan, but it looks like she has stuck to pretty much the current play book again, you've got the hopes of 1% growth and roughly 1.5, 1.6% inflation. that doesn't -- especially with the eurozone, pmi numbers doesn't really get you fired up for the economy going forward. i think they will have to continue to be accommodative and maybe increase those numbers as well to get this off but as far as bunds in particular, we saw some of the widest negative rates in history and banks were charging for loans and things like that or charging for deposits, but i think it will be a better year for the eurozone

but not so much where you would say we're going to see 1.5% growth. >> all right let's leave it there for now plenty more to chat about coming up head of fixed income capital markets raymond james. joumanna >> one of the topics we just touched on is who is going to replace carney when he steps down one last press conference to look forward to out of the outgoing governor and we'll find out who he'll be replaced with now that the general election is out of the way, certainly expecting the chancellor to come out with an announcement in the next couple of days. let's look at some of the front-runners here right at the top we have the current director of the lse, but she did serve as deputy governor on the bank of england in 2014 to 2017. she left in 2017 to go be director of lsb.

she also has experience at the imf and world bank she is expected to have a light touch approach to regulation which, of course, would work quite well with boris johnson himself and his focus to reduce some of the regulatory burden in the uk post brexit second choice now also is andrew bailey he was the front-runner a year ago. in fact, he was so much the front-runner in april 2018 that some betting sites stopped betting on wagers in support of him. he currently runs the fca as a second favorite. this after he has come under scrutiny as well some people saying fca missed some of the warning signs. because of that his odds have dropped in the last couple of months and a new contender that has come up from the ft overnight. kevin warsh a former fed official, he wrote a report in the bank of england about

transparency and accountability a couple years ago, but also worth bearing in mind that while he was at the fed he was known to be one of the more hawkish members of the committee, quite against quantitative easing and warning against the prospect of higher he would be a hawkish bet. but of course both of them bring a wealth of experience and academic gravitas to that role if they were to be nominated one other final name, another lady who is also one of the contenders that came up is helena morsi she was the ceo of newton for 15 years, moved away from that, servinged at lgem for two years and stepped down in the summer after which in september the mail sunday reported that she was actually being interviewed for the governor role at the bank of england.

so there was some suspicion there she also may be a front-runner worth mentioning actually two points if shafik is selected, that would be the first female bank of england governor ever in history. the bank of england has been around for three centuries you the second point is it's very late in the process. less than 50 days to go until january 31st mark carney and his predecessor were announced 200 days before their start date so it's a very short timing here and certainly the next bank of england governor will have a lot to deal with and the task, not least with brexit and of course the slowing economy as we just saw with the pmi numbers tatelbaum? >> excellent thank you. let's look at saudi aramco shares which rose for the third straight day aramco temporarily hit that mark last week you'll remember before profit taking pushed shares lower. speaking to hadley at the forum,

ceo gave his reaction to aramco's megaipo. >> i was positive when i had been asked one month ago about aramco because i know very well the company is very good from technological point of view, good from a reserves point of view, big field, huge upside potential. they have good oil and i think they're also working on -- they're creating a very efficient system so, they can look at the future. and when acompany is strong an is looking at the future, clearly is interesting for investors. so i think that it is there and i think that aramco can do well in the market. >> would you buy aramco?

>> i cannot because -- i buy aeni that's all. >> walk me through what's going through the european countries there's a lot of conversation particularly in the last couple weeks we might finally see an end to the blockade of qatar by the uae, by saudi arabia how would that impact your business would it make things easier? >> make life easier to everybody when there is communication, when there are good relationships is good. we don't have to look for war. we don't have to look for conflict we have a lot of issue, trouble in the world use less conflict. everybody is suffering in this area because of this situation so i don't want to enter and talk about reasons because it's not to me. but i think that clearly peace would be good for everybody. meanwhile, tens of thousands

of demonstrators took to the streets of rome this weekend as part of the growing sardines movement against italian par right leader salvini these grass roots protests first started in november and have led to demonstrations in several italian cities salvini mocked the protests. coming up on "street signs," wednesday may witness the historic impeachment of a u.s. president. the house votes this week on whether to move the case to the next phase with the senate we'll be right back.

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♪ welcome back to the show well, we're looking at fixed income this morning. let's look at where u.s. yields are trading. and all of the maturity are trading slightly higher. ten-year note at around 184. again, two bases points higher we did see a marginal selloff after the trade news emerge on friday afternoon, but some would say this selloff has been very muted in nature. let's get to the experts

the head of fixed income at capital markets of raymond james. we were just talking about the moves in fixed income. and actually the big catalyst for the saleoff was the employment report the week before, the prior week after that ten-year note briefly touched 195 in subsequent sessions, but we're now back down to around 184 so it doesn't appear as though this fixed income selloff really has lelgs, does it >> no, not really. still has a lot to do with the inflation rates that we talked about. the employment report was a big outsize, upside surprise to the market they were not prepared for it at the time so you saw natural selling there. a little bit more of an up tick or little less of an up tick in average hourly earnings which pushed slightly higher the year over year number but the monthly number was lower than expected, so the market tended to settle down most of the news we got after that, even though it was probably good news, wasn't going to upset the risk of trade as

much as people thought it would. so, buyers came back into the treasury, especially knowing with inflation low and the fed on hold, the next chance could be that if a weaker economy persists that those rates would go lower. >> what's positions lag in fixed income would you sna. >> so, you know, that's debatable. i think you would probably in a balanced portfolio still be 65/35 equities to fixed income it could be as high as 70/30 in favor of equities after this past week if we get some decent growth numbers it could go as much as 80/20 next year. >> it feels as though the markets have really taken these impeachment proceedings in stride we are shortly going to get out to our colleague in washington, d.c. for the latest. from a markets perspective, at what point will these proceedings become market moving or something that fixed income investors can't ignore >> yeah. the market view right now is that the house will impeach. it will go to the senate and the

senate will acquit that's where it has lied at least in the feelings right now. if you get something other than that, and this will be a significant event for the markets and really for the world if the senate does anything other than what is expected. that happens, we probably don't see a whole lot. the only risk really a real surprise >> all right thank you very much, kevin, for joining us that is kevin gettis, head of fixed income capital markets raymond james. as promised, an update on the latest impeachment proceedings. the u.s. house of representatives is expected to make the historic vote on donald trump's impeachment this wednesday. the house judiciary committee advanced two articles of impeachment last week, including charges of abuse of power and obstruction of justice our nbc colleague tracie potts joins us live from washington, d.c. tracie, outline for us what are we in store for this week and what is so monumental about what

could happen >> sure. well this will only be the third time in history that the house has impeached a president. and we are fully expecting that to happen by midweek overnight, a 658 page report was released outlining those charges that you just mentioned. they'll outline some rules tomorrow and then the vote is expected to happen on wednesday. now, there are a handful of democrats who are not planning to vote along with their party, just a few in fact, one famously is leaving the party, he says he also has some issues in his district in terms of re-election. but he says he's leaving the party to vote no on impeachment. but the numbers just don't add up for president trump on this and so we do expect that he will become the third president in the united states to be impeached on wednesday the big question after that, as your guest just said, is what happens in the senate with the trial? they are still working out

details about how that trial will work. there are still decisions being made about whether witnesses will be called the president wants them democrats want them. republicans not so sure. and they are still trying to figure out how long this trial might last >> certainly something to watch out for, even though as we were just talking about, markets have been fairly immune to the developments from the political side of things tracie, thanks as ever, for bringing us the latest from washington a quick look at u.s. futures actually as we head towards this historic week from a political side of things s&p, dow, nasdaq all seen opening higher but mainly on back of the optimism on the trade war. that is it for "street signs" i'm joumanna bercetche. >> i'm julianna tatelbaum. xt cinupde exchange"omg ne is cancer relapsed, julian's mom was devastated. my mom heard about st. jude. julian was referred to st. jude children's research hospital where our discoveries have helped increase the survival rate of julian's type of leukemia from 4% to 94%.

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♪ it is 5:00 a.m. at cnbc global headquarters, and here is your five at 5 totally done the top u.s. trade negotiators selling the phase 1 u.s./china trade deal as details remain elusive. grounded for good. reports this morning boeing is taking a hard look at the future of its 737 max model jet dupont strikes again this time inking a more than $26 billion deal creating a new consumer products power house. and, room to run a week-long series kicking off today, a