craig melvin: that's all for this edition of "dateline". i'm craig melvin. thank you for watching. [music playing] welcome to "street signs." i'm julianna tatelbaum these are your headlines france hits back french finance minister said his government will go ahead with a digital tax calling it a move of justice after the u.s. pulls out of talks dashing hopes of a deal >> caller: a provocation to all we've been negotiating and to all citizens in the world that

find it legitimate that these companies pay their taxes. >> european markets trade mostly lower as a surge in cases in oklahoma and beijing's flight ban fear a second wave of the virus. >> wire card shares trade near the bottom the publication of the german group's numbers are delayed three times. the bank of england is expected to expand its bond buying plans now saying they are, quote, under active review. >> a warm welcome to "street signs. french finance minister has hit back at a u.s. decision to walk

away from digital tax talks. the mayor called the u.s. decision a provocation and said the tax itself was a form of justice. >> translator: we have received with my spanish, italian and british counterparts, a letter from steven mnuchin stating that they don't want to continue negative oceanition at the oacd on digital tax this is a provocation to all the partners we were just a bit away from reaching an agreement on a tax a provocation against all at the oacd and all citizens in the world that find it legitimate that these companies pay their taxes. it is also a provocation towards the u.s. allies.

what way is this to treat your allies by constantly scaring us with sanctions if you don't do this, we will sanction you i am confirming here as i made a commitment, there will be in france a digital tax in 2020 or the u.s. review their decision and we reach an agreement before the end of the year and it is the global taxation that applies. that's all we hoped for from the president. the u.s. block it and they are the only country blocking, then we will apply our domestic tax it was never withdrawn, just sustain tended for a if you months >> steven mnuchin sent a letter saying discussions reached an impasse and attempting to rush the talks was a distraction to more important matters like the

covid-19 response. conferring the move at a house ways and means committee >> we need an international regime that not only focuses on certain size and industries but where we generally agree as to how we are going to tax people internationally. there is clearly room for a negotiated settlement. at that point, we were making no head wind. rather than have them go off on their own, he would say they are no longer involved in their negotiations >> going to nevile hill. as you were saiding out to write your 2020 outlook and incorporate the pandemic and responses, was an escalation in tensions between the u.s. and europe something you had expected we thought it was a risk ahead of the coronavirus to be fair to

be growing tensions. ahead of last year, it did look as though those risks were deescalated. yes, i think one of the consequences is likely to be even greater protectionism around the world between the u.s. and china and across the atlantic >> i was reading through your latest research report and the title stands out being euro area positive inflection point, question mark. what is your thought on the euro area and what has stuck out to you as the game changing moment for the block? >> there has been a lot of things going right this is always a big surprise. the fact is that the lockdowns have proved successful in the containing of the virus.

easing their lock downs and that is considering a rebound of activity the key fault lines were stresses in sovereign debt markets. the game changer has been the combination of profoundly aggressive european central bank bond buying with the eu recovery fund which does reduce the capacity to the bond market to provide a nasty shock to the recovery later on which i thought was a very live and unreal risk only a month or so ago. >> on that point, it has had a positive impact to the recovery proposal a long way away from the agreement and implementation we do see a risk of the diluted proposal what does that mean for the outlook? >> i would worry if we had a

severely diluted principal issuing point and several debt and delivering that to the countries in the form is what really helped the bond markets i don't think the timing mattered i don't think the ecb was able to absorb the bond units the next 12 months or so what investors were concerned about was the debt burden for those like italy and spain was going to be too high the signal that the eu and crucially germany and france were going to be prepared to accept some form of debt and debt burden at the expense of the eu's debt burden was the fundamental principal that led bond markets to become more calm i think if that principal is

watered down or lost in negotiations, we are back to square one the fact that we've got the french and germans for the first time in a long time pushing towards this integration is an encouraging sign the relative importance of the countries are unlikely really to have a material chance of blocking it. particularly now that the uk is no longer a member at the european union >> assuming that we do get a deal through largely in its current form, let's talk about the longer term impact of this debt rising in the system. one of the elements is to propose digital taxes to eventually help pay down this debt today with the global tax framework sharply in focus and under a lot of scrutiny, is there a risk that gets

jeopardized and paying down in the future >> once again, one of the things coming out of this crisis is a sort of economic nationalist approach as a whole and to taxation that may provoke a response is a distinct responsibility we may see that before the crisis and for the proposed green deal and the border tax to be proposed at the green level which would be significant to protect eu industries as they carbonize. i suspect to the degree we see the eu build borders around itself in terms of taxation in terms of digital services and

potentially high carbon imports is something we'll likely see more of and not less of. >> taking it back to the uk, we have the bank of england meeting later today where analysts expect them to buy their bond buying program the question is around negative rates and how that discussion is likely to be shaped up what are you watching for >> wethink they'll keep the option open on negative rates. for me, the big surprise would be if the discussion suggested that they were thinking about negative rates in the near term. we think that would not be a good thing for the uk economy and raise the cost of capital for the banking system, which at the moment is important in providing support. the uk is a huge sustained current account deficit as the zbormt said, the uk relies on

the kindness of strangers. rewarding that kindness with negative interest rates is some what full hearty given the currency is not starting from a particularly strong place in the first place. we would be surprised if there was a vote from negative rates or a suggestion we might be looking at the prospects over the next three or four months. it is more likely to discuss that it is worth wide leading to the future >> thank you chief economist. we'll be taking a deep dive on the decision of the u.s. to walk away from digital tax coming up at 10:45 cet for now, let's look at european markets for now. we have bounced off the lows

we are trading a little bit down for 10 basis points. sliding positive where the main benchmark gained nearly 7% overnight, we have seen more focus on this digital tax with the u.s. walking away from talks with europe over a global digital tax framework and continuing to eye the rising number of infections in the united states and in china and we are all looking ahead to the bank of england meeting as we were discussing. let's look at the sector break down a look at markets first. a mixed picture. uk and french markets lower. little green for german and italian stocks

a mixed picture here evenly split board at the top, chemicals half a percentage point higher. seeing business improvement during 2020. still no full recovery in sight but providing a little encouraging sentiment for broader chemical stocks. auto and retail. at the bottom, real estate, oil and gas and media. the european commission launched a probe into psa and peugeot. we have seen shares turn positive with both these and the broader market let's take it out to charlotte for more it is not uncommon for

megamergers to warrant more scrutiny from megamergers. what did you learn from the european commission on this deal >> this is not a surprise. it had been telegraphed that they had an issue with the segment. we are waiting for the details with the commission. they came through and said that they are worried about the merger to reduce competition with 14 countries in europe including france, uk in europe, they have about a 34% market share and that is the 3.5 tons and the one the commission is looking at. the specific countries going above 40% level in the market share now they will launch the investigation.

the two companies can come up with concessions and solutions as well he is not just about market share in the merger of cases so to that price range adding a constructive spirit in the coming weeks the next date will be october 22 so the commission has to come up with their answer talking with the companies so we'll have it here as a merger as they confirm to close the measure by the end of the first closure in 2021. during the calendar of 18 months

to close it. they have taken into account the possibility that has been open and expected to have their opinion by october 22. in any case, both stock fca and psa in talks coming up, we'll bring you the latest rate decision from norgis bank. plus fresh powder as aiming to shore up uk finances in the face of the pandemic more after the break on "street signs. businesses are starting to bounce back.

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welcome back to "street signs. there is no shortage of central bank action. norway's central bank kept their rate on hold

to put this into context, norges bank cut rates three times since march from 1.5 down to zero. since the monetary policy meeting in may, this is now the statement. activity has picked up faster than expected. implying the rate at a current level over the next couple of years following the gradual rise as economic activities normalize. the outlook is expected to contract by 3% this year better than a may forecast of a 5.2% drop they expect the economy to rebound versus si 3% expansion seen last month. the economy seems to be getting better and they have kept rates on hold. in the united states, fed chair jay powell has resumed his call for an increase in government spending to help bolster the

economy against the coronavirus. he told congress that the u.s. is beginning to recover from the pandemic and added more fiscal help is needed >> it would be wise to look at ways to continue to support both people out of work and small isser businesses that may not have vast resources for a continued period of time, not forever, a continued period to get through this critical fiez the economy is just now beginning to recover it is a critical phase and i think that support would be well placed at this time. in switzerland, the central bank has, quote, decided to intervene more in currency markets. keeping rates on hold at 0.95% saying the expansion policy remained necessary as it forecast the 6% decline in the

country this year. we'll have more on the decision later today when we speak to chairman jordan who said the economy is in sharp recession. here in the uk, the bank of england is expected to raise the bond buying program by $100 billion pounds as they hope to help the uk recover. joining us just outside the bank of england, break it down for us what will be the key debates at today's meeting. >> i think it is so confusing. i'm even more confused goodness knows what the policymakers mean at the moment. here it was, the 13th of march of our broadcast tour when the day of the budget and the bank of england came up with a whole host of measures we saw it more since then but in

a nutshell in the restraints of banks. they cut interest rates as well. they launched the qe to the tune of 200 billion taking it they steady the nerves andrew bailee to date has done what is expected and hopeful for the bank of england. that's great what happens next is con voe looted and confusing you think the economy is 20% down, 24% down 5% pass in march as well big contraction, big claim and real concerns about inflation. then you get a statement like this which makes it sound like things are really good listen in. >> we do expect over the next

couple of months to see some form of return as for the housing market itself, we point open the sale for about three weeks. we have seen the response from customers. this isn't about the short term, this is about investing in the long term. >> taylor wimey responding with us do we need more quantity ative easing possibly 150, possibly 200 billion. at the rate, it will be absorbed very much. i know they bristle over the bank of england behind me at the thoughts of government financing. they'll talk about whole host of other steadying issues out of the 200 billion quantitative easing, they spent

148 billion buying the 152 pounds worth issued since the march crisis began coincidence? perhaps not as well. as far as the debate we heard, hoping that they wouldn't do it because of the negative effects. it is a debate that will keep going. we don't think we'll get negative news. but no doubt we'll be directed to the governor as well. as we started off, so many confusing, conflicting signals for not only us but the people that have to make decisions behind us. tough job. >> we'll bring you the boes decision later today and answer some is of those questions that's at 12:55 cet. i want to bring you in fresh lines around this global digital tax story we heard about this morning. we already heard france will not

be backing down. we have some fresh lines out of the eu tax commissioner. he says he regrets the move to put brakes on the international talks. he hopes this is a temporarily setback rather than a definitive stop he said he hopes finding a solution is impossible this year, the eu will come forward with its own proposal at an eu level. that is interesting. also saying the commission stands with eu countries that have moved forward on digital taxation we will act as one, if needed. that is the message that follows the message earlier this morning. now the eu commissioner von der layen, she also cast out over britain's decision not to extend beyond the post brexit decision

period >> we have been ready to grant extinction this means we are now half way through negotiations with five months left to go. we are definitely not half way through the work to reach an agreement with little time ahead of us. we will do all in our power reach an agreement we'll be constructive as always and be ready to be creative to find common ground where there seems to be none what we are not ready to do is to put into question the principals and integrity of our union because it is our duty to protect the interest of the european citizens. coming up on the show, bombshell revelations from former u.s. national security advisor bolton in a new book find out why the white house is trying to ensure it never sees

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welcome back to "street signs. i'm julianna tatelbaum these are your headlines france hits back, french finance minister says his government will go ahead with digital tax calling it a form of justice after the u.s. pulls out of talks dashing hopes of a global deal >> translator: it is a provocation against all at the oacd and against all citizens in the world who find it legitimate that these companies pay their taxes. >> european markets pay mostly lower following a depressed case in asia as a surge in cases in oklahoma and asia with a flight ban. the bank of england is expected to expand its bond buying program governor andrew bailee saying they are, quote, under active review a bombshell new book claims

president trump has turned to china to help him win the 2020 election with author and national security advisor john bolton and saying the u.s. leader has offered favors to dictators during his white house tenure european markets have now been open about an hour and a half it is a mixed bag here we bounced off the lows for the morning. we bounced off the lows for the french, british and swiss markets. we are all closely eyeing the bank of england meeting later today. we'll look at any includes of how the bank will look at the future for the expansion of the bond buying program. continuing for the markets and supporting the economy

we had talks edge higher a fairly muted day for the news flow with future looking to the global tax dispute with the u.s. pulling out of talks with europe one stock i want to bring your attention to, wirecard the german fintech firm has been plagued with allegations of false accounting has pulled its earnings three times trading down nearly 5% let's get a check on u.s. futures and what we can expect from the wall street open. we are looking at fairly muted moves higher the dow jones higher, s&p and nasdaq fairly muted but higher as well. in a little bit of a pause mode. taking a moment to catch their breath

jd.com shares closed 3% higher in their debut in hong kong the deal is the latest in a string of chinese companies launching secondary listings amid tensions between the u.s. and china. let's get to chery with more >> solid start when it comes to the hong kong debut looking at the closing price of $234 hong kong dollars looking at 3.5% upside on the trading day. talking about something very much in vogue. we saw alibaba do the same thing last year. a virtual covid-19 style kind of home coming, if you want to call it that. for the chinese online retailer, it is about coming closer to its home market of china

it goes to show how hong kong are really trying to ensure, take advantage of the global fund access in hong kong but while eyeing the potential, the possibility of getting into the chinese investors minds as well. there are possibilities of potential stock connected schemes and so on that connects with mainly chinese investors and hong kong in terms of the platform as well we saw young china and its shares surge overnight because of reports that young china is also considering doing something similar as well. in terms of the performance, we are talking about $3.9 billion raised to improve

operating efficiencies it is important to talk about what kind of backdrop we are talking about here a lot of tensions between the u.s. and china and the growing scrutiny over chinese listings in the united states we saw the trouble of lucken coffee where they say we have to review this and look at delisting some of these companies. in the meantime, the message coming from the mainland official premier li talking about how he wants to support hong kong's position as a key financial center so perhaps that will drive even more the chinese adrs to hong kong as well >> thank you for that report on the topic of u.s./china relations. mike pompeo and china's top diplomat met in hawaii for,

quote, constructive dialogue president trump signed legislation calling for legislation of chinese principals responsible for 0 suppression of chinese uighurs that is expected to further strain tensions between the u.s. and china. the good 7 is urging the u.s. and could quote seriously under mooin hong kong'sa taun my after the uk announced it will extend visa rights to citizens with uk passports. warning it could have a, quote, devastating impact president trump reportedly sought aid from chinese president xi jinping for his

election this year, reportedly from a new tell-all book >> reporter: a blistering port trail from his former national security advisor writing, the trump president di is not grounded in philosophy, grand strategy but grounded in trump i am hard-pressed to identify any significant move that wasn't driven by reelection he writes during trade negotiations pleading with president xi so that he will win offering some increases in chinese farm to help win the vote adding that the president was willing to halt criminal investigations to give personal favors to dictators he liked citing cases like china and turkey adding that the pattern

is a way of life points to offense the of william barr and adds that they are not impeachable offenses bolton says he resigned, the president says he fired him. asking if finland is part of russia saying mike pompeo passed him a note insulting president trump saying he is so full of skpli tiff the justice department filed suit delaying publication. says the manuscript is rife with classified conversation. >> any conversation with me is classified, it becomes even worse if he lies about the conversation >> bolton's lawyer denies the. he dragged it out to keep the perfect easy from being

embarrassed. so far, the secretary-general or secretary of state has responded to the accusations i want to take you to the european market. we have seen a turn in sentiment, the stoxx 600 now up a quarter of a percentage point. we are seeing this attributed to the experts saying the beijing coronavirus is now under control. this has been something we've been eyeing closely. the new clusters that have emerged prompting the resumption of schools and classes on line the travel ban in place as a result of an up tick of cases. now we have the chinese cdc expert saying the outbreak is now under control. this perhaps is contributing to the turn around sentiment. we opened on the back foot now we have the ftse 100, the cac and the dax 40 now up about a third of a percent on the day. let's come back to the

conversation around geopolitics and pick up where we left off around the u.s./china story. joining us now, reader and conversation from king's college london it would be great to pick up on the back of what we've heard of these bombshell allegations of john bolton. would it surprise you to hear that the president has sought aid from president xi jinping to help guarantee his 2020 election >> on the one hand, president trump has been tough on china. now we see that he's asking the chinese president for his support to be reelected. it is complex but seems like what is happening on the surface is the matter of what is going

on behind closed doors >> if you look at china's action around asia, they have taken a more aggressive approach towards managing their relations with china and india coming to the surface this week. what do you think of the retreat over the region to influence or attempt to influence the same way. >> i think so. we have seen china become tougher on india yes, there is combination from the u.s. and they are doing much more than using these harsh words. you can see how they have been

emb emboldened to come back on how we feel. >> what we saw on the border there a midevil battle that resulted in death and effectively the leaders are facing off against saying the he said, she said it feels like neither country actually wants a war >> i agree but we have also seen india and china in the past few months, not only earlier this week because they claim the groups came from both countries

there is one for 45 years. we should discount taken place. >> the market has come well since the blowing up of the office what we've seen on the back of some tensions as president trump warmed to the relationship with the north korean leader. what are we looking at now there is a few to reinstating the economy. what is north korea aiming to do at this stage? >> this is a clear case of the korean leader not fulfilling his goals. he thought he would get relief we have reports coming out of north korea saying the economic

situation is quite bad as a result of the coronavirus. that coronavirus casein side north korea. it seems that this is a case trying to alleviate the tensions i would expect more tensions between both they are going to target the u.s. in an election year >> we will have to leave it there. thank you for being with us. still ahead on "street signs," the uk walks away from talks with europe. what does this mean for a prospect of global digital tax we have more after the break 300 miles an hour, thats where i feel normal. having an annuity tells me my retirement is protected. protected lifetime income from an annuity can help your retirement plan ride out turbulent times. learn more at protectedincome.org.

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welcome back to "street signs. we have some news for you from wire card. shares are down about 9% the company has delayed the publication from 2019 due to implications of balance confirmations. we have comments around the

auditor and confirmed wirecard evidence could not be obtained on cash balances on trust accounts to be consolidated in the amount of $1.9 billion euros, approximately a quarter of the consolidation balance sheet total. respectively from wire card trustee accounts in order to deceive and prolong the exception holding the accounts to the companies the wire card management board is working with the board against the clarification of the situation. so in light of the above developments, the 2019 financial statements cannot be included in the plan a new date will be announced so another delay for wirecard and shares are reacting accordingly. the u.s. justice department

is proposing to roll back protections for big tech social media platforms do not have to bear responsibility for their user's posts the new proposal could force them to take action as well as increased transparency about mod rating their platforms, after president trump vowed to crack down after twitter added a fact check notice to some of his tweets earlier in may. the u.s. has pulled out digital tax talks with europe citing a lack of progress. frns finance minister called the move a, quote, provocation calling the digital tax a move of justice treasury secretary mnuchin said discussions had reached an impasse and attempting to rush the talks was a distraction from more important matters, primarily the covid-19 economic response let's bring in analysts from

fitch solutions. great to have you on the show. first off, what do you make of the timing of this decision to pull out of the talks. >> it is not that surprising i think the surprise is maybe more that they agreed. it seems that the u.s. was very, very keen. >> in the economy and taxation both really coming backfiring and suggesting that europe is not backing down what does this mean in terms of the future and taxation?

>> france will always say they will do it anyway. speaking on the decision, it doesn't really look too bad for him. it is difficult on the european scale as they tried to have a european level digital tax it means that we are several member states which we are not very keen. i don't see that unchanged i don't see the countries saying we don't really want to have a tax. we'll see also pushing forward and almost a unilateral kind of countries or to try to sanctio them because that is basically their plan >> to throw into the mix spain also coming out speaking the spanish government saying they will not accept any threats

on the digital tax it is legislating for tax systems. so another country weighing in this morning i wonder is there any difference from the covid-19. it is 1.3 billion euros in tax through digital means. if you talk about countries that oppose the digital tax could coronavirus make a difference to the digital tax. >> even the quarterly result to q 1 to put them in shares. the triple wammy of the sale and the supply chain to come to them

through the western sales because most countries won't log down in march and the sales for q 1. they are the biggest pockets and there is many countries believe that they are being taxed fairly there needs to be a change in the system of taxation where they are not sort of based in the country. these companies are looking in the detail and depth you made it difficult and need the u.s. on board. i won't say it is a coincidence but mostly american. you know with that global agreement. you end up being unilateral being against it and in the sanction where it makes it difficult for any other company to go ahead with the consequences from that decision.

>> dexter, it feels as though the world has moved on from when we started to discuss digital taxes. one view was that these companies, the faang would pass on the transaction tax since then, the e commerce has gone away. is it likely that will be passed on these days? >> in france, when france introduced the digital tax, it tried to pass on that 3% to third party sellers. it could potentially do that it depends on the level. the level is fairly low. they just wanted the issue in terms of profit and revenue. what i find interesting with the

construction of the covid-19 app whether on facebook and social media and free speech and microsoft and amazon -- >> we'll have to leave it there. thank you for joining us senior analyst fitch solutions i want to give you a check on wirecard down 36% after announcing they have to delay the publication ofresults due to the indication of spurious balance complications. that is being reflected in the selloff. we'll look at the u.s. futures that's it for me i'm julianna tatelbaum "worldwide exchange" is up next. businesses are starting to bounce back.

but what if you could do better than that? like adapt. discover. deliver, in new ways, to new customers. what if you could come back stronger? faster. better. at comcast business,

we want to help you not just bounce back, but bounce forward. and now, with one of our best offers ever, we're committed to helping you do just that. get a powerful and reliable internet and voice solution for only $29.95 a month for three months. call or go online today.

it is 5:00 a.m the "top five at 5." the nasdaq could make it nine out of the last sessions higher. a cautious fed chairman giving investors reason to pause. one investor says the u.s. stock market rebound is forming a bubble and ignoring the facts of reality. taking action. companies to pledge to tackle racial equality an