melvin (voiceover): that's all for this edition of dateline. i'm craig melvin. thank you for watching. [intense music playing] good morning and welcome to "street signs. i'm joumanna bercetche, and these are your headlines. uk consumer price inflation comes in hot at 8.7% in may, bucking expectations for a dip, while the core figure surges uk rates are now at 45% chance of a half a percent move by the bank of europe tomorrow. u.s. futures hold as we

await jerome powell's testimony on the first day at capitol hill. rival fedex slashes its workouts for the year, sending jitters throughout the sector. the ceo says cutting reliance on china might prove difficult. >> and european leaders pledge to support ukraine for as long as it takes, this as the uk prime minister ruishi sunak prepares to announce a major new impact of support here at the ukraine conference, we're going to speak to the european president exclusively in around 35 minutes' time.

well, good morning again there's one thing and one thing only that investors are focused on only and that's the uk inflation data the cpi number came at 8.7% on the year and made defying expectations for a 30 basis core dip. the monthly jump coming in at double the forecast, heaping more pressure on the government and the bank of england ahead of its rate decision tomorrow money markets are rethinking their rate hike bets after consumer price inflation did come in hotter than expected for the fourth month in a row with a 45% chance of a half point hike now priced in. arabile joins me to break down the latest figures let's delve into it a little bit more give us color on what elements are providing it.

>> it's pretty much the same ones we've had for quite some time the likes of food as well as nonalcoholic beverages that was up 19.1% and now it's 18.4%. it's really, really high and has really maintained the levels it's been at above 18% consistently businesses as well as hotels, still in the double digits a lot of these numbers when it comes to the elements are still remaining in the higher double digit figures, the uk overall having the highest figure in the g7 nations bind them at around 8% right now the bank of england expected to hike interest rates. minimum now looks like 25 basis points, but as we know, a 25% chance of a 50-point basis hike

is certainly in play there we spoke about the bond market's reaction to all of this, and that has been quite vast as well the 2-year government bond yield, even in germany, has hit its highest mark since march 10th and the british yield still above the 5% figure too. so these numbers have really, i suppose, scared a few. even uk chancellor jeremy hunt coming out saying we will not hesitate in our support for the bank of england as it seeks to squeeze money out of our economy. clearly everyone is banding together to try to get this down. >> since we still have the gilt curve up, let's take a look at the 2-year up 5% i think investors were very

quick to price in. i would have said that going for a 50-point basis hike tomorrow would be high, now we're sitting at around 37 basis points as what's priced in for tomorrow. so it's a 50-50 chance of them either going 25 or going 50 basis points but beyond that, the terminal rate is now priced at %. so you've got to think of the impact it's going to have as we've been speaking about the housing market anyone who has a mortgage, anyone who has that, there are going to be huge ramifications on those members of society, and because of that, the bank of england is coming under a lot of political pressure the country's confidence is at an all-time low. the political pressure is piling lots of people are saying where have the bank of england been, even though they were the first major bank to start hiking in 2021, their inflation levels are

still sitting at the highest. >> having spoken earlier this week, we spoke about the mortgage situation which also plays some hand into the delayed effects of that inflation number, going down eventually. i think one think's for sure when the bank of england looks back at the last three years or so, having gone through all the crises that it has, it probably would have wanted to have perhaps a greater impact on interest rates and hiked them perhaps a little bit more, but unfortunately it didn't do that. now they have to ask itself where can they maintain some center of credibility where there's an absolute need that they must double down now and hike by 50 basis points, but to do so, at what cost to the economy, which is already on decline effectively. >> i would add within more thing going back to cpi inflation. many are saying, look, the head

number came in at 18.5%. food has been a big driver as you say, it's still sitting north of 18% year on year. to what extent can the bank of england influence prices that's not up to the bank of england. what needs to be done is the government needs to put pressure on retailers to start limiting the price increases. fine, you can deal with that but then core inflation, which is the number that you get if your strip out all of those volatile components is still sitting at an extremely high level, and unfortunately that's why they're getting so much criticism. so they are in a very, very tricky spot. arabile, thank you for joining me this morning to break down this very interesting set of uk data. on a programming note door not miss decision time tomorrow. it's going to be a big one i'm going to be bringing you that all-important bank of

england decision at 12:00 p.m. local another big central big central bank day tomorrow. let's turn to the big boards the hand of the u.s. markets and asian markets are quite sour the hang seng down about 2% yet again, this after investors continue to digest the smaller than expected rate cob the day before, that sfrigt the property stocks so the mood out of asia has been pretty negative. the stoxx 600 down 0.1%. nothing major, but we're billing on losses from yesterday's session as well. in terms of the european market's breakdown, a bit of a mixed bank the ftse mib is up 0.3%.

in spain we're also seeing a bit of green the xetra dax, adidas is up. that stock is doing quite well on the flip side, deutsche post is really getting sold heavily this morning as a knock-on effect from the warning. red the u.s. fedex stock was down 10% weak results for the quarter, but also negative results looking into the rest of the year that's quite important because they tend to be a bellwether for activity in transportation the cac in france down of course, the ftse 100 down about 50 basis points. here there is one sector in particular that's dragging down the index. you don't have to really guess it's the homebuilders index. the markets are pricing out at

6% none of that is good news for the housing market if we flip over to sectors, you see real estate is at the bottom, down 2.2%. that's the china narrative playing out. there up at the top, we're seeing a bit of green in autos and banks. both are up respect actively in terms of euro yields, we're seeing knock on events the 10-year bund at 2.43%. all the action had been at the front end with the 2-year continuing move higher and higher 10-year italy also sitting around 4%. let's switch over to gilt. this is the market we're focused on let's go to the front end. 2-year gilts up about 5.10%.

today the market is fliegs roughly a 50-50 chance of a 50 basis-point hike tomorrow. at peak by december 2024 we're seeing remarkable moves in the front end of the uk gilt curve. as to how it's translating, this is the picture over here the pound is actually weaker, which is interesting, especially after the inflation rate came out. we saw it pop higher but it pulled back. 127.20 is where we are 0.3% weaker, that is notable europe is trading sideways and we're seeing the rah member by down 2%. i have an expert with me i'm happy to say the global expert joins me. george, so much to unpack here i'm obviously going to start with the uk.

give us a sense of what's going on now we're coming back again. what's going on? >> i think it's reflective of some worry we are worried about the uk because if you look at the big picture, it's been going sideways essentially some could argue we're moving into a wage price spiral dynamic, and the key issue for the currency market is bank of england credibility. if you think about the last year or so, the bank of england has been too model dependent they've been constantly pushing back on market pricing while every single bank was endorsing it and keeping the need of expectations contained what's remarkable over the last three months is market pricing has actually been essentially consuming full credibility, so real rates have been moving up and if you look at inflation

expectations in the uk, despite the inflation surprises, they've been moving sideways i think what the market is starting to worry about is the bank of england not delivering on the rate hikes. you might see real rates go down and the inflation rates going up that's why the currency has started to weaken a little if the bank of england doesn't deliver a solid hawkish performance tomorrow, you may well see the currency meeting a lot more in the worst kase scenario, you could go back to that period we saw last year where yields were going up at the same time the currency was going down when you have the full credibility loss the bank of england has to be very careful. >> you anticipated the question i was going to ask you if you go back and plot front and yields versus the performance of the currency, i would say over the last few months the rate has been fairly

high you saw the pound move higher. it feels today we're at an inflection point because now the market has moved on away from what the rate curve has been playing to actually the bank of england credibility, and if there is some sensitivity around the bank of england's credibility, then it is without question going to impact the pound from here, so it's something investors need to keep an eye on. let me ask you what you think the bank of england will do at the meeting tomorrow i would have thought 50 basis points was quite high, but after today, investors don't seem to be that sure that they're going to go for 25 basis points. >> so i think we always have to be careful in the market in talking about what we think they should do versus will do they should hike it by 50 basis points and try to ensure that credibility in terms of what the market is doing, but in terms of what we think they will do, it will probably be 25 but signal that they could step up to 50.

again, the risk here is that is falling behind the curve, which is something that essentially has been happening for the last year or so so a hawkish 25 is what we expect, but i think they should be doing 50 basis points. >> i wonder if a hawkish 25 basis points is going to be enough as you say to allay investors' concerns here the ecb are also sounding pretty hawkish and they've been un wav e er ly. how do you think the two square up today >> we've been looking at the pound since the start of the year, and we did see the euro underperform i think if we look ahead to the second half of the year, our biggest worry is precisely around the bank of england credibility risk premium, that they may not be able to deliver fully on market pricing. that's because they remain too

model-dependent. obviously you've got the elections next year, and the focus on the housing market is building under pressure to protect that we think the risks are that eue euro recovers against the pound because the boe may not be able to deliver as much while when you look at the rate that's delivering, we're still at the lower end of that range, and it's very possible we have an ecb range above 4% >> george, the other thing that's been playing out is the weakness that's emerged from china. the china rebound story is beginning to fizzle out. how are investors looking to play that trade going into the second half of the year? what's the best way to express that china's recovery isn't

going to be as strong as we had anticipated? >> i would say china's weakness has been one of the big sur prices the way investors have been expressing that view is essentially to use the cnh as a funding rate the dominant theme at the moment in the currency market is character rate the equity market is doing relatively well. what we're seeing investors, rather than taking a market approach and speaking to currency is to actually reach for yield. you're seeing the high yield currencies outperform and what they're looking at are the best funders. they are the ones that would have a low level and in an ideal world they would weaken. we're seeing increasing signs that investors are i'd fig cnh i think that's one of the reasons why you're seeing that weakness the other currency, the yen, has

been increased. >> the yen is sitting at around 142, and at the beginning of the year, i think it was one of the most consensus loans out there have people just thrown in the towel on that trade because the bank of england is staying put on their dovishness? >> absolutely. i think the bank of japan has disappointed expectation this year when you look at japan, what's going on, the rates are declining very sharply you have inflation expectations that are rising, keep rising to the upside wages keep rising. the yields are declining, and you can see that in the way the market's behaving. the nikkei is the best performing equity market there's a huge amount of inflation going on japan's normal gdp is the

fastest in the developed world, and the market is using the yen as a funder together with the yuan you look at the bank of japan's policy. >> it doesn't seem like it's going to any time soon george, thank you for joining me on the show. always a pleasure to have you on "street signs. i just want to flag to you our colleague steve is obviously at the fund event today. we got headlines he says it is clear we must build a platform for businesses to invest in ukraine they will be announcing a claim. very much in the context here you can see the ukrainian president zelenskyy is

addressing the conference virtually. let's listen in a little bit. >> the cost of freedom in the airlines and are only weight for them to recognize this really, reality, politically thanks to the same balance, we are developing strong alliances with leaders of the democratic world and the united kingdom, the usa, canada, japan, australia, all the eu members, and this gives us new power and fast economy and global prospects for democracy. we built our alliances and, thus, we are safeguarding the level of freedom to which our people are used to second, we are strengthening

stability at least 600 billion consumers out in the world who directly depend on our agriculture production this is a huge potential for food security. at the time of this war when russia blocked our doors and destroyed freedom, the world saw what ukraine grain is. without it, there's the press of increase of price. we have no possibility of restoring the movement of our agricultural product by seeing through two expert initiatives, and this is stability for a huge social and economic stage from morocco to sew mall a ya, from china to elsewhere different aspects, different

influences, but all of this a contribution to stability. >> ta was president zelenskyy addressing the ukraine recovery conference that's taking place in london right now. he's joining in virtually. a short while ago we did hear from the uk prime minister rishi sunak. stay tuned for our conversation with ursula von der leyen. steve will be directly involved in it. i'd be interesting to hear what you're thinking. coming up, as shares of deutsche bank decline and fedex slips after reporting weak forecasts for the full year. we're going to discuss more after the break. also later today but only for our premium subscribers, arabile will be speaking with dani saurymper

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signs" they rose 18.8 to 1.1. the big jump was 18.5% we're seeing a healthy bounce with most of the makers, the likes of bm up 1%. daimler up 1% also volkswagen, similar move very strong carmaker numbers despite the headwinds we talk about. similarly, daimler truck will propost the first dividend of 1.30 per share that's a rise of 55% on the year

and a 25% jump in revenue in the first quarter of this year the stock is reacting quite positively to that news. now, daimler truck chairman told cnbc the company is an industry leader when it comes to ai and advancing autonomous driving in its fleet. >> when it comes to numbers driving there, we have a really key portfolio out of virginia. it will take a couple of more years until we're ready to launch it commercially ai plays a pivotal role in accomplishing that challenge. >> here's a name, a company we've been following very, very closely in the chemical space. yesterday we with were talking

about the results across the chemical sector as a whole in europe, but then look what happens in the afternoon session. yesterday investor shares jumped 12% higher in trade, this after bloomberg reports that the oil company had expressed interest in a takeover of the chemicals firm, a 40% premium on monday's closing price. we're dipping back a bit today also it's part and parcel of this trend from these major investors in the middle east taking an eye and looking at some european companies and where the investment opportunities are, so something to keep in mind there. now also your fedex shares fell in extended trade from flight to low single percentage rev you growth

the transport company was forced to ground 29 more planes in the fiscal year. e-commerce has been particularly hit as customers return to shops after the pandemic fedex reported an adjusted profit in the fourth quarter so the fedex impact is having knock-on effects d dhl in europe is down as well. the united states are getting concerned over the shipping. deutsche post's new ceo told cnbc on the sidelines of the german day industry conference that it might be more difficult given the vast supply chain network. >> the may crow environmental

continues to be difficult. we don't really see a trend. that's not the case. yes, they might set up a factory in vietnam and other asean countries in turkey. a lot of components and parts are still coming from china. the manufacturing in china is so deep and has such capacity, it will be hard to replace even in the coming years. >> do you see a change in the way goods are traded across the globe because of the geopolitical situation and the geo positioning of the companies? >> we do see some changes. if you want to get a warehouse in malaysia, you will struggle there's a lotof things happening, movement happening, but it's not a change of reassuring pack to market. that's not the case. as you said, it's a matter of

diversification. this factory is not built in china. the assembly is not built in china, but, again, a lot of parts and components will still come from china. >> let's take a look at how u.s. futures are faring ahead of the u.s. open. we're sitting marginally positive the s&p is sitting up 1 point higher the dow jones up about 14 points as well. but it is going to be a big day for anyone who is piecing together what the central bank plans on doing because the fed chair jerome powell is set to spend two days of testimony. the investors will be looking to see whether he offers any clues on future rate hikes after calling july a live meeting following this month's pause meanwhile comments from two fed board nominees overnight suggests that inflation has started to abate but remains too high fed governor and vice chair nominee said the economy is facing numerous challenges

including banking sector stress and geopolitical conflicts and that the fed must stay focused on its 2% inflation target. also coming up on street signs, investors and policy makes gather in london to discuss frern funding to rebuild ukraine even as the war continues. plus stay tuned for steve's exclusive conversation with european commission's ursula von der lay yen. that's coming up in about 10 minutes' time. jooing

. welcome back to "street signs. i'm joumanna bercetche and these are your headlines uk price inflation comes in hot at 8.7% in may, bucking expectations for a dip while the core surges. >> uk now points to a 45% chance of a half a percent move from the bank of england tomorrow. european markets buckle while u.s. futures hold still as investors await fed chair jerome powell's testimony on the first

day on capitol hill. rival fedex slashes its forecast for the year, sending jitters through the sector ceo tobias myer downplayed the global trend telling cnbc cutting alliances with chinaed my prove difficult. >> i don't see a trend to deglobalization. that's not the case. the manufacturing in china is so deep and has such capacity, it will be hard to replace even in the coming years >> european leaders pledge to support ukraine for as long as it takes while ukrainian president calls for confidence at the conference underway today. >> we must move from reason to agreements and from agreements to real projects. >> steve will be speaking withwith ers la -- ursula von der leyen

in a few minutes. the conference is hosting joint by by the uk and ukraine leaders are looking for support to help the country's economic and stabilization and recover friday from the effects of the war with an array of participants from the international community, financial institutions, and the private sectors. i'm really happy to say the former trait representative of ukraine in addition to the numerous other harts that you have joins me around the set natalia, thanks so much for joining me and taking the time what would you say the ukrainian delegation is looking for in terms of the outcome of the conference that's underway in london >> first of all, i think we're all looking, hearing that the support will not stop both military, political, and financial level. second, because the uk and london are known everywhere as

the capital -- private capital as a financial capital of the world, everybody is looking in terms of hearing how the private sector might step in into the ukraine's recovery, being actually incentivized by the government and donors. >> when you think about how much money is needed, i thought it was interesting. just for 2023 alone, and this isn't taking into consideration the recent destruction, over $400 billion whether to your mind is that money going to come from >> today i had the honor to be at the bank where the first deputy minister of ukraine, and what she told is that the ukrainian government is expecting 20% coming from the public -- being public money and 80% being private capital. we in no way understand that

like, you know, from 4 town to $700 billion u.s. could be actually -- you know, we can get them in public money so the private sector has to step in, and ukraine has to offer to the private sector the project that they are -- they can invest. >> i thought it was interesting earlier that the uk prime minister who was also addressing the recovery conference said that they will be looking to announce a new framework for war risk insurance to what extent do you think providing governments, providing these sorts of guarantees, this war risk insurance is going to be essential to helping private investors deploy capital >> the government has to step in because we understand that all private investors and private capital, they're looking for some skin in the game from the government the skin in the game might be a form of the war insurance. it might be in the form of

actually putting equity into some private equity or venture capital funds or it might be also the guarantees from the expert credit agencies or insurance agencies there are different ways how the foreign government might incentivize or might partner with a private capital to come to ukraine >> that's what the government will be looking to do to allay people's concerns. at the end of the day, the country is still in war. you have to think about the short term, the medium term, and the long term, that's the sort of time frame spelled out in the recovery funds one thing that i they has really emerged out of my conversations with yourself and many others that we had at the prelondon stock exchange, despite the war going on, there's still a huge appetite on the ground to keep the economy ticking.

not just through that but also to build and plan for the future, ukraine 2.0. what does that future ukraine look like, natalia >> i would say future ukraine is ukraine that is billed by interpreters, built by resilient people around ukraine that are experts, notwithstanding we have the sea closed, that we have a limited capacity in terms of bringing the goods by the train, by those interpreters that are looking into the future by diversifying markets and looking for investments but also by those who are now trying to partner was flooding investors either to bring capital into their business or create venture funds to invest. definitely ukraine is going to be the number one tech nation in the world because notwithstanding the war, the tech sector in ukraine is growing.

ukrainian startups, because they're selling abroad, the market is abroad, they are expanding, and what we currently need, we need a bit of capital flow into the country, into those startups so they can actually flourish. >> and certainly when we spoke about it at this event especially at the london stock exchange, one of the sectors that does stand out in terms of positive performance is the tech sector torque be the largest country in the world is going to be a bit challenging certainly there's going to be hope there i do want to switch tact i mentioned at the beginning you wear many different hats and you sit on the board of the leading high trow electric company in ukraine. you're essentially sitting on the board of the company that also overseas and has the dam as part of its portfolio. the dame was destroyed there's been a huge amount of displacement, lives lost on the back of it

talk about the impact that the destruction of the dam is having right now. >> yeah. there's a very important point i need to make here. there were a lot of media pieces stating that the dam collapsed we believe and we know who that dam was intentionally blew up -- blown up by russians, and we know that because the dam was designed and built in a way that it actually might go through a nuclear strike we know that russian troops intentionally mined the dam from the outside and most importantly the russians have been targeting our hydropower plants in different regions of ukraine from the beginning of the war. all of this proves that actually the dam and the hydropower plant have been blown up by russia, and what the prime minister just said at the opening of the ukrainian recovery conference,

russia has to pay. and what we have now, it's 1.5 -- at least 1.5 billion losses caused by this, but most importantly, it's an ecosite because they hall tul it. they have been destroyed we're not even talking about the people's lives who are priceless. >> the colleagues at nbc news had a meeting with your president, president zelenskyy, and he also said he was 99% certain the dam was blown up by russia the reason we're having this conversation is russia is asserting it's ukraine talk about how difficult it is to rebuild the country when so much of the money has to be funneled toward just

reconstructing infrastructure that keeps getting targeted? >> i think there are two-dimensional and three-dimensional debt problem first we need to think about immediate repair and recovery. something has to be done immediately. we need to have war insurance in place. foreign contractors will not come and do repairs of the equipment to any of the ukrainian businesses they will not come and do installment of new equipment if we launch to install a new production line. we need this to continue producing, to continue actually rebuilding what has been targeted by russia, and in terms of further billing strategy. in the midterm, in the midterm, we definitely need the flow of a foreign capital. either it's a public capital or private capital. here i would like to again

emphasize that, that the more we have private equities, venture funds, and investment vehicles or investment institutions looking into ukraine, the better for us the more success stories we see, and the first investment flowing into the country, the better the situation is in terms of actually asking. you know, it's always difficult to be the first one. but then there are more and more people willing and ready to join, and here like one point i want to emphasize, ukraine is not only about charity and about the country that actually needs help ukraine is also business-wise given the opportunity for businesses to invest and actually make money. >> my colleague steve is at the recovery fund -- conference today, and he's going to be speaking to the european president ursula von der leyen shortly. i wonder how the cooperation has

been with the eu and what is the sentiment like among the public? do most ukrainians want to be part of the eu in the future >> ukrainians proved that position a long time ago during the evolution of dignity i was pregnant at that time, but i was standing there and actually making it very loud that we want to join the eu, and eu is our biggest trading partner. you know, before the war and after the war, the importance of our trade relations is just tremendous ukraine has a deep and comprehensive free trade agreement with the european union. our trade to you and experts to you have been growing for quite some time, and the only issues that we have and the biggest restraint now is we have our sea closed by russia, and russia as a part of that genocide of ukrainian nation, it's not only

killing our people, but trying to destroy it, what it cannot have it's trying to destroy the ukrainian economy by actually foreclosing. the way for us to sell to get foreign currency back, but the trade is not only about actually selling something or buying something. trade is about building relations and potentially bringing investments into the country. >> o, nataliaing we talked a lot about trade, investment opportunities, landscape military assistance is key here, and a love lot of it has come from the united states, there's talk that there will be -- there's an election coming up next year. the republicans may be less key on providing as much military support as president biden has how much of a concern is that when you think about the outlook for the next year? >> i think that military

assistance is of most importance for ukrainian business you cannot rebuild or do recovery work if you have missiles flying over your head and hitting whatever you're rebuilding all the ukrainian businesses when we ask them, like what is your one wish that you can say all over the world, we need to have fighter jets and missiles to close our sky because for business and economic recovery and rebuild, the closed sky is one very important issue, and, yes, it is a concern to us, but i would here make a point. also the u.s. is the biggest donor in terms of military assistance to ukraine. the uk was the first one to provide weapons to ukraine, especially the heavy weapons uk is being on the forefront of a lot of initiatives of helping

ukraine on the military floor and the standing that that's also a part of the economic recovery. >> i just want to ask you a question about the war before we round thinkgs up? how is the counteroffensive going? what we've been reading, gains have been made, but the casualties are very high. >> i would say our military leadership in ukraine, what they told us, we'd rather be silent on what's going on on the counteroffensive we do what we can in order to support ukraine military we pray, we donate, we buy stuff, and we honestly believe they already do their best because it's the only way for us to win the war. >> how is the war going to end >> we will win ukraine will win and we will see you all in ukraine for a big victory party or a big investment conference. >> natalia, very powerful words. thank you for joiningmy me on

"street signs. i really appreciate it. italy and france have vowed to continue supporting ukraine and its war on russia for as long as necessary. meloni warned the war is getting closer to europe and without continue support for ukraine, the region would descend into chaos. >> translator: what ukrainians are doing is also defending our freedom and defending a system in which the force of law win and not the law of the strongest. that is the reason why we will continue to do our part. it's the reason why i'm proud we can announce together with president macron that the defense system is operational because the president correctly remembered it's a fundamental system to defend civilians, innocent people, and we should be proud we've worked so hard so

we can offer this tool in the shortest possible time. >> and european leaders are set to pull out china in terms of economic support of china that and help bring an end to the war in ukraine the bloc will make the statements at the end of a summit with chinese officials next week. and eu competition commissioner margaret is in the top running. in a statement to cnbc she said she welcomed the danish's decision to nominate her for the job. she's been at the forefront for almost a decade having seen a crackdown and levies against some of the big naples we'll be hearing from margaret vestager at 11:15 cet. and soft baifrpg touched the top of the nikkei in early trade

after bullish comments from the ceo at the firm's annual general meeting. speaking to investors, son talked up the developments. >> we focused on being defensive. we, in fact, have built up cash. three years ago we didn't have a lot of cash on hand. because we've been in defense issue mode, we've built up to 5 million yen. i'm very excited about that. the number coming in much hotter than expectations headlined 78.7%. core cpi, 7.1% food inflation still running at 18%. the work is cut out tomorrow

we're below 7,600 again. we've dipped about 0.1%. homebuilders dragging the ftse down, no surprise now that the praise hike is down 60%. we're seeing a good bounce on some of the car makes today. xetra dax, we ee seeing autos at the top as well as adidas. not doing so well is dhl that name is being dragged down by fedex results overnight in terms of sectors, this is where leadership is coming from. we have right up at the top autos, and that is something that i just spoke about. on the flip side we have got basic resources down 1.4%. real estate, down 1.9% the reason they're underperforming is on the back of some of the weakness in asian

stock that have come through, disappointment that pcob did not cut basis points yesterday in terms of the uk market, i mentioned the ftse is down lot ee switch over and talk about gilts because there's been a lot of movement. 2-year gilts sitting above 57. investors have been quick to move on interest rate market price. tomorrow the bang of england is expected to hike somewhere between 25 and 50 basis points markets are pricing in at 37 basis points for tomorrow's meeting. so 50-50 chance of either one. a quick look at the pound. the reaction was quite interesting because when we got the very hot numbering we saw a spike in the pound now dipped lower it's trading at 127.17, 0.3%

weaker if you were listening to the show earlier on, i was speaking with george an he was saying at this point the market is flipping away from micing in furor interest rates into sterling where the fx currency period is trading to now being concerned about the credibility risk premium of the bank of england and their actual ability to beat inflation. that's going to be the big question for the bank of england tomorrow i'll be there for. i'll be presenting thursday on you don't want to miss it. that's our show for today f i'm joumanna bercetche "worldwide exchange" is coming up next.

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it's 5:00 a.m. at cnbc global headquarters and here's your 5 at 5678 we look at stocks doing something for the first time in a month as attention shifts back in two days with testimony of fed chair jerome powell andy jassy prepares for his first face-to-face with the bloc's piece we speak with her. modi has big tech on his