that's all for this edition of "dateline." i'm andrea canning. thank you for watching. ♪ fed rate decision janet yellen tells cnbc she expects turbulence in the economy. >> our monetary policy on the economy and we expect to see some impact. it is a mixed basket for european retailers as ocado

touches the top of the ftse 10 and finishing fisher dives to the bottom as it cuts the full-year dguidaguidance oil prices hit gains with ten-month highs with saudi arabia's energy minister says cuts are not just a way to force prices higher. >> it is not about the jacking up of price, but it is making the decision at the right time when we have the data and when we have the clarity. and instacart's big day. the grocery firm prices at the top of the range around $10 billion as the ipo market gathers pace

good morning let's check in on markets and how they are faring. u.s. markets inked out gains yesterday and all eyes are on the fed meeting that is happening tomorrow no expectation they will hike. investors are looking for clues in they will keep the door open to maybe one more hike later this year. the market is currently about 30% priced for november. the economic projections will be closely watched. that is the tone for the u.s. session. overnight in asia, we have seen risk sentiment nose dive the stoxx 600 had a very negative session yesterday you see more green on the heat map. the index is up .20% pairing the losses yesterday from the index down 1% in trading inching back into the green, but still a way to go to compensate

for the losses let's get to the individual boards a couple of stories we are watching today the patch of red is the dax which is down .20% the cac 40 is up .30%. we had interesting stories overnight in france downgrading the forecast for 2024 and 2025 the ecb governor said that once inflation is 2%, rates can start falling again. something to keep in mind with the dovish hike last week. a dismal performance on the capital markets yesterday. ftse 100 in the uk is up .30%. we are watching a couple of stocks with retail day for ocado and those shares opening up 5% now they are up at 2% on the opening. and king fisher stocks are down

for the day. in terms of sectors, let's get into details this is where leadership is coming from. real estate is seeing a bounce interesting with the general trend higher for yields that we have been talking about. autos in focus up 1.1% that is remarkable given the strikes at the key automakers in the u.s. still ongoing. des financial services up .80 recent we have retail down poun.30%. i want to mention banking news today. reuters published a story that ecb may tackle liquidity in the

system something to watch out for in terms of u.s. futures, we have all of the three majors opening in positive territory after a mildly positive session yesterday. anything can happen on the fed let's talk about that. markets are pricing in a near certainty that the fed will hold rates at the decision tomorrow with investors focusing on the central bank future path the fed will release the dot plot suggesting they will increase once more this year traders see a 70% chance of the fed holding rates in november according to the cme fed watch tool with the probability of the hike falling in recent weeks. there is still 30% of a hike priced in. u.s. treasury secretary janet

yellen told cnbc she does not see signs of the economic downturn despite interest rates. >> we have a good labor market not as hot as it was because that is important because our objective is to bring inflation back down to 2%. our lasting impact of monetary policy on the economy and we would expect to see some impacts. we have certainly seen it in the housing market, but we still have a good, healthy labor market and consumer spending remains quite robust the bank for international settlement warned the build up the short bets on u.s. treasury futures is a vulnerability it joins the fed and financial stability board in warning of the risk of hedge fund margin

de-leveraging. janet yellen is not worried about the u.s. to issue bonds to finance government spending. >> not really seeing concerns in the bond market about issuance the fed has tightened monetary policy and that's pushed rates up, but there are pay fors in the legislation that funded all these programs i'm not really concerned about the impact that they'll have >> i'm happy to say that the vice chair of global financial from deutsche bank is joining me wonderful to have you on set you have been away a couple of months >> i hope you had a good summer. >> i did likewise you said let's get through the summer september is when things will get spicy for markets. i think it is fair to say that

the market narrative has prmove away from central banks begin to cut. >> that's why i'm back look, a key central bank almost like wimbledon finals or nba finals we know we are almost at the end of the hiking cycle. for rates, especially for money players, they are itching. something happened over the summer moved to 35% higher in three months over the summer on top of the spiral the first thing to play is paying rates. >> i wanted to ask about what is happening on the duration side and energy brent is almost at $100. it is crazy how much the price of oil has moved

if you look at what the economists are saying in terms of what this translates to cpi i looked at the note from morgan stanley yesterday. every price on oil is translating to core inflation. it shouldn't have an impact on the central bank decision? >> i'm with you, but it also impacts expectation. if you know from the markets, usually we get that $100 brent it is getting more powerful in the global markets and mbs and his production of cutting is working perfectly. now putin has jaoined him. that puts president biden in the corner that may not push around core inflation right away, but we are sensitive that even on the .1 beat approaching 100, your

expectations of 70% hold in november may change and things may snowball that's not my expectation. my expectation is one more push on rates higher because people are long duration. probably another push toward 450. maybe 450 becomes correct. more real money. finally a risk >> finally fx risk >> then you buy. >> the new cycle high. the recent cycle high was 3.5 on the 10-year treasury what about the fed this week is there an expectation that they perhaps guide hawkish nobody is expecting them to hike interest rates there is a lot of talk about

with next year and those cuts. >> the famous dots i would say there is a debate. some clients expect things not to change on the 100 i would say more on the hedge fund side. expect dots to move higher in plain english that means less cuts just like we said, that can impact the narrative also how powell talks about growth and inflation jobless claims they are sticky and stubborn does he talk down growth friday's pmi is important. on the inflation side, how is the 2024 forecast look i lean more hawkish and that inflation forecast being hawkish. >> you talk about all of the

asset classes. bond guys have a different view of the world than the equity in the u.s., we have been talking about a.i. and tech stocks and successful launch of a.r.m. last week put it all together, what are your clients saying about the sentiment? higher oil prices and higher real rates and the fed sounding hawkish. >> i do the roundtables and in the polls, every single time, equities move. they want equities to go lower it keeps saying persistent this time around, it is a bit of a.i. versus supply and voersus energy what about a.i.? so far, for equities, that turns out to be correct.

a.i. still lifts equities. supply and oil is more important for duration and rates. >> that is a fair assessment before i let you go, we have other central bank meetings coming up this week. i want to ask about the bank of up how closely are they watching this meeting euda is getting away from the move and what impact will it h have >> that is the big question. bank of england is like the ecb on steroidis. they may cut, but think will hike they will get the dovish hike. bank of japan, watch out deutsche bank's team took our forecast for this meeting and october and famous negative rate policy from the december of 2024

to january of 2024 we expect a hawkish meeting. that may be the big one this week the most popular trade is japan short and the famous king kong dollars. that is a bit of a strength beyond the intervention talk i think medium turn, the dollar still wins soft recession hard recession risk off dollar again wins. in the short-term, the bank of japan impacts how dollar trades. >> ozan, i could talk to you for a long time. we will leave it there thank you for giving us your overview >> happy birthday to my mini schnauzer. >> thank you vice chair of global macro from

deutsche bank. cnbc's delivering alpha summit is around the corner you can join leaders on september 28th in new york to help you balance risk with maximizing returns. scan the qr code on the screen or go to cnbcevents.com/alpha to find out more. coming up on "street signs," ocado sales are on the rise, but keeps the same forecast ouootlk for the year we'll have more after the break.

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welcome back to "street signs. quick corporate news we have been following the events at bp closely the company is announcing it an an appointed an interim cfo. that will be kate thomson. the prior cfo is now acting as the interim ceo. a shuffling of the deck there.

and ecb's galhau has a hawkish note with the ecb falling rates again when inflation gets 2%. that current rate is 5.3%. we will get a confirmation at 11:30 cet today. the risks are there for the country's financial sector, but cautioned against overdramauma tiezing the situation. >> particularly through covid. the huge support did shield the banking system from credit losses as we are looking at it now, we are seeing a pick up in impairment across the banking sector it is not one people should be alarmed about just over 1% of mortgages are in arrears. that number was as high as that in 2018. in the financial crisis, it was

3.6% it is going up, but from a low base in retail space, kingfisher is warning of demand in france and poland the british retailer has a first half profit of 317 million pounds after a 2% drop in sales. kingfisher announced a 300 million pound share buyback program and said it is optimistic the inflation will ease in the second half. one of the worst in the ftse 100 today. ocado has full year outlook despite the 7.2% rise in the third quarter revenue. what is the reaction in the marketplace, arabile >> it has been positive. the revenue figures have climbed 7.2% if it has grown that much or grown that much in the third quarter, the first half of the year revenue grew 5% this will be good news for marks

& spencers the one thing to note is the average price has gone up 8.4% with the inflation impacts the company has wanted to decrease prices in face of the inflation impact because prices have gone higher what they are trying to do is gain back margin by reducing prices and have a few more people back in the store the online space is growing, but for them, it is not growing the way they would like. there areitives in the number 8.4% customers are going up 1.5%. active years nearly 1 million will bode well for the company. as i said, revenue growing in the third quarter faster than the first half of the year. >> that ocado retail business. arabile, thank you very much for that report. let's bring in susannah

streeter it is wonderful to have you on the show interesting of what arabile saying they were able to pass on prices to consumers when we talk about the cost of living crisis because people have been cutting back on the grocery spend. not with choice, but because they have to where does ocado stand within that universe of a race to the bottom in terms of cutting prices to attract new customers? >> you are right th there's been a bump with the grocers taking on the discounters like aldi. ocado shoppers are more insulated from the cost of living headwinds we have seen that with the results across the business as a whole especially with the joint venture selling groceries

through its platform it seems this section of the market is more resilient this is a reason for that. look at the uk as a whole. 37% of homes are owned outright. so those people who many are core customers of marks & spencers is not so effective by higher borrowing costs because they don't have to pay a mortgage because that takes a big supplies from the household budget that is the reason why ocado's customers are proving more resilient. they are still price conscious like across the board with prices going up pretty much everywhere they are not immune to the cost of living crisis if the price is right and it certainly seems ocado is getting the prices at the level the

shoppers want, it can reap rewards. >> we had that dramatic fall post-pandemic last year. we are making some ground back in the course of 2023. let me ask you about how analysts are thinking about the division of ocado retail and ocado technology business? that technology business is the partnerships to re-sell robotics they have partnerships with the likes of kohl's in australia and kroger in the u.s. how is that upside potential for the stock? >> that is why you did see ocado stock rise so high because of the growth potential this side of the business is believed to have however, it is really not met those expectations yet it has 12 partners and 23 sites are using the really impressive

robotic systems. among those deals, the current revenue is impressive at 61% that is why, of course, there are still hopes this part of the business does have a big potential. the problem is it hasn't met expectations yet it is a really difficult time certainly for companies eyeing up higher borrower costs it won't enter into the expense, but there is a hesitancy and that has slowed down more deals inked which is disappear pointing there is a lot of growth potential. still relate revenue retail accounts for a lion's share. what investors want to see is more progress sdp

>> let me ask about the m & s leadership here. it is the lack of fruits borne by the venture is this something that will persist and is it going to be a jv that works for ocado? >> you are right there has been words exchanged about from the chair about the joint venture is not where he wanted it to be. so there has been a lot of focus on this and i think what you will see from the results with the retail today is the sign of encouragement for the joint venture. there is still a long way to go. it is still a very tough operating environment despite the improvement we'll see.

i think certainly any progress will be watched closely, particularly in the pre-festive season right now it seems ocado's core shoppers are resilient will that continue into christmas? >> susannah, thank you for joining me on "street signs. head of money and markets from hargreages. coming up on "street sig,"ns saudi arabia discusses production consuts. we'll discuss after the break.

welcome back to "street signs. i'm joumanna bercetche and these are your headlines european equities and u.s. futures are muted as investors countdown to the fed key rate decision u.s. treasury secretary janet yellen expect turbulence in the economy. >> our impact of monetary policy on the economy and we would expect to see some impacts it is a mixed basket for european retailers as ocado

touches the top the ntftse 100 the third quarter and king fisher is at thebottom. and brent cracking $95 a barrel and the saudi energy minister saying this is not about forcing prices higher. >> this is not about the jacking up of price, but about this decision at the right time when we have the data and when we have the clarity. and it is instainstacart's day. prices shares at the top of the range giving it a valuation of $10 billion as the ipo market gathers pace let's check on the european

markets. we are tilted toward the green after yesterday's more negative session. yesterday, the stoxx 600 ended down 1%. today, things have turned marginally positive. one patch of green is the dax. others are trading positively. i talked about the comments we got from the ecb's governor galhau the bank of england issued a kr correction the ecb rate can be lowered. not fall that is something to keep in mind we are keeping a close eye on central banks, not just the ecb decision, but later with the

bank of england decision on thursday will they go for a dovish hike let's look at the fx this is how the yen is trading 147.70 ahead of the big meeting this week and ozan believes it could take some pressure off the dollar that is something to watch out for. others are trading sideways. we are keeping a close eye on the euro which continues to drop since the hike last week this is the picture in the u.s. session. all of the majors on in a holding pattern ahead of the fed meeting tomorrow we will be watching closely for the economic projections and the dot plots. let's get back to commodities. oil prices are pushing north of $90. rising for four straight

sessions as shale rate in the u.s. is among production cuts. dan is in dubai and he has been covering oil dan, we can't say we didn't warn the market opec is saying the market is in deficit. any production cuts can put more pressure on the price of oil it is more difficult for the saudis to justify the production cuts, isn't it >> reporter: well, that's an interesting question, julianna i know you have been following this i have been absolutely fascinated with the rise of oil prices you said tracking at a ten-month high with the brent contract at $95 a barrel u.s. dollars. are we seeing the gains extended through the u.s. open when we see volumes coming into the contracts? oil has been higher for all of this trading session let's see if it can be extended.

nevertheless, gains for the oil market today this comes as we see bets increasing that we will see the deficit in the market being extended it nto the fourth quarr and saudi arabia and russia are extending that production cut. we see the u.s. production dicondicontinues to decline we see sluggish economic growth in china we had the fresh comments from the saudi energy minister. he spoke at the event in c calgary. he said it is meant to be happening following the opec decision to cut the curbs. he said they are limiting volatility the primary focus is market stability. he says not jacking up prices.

listen in. >> we can produce more or we can increase that has been a subject that we with want to make sure that the messaging is clear it is not about, again, this jacking up prices, but it is about making the decision at the right time when we have the data and when we have the clarity that we become more comfortable. >> reporter: his royal highness there. julianna, when it comes to the justification of the cuts, that is an interesting question you know we follow this closely. if opec is the central bank of oil, then his royal highness is the governor the indications that we had from

him is there is no intention from the opec group, particularly from saudi arabia to exit or unwind from the cuts. anything could happen in the fourth quarter and ultimately it is the u.s. policy and the outlook for china which could determine if oil breaks above 100 in the fourth quarter. >> dan, we had a guest earlier on in the show and he was saying his clients are all very much focused on the higher oil prices and what it means for mondetary policy central banks are approaching the end of the hiking cycle. we are keeping a close eye on it thank you for the report from dubai. switching to european politics spanish socialist leader sanchez has called on the eu to recognize spanish difficult

el dialects in the bloc he is expected to discuss this today. many like france, germany and sweden are speaking out. this is extraordinary. in order for them to put a functioning or viable government together, he has to get brussels approval >> you have the european affairs minister meeting in brussels to make the official language status in the eu that is a condition that cat al al - catalon's party. it really has encouraged spain with the proposal on the table you need an ppproval to all of

them they need to know theof doing ts you have the support of sanchez if they get the language status. they need amnesty to the politicians part of the 2017 referendum that causing a controversy he is looking to see the support with the seven seats and he can cross the line of 176 seats in parliament at the moment, the discussions are going on. >> what is the reaction from the conservative party technically, they won a simple majority, not an absolute ha maj majority last elections. >> he has been put in charge by the king on paper, he doesn't have the

absolute or simple majority. that is why he is trying to see if it comes to his turn to form a government and if he has the threshold. that's causing controversy even within his own party all of this is happening and that decision is back in brussels with the 27 countries to make it play into it. >> it is fascinating good case stud any democracy and helpingthe spanish government get together charlotte, thank you coming up on the show, the united nations general assembly

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welcome back to "street signs. united auto workers union threatened to extend the strike as negotiations with detroit automakers and employees failed to reach resolution. union president shawn fain warned about the proposals carmakers move to scale up production of evs. fain said the union will decide on the next steps in the coming days >> things are still status quo moving slowly. we had meetings over the weekend, but we still have a long way to go that's going to be up to the companies how this plays out we'll see how things progress the next few days and if we have to amp up pressure, that's what we will do this battle is not about the president. it is not about the former president or any other person

prior to that. this battle is about the workers standing up for economic and social justice and getting their fair share they are fed up with going backwards. >> stellantis has been caught in the crossfire after details of the proposal to the uaw issued last week. the carmaker said it would close 18 u.s. factories, but would repurpose a defunct facility in illinois shawn fain accused the carmaker of using workers as a bargaining chip stellantis held talks with union leaders and looked forward to getting back to work our colleagues will speak with the coo mark stewart later today. tune in for the interview at 13:40 cet. stellantis shares are up in trading today 1.3% for more on the impact of the

uaw strikes on the economy, check out cnbc.com. president biden is set to address the united nations security council today as the first day of high level general debate in new york the u.s. president plans to address the chrisis in ukraine president volodymyr zelenskyy will attend the summit in person for the first time since the war began while china and russia will skip the meeting all together eu representative said the assembly represents a key opportunity to discuss global priorities >> the high level and high moment for the political united nations. everybody is here. we have coordinated our outreach to countries among all ministers. they can tell you that all together we will have a meeting with 133 persons here in new

york during this week. it shows intensity to talk abou the big issues this week like climate change and sustainable goals and reform financial architecture and certainly the russia war against ukraine. >> ai'm happy to say the program director is joining me now wonderful to have you with us on the show can you highlight for us what you think is at stake for the summit and what you are looking for in terms of commitment versus what we had and what we achieved at prior summits? >> thanks, a lot the summit is important because it confirms the secretary-general of the u.n. is personally committed to advancing climate action i think in the past, these

summits were having a broad intent what is significant is the president is trying to set the bar for what ambitious action. he is trying to give benchmarks for how to give credibility to the wave of net zero commitments from locals and local authorities and really trying to say you have to reduce emissions and not rely on carbon credits as a get out of jail card. he is calling for countries to take bolder commitments to cooperate with the private sector and we are trying to get more clarity of what message this could send.

one signal is very much discussed in new york is the question of the fossil fuel phase out. in particular, could we start talking about potential dates for certain geographies to give objectives and a bit more credibility to the ongoing discussion driven by the scientific body summarizing the plan >> i read a blog post that your group put up you talk about a huge ambition gap having a 50% chance of meeting 1.5 degree celsius with no overshoot which requires to reduce remissions by 2030. current commitments reduce them by 0.3% at 2019 levels by 2030 this reads as disheartening.

>> it should remain the target and maximum ambition the numbers are less dire if you look at keeping temperatures below 2 degrees. we have been clear in the last few years that 1.5 was the best we could aim for and still impacts would be worse than today. i think it is becoming more tangible what climate change looks like it is dire at the risk of sounding more disheartening, there is a sect g second gap, the commitments are not enough toward off climate change we are not putting in place the policies and measures that would be required to meet those targets. if you look at currently stated policies, we are not on course to really have to kind of

plateau with the reduction of emissions. there are still encouraging signals. there is a race toward renewables and the international energy agency is projecting that there will not be long-term growth of coal, oil and gas. for sure, you know, we have to go faster. we are starting to see a bit of a curb now we need to accelerate. that is the purpose of the summit in new york >> ton the show, we speak to a lot of people in the oil industry they say the non hydro carbon infrastructure in place is not built enough it is not sophisticated enough to deal with the energy demands. if we were to abruptly stop reliance on fossil fuels or hydro carbons today, there is

not enough to meet demande it needs to be a phaseout. we would need to see a faster phaseout what is the solution here? how can you satisfy our needs for energy and at the same time do it in a way to still achieve the climate targets? >> in that is the critical question for decades, the group has focused on trying to lower the demand for fossil fuels and energy trying to ramp up clean technology and transport buildings power and then we can look at the supply i think what is interesting is that because the summit is taking place means we will see increased focus on what is the responsible behavior expected from the supply sector i think one of those is going to

be about being honest and frank about the ratio of investment. currently companies portraying themselves as part of the solution invest on the ratio of 9 to 1 in fossil fuels compared to clean technology. yes, you should maintain the current infrastructure to ensure it is not derelict the key question is should we invest in new oil and gas and coal we see countries, including the majority of developed countries, and a lot in the u.s., investing in new capacity to extract more oil and gas. the question is we should implement faster the clean technology to reduce demand, but it is also a time the supply sector sends a signal that they know the tide is turning and they do want to invest

considerable resources into part of the solution. let's not forget the last couple years have seen increasingly huge amounts of profits from the oil and gas sector the question is what do they do with the windfall profits? do they put their weight behind the clean technology or are they investigating in legacy infrastructure >> that is the big debate for the oil and gas companies rebranding good luck this week with the summit climate program director from iddri. meanwhile, klaviyo lifted the price range to the rvalue it at $9 billion and that is 20 times oversubscribed the frenzy of the ipos in the u.s. in the last couple days

after a.r.m. instacart priced at $30. the top end of the range valuing the firm at $10 $10 billion. that is a hefty downgrade from two years ago at $30 billion as the delivery service faded as pandemic restrictions eased. it will debut today under the symbol k-a-r-t. and elon musk announced x will charge subscription fees. musk discussed the plan in the live stream with the israeli prime minister benjamin netanyahu. some very interesting comments wondering if you would be willing to pay a monthly fee to twitter for the benefit of using the platform interested in hearing your thoughts we are @cnbcjou.

before we he head out, dax in the red today all the others are in the green. not full ty compensating for the losses on the stoxx 600. ftse 100 is up .25%. we have been watching ocado shares today trading toward the top of the ftse 100 after more positive results as for u.s. futures, this is the u.s. markets going into the day's session. all of them are seeing opening up in the green. that is it for our show today. i'm joumanna bercetche "worldwide exchange" is coming up next.

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it is 5:00 a.m. here at cnbc global headquarters. here is the "five@5. wall street focused on the federal reserve. also, uaw sets a new deadline for detroit's big three threatening to expand the walkouts. ipo rush showing no signs of cooling off as investors brace for the instacart debut. coming down to the wire. lawmakers have less than ten days to avoid a government shutdown we have a live report from d.c. ahead. late