and only i see her my angel of light. [music playing] ♪ good morning. welcome to "street signs." i'm joumanna bercetche and these are your headlines. it's super thursday for central banks as sweden's bank has a 25-basis point hike. i'll speak to the sencentral ba as part of the bumper decision time. and the swiss surprise move

with the down beat cues from asia and the u.s. as the fed presses pause. and investors countdown to the bank of england decision as they are leaning toward a hike after beginning the day on the knife's edge. and cnbc understands the writers guild of america is nearing an end with a deal and hoping to strike agreement with hours. welcome, everybody. we have a packed show coming up for you. it is a huge day for central banks. right now, let me bring you the

latest news from norway with norges bank. they raised interest rates by 25-basis points. they raised from 4% to 4.25%. remember, norges bank surprised by ahiking back in june. they indicated two more hikes were to come. they have done that now. listen to this about the forward guidance. whether additional tightening will be needed depends on economic development. there will likely be one additional policy rate hike, most probably in december. a somewhat higher interest rate is needed to bring inflation down to target within a reasonable horizon. they hiked by 25-basis points. they indicated that possibly there is one more to go, maybe in december, but there onwards is a function of economic development. that is something to watch out

for. the norwegian krona has weakened. .27% on the down side. and we have riches bank with the weakness of the currency which is one reason why norges bank has gone for the hike today. don't forget the price of oil which is up 20% from the meeting back in june. that is something to consider given they are an oil exporting country. the norges decided to go for the hike today and guiding to one more in december. sweden's bank hiked by 25-basis points and said more tightening could be needed in the future. the central bank set policy will

remain contractionary and will hold eight meetings per year from april of 2024 up from five currently. i'll speak to erik thedeen. do not miss that. it will be fun and a first on cnbc interview at 12:45 cet. let's break down the market reaction to the fed yesterday. we were anticipating the fmoc which they didn't hike, but there were surprises with the upper division of the dots for next year and pricing out the rate cuts that the fmoc participants participated before. that was met with a hawkish surprise by the market. i'll tell you more in a moment. we did see a down day for wall street yesterday. yields moving higher. the 10-year treasury is 13 basis

points higher before the fmoc. we have seen a strengthen of the u.s. dollar which means that, all in all, the market sentiment is negative. stoxx 600 is down .60% after the weak hand over from asia. this is what we have on the board today. the only patch of green is the swiss index after the snb decided to not hike rates. they kept them on hold. 16 basis points of hikes priced in. good news for anyone who is long swiss stocks. the rest of the picture is negative in europe with the ftse mib down 1%. ibex down .70%. d dax is in focus. the cac 40 is down 1%. luxury under selling pressure with the links to china we had a couple of downgrades from brokebroker s yesterday. we have the ftse 100 which is down 1%.

a huge day for the uk. i was talking through what was at stake for the bank of england decision. the market was leaning toward a rate hike and now the market is split. many say they don't need to go for the last 25-basis point hike. let's see what they do. in terms of sectors, this is where leadership is coming from. the retail is up .30%. on the flip side, travel and leisure. what a down day down 1.2%. today, oil is lower, but in general, higher oil prices are not good for the airline industry. basic resources is selling off as well. down 1.5%. iron/ore and coptper is leading those losses.

the fed has pressed the pause button leaving the target range between 5.25 and 5.5%. the decision was fully priced in by markets, but the central bank suggested tighter than expected policy going forward. chair jay powell said economic strength pushed the rate expectations higher. >> i always thought the soft landing was a plausible outcome. a path to a soft landing. i said that and it is also possible that the path has narrowed and widened apparently. ulti ultimately, this may be decided by factors outside our control. >> here it is. anyone who has been watching these meetings will know this is the fmoc dot plot. it is very important because it shows the majority of fmoc members expect one further rate hike this year.

the average projection suggesting two cuts next year. that is the one that really caught the market by surprise. you can can see the dots here. they raised the forecast for where the interest rate is going to end up. that was interpreted to be hawkish from market participants. projections showed tighter policy than the forecast had at the june meeting where it indicated four rate cuts next year. fmoc members seeing an average rate of 3.9% in 2025 compared to 3.4% in june. this meeting was the first time the members projected policy in 2026 where they see rates above the long run mutual rate. the tighter policy projections comes as strong economic growth and tighter labor market were raised by over 1% point from june with the outlook from 2024

also improving. fmoc members cut the outlook for unemployment over the next three years while inflation expectations remained relatively stable. absolutely goldilocks scenario. they upgraded the forecast and downgraded unemployment rate forecast as well. happy days, it would seem. here is the picture for u.s. futures as we head into the u.s. session. all three majors in negative territory. it was a down day for all of the majors yesterday. it looks like we will get another negative day for stocks. a lot of focus has been on the nasdaq which tends to be more interest rate sensitive. speaking of interest rates, this is the picture for u.s. treasuries. the move up wards continues. firmly above 5%. four basis points higher on the session just today.

we had an upward move yesterday after the 10-year treasury was 4.42. this is a new cycle high. the previous cycle high was around 4.35. we blasted through that now. the 10-year treasury is 12 basis points higher than where we were before the meeting. keep a close eye on what is happening on the u.s. yield curve. chair jay powell said it is too soon to declare victory over inflation. >> we have covered a lot of ground. today, we decided to leave our policy interest rate unchanged and continue to reduce our securities holdings. looking ahead, we are in a position to proceed carefully in determining the extent of policy. longer he longer expectations are well

monitored. let's switch to talk about the uk. interest payments came in 25% less for the obr, office of budget responsibility. uk debt-to-gdp has not been seen since the 1960s. uncertainty looming ahead of the bank of england decision with markets leaning toward a hike at today's meeting after being split 50/50 earlier this morning. this after wednesday's inflation print surprised to the downside. before that, 64 of 65 economists expected to see the 15th consecutive hike today. and goldman now says it expects to see rates unchanged and lowered the terminal rate forecast to 5.25% t.

it is an exciting day for central banks. i have a wonderful person to help break it down for me. the global head of research from the bank of america. wonderful to have you with me. >> thanks for having me. >> let me ask about your interpretation from the fed yesterday. i think people were quite surprised from the upward movement. >> it was a risk our economists flagged. hats off to them. we were worried we would see 50 basis points of cuts in the 2024 projections which is where we ended up. it is a challenge to the market which has been clinging to this view of the rate cycle turning for so long and we clearly did put a bit of positioning yesterday. people are in steep and anything that puts pressure on front-end rates will be unpleasant. >> i was at the wall talking through the latest economic forecast. the forecast, i think, is

remarkable. they upgraded growth and downgraded unemployment rate and downgraded inflation forecast. this all seems super positive for the fed. possibly the most successful monetary tightening ever sdpever. >> if they can pull that off, hats off. it seems a little bit like cake and eating it type of forecast. at some point, you expect the unpre unprecedented policy tightening process to have some downfall or growth back drop to not deliver the further decline in inflation that the fed continues to look for here. the forecast seems a little tricky to me. >> have you changed or will you be changing your forecast of when you think the first rate cut is going to come through from the fed? >> we still have them in june of next year. that is what our economists have

called. our forecast does also assume that we will get inflation on a continuous decline from here on in. there isn't much standing in the way of the fed fulfilling what the market is pricing in. what the fed is trying to avoid is a position where financial conditions ease too early for them to deliver the softest of soft landings that they are forec forecasting. >> what does it mean for yields and the march higher? it is a new cycle high. will they stop at this level. >> if you asked me a couple months ago, i would have said yes. the big driver was the fact that positioning has not adjustadjustment

adjustment -- adjusted. until we see a more meaningful turn in the data, it is difficult to see how that will stop any time soon. i will not call for higher rates from here, but for choice, we would rather be short the front end than long the back end. >> let's turn to the bank of england today. it is split. i don't know if your economists have changed their view. >> they have not. >> are they still going for a hike? >> they are still going for a hike. i have a lot of sympathy for their view. surprise on the down side yesterday was core services and within core services is hotels and airlines. i find it difficult to believe the bank of england will turn on a dime because of that one print. granted, everything else is coming in softer and confirms the turn in the uk economy. the uk does have the most entrenched inflation problem of all of the majors.

one more hike to us is more likely than not. from the risk management perspective and credibility persp perspective, that is what the bank of england goes for. >> what is the uk rate call for? >> one and done. >> in dpgilts. >> maybe apart from japan, we are looking for underperformance on the cross market paces. higher yields and in particular a massive inconsistency of what the market is pricing in over the bank of england. if the bank is able to stop hiking as soon as the market is pricing in, that is because yields need to be higher than what the forecast is implying sdpimplying. >> i take your point. the bank of japan meeting will be one to whatatch. thank you for joining me. the global head of research from

bank of america. the bank of england decision crosses the wires at 12:00. join me at 11:45. coming up on the show, the oil industry is moving through as prices back way from $100 a barrel again.

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welcome back to the show. we are keeping a close eye on how the price of oil is trading. it is slipping somewhat. brent at $92.50. year to date is only up 10%. if you go back to where we were at the beginning of june, wee'r up 40%. and high oil prices could push the fed to hike rates. >> i think the probability of rate hike is higher prior to the

oil spike. the oil spike is problematic. we know the base effects, the roll roll-off of the cpi will lead to inflation going back up. i think the chance of a rate hike is higher because the oil prices will be a real problem. >> investors are taking note of the higher oil prices. i'm happy to say the founder of insights joins us. a real treat for us. >> wonderful to be back in the studio. >> absolutely. it's been a while. let's ask about the price of oil. do we get to $100? it is an open question, but will we test triple digits? >> i think we will before the end of the year. this is a function of fundamentals are tightening. this is not a demand driven tightening. saudi arabia and russia tightening.

we are seeing inventories be contracted. i think we'll get there. i'm not sure we will test far above and i don't know the we'll stay there. i'm -- and i don't know we'll stay there. i'm worried about demand. >> people ask what will bring down the price of oil given the saudis and russia want to keep the production in tact until the end of the year. i guess it is the swing factor which will be demand. we spoke to an oil analyst. he said demand in china has been decent despite the economy, their demand for oil and oil products has been reremained re. >> two things i'm watching with china. what is the actual demand or refilling the exstrategic reserves. something the u.s. couldn't do. how much is actual demand?

as we're in the higher price, how price sensitive are the chinese and indians? for most of the year, china and india have been getting discounted oil from russia, especially, but china has been buying discounted iranian oil. one swing factor that we are watching is iran. the additional issue is iran. the illicit barrels that go through malaysia or elsewhere. one reason why iran is less interested in the nuclear deal. watching how much more are we talking about here with another 200,000. chinese demand and iranian supplies and also what happens with the price cap implementation. market actors think it is a bit of a joke. there is still a lot of friction in the system. does russia take the moment to

boost prices? heading into next year, i think we see a bit more supplies coming online from the americas and we'll see with the beginning of the year which demand is softer. there is the question mark of what's going to be the impact on demanded for all of these countries whose currencies have been weakening against the dollar and then hit with the higher oil price. >> lower income fuel importing countries. that's a big issue for them. less so for the developed central banks and countries. i want to go back to the russian oil price cap. g7 will say it is working, but everyone else says it is not working. >> it is partly with the fed mandate and other central bank mandates. this always had a mandate.

keep the oil flowing and the u.s. was in that camp and cut heav revenue. the u.s. treasury sees this as a success, partially, because russia is selling for a cheaper price. the u.s. is worried that the world wasn't ready to quit russian oil. the goal of keeping the oil flowing means we're heading into a point where it is clear with persistent discounts, this is over the maximum price. there is a real enforcement challenge ahead. i don't think the u.s. is willing to do the secondary sanctions to really enforce the price cap. you know, rush is still earning less than they would have. the key is we are seeing shipping and insurance increasingly taken over by non g7 countries. >> the things to go back to the u.s. administration which is unwilling and given where oil is at right now, they don't want

the risk of another oil strike. another question i want to bring to you putting on your geopolitical hat. the brics summit. india took a leading role and spearheading the expansion of the unit. how should we take the brics as a viable counterpoint with the dollar being traded? >> i think the very diversity of countries they brought in actually makes it harder to be a viable counterweight. it brings together a few different counterweights. it is striking they brought in or if they join two big capital suppliers. saudi arabia and uae. then a bunch of countries that are cash strapped to other

current and future members of the brics. there is a lot of interest in coming up with payment systems. doing that is tougher. it really depends. i'm watching what comfort level does china have with broader use of the umb. what do they have to move away from the dollar system? as china is managing that versus the dollar, you are not moving away from it. you might add friction. it is interesting to see the countries getting together and you see what bilateral and pilot projects start to happen. >> rachrachel, thank you. also coming up, we will discuss the outlook for germany and the ecb rate hiking bank with manfred coming up.

we'll be right back.

welcome back to "street

signs." i'm joumanna bercetche and these are your lheadlines. norway's norges bank has a 25-basis point hike and signaling more to come. switzerland delivers a surprise and holds firm. i'm speak to the chairman later today. the smi is the only european index in the green after the surprise move and wider equities after the fed presses pause. gilt yields tick higher as we countdown to the ecb decision today. and cnbc understands the writers guild of america is nearing a deal with hollywood to put an end to the strike action with negotiators hoping to finalize an agreement within hours. commerzbank ceo man fred

knof is going under a strategy review. he called for a stronger outlook amid higher rates and said it may end up making around 9900 million in euro payouts this year. annette will conduct the special interview. >> reporter: thank you. i'm joined by manfred kknof. good morning. my colleague said you were looking for higher interest income. you are benefitting from the higher interest rate environment. are you calculating that throughout the next year? >> the interest rate is causing us to uplift our communication.

there is more to come. this gives us tailwind, but we also give it to our clients. they will benefit from the situation. going forward, interest rate and provision income will carry com commerzbank going forward. >> will your clients benefit from that? >> there is inflation all over the place. we have a good solution and personal advice and everything on to what is best which is now available for our clients. they are definitely benefitting from the oveffering. >> let's talk about the general economy. commerzbank is looking at germany being the sick man of europe now. how is the assessment?

>> the loan book is resilient. we don't see any default ahead of us. volume on our loan book is also on our credit portfolio is stable. we don't see anything on our portfolio. that is also signaling we work prudent and we are careful. talking about the german economy, you are right. the situation is challenging and that's what we see also in the german sme. they are resilient. we see a lack of willingness to invest and that should concern us going forward. we need more activities and more framework for the german smes to invest. >> why do you think they are reluctant to invest? higher energy prices?

whe what is the biggest problem? >> the combincombination. the higher energy costs have an impact on them. regulation and bureaucracy. the lack of skilled labor in germany. what with we need in germany is really an agenda or strategic path for germany which will help otherwise they may invest a abroad. >> exactly. the talk of the industrialization in germany. are you discussing that with clients? >> we see a green transformation ahead which has a huge implications going forward. it would cost $200 billion a year in germany. not to talk about the infrastructure improvements, but

the $200 billion is a huge opportunity which will create jobs and new industries. the main message here is this is not financed by the state or federal government. they cannot write a check every year. that's where we come into play. >> it is not only the banks which come into play, but the private capital which needs to be invested. is that also what you think? >> first off, i think the banks are really the heart pump of the system and we can and should mobilize private capital and there is something to be done in the political agenda. we are waiting for capital markets and banking unions which are talking about it year by year. private capital is absolutely necessary. we are doing our share here. we are one of the biggest

investors into the green technology. we just gave a new green bond to the market this week and that shows we play a significant role here. a framework could be better. >> just to perhaps give international viewers a sense of how the situation is in germany. we called germany the sick man of europe. years afterwards, we got the agenda with 2020. is that a break moment? >> i think it is strategic with the agenda because everybody would know the priority and what we want to accomplish. the clear focus on execution is what is lacking. therefore, that could help everybody. i still believe in the power of the generman economy and german

sme. there will be a way out. i think the situation is, by no doubt, challenging, but not hopeless. i think we have the energy and power to find the solution. >> a lot has to be done by the political scene. we have the rise of the afd and populous party in the polls. do you think that is a potential stretch for the outlook for germany? >> i think we see it all over europe and also in germany now. definitely the population sees they are not happy and a lot of the issues and problems are not solved. for a long time, we were in good shape and maybe asleep and not ready to modern eize and not tackle the changes. i think with the agenda which could help would bring the

population back. of course, democracy is not self evident and we need to fight for it and defend it. >> let me bring you to commerzbank. you are looking into the strategy update. i know it is already here for november. >> we are successful implementing our strategy of 2024. that is not done yet. it is true, we will come up with an update of the strategy. since this strategy is successful and that means there is no reason for change of course. the biggest part of the financial restructuring is over and therefore this is on the top of the agenda and also the cost of capital.

>> that is a crucial element. one reason why the share price has not lifted off in a way. what do you hear from investors and what they need to see your share price rise? >> we have done a good performance in the last two years. >> fair enough. >> there may be a pause which is clear and now they are wait ing for what is coming. the confidence that we execute and deliver what we promise is crucial and we can benefit in this situation and show that we continuously improve our profitability which is beneficial for all stakeholders sdpstakeholders. >> thank you very much. good luck with that. guys, back to you. germany is in a difficult space, but the banking system despite

the regulatory path and the times of the year ahead will be difficult and tough is still very resilient. >> brilliant. annette, we appreciate you bringing us the interview with the ceo of commerzbank. let's look at the markets. the markets digesting the hawkish pause from the fed. they did not hike rates, but indicated higher rates would be with us for longer. the reaction is negative. the upward move in yields with the dollar strengthening. hand over from asia is weak as well. the exception of the swiss index trading in the green. this is after the snb decided not to hike interest rates although it was 16 basis points priced in. it decided to keep them on hold. very interesting.

i will speak to the chairman of the snb in an hour and a half's time. of course, all eyes today on the bank of england decision which is at 12:00. after the inflation print yesterday's surprise to the down side, markets dialed down the risk. we are looking at a 50/50 split. the wage inflation back drop is strong. the economic back drop and disinflationary trend is a reason to pause. the decision is coming up at 12:00. in terms of currency trade. this is key for the central bank decision making . the pound is down .70%. we have the bank of japan

meeting as well tomorrow and there are expectations that we may start to sound hawkish and insinuate they are moving away from negative interest rate policy. keep a eye on that. in the euro, it is trading sideways at $106.50. we dropped a lot since the ecb dovish hike last week. in terms of futures, a continuation from yesterday with the three majors ending the day in the red. the hand over from asia and europe is negative. u.s. markets are seeing opening up in negative territory. the nasdaq in focus as the growth sensitive tech stocks which got impacted by the expectation of higher interest rates to come following years. keep an eye on that. coming up on the show, cnbc understands that the hollywood strike could come to an end within hours. the show must go on. all the details just ahead.

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welcome back to the show. there's one stock we have been keeping a close eye on since the ipo last week and that's a.r.m. despite the very positive reaction on the first and second day of trading, the stock hit a high of $69 on friday. since then, it has been coming under selling pressure. it is trading very close to that ipo price. listing price of $51. we have come a long way up and down again. that is something to bear in mind as we get into the u.s. session. if it goes through at $51, it tells you people who bought into the ipo will be under water on their position. something to keep an eye on. shares of instacart fell 11% on the second day of trade wiping out almost all of the ipo gains. the company listed on the nasdaq on tuesday pricing at $30 a piece and closing shy of $34.

and klaviyo became the first notable venture backed software firm to go public in the u.s. since 2021. c klaviyo closed at $30 weeach. shopify owns 11% of the company shares. klaviyo's ceo said it is expanding to attract other customers. >> we are dealing with a lot of other platforms in retail and outside of retail. we love working with other software companies that complement klaviyo. provide the payment and back office. we help with the customer experience on the front end. we love building software to help businesses take on challenges. we want to be the revenue growth engine. we give them the the tools to grow their business.

negotiations with the u.s. uaw and carmakers remain far apart. the uaw represents 12,000 factory workers which are currently on strike and has threatened toes c escalate at factories belonging to gm and ford and stellantis. gm and stellantis laid off additional workers blaming strike action. gm suspended production at the plant in kansas due to the shortages. negotiators said they were reviewing proposals, but suggested workers may reject it. writers and producers may be close to the deal. the two sides met face-to-face

on wednesday and could seal a deal as soon as today. wga members had been on strike for more than 100 days with actors joining the picket line in july. tanya has been speaking to an actor, producer and director david yaello. it looks according to cnbc sources, maybe there could be a resolution in sight? >> that is right, joumanna. they have been going for a long time now. people seem to be hopeful. let's hope they can resolve it and both sides will woulith be . i caught up with david yello who was taking part in the goalkeeper event on the sidelines of the united nations security council in support of

the bill and me la -- melinda gates foundation. >> the one thing is they set the goals that have to be achieved within a given amount of time. i always like a deadline. they very much subscribe to that way of doing things. you could easily see they can rest on their laurels and they will leave a trust or fund or whatever it is to keep on funding these problems beyond their time here on earth. the fact they have put energy and emergency over the issues is inspiring to everyone around them. >> just finally, david, you are a successful actor and producer and writer. it is a very difficult time in your industry right now. do you hope that the strikes can be resolved? >> it is imperative they get

resolved. this issue is another one that is steeped in inequity and need for fairness and justice. i'm fortunate i had a degree of success. a lot of creatives are working class people and they are the ones creating the stuff that the studios depend on to build their business and not treat the people who are creating the thing you dependent on and to not treat them well is unacceptable. we hope that gets resolved soon and resolved fairly in a way that going forward we can all link arms again and get back to doing what we love to do. >> i also caught up with hasan who is the co- founder of global nation which measures the resilience and strength among

international cooperation. >> the findings are sobering. the world is in the danger zone when it comes to solidarity. people feel they are citizens of the world. they want taxes to go to solving problems and institutions to have the power to bring corporations together. unfortunately, institutions have not stepped up to the plate. the feeling of solidarity is not translated into the funding and empowerment and agreement that would allow us to make progress and that means impacts are at a breaking point. >> what can be done to the new and rebuild cooperation? >> we did not just stop it. we asked how can we reignite it? the first we call just

transition now to solve climate change. that means we cannot continue to have new investments in fossil fuel if we want to keep to 1.5 degrees of warm being. -- warming. we need far more money to solve the huge problems like climate change and pandemic. we won't achieve that unless we reform what wie are doing. by reimagining this foreign aid from the richest countries to poorest. >> hassan there on the need for international cooperation on so many issues from climate change and the reform of the united nations. >> that is a trick dy one. i was listening to the comments from the u.n. general assembly

and saying we are not a decision making pobody. that is a difficult decision process. >> especially as four leaders from the five leaders on the united nations did not attend sdpattend. >> exactly. thank you for bringing us the interview. let's push on and talk about markets and how they are faring. it has been a really exciting 24 hours for anyone who follows central banks. the fed came out with their hawkish pause. reaction for the equities was negative. u.s. futures opening in negative territory. all of the majors having a downbeat day. european markets, with the exception of the smi, decided to keep rates on hold. all of the other indices trading in the red. cac 40 down 1.2%. dax down .80%. ftse 100 is relative out performing, but all of that may

change with the bank of england decision at 12:00. something to put in your diary. will they snhike? will they not? join me for that decision time at 11:45. it is not just the bank of england. i'm also going to be speaking to the snb chairman and riksbank chairman later today. that is it for "street signs." today. i'm joumanna bercetche. "worldwide exchange" is coming up next.

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it is 5:00 a.m. at cnbc global headquarters and 5:00 a.m. at the nation's capital. here is the "five@5." the fed heninting at a hike befe the year's end. the fed not the only game in town and investors await the latest from the bank of england and a decision from other european central bank. ipo rush looking more like a crawl after instacart looking to set the