will to "street signs." these are your headlines. amazon and microsoft face a competition investigation in the uk as probe into tech giant's dominance in the market. consumer policy director outlined his hopes for the probe. >> what we'd like to see is a fair playing field in the market. making sure that the business

customers can switch and use multiple providers easily. to really challenge amazon in the marketplace. alstom shares are off to the worse start. a clouded market environment. we'll check in later this morning when we talk to ceo first on cnbc. and republican hopefuls jockey for position in the race to replace house speaker mccarthy as the kay wros on capitol hill continues ahead of another looming government warm welcome to street signs. our top story this morning, uk competition and market authorities has launched a probe into the country's cloud

industry after referral from the country's communications regulator. concerned about amazon and microsoft's position in the cloud sector, saying that some practices are making it harder for customers to use or switch between multiple cloud providers. microsoft has said it will engage constructively with the investigation. offcom told cnbc that businesses are concerned of not being able to move between providers. >> they've reduced concept. they're concerned about being in the locked in the initial provider. this is about the effects of this moving data. so it's all about making sure those benefits you identified

are preserved in the future. >> one of the concerns might be in the hybrid cloud, where you want to keep some information public and some private. is that some of the early issues you've really scratched the surface on hybrid cloud. >> hybrid cloud is a reflection of what customers want to do is use the best in class services for their particular use case on any even cloud. that ability to mix and match across providers and for security reasons, whether for resilience reasons came across as being really important to those we spoke to. >> as always, we've got our in-house tech expert with us to help us understand this story in more detail. if we can take a step back and outline for us the three primary concerns that ofcom has about

the cloud industry. >> the egress fees, the fees for these cloud providers to move it to a rival service, ofcom has issues with these, higher with scalers and discourage those from switching. technical restrictions effect ily, while services from one cloud provider don't necessarily work with others and again this prevents some customers from using multiple vendors and the third is what they call committed spend discount. i spend it on these companies who will offer discounts to customers who will be there for five years. encouraging customers to use a single single-provider. it's harder for customers who want cloud computing services to find a good deal but difficult

for them to switch products or use multiple vendors and it's harder for the smaller cloud payers to compete. >> i was reading the coverage the dij tam team put out this morning, aws and microsoft seem to be dominating this market. aws catered to smaller markets and microsoft tends to go toward larger enterprises. what other competition is there to fill in the gap? ofcom wants there to be more competition? >> this is one of the questions that i asked ofcom as well, are there other competitors out there? it's harder to muscle in. amazon and microsoft offer a variety and a suite of products.

if you're a business and now we're moving into this world of a.i., and you're thinking, well, i need some sort of a.i. product, maybe in the customer society, data processing, it's very difficult to build that yourself, so you need to go to a tech company to do that. now, what you're looking at what microsoft and amazon have done they've released effectively foundational models that allow companies to build a.i. products on top of it. if you're a business wanting an a.i. you can go to amazon and microsoft. i need this product. what can i build on? they have that ready-made. very few companies around will be able to compete with that. you look at the market, 80% of the market, huge, google it, a distant third. google, a distant third. so, when you look at that google as a potential competitor but when we think is there a smaller company that can compete?

not many. perhaps it's about allowing companies like google and the cloud place to come in and bolster the market. >> let's go the stocks, amazon and microsoft, what kind of reaction should we see today? >> i think it's early days in this investigation, right, so ofcom has told the cma to have a look, they'll conclude an investigation by april 2025, 18 months down the line, so, right now i don't think this is an immediate concern for investors, where it's a concern, this is broad comment on any regulatory action out there at this point, does this fundamentally change the business models of these companies? any regulatory case, does this change the business practices of these companies? if so then it's a concern.

>> thank you so much for joining us. >> the regulatory pressure increasing. similar to last week, remember, last week the reaction was minimal because most people thought that the ftc wouldn't have the teeth to win this case, they've had several defeats. interesting to see cma end upcoming out with a judgment that would reply remedies to the situation. >> practical terms is how easy is it as well. >> all right, thank you. for more coverage on the latest setback for tech giants, check out that piece we referenced on cnbc.com. back to maco, growth in the u.s. service sector fell in nine-month low but remained in

expansion territory. private job growth in the u.s. grew by 89,000 coming in well below expectations according to adp national employment report. now the number was driven by gains in the services sector which contributed 81,000 to the total. >> data was important for the markets yesterday, one of the reasons why we started to see a turnaround in bond yields and the other one was oil, it plunged 5% yesterday that meant all of the concerns we have concerned about rising bond yields were parked aside. we saw stabilization go on there. on the back of that, some more positive risk assessment. a positive close for wall street. you can see over here in europe, for once there's actually a lot of green on the heat map behind me. in terms of what to watch out

for next in the macro space, we get numbers coming out tomorrow. will be key for market direction from here. a couple of interesting data points this week with the jobs number coming in much stronger than expected, tomorrow will be a key one for markets to look at. in terms of european, a breakdown this morning, every one is enjoying a rally, 3.5% for the spanish index. up .3%. and other tech names within europe are doing quite well. ftse 100 up 3%. digesting news from that conservative party conference and the headline was the scraping of the hs2 railroad up to manchester, but the bigger

picture of course is the political situation is still very fluid and we'll talk more about that on the show. in terms of sector, travel and lay sur leading. yutilities up .8%. household goods, a luxury also enjoying a bit of a bounce today. on the flip side, oil and gas, i mentioned the price, pretty much plunged yesterday. down 5%. just a few days ago we were talking about oil getting to 100 we're now close to 86 again. let me take your attention back to amazon the top story of the morning, a comment now from amazon on the investigation, amazon says we disagree with uk's ofcom's finding and based on a fundamental misconception on how the i.t. sectors

function. they'll work with uk's cma, this follows microsoft's comment earlier this morning they'll work with cma as they conduct their investigation. well, bond yields have started to stable ides, so i guess that's a good signal for equity investors. yesterday, people with taking comfort in the fact that yields are no longer rising at least in this time period, do you think the selloff is done here? >> we're not sure. when you look at the momentum in european yields it's still very strong and listening to our technical analysts, the key level, then 3.25 for a 10 year. in the u.s., the data is mixed.

but when you think about the main drivers for the selloff, the combination of positioning, real money positioning being already very long, supply in treasuries space picking up, at the same time uncertainty really around the data over the next few quarters, that to us suggest we may see -- >> a bit of a reckoning after the last fed, remember, they raised up their dots for next year, i.e. pricing out rate cuts on the back of that we saw the beginning of a re-pricing of expectations of where interest rates are going in the u.s., has something similar happened within europe, many people are saying, well, they're done for now, has a similar sort of reckoning happened in the front end of the european market. >> that's a very interesting

question and it's key difference we're seeing between the europe and the u.s. in the u.s., we priced out the cuts for the next couple of years and also priced in ultimately the level at which the fed will stop cutting will be higher. so it's the whole curve that moved higher as a result. in europe, it's been more driven by the 5 and 10 year yields moving higher. we're expecting roughly the same amounts. driven by really a re-pricing of short-term. >> you expect bond yields to rise further in europe, what kind of levels are we talking about? >> i mean, from fundamental perspective it's hard to define specific levels but when you

look at european fundamentals they've been quite weak relative to the u.s. this is where we take our cue from our analysts. this can be explained by technical flows. so 3%, 3.16% could be our next key levels here to watch. >> another area of the bond market that i know investors are watching closely over the last couple of weeks is in italy, italian's btps have been widening. what's your take on the future looks like on btp? >> less concern there. when we look at the widening in the italian spread. we find that actually it can be very well explained by the

performance of risk assets. we have regressions and historical analysis of that and we find that actually this selloff in equities fully exmrabd a widening toward 200 basis points that we have seen last week. >> interesting. can i ask you about the issuance outlook, how people are thinking about issuance in the terms of european bond yields. fiscal spending has more pronounced in the u.s. than europe. in europe the fiscal tide is turning. the governments are thinking about issuing less. what is the outlook as far as investors are concerned, is that a factor at all that's contributing to these rising higher. >> an interesting picture for next year. from a fiscal perspective we

have indeed -- we're looking at tighter budget deficits next year, at the same time next year, they'll be buying a lot less than this year, when you think about net supply to private investors we're seeing that next year may be another record high, higher than the numbers we have seen this year by around 50 to 100 billion, the pressure will still be there, now i think the fiscal story can still be important in the sense that if we were to see significantly more tightening with the ongoing budgetary rules discussions this can certainly raise risk of recession next year, and when we think about a recession that's an environment where investors will be happy to switch out of equities into bonds. the supply may be better. >> you mentioned historical comparison, a question about

high-level question about whether there's anything surprising or unusual about the selloff in bond markets versus similar episodes of hard selling? >> it has caught many by surprise, really, because we are in general in an environment where investors wanted to position for end of cycle, an environment where the curves tend to be under pressure on the front end of the curve is supposed to rally and when the data weakens, you also price out those additional tightening by the central banks. the selloff that we have seen certainly surprising and in particular they're steepening in the u.s., because we have seen in the last quarter is that when data surprises to the upside the curve tends to bear flat. it's caught many by surprise,

i.e. building of term, potentially linked to supply. >> a pleasure to have you on. really good insight there. the head of european rates strategy from bank of america. a reminder get in touch with us if you've got thoughts on the show and markets on x, the platform formerly known as twitter. coming up, eu leaders are set to meet in spain for a two-day summit with the bloc's enlargement high on the agenda. we'll be le erivthe after this break.

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welcome back. let's get into some corporate stories today. shares in alstom is lower than its slashed flow target. this stock is down 35%. tell us more. what's going on. >> very strong reaction on the stock this morning, yesterday

from alstom, between 500750 million for the year. positive cash flow, big change there. had a cash outflow of 1.5 billion euros for the first half there. working capital investment in the company's backlog, about 87 billion euros in backlog there. some delay in train programs. they built 95% of the trains but only 87% have been paid for. expect full completion of that program, full cash by '24, '25. more positive outlook. the supply chain, they said, a suggestion that there's too much inventory and too much raw materials they bought in the first half because of the supply chain concern. finally, lower than expected orders in the first half, but

they expect some better prepayments in the first half, expect big orders from portugal, israel and quebec, slightly more positive picture for the second half. some notes from the analysts this morning, no liquidity concern. there's track record of free cash flow volatility at alstom. seemingly never-ending free cash flow problem at alstom. they're focusing on this. however, the other targets there at alstom, revenue of 8.3 billion above last year, margin of 5.2% while confirming the full-year target around 6 .. an indication that potentially in the second half things will get slightly better. free cash flow has been an ongoing issue at alstom. a difficult integration there

some issues have been dragging on there. that's why there's strong reaction on the stock this morning. >> in what otherwise is a pretty calm day for markets. alstom stands out. switching gears to european policy matters, expected to discuss securities while support for ukraine. fortunately for us, we're on ground and tell us what's on the agenda for this summit. >> reporter: a very difficult meeting, but before i get into what's at stake here, i want to remind our viewers that the european political community essentially brings together heads of states from all over the european continent, in essence, almost 50 heads of state, now with that in mind the biggest topic no doubt is security. in previous meeting that was

essentially four months ago, in june, very clear the focus was on ukraine, providing further support and in fact president zelenskyy was the first one to arrive at that meeting. now, four months later, the tone is a little bit different. the focus on ukraine no doubt about it but it's lost a little bit of emphasis, within that context, i want to show you this chart, there has been a drop in public support when it comes to providing further aid to ukraine. whether that's military, financial or even receiving refugees, however, the levels of public support are still pretty high across the bloc, but having said they've dropped since april of 2022. now, this is a challenging moment for ukraine, we know that very well, we just got confirmation that president zelenskyy is coming to this meeting as well, he'll be

arriving here shortly and essentially three main challenges for ukraine at this point, financial aid from the u.s., huge question mark there. a pact with poland as well. thirdly, whether the eu is still together, united in providing further support to ukraine. now, let's see what kind of compromise and aid to ukraine. other conflicts resurfacing in the european continue innocent, i'm talking about serbia and kosovo, more complex as leaders prepare to meet in granada. >> looking forward to your interview, i believe you're interviewing the president of the european parliament, roberta metsola. also coming up on street signs today, we'll be discussing

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welcome back to street signs, everybody. these are your headlines. amazon and microsoft face a competition investigation in the uk as ofcom refers its probe in the tech cloud tom nance to the competition watchdog. the consumer policy director outlined his hopes for the probe first on cnbc. >> what we'd like to see is fair playing field in the market. making sure that the business customers who rely on the cloud can switch and use multiple providers easily. allow providers to challenge amazon in the market. >> alstom forecasting a negative free cash flow. german defense contractor pulls its ipo at the 1th hour

citing a clrowded market environment. republican hopefuls jockey for position in the race to replace ousted house speaker mccarthy as the chaos on capitol hill continues ahead of another looming government shutdown. european equity markets have been trading for an hour and a half here gradually gaining momentum. we've got green firmly across the board in europe. ftse 100 up .5%. the spanish market putting up a pretty decent performance. the benchmark dropped about 14 basis points over the course of

the day yesterday to a fresh six-month low, a rebound this morning after some downbeat trading. turning to fx markets, the euro holding firm against the greenback. the dollar on the back. versus the japanese yen. sterling, very little change. dollar index retreated about 24 basis points overall. as for wall street, this is picture for the u.s. open, we got a little bit of a pullback in store, this after all three of the majors rallied yesterday. the nasdaq gain ed yesterday. ipo or not to ipo. germany defensive contractor renk has cancelled its ipo. the company cited a, quote,

cr crowded market environment. renk shares, valuing the company up to 1.8 billion euros and i thought the stars were aligned and i thought we were ready to go on this one. what happened? >> yes, it was really a surprise today in the morning when we were waking up, they actually pulled the ipo plan for today because renk is a very special company and should have directed quite a lot of interest from investors. the owner decided to pull the plug on that ipo for now, they're looking into postponing it, because clearly, what happened during the pricing period is that investors preferred the lower end of the range, 15 euro, 18 euro, okay

given the substantial of shares they wanted to sell would have made a big difference, the official reason, 15 euros a share would have ranked renk not very favorable with its competitors. it's not just the german tanks which are provided by them but also the french one, the australian ones, they're sitting in a very growing market, given the defense push we're witnessing across the globe, so, having said that for now it's postponed and we don't know yet what actually makes them trigger another move to the markets, but it was clearly committed to bring 25% of renk to the markets

because they want to realize parts of their gains. the mated market valuation now sits at 1.5 billion euro to give you an idea of how good a business that is and was for the private equity player. >> fascinating. we got to see if it ends up ipo'ing we'll keep an eye on that. lot of volatile trading going on in individual stocks. one stock within the uk we're watching very closely and that's metro bank, those unfamiliar with metro bank, one of the challenger banks that emerged in the uk in 2010 seeking to disrupt i guess the traditional banking system, since 2019, the stock has been on a decline path namely after they said that their commercial lending

portfolio was a lot riskier but you can see today the reaction is extremely stark, down 24%, halted twice in trading already today and this after they confirmed they were evaluating options about a potential fund-raiser, there has been some press reports about them looking to raise 600 million pounds. >> this certainly is an interesting story to your point about being a challenger bank, this bank has emerged on the market as one of the first banks the last a hundred years to emerge on the uk scene as a new bank, clearly it's been a disastrous road for the bank. looking back at its share price back in 2018, peak evaluation of 3.5 billion valuation cap. you can look at the chart right now, you can see its demise. it's one of the ten largest banks in the uk.

so, it's still meaningful from a main street perspective but a stock market perspective it's tiny now. >> these volatile markets -- concerns, you have ipos being pulled and concern about whether or not ipo activity is going to be picking up again, one of the big questions is whether or not this fund-raising event for them will be successful. is there going to be appetite to buy into this company? >> we'll keep an eye on this story. meanwhile, foxconn's september sales dipped due to a high comparison base, even as auto components shipments surged. a new product launch in september when the iphone 15 launched led to strong revenue growth in the quarter and expects that to continue in time three months of the year. shares of doosan robotics is

higher on the first day of trade. the company's listing raised over 420 million, making its south korea's biggest ipo this year. new era cap has reportedly chosen jpmorgan as the lead underwriter for an ipo next year. reuters has reported that the sports cap ipo could value as much as $500 billion. christoph boschan joins us now. great to have you in london. >> good morning. it's great to have you on a day where we were preparing for this renk ipo on the market. everything changed this morning, the company decided to pull the ipo. cited an uncertain market

environment. in your view do you companies should be nervous about listing in the current market environment? >> that decision is lies at the sole decision cession at the company. obviously, some companies see greater opportunity in the market, we've seen major fl floating recently. again, the window of opportunity. >> the arm listing was the most high profile to date, lots of hopes pin on that ipo going well and reopening the i. o market, do you think those hopes were misplaced or is there an opportunity here to reopen them in a meaningful way? >> well, i think particularly it raises serious question about the state of play of the

european markets, as we all know, choosing the venue is a sensitive issue and different pack tors. where do you produce, where do you sell your product, and in most cases that still leads a listing on the home market, however we have seen these very prominent examples of genuine european companies listing abroad and particularly in the u.s., why, because they allegedly find the more liquidity and the higher valuation. >> so how do you compete with that then? allegedly they're looking for all the things you just listed. >> with a wake-up call to the european scene particularly the european politicians, to address that particular issue, how to set up relevant, substantial

capital in europe. people love to talk about regulation, taxation, that's important, but the major factor is the large capital and how to establish them and how you do that traditionally, well, my take would be to at least partially orient the retirement to them. >> so interesting. can i ask you this year in genoa trading volumes have been like on the stock exchange? >> in general, trading volumes went down significantly. in our case, everyn a little bi more on our european peers. however, we all know the old saying, the market lows have been quite calm whereby the

market heights are accompanied by a frenzy and huge noise. a great opportunity particularly these days in austria to invest now because valuations are an historic low. providing great dividend yields currently. the average dividend yields stays currently around 5%. on average. that means there are either prominent issuances that pay, 6, 7, even in one case over 10. whereby the european is about 11, 12, a great opportunity now to build up some position at least. >> you mentioned the pension issue as one of the key barriers to deeper capital in the u.s. versus europe. they tried to create more, more room for pension funds to take

stakes in early stage companies to try to boost the appeal for tech companies to come and list in the uk. >> meaningful, that's actually the relevant word here, we follow all these developments quite closely and you know, all these grandiose buzzwords we see on the european stage, the list ing oriented overhauling of regulation, all great and we should strive for that and continue to work on that, but in the end it all turns out to be homeopathic compared to the real measurement. as a supplement not as a substitute to the capital market. this and only this is the chance to catch up with the u.s. another topic which i think

is quite interesting and topical, we're seeing some exchanges look to sign up to these partnership projects with data providers, in market, we saw that with the london stock exchange group as a means of diversifying and introducing new products to your customers and aggregating your data into the cloud platform, is this an area you're looking to get involved in. >> the tendency towards diversification is a pressing issue for every exchanges, the main stream of revenue, there's a natural tendency to diversify into other business, into other markets, into index calculations. the establishment of a leading european platform for that listing. it's a very natural tendency that you see all over the place. not sure if your question

involves another recent initiative is the joint european consolidated -- one of the central barriers, central shortcomings of the european markets is consolidated overview, what's available in the market. this will be solved soon by a regulatory market. detached from the exchange's data business that will provide the european answer. >> christoph, thank you so much for sharing your insight with us. an inside look of what's happening the the world of exchanges. still ahead on the show, back on track, uk prime minister

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welcome back. uk prime minister rishi sunak ended weeks of speculation on wednesday announcing the cancellation of the country's largest infrastructure project, in years to come when we look back at the conservative party conference of 2023 the only thing people are going to remember is this whole saga around hs2 that can't be good for prime minister. >> going to make long-term decisions for a brighter future, this was a long-term decision made by previous government for a brighter future and you've cancelled that and said we're going to make different long-term decisions instead. you're not even sure you're going to be in power. again, this could be derailed again as a train infrastructure

project. i'll give you for example the new station in bradford met to get 2 million pounds, it was ini initially promise that was scraped by boris johnson. rishi sunak decided we're going scrape it. it's a whole host of u-turns and emblematic of problems within the party itself. they keep on u-turning, their last big chance to say to people we're the conservative party for you. what sunak was trying to get to, who's trying to make sure people understand we're doing this for the people. this is what he had to say on hs2. >> if we want fundamental change in our country we need a strong

economy as a foundation, that's why halving inflation was the important of the five priorities i set out at the start of the year. everything we want to achieve requires getting inflation under control. inflation is the biggest destroyer of all. of industry. of jobs. of savings in society. month policy which puts at risk the rick of inflation can be right. not my words. but those of margaret thatcher as true now as they were then. i know you want tax cuts. i want them too and we'll deliver them. but the best tax cut we can give people right now is to halve inflation and ease the cost of living. >> let's substitute the tax cuts with lower inflation. >> or a tax cut.

>> he's admitted for 50 years the uk hasn't done what it's promised for all of its consumers for the last 13 years they've been many power, who's to blame in. >> hard to make your case for the change when your party's been in charge for 13 years now across the pond, the search for a new house speaker after kevin mccarthy was ousted from the role on tuesday. brie, what can you tell us about who's if running to replace mccarthy? >> reporter: yes, while some republicans are now running to replace former speak mccarthy other lawmakers are urging house to scrape the rule that led to his removal. the first two gop members jumped into the speakers race, louisiana's steve scalise and ohio's jim jordan. following the historic ousts of

kevin mccarthy. now senate minority leader mcconnell is urging mccarthy's successor to get rid of the current rule. now, the house is expected to have a vote on the speakership next week, house republicans are set to have an internal election on october 11th, where they'll decide to nominate for the next speaker of the house, keep many mind lawmakers have to act fast, government funding is set to expire next month. senate majority schumer is warning of another shutdown threat and other consequences if there's not an elected speaker in place soon. >> thank you so much for the breakdown. keeping us on top of the twists and turns. really appreciate it. let's turn back to markets and see what's he store for the u.s. open, we've got red across the board, the dow now looking

to open 100 points lower, the market picture has deteriorated over a half hour and a bit of red on the board in europe. >> no coincidence that we are seen bond yields turn around. we've got ten year 1.5% basis points higher today. maybe the sellers are coming back again. what's been happening with the bond yield space. one of the reasons yields started to rally back yesterday was this weaker than expected. tomorrow is huge for labor markets. >> i think the turnaround, yesterday, was drastic. i was on squawk box yesterday morning, throughout the morning we were listing all these new cycle highs. i think you tweeted about it. the whole morning yesterday was about highest since. this

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