and if you hear someone else, speak up. don't let a cry for help go by. [music playing]

there is nothing more important before the nation than the building of the railroad to the pacific. so what we need today is for all of actors in this part of the world and investors to

rally around the project to recognize that's prosperity of europe is not to go across the pacific but to address this generational part that i've referred to it the second ingredient for success is embodied in the change of method. so far, captain it has been implemented in the bottom-up approach. and capital markets to overcome the limitations of small domestic settlings and removing the barriers of the marks intergrating further. piecemeal changes to legislation have tackle object stick calls with notable successes. but it has not provided sufficient incentive for stakeholders to build a

european mark. for what the european market is less than half the size of the united states. it does three times as much exchange groups. and there are roughly 20 times as many post infrastructure providers in europe. this reduces market depth and liquidity and it hinders the development of larger capitol markets. the bottom-up approach did not lead to things in the policy areas to could move the needle to remove cross barriers. there are no common rules on the wrecking of credit planes

and insolvency proceedings. it hinders the development of secondary markets for the distressed assets. so now it is time to actually use that constant shift approach and move from a bottom- up approach to a top-down one. many people are not going to like it. and it will require the courage of the leadership and the unity that you called for, president. even though the u.s. capitol market is organically in response to the funding needs that i referred to, establishing a appropriate institutions was critical to sustain it. the establishment of the security and exchange commissions, the fcc and in the 30s played a pivotal role in suppressing statests to

fragment security markets, if they could. we have the european securities market authorities. some of that is not single. supervision remains largely at the national level. enforcement powers are often split across national regulators. so creating a european secretary by extending the powers, could be the answer, or part of the answer. it would need a broader mandate, including direct supervision and market infrastructures such as the eu central counter parties. you'll be hearing from the president from the french competition authority later on. that scenario, the combination of national authority or super national authority at the european level has made some really in roads into that

occasion of authority with having the central power. but beyond the strong institution, a single rule book is also key, a lesson that we have learned in the banking sector. before the great financial crisis. it is a set of applicable rules for all banks, leveled the playing field in europe. the more ambitious approach should have a single rule book by a supervisor that would empowerrer private empower

investor and for the investment. a truly european capitol market needs constantly updated infrastructure. the consolidated tape will encourage a shift towards large infrastructure and exchange groups. research shows that the sock market that are part of wider groups do better in liquidity and equity. and this is powerful for small exchanges. i'm not sure if i've convinced you, but i hope that you can reality what happened in the united states in the 19th century to what has to happen in part of the world and beyond where there are capitol markets that are unified and strong. we want to succeed, we have to

move fast. let me return to the wisdom at this point in time. there was an idea of doing the right thing because it is right. but he was also clear in order to act in this way, one must operate first from the foundation of goodwill. the foundation of goodwill is there. wherever you go, whoever you talk to, policymakers, banks, investors, all say that they want this project to succeed. what we need to do now is to build on this and to go further. otherwise we risk the ability of

european to deal with in that we know of. there is a more ambitious approach in the changes circumstances that we face today with the challenges of degloballization and decarbonation are looming larger and the capitol markets were an integral part of our success. some of argue that unless we start to issue bonds, that we'll ultimately parallel the u.s. treasury bonds. this project will not succeed. even if this is correct, that should not stop us to work on the other areas that are necessary for the capitol markets union to become a

reality. we have to take the steps that are in front of us. when the moment arises, the other steps will follow. so with immense financing challenges, the moment for action is now. so i encourage all of us to be bold, to not let it pass, and to do what we have to do. thank you very much. >> that is the eep president addressing the group in frankfurt in a long-term structural speech being delivered by the ec president. nothing to do with policy. that was mainly about the longer term challenges facing the european union. and she talks about the challenges of the three things.

and she goes into the capitol union and why it differs from the harmon any like oversight powers that you see in the u.s. it was interesting that she was pointing out for many small businesses in the eu, it is difficult for them to obtain funding. they get on average 40, 50% less than the wholesale funding is available to the u.s. counterparts. and she said this needs to change. and the whole speech what we can do to strengthen the system and make it more harmonized. >> it is amazing to see how many was on the capitol market and an explanation why we have not seen this project come good. it has been years until the making. they have been talking about putting the capitol market for years. and she talked about the importance of creating an f cc, like we have in the u.s. they

have some of the pieces that the fcc has. but it is not single. you need a broader union across the region. >> let's go to a little bit of sound that we heard from the speech just speaking in the last couple of minutes. this call for paradigm in the integration. >> it is so far that this the conditions for the capitol market in europe has not been satisfied. think about my railroad example. we have lacked a unifying project around which capitol markets union can be anchored. but this is not changing. the second reason is that we have relied on the bottom-up approach to integration.

this solution, in my view, has to drama dramatically change. >> there was reference to the fcc in the u.s. she also called for a sing market watchdog. >> it is time to use that shift approach and to move from the bottom-up approach to a top- down one. many people are not going to like it. and it it will require the courage from the leadership and the unity that you called for, president. even though the u.s. capitol market is divided up organically, but having appropriate institutions was critical to sustain it. the fcc in the 1930s, played a

pivotal role in suppressing state efforts to fragment security markets as they could. we have that the european securities market authorities. it does some of that. but is not truly single. it remains largely at the national level. enforcement powers are often split across national regulators. so creating a return secretary by, for example, concerning the powers of that could be the answer, or part of the answer. it would need a broader mandate, including direct supervision to mitigate risks and across border firms and market infrastructures, such as the eu central counter parties. >> we're going to help you

digest what we heard from the eu president. she focused the speech on the need for take capitol marks union to be able to compete with the united states use as a region. i'm curious if you think that the development of the institutions would be as transformative as she suggests? >> thank you for having me. secondly, it is one of the big problems of the euro right now. the fact there is no common markets across the region. this is contributing to the financial market and the revolation across the creation across the region. so this creates a much more

rigid system in europe that relays on growth. this many would be a positive development, if it were to be prevented. >> end of her speech, some would acknowledge there, will be a bond to the safe asset and parallelled u.s. treasury bonds, this project will not succeed. do you that is true and we need to head down the road with the joint way? >> it will be an important step, if not the parallel step to get the market and euro zone. however, this will be the most challenging steps. it involves governments ultimately giving up some of their sovereignty, which we

know is difficult across the world and it is true, as well, in europe. this will be probably where the project will break down. italy, germany, france all have their own risks that create fractions in the around zone. >> european zone. >> let's go back to the bank funding and you have flourishing capitol market system. there has been a steady period

of monetary tightening, that is introduced on the back of these rate hikes. how does that affect the ability of credit and borrow out of those institutions, corporate that would typically go to the bank for the funding? >> that will provide a lot of answers for this question. from the perspective of the willingness to lend by the banks has been tide for households and for corporations. on the other side of the equation, we can see that the credit has collapsedded by firms. and one of the reasons that they cite for decreasing the borrowing demands, is that the interest rates are inter grated. so this is starting to have an impact. and we're seeing in a more concrete fashion, when you look

at the credit flows. and credit borrowings by firms is actually in negative territory. the ie firms are repaying their debt right now. so it shows clearly that the monetary policy in europe is having an impact and will lead to a resession. >> market has the first rate cuts sense of april of next year. do you agree with that timeline? and how do you think it will look at that point? >> april may be a bit early. but ultimately, we're looking at a month or two here. they seem to be looking in the rearview mirror that her trying to decide the track of the

policy. they are also paying a lot of attention to wages. and wage growth is a lacking indicator. and the focus on it variable, means that there is here. and we see on the global economy, based on dynamics in the euro zone where they are going to be next year, that the euro zone will be in a recession by the summer. but the rates will determine if we see more deterioration in the market. so more summer rate cuts. >> that makes sense. if things go along the top like

you describe. we appreciate you coming on the show today. we have been monitoring the speeches that are coming out of the european banking meeting in frankfurt. let's listen in. >> sometimes i'm a little puzzled because that is what we seed right now, we have interest rates that are potentially a little higher than usual. it is something that we're prepared for and coping w and this is the normal business environment. sometimes i have the feeling that people thought that the normal business environment was

negative interest rates. if banks cannot cope with normal interest rates, then something is wrong in the system. thanks to the legislation after the financial crisis. we are robust and healthy and i'm not concerned about higher interest rates for longer. i'm not concerned about the obviously refinancing in classes make it more difficult in 2024. i believe that be in general. we shut put your presentation and your speech and we should take it as the speech why capitol markets are so important without that the green deal will not happen.

and i thank you for your presentation. it was fantastic. [ applause ] >> what i'm really nervous about is not the situation right now as you were saying. we are in good shape. but where is the growth in european coming from in 25, 26 and 27? is that is the question which we need to nswer. and we need that to have the investments. for that we need to change in bureaucracy and we need the push for more european union and we need to invest in artificial intelligence and all that needs financing. if we don't generate that growth, and then we have an issue in europe from a competitive point of view in the medium turn. this is what we have to actually attack. so it is not the short-term. it is the medium and the long- term and the growth aspect for

this continent. i was last week in hong kong in china and people are saying that china is facing certain issues because they are only growing 2 or 3%. when i see companies investing in technology like nobody is doing like in europe. the investments are there. that is what we need to focus on. so we should use our profitability, the robust situation here in order to invest into the future and then i'm not concerned about europe. >> you want to drill deeper on cap call capital markets. clearly there are some concerns out there in regard to higher rates for longer terms. are you hearing worries from your customers? or do they say, actually, it is

a relief to see the prospect of inflation coming down? >> from my clients, no. >> they do their homework. >> we should not overstate all of these questions. there is adaptation. there is a monetary policy change. we know it. we have to adapt. clients have to do their job. and we have to do our job. and we should face it. i hear concerns as well in the u.s. from time to time. we have not seen so much of this in realtime.

so we have to be ready for -- to a certain extent for the unknown for we don't know when. but systems are resilient. i have not seen any significant difficulties. by the way, if i have seen the difficulties, we have seen difficulties in the u.s. and switzerland, that is for sure, but they have been managed. i think this is the second point i would like to make. if i compare the situation today with ten years or 15 years ago, systems have been much more reactive, there were difficult days that have been addressed. and we had avoided extensions. so in a nutshell, the systems has to adapt. but they are quite resilient.

if we continue to work together. i do insist on this. in an open dialogue to providers, banks, particular leaders, the way it has been done over covid and the way it was done in the story, fine. there will be difficulties. but we know how to address them. >> we're coming out of that panel in frankfurt where the banking chiefs are sitting having a discussion. i'm not worried about long-term height interest rates level. that was one of the monetary focus talks that we got out of frankfurt this morning. we're going to a quick breaking now and we'll talk about retail sales that dropped a bit in october. wel veordeilne. 'lha me tas xt

welcome back. there is a call for the shift in the keynote speech in front of

the banking congress. she said it is time for a single watch dog. >> it is time for that approach and extending the powers could be the answer. >> european equity is building on a positive storm off the trading week as money markets are 8% taj points. that is 100 points fighting for the end of next year. uk retail sales will fall in october to the lowest level at 2021 at the height of the pandemic lockdown as they weigh on cash strapped shoppers. and the wheels come off for local cars. a swedish automaker falls to a record low

you can see it was a positive start and building on gains for the week. is it up 2 and a half percent week. the yields have moved lower. and we're witnessing that out of the u.s. as well. a lot of earnings coming through this morning and the more broader positive sentiments. so let's give you a more complete picture. they are inching their way up to 16,000 again. we're looking at the energy another positive day for that

software. there have been a lot of focus on the industrial giants. we're seeing a bit of a build for that things that have been hit last week. the retail sales coming through this morning, the lowest level in 2021. not painting a pretty picture about the uk consumer. we'll talk about that in a moment. the index is seeing a bump today and we're seeing the minors do quite well. and in health care, also

putting in a good showing. the tech is up 3/10 percent. and one other thing that i should mention before we delve deeper into uk. the retails sails, sales, there was a lot of positive flow. but they came out lower than expected at 10:00 a.m. this morning. so that is something to watch out for. let's talk more about the uk. retail sales fell to the lowest level since the 2021 covid lockdown in october. and unexpected decline of 0.3% for the month. sales have diverged so much that compared to pre-pandemic levels, consumers are paying

17% more in real terms for 3% lower volume. that is alarming. >> those are staggering numbers there if you compare what we had in 2020 let's see if there was much of a reaction. not much. really staggering evolution here with the prices up so sharply. so you're getting so much less for your money now. >> big squeeze is on it. you're seeing it on the u.s. but you're seeing is a lot more here in the uk. it is the higher rates that have impacted prices that are high as well. consumers are sitting at a point where they aren able to look at their borrowing costs at present that has squeezed

them as well because of the higher rate. and they are able to afford this. that is what you're seeing as well as when it comes to the retailers. they're struggling to find a fit for the uk retailer because they need to come up with the right idea and the right way of marking themselves to the uk consumer. so what you're seeing from the numbers is consumers picking a little bit more, what it is they want to buy and being seasonal about it. so when it is cold, just pick that for the winter. that is the sentiment that we got from the u.s. >> one of the things that is also reaching out in the u.s. are the specific companies that reported this week, the consumer, the way they buy has changed. and there is a view of waiting till the prices get cheaper. it is a deoperation in de-

inflation mentality. you start listen to what the ceos are saying about these companies. yesterday, walmart mentioned the word deflation. that will affect the consumer psychoi psyche as well. would you have halloween, black friday and cyber monday and diwali. maybe it pushed things higher because the consumers are looking for better bargains. but one might have to know they are squeezed as a consumer. they were not necessarily saving, but they just didn't have the money to spend. >> to look at a broader perspective, if inflation is going you don't know and real wages are going up, that should

be a good thing for the economy. these numbers are suggesting otherwise. that is why many people are quick to jump to the conclusion that the uk economy may not be as strong as it was a couple months ago. the numbers are not doing well head of winter. we're seeing a big rally this morning. it is down 6, 7, 8 basis points. >> the pressure on the bank of india is probably a lot harder than a lot of other central banks because of the indian's appreciate that sits on the uk consumer and the me. we saw the drawdown in the cpi print this week. the expectation was 6.8.

but that is a big draw-down from the energy costs. that dropped off below 2,000 now. that has helped. but it will be a sustained downward impacting that will impact things a little better on the pricing side. overall, it is a bit worrying. >> we'll see how black friday goes. it still blows my mind it is a holiday here. a lot of people don't have off the day before thanksgiving. >> is it strange that people are doing their black friday shopping from work. let's get to the movers. that is the volvo car. the biggest movers from the

upside and the downside. volvo is plummeting in early european trade. 100million shares to institutional investors. a bit of a mechanical move here. but what makes this different to my mind, other indications where large shareholders fell down, investors were calling for a bigger free flow here. and they got it. i think the timing really surprised the investors because the shares were trading so low. it came as a bit of a shock this morning. >> none of the cash from the sales is actually going to be reinvested to volvo cars. they sold down 3.4% of their stake this morning. but the proceeds, they're not investing it back into volvo. they are keeping themselves. that raised a lot of questions why the majority owners are not

using money to reinvest back into one of the companies that forms part of the group. >> they have a 78.8% stake in the company. we're watching that closely. it is one of the talks at the bottom of the top 600 today. but another story lingering in the background, the european union and the u.s. are working to agree an end on tariffs put in place in the trump administration. they have failed to put a permanent end to this. it is interest. it is a tariff issues that remains on the back burner.

if is a longstanding issue between the eu and the u.s. >> exactly. i thought it would be good to revisit the story to understand where we are as we approach the u.s. election next year. but let me rewined and let's focus back in 2018. that is when we first saw the trump administration imposing tariffs on european steel. that was a huge moment. and it was in the well received in the eu and they retaliated with 2.8 million euros and they filed a complaint against the u.s. at the wto. and then there was a change in the leadership. president biden entered the white house. and they decided to pause this dispute and try to come up with

an agreement where both sides would actually benefit from that. the industry and the u.s. and the eu would benefit from this. it turns out that we have not seen that happening. in october, there was a lot of speculation that perhaps we would see an agreement when it comes to the tariffs. there was an eu summit. but it did not happen. we're approaching the end of the year and we do not have a compromise. there is a huge question if they will manage and reach an agreement as we approach. election. there is a possibility that donald trump will return to the white house. could we see this dispute resurfacing and seeing further tariffs. so that is one story that we should keep monitoring. >> i was going to ask, in addition to the upcoming

election when this may feature more promptly, are there any catalysts may look out for when this issue may come to the forefront? >> there is a comment from the

eu. >> what upsets you about the black friday shopping? >> is it such a festive day. you're with your family in the u.s. everyone falling asleep in the turkey coma. and next morning you do your black friday shopping because everything is off of work. here nobody is off of work. you're here scrambling looking for a deal on your computer. >> why not? loss coming up on street signs today, argentina has a runoff erection and triple digit inflation. we'll look at the that after the break. ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't

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(texting clicks) (tires squeal) (glass shattering) (loose gravel clanking) welcome back to street signs. pedro sanchez is trying to create a new government in spain. it is a controversial amnesty

deal with separatists. shoulds of protesters gathered outside parliament after the vote took place after two weeks of demonstrations across the country. sanchez addresses the people. >> they chose to continue advancing rather than regress. to all of you, thank you. >> argentina heads to the ballot booked this weekend. it shows -- with a slight advantage in what is said to be a hotly contested race. it comes at argentina's economy struggles with triple digit inflation that hit 143% in october. so let's rewined a little bit.

we had the primary elections take place a few weeks ago. and there was a bit of a surprising turnout. you and i discussed it at the time. what happened is the incumbent prime minister got 37% of the vote and he only got 33%. they went in a second round runoff. the polls are very tight today. let me give you the backdrop to this election. it is coming at a very, very critical time for the argentina economy. you have 40% of the people living below the poverty line. argentina is ims's largest deader. they have an outstanding debt of $46 billion. there are lots of questions if

they are able to honor their debt repayment to the international market and the ims. they had to borrow money to pay back the ims. the big question coming out of this election is who is going to be the right person to actually fix the state of public finances? >> you got the economy minister who is representative and also a part of the political party that has presided over the economic decline that the country and the state it is in today. they've been accused of corruption, not very well perceived by the market. but on the flip side, you have the self-appointed a capitalist. let's put up a couple of points. he talks about very radical things like a full donor of economy and talks about the

essential bank and slashing spending by 40%. there are radical ideas here, which themselves will be very bombastic if they were implemented. if is key. it gives them a real shot of the next president that the former president from the center right party has actually voiced his support. it is the voice of two evils. and the hope is they will not get an absolute majority. he could be forced to coverage with the center. and they would act as a cushing or a restraining force on some of the libertarian things. >> from a market perspective, it seems like a difficult deal. the economy minister who is up now is the one that reigned over the issues developing. but the plan seems so radical. what would the market want to see? >> i think it is difficult to

say at this point. what i will tell you, since the primaries a couple weeks ago, the unofficial exchange rate -- in argentina you have the official exchange rate and the black market rate, it is down 40% in the last couple of weeks. there is a lot of concern as we head into this election. if he would come in and fully implement all the bullet points that just listed, it would be a radical and not necessarily the better approach to dealing with around argentina economy. they don't have a lot of dollars in the system. i read a couple pieces if he does go ahead with the plans, argentina could defaulting more dramatically than it has in the past. but, again, if he does come in into power and moderated by the

more center right influences that have a lot more governing experience, then perhaps there could be a dew point out there that he will be restrained somewhat and now may be the time to bring in fresh blood and a new perspective. something has o come and make the tough decisions. so maybe cutting spending is the solution. >> so it is not necessarily a question of him and his most radical policies versus the economy, but perhaps the more realistic situation he's a more restrained force. >> but is it a big one for the economy. >> a big weekend in argentina. we look forward to the follow- up coverage on monday. let's go back to europe and see what is going on in the market. >> we're ending week object a positive note. they are up 2 and a half percent. people are really. this has been a week where we

had a number of inflations for the downside and the u.s., uk and the euros. the market is pressing in a hundred basis since points out of the ecb next year. so perhaps that explains some of the positivity that we're seeing in the markets. >> is not the feds, just have seen the narrative change in the last week or so. looking at the u.s. take a look how the marks are fairing state side over the last five days or so. we had a number of retail prints come through this week. the latest retailer to report numbers, walmart, they said that some of the grocery items may deflate in the next months. using the word deflation is

something to look at. the dow jones industrial average is up 1.9%. on the back of that downsize surprise in the u.s. cpi, we saw a lot of short coverage that accounts for some of what weave seen in the wall street stocks. >> it comes back to people of the expectations of rate cuts. i managed to speak with the former st. louis president. this is not the time o start thinking about rate cuts. they said the same. but it has not stopped the marks, though. >> no. i would not expect the federal refer to come out at this point. but let's look at your futures to see how wall street is shaping up. that is it for us.

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not the curious case of the american consumer and muddled picture it is painting for the future of the u.s. economy it is. so watch the consu