China. Xi jinping ahead of talks with President Trump before the g20. Bayer shares jump as the German Chemicals group bolsters its legal team to address a multibillion dollar litigation challenge around its roundup we weed killer. And h m reports sales of its summer collection are off to a strong start with the firms shares on course for their best day in three months. Good morning a bit of italian data this morning. Italy june Consumer Confidence numbers are just out theyve fallen to 109. 6 verses a consensus of 111. 3 this is the lowest italian Consumer Confidence number since july 2017. Overall Business Confidence has also fallen to 99. 3 versus 102 in may Manufacturing Confidence has also fallen to 100. 8, slightly below consensus of 101 also lower than in may that will paint a picture of slowing confidence in italy. That is the picture for euro, returning flattish around 1. 1370 there hasnt been Much Movement in the euro. The story has been one of dollar weakness rather than Euro Weakness lets bring in our guest good morning. Good morning. Weak Consumer Confidence in italy. You look at fixed income youre a fixed income expert italian bond yields keep going from strength to strength. Certainly Central Banks are back in the driving seat mr. Draghi at sintra did another semi whatever it takes, if you want. If you look inside the government, theres two souls, two areas within the government. One that wants to look for compromise, look for a budget deficit, on the other hand you have other members of the government that are a little bit more prone to spending so theyve postponed the Budget Planning for later on. You know, were still looking to see whether there is going to be an excessive deficit procedure ultimately what the Sticking Point is going to be is the yield turn you will have automatic stabilizers with an increase coming up. For people watching this closely, you dont think watching the new set of numbers, the halfyear budget from the Italian Government will be that significant. You dont think the next European Commission meeting where they might decide to pursue an edp is the issue, its more the latter half of the year the latter half of the year will be more in focus. So just talking about we were talking about what fixed income has been doing. The politics are important on the sidelines of g20 theres a meeting between juncker and the italian Prime Minister, conte. Thats another meeting happening on the sidelines, not just trump xi isnt the more important driver what the ecb decides to do at the next meeting or in september . Theres been a lot of talk among the fixed Income Community that they may be looking to change technical constraints. Isnt it a blank signal to buy any fixed income asset in europe we have seen the return of the carry trade. Anything thats got a positive yield and there are not that many assets out there left with a positive yield, so we have seen that carry trade. It does feel like theres a lot priced in already. Its not obvious that qe is going to be restarted tomorrow, which in some areas of the market, thats priced in already. So theres a higher chance that perhaps they cut rates first, or even if they do corporate qe rather than sovereign qe is there a simple way that the ecb can try to provide the support through easing that were talking about and that draghi hinted at while limiting that support and cutting out italy so that italy and the Italian Government are not encouraged to go ahead with the lower taxes, higher spending is there a mechanism for that . Is it politically impossible nothing is impossible as long as theres a will, but its a challenging political decision its difficult for the ecb they dont want to put themselves in a tough political spot there are constraints. There are constraints that have to be dealt with based on the latest discretions and rumors they are looking into that they dont want to give a free ride or perceived to be giving a free ride he to certain countries who are keen insurers. Again, its difficult to say its more a Political Choice than anything else dont go anywhere well bring some market numbers to our viewers lets talk about some Market Movers yesterday we had a moderately better session for u. S. Equities with the major indices posting a little retreat but positive end for nasdaq a big bounce in semiconductors up 3 . That was the story we were watching yesterday chipmakers had a good session on the New York Times report that some of them are still selling to huawei. That helped boost the chipmaker not just in the u. S. But in europe as well overnight, asian equities are trading positive on expectations of the trade truce all eyes on that saturday morning meeting between president s trump and xi. Thats happening at 11 30 a. M. Japanese time. This is the picture for europe this morning about 60 in the green 40 in the red, trading slightly more positive for stoxx 600, up about a quarter percent. A bit more positive. Switching to european markets, lets break it down. The relative underperformer today is the cac 40. Trading around the flat line ftse 100 above 7,400 Boris Johnson, the prime candidate to be the next party leader and Prime Minister said there is a million to one possibility of a Nodeal Brexit. So at least a bit of optimism from the leading contender there. The market doesnt quite believe him. Xetra dax up 0. 7 . One name in particular were focused on is bayer. The German Chemicals company hired a group of legal experts to look into the cases being pursued against them in the u. S. That is perceived as positive from it the market ftse mib, we were just talking about italy, up about 0. 60 . No Real Progress when it comes to edp, so no gonews is good ne. We can see the breakdown of underperformer and outperformers defense and utility down retail having a good day h m a real outperformer here. That stock up 10 on positive sales numbers. Autos 1. 4 firmer. We had that more positive risk tone out of asia. Cyclicals in the driving seat today. Asian equities rallied after a report that the United States and china agreed to a tentative truce ahead of the g20 meeting in japan sources have been quoted that the meeting between president xi jinping and donald trump would not go ahead if washington were to proceed with additional tariffs. The two leaders are provisionally scheduled to sit down on saturday morning the chinese newspaper said details of the truce deal are expected to be released in two separate press releases. Trump told reporters a broader trade deal with china is possible this weekend. But he also said the u. S. Could impose additional tariffs if he cannot reach an agreement with xi weve been ripped off by everybody over the years theyre not ripping us off anymore. A big difference right now were meeting with china, just so you know china has been paying us billions and billions of dollars. Until i got here they never paid he this country ten cents. Well see what happens with china, with russia, with japan, with many countries. We still have andrea with us. I want to ask you about this meeting. Does it really mat nter in terms of the way the fed will prepare for this or investors are positioning, how significant will this meeting be its important to see how the Market Sentiment will evolve a lot of the turnaround in Market Sentiment that has favored treasuries in may came as a result of an escalation of the trade war tensions so any easing of those tensions could have an impact onbroader Market Sentiment given that you have more than 100 basis points of cuts priced in for the fed. Theres quite a bit of bad news already in the price ultimately what will matter for the treasury market is going to be really about u. S. Growth. The big picture, geopolitical tensions do matter but the fact of the matter is u. S. Growth is slowing were seeing you were mentioning earlier italian Consumer Confidence. U. S. Consumer confidence has also come down sharply you dont have the luxury of being able to use the fiscal lever like you had last year so in this environment, assuming that the fed is one of the few Central Banks who still has room to cut rates, which is a luxury that not a lot of Central Banks do have, theres still room for treasury he yields to be well supported. Lets pick up on that so much about Financial Markets is about whats priced in. So i read many previews as im sure you all have into this g20. It seems like the expectation is that they will agree to continue negotiations, not apply extra tariffs, but then not repeal existing tariffs what type of reaction do you think we would see in markets if we get that baseline scenario . Both for the u. S. Dollar and for fixed income and does it matter if negotiations are continuing and if the more imminent data is pointing to the down side . The more recently weve seen markets reacting less around the geopolitical u. S. Geopolitical headlines and much more to data it is more about whats going on in the u. S. Particularly around the consumer and the job market. Thats the one pillar doing okay until recently weve seen the latest nfp numbers coming in weaker so anything that indicates that weakness is continuing will be of focus everything else, politics, whats going on at the g20 will matter but address weve seen in the past, people already have or investors are expecting this is not the end of it. There will be a back and forth that will likely continue with ongoing escalation, slowdown, things Getting Better and then worse. All right well continued the c the conve shortly. In the last hour Chinas Commerce Ministry urged the u. S. To cancel sanctions on chinese firms like huawei. They announced they are in talks with verizon about payments of their use for the firms patented technology. Arjun kharpal joins us on his way back from china where he has been talking from various huawei executives do you get the sense that huawei is initiating these conversations as a way to hit back at the u. S. Its certainly the right question to ask. I want to answer that by telling you the context. A few days ago we had a report that suggested huawei was seeking around 1 billion in royalties from verizon on over 230 patents that verizon uses of huaweis i spoke to the chief legal officer of huawei, he told me that he confirmed that huawei is talking with verizon over patents. He stressed these talks are in the early phases he told me that huawei licenses hundreds of patents to verizon covering end to end operations of the company so very significant. No word how much huawei is seeking from verizon and those terms are still being worked out. The timing is interesting just given the fact that huawei is facing Slower Growth this year and next as a result of that u. S. Pressure. I asked if this was a way to put pressure back on the u. S. Firms. He made this clear he said huawei is not trying to weaponize patents. He said they should not be used for political means. Huawei has over 87,000 patents globally over 11,000 of those in the u. S. They own a lot of critical technology, these are piece of Technology Critical in making mobile Networks Like 3g, 4g, and now 5g work. There seems to be some awareness from the u. S. On how strong huawei could be on the patent issue. Just a few days ago there was a piece of legislation filed by marco rubio that would stop huawei from fighting patent disputes in american courts. In a press Conference Today it was said that would be a catastrophe for Global Innovation the key message here, the key point to make here as much as huawei says this patent action is not political, theres many experts who i spoke to over the past few days who say the timing of this ramp up in searching for royalties from huawei is no coincidence. Its more than coincidence just because of the ongoing tensions between the u. S. And huawei, huawei is putting pressure back on the u. S. Firms. Coming up, elliott unveils a stake in bayer as the Pharma Company begins to fight tens of thousands of lawsuits over a controversial weed killer. Well have more details after the break. You need to buy a car and you want to get an excellent price youd think with all these options it would be easy. But with terms like msrp, invoice, list price, things get confusing pretty fast. You just want to get a real price and thats where true car comes in. Only with true car can you see what other people paid for the car you want and you can connect with certified dealers who offer prices based on this same information. None of those other sites do that. From end to end, true car is your only one stop solution. The first survivor of ais out there. Sease and the Alzheimers Association is going to make it happen. But we wont get there without you. Visit alz. Org to join the fight. danny s voice of course you donte because you didnt . Your job isnt doing hard work. Its making them do hard work. And getting paid for it. vo snap and sort your expenses to save over 4,600 at tax time. Quickbooks. Backing you. Hey i live on my own now ive got xfinity, because i like to live life in the fast lane. Unlike my parents. You rambling about xfinity again . Youre so cute when you get excited. Anyways. Ive got their app right here, i can troubleshoot. I can schedule a time for them to call me back, its great you have our number programmed in . Ya i dont even know your phone anymore. Excuse me . what . I dont know your phone number. Aw well. He doesnt know our phone number you have our fax number, obviously. Todays xfinity service. Simple. Easy. Awesome. Ill pass. Bayer shares are trading higher after the company said it appointed an external lawyer to help with its u. S. Legal issues and Elliott Advisers confirmed a holding in the group bayer formed a special committee to deal with the 13,400 u. S. Lawsuits which claims its roundup weed killer caused cancer the activist investor welcomed the legal appoint. Annette weisbach joins us. Bayer stock is performing well on the back of this news i think its a twofold explanation here one, clearly that the Supervisory Board also takes part of the responsibility for the monsanto takeover, and the ongoing problems theyre having in the United States and that theyre creating a task force to tackle the issue. Clearly thats a shift in strategy before bayer was more or less having a hard line approach when it comes to the issue in the states. They said theres no clear evidence that it is causing cancer but i think this strategy didnt work out theyve lost three court cases in a row now with also the u. S. Law firms getting on board, it more or less looks like theyre aiming for an outside Court Settlement, which would be a good sign for shareholders and that is also where elliott comes in its interesting that they are stepping out just a half hour after the official statement a, confirming that they have a stake, quite a substantial stake in bayer and b saying its a good idea to be proactive and try to find a settlement outside court so the estimates are running that it could cost bayer as much as 10 billion u. S. Dollars to settle out of court but thats nothing compared to the potential litigation costs they could face if they had to settle each and every single court case, which is threatening bayer. I guess what elliott is saying in that statement is also pushing shares and a good sign that theyre changing track, aiming for an outside Court Settlement in order to get that out of the way and elliott being an activist investor, they like to free structure companies. Thats something that bayer is probably now pushed into as well perhaps well see a splitting up of certain business areas. With that, back to you annette, thank you. H m shares surged after the swedish retailer said sales of its new summer collection had started strongly and that key markets including the u. S. , mexico and india were performing well the Company Also Announced its expanding its partnership with u. S. Bank clarna h m reported a dip in second half profit, in line with expectations. President trump continued his criticism of fed chair jerome powell. During an interfew with fox trump said the fed should have mario draghi instead of powell because of draghis willingness to stimulate europes economy. He is stepping down in november. Could be looking for a job that would be something jokes apart, lets talk about the fed here the market is pricing in more than 100 probability of a cut in july. 100 certainty more than two cuts by the end of this year. So far the fed have not pushed back yes they had every opportunity to tell the market, guys, really, this is a little too much. And now we have 35 basis point priced in for july 70 chance of a 50 basis point cut. Thats quite a lot arguably data has been in line with this view we have seen a slowdown. Certainly the geopolitical tensions do not help we do think that theres a chance of two cuts this year over the next six months or so the front end looks a little bit stretched. Again we will see. The thing about the fed, mentioned earlier, they do have the luxury to cut, which is not something a lot of Central Banks have in a world where the economy is slowing, global trade is slowing, a cut is not out of the question ea earlier this week powell said the fed is not looking at specific data points which individual pieces of data are you guys looking at as you try to position for the rest of this year . Any data evolving around the consumer and the job market will be very important. In the u. S. But also elsewhere so far the majority of the weak ps has be weakness has been driven by exports and so on. The domestic bit has so far been held in quite he okay. Any sign that starts to give is going to be relevant for us. Well leave it there. Thank you very much for talking with us. Thank you theresa may is arriving in osaka for the g20 summit shes expected to meet there with president Vladimir Putin of russia thats going to be a rainy arrival in japan it looks like for th british Prime Minister. Eg and everyone ive ever loved away from me. Everything. I blew my ankle out and i got prescribed pain pills by my doctor. If making my detox public is gonna help somebody im all for it. I just wish i wouldve had a warning. Welcome back to street signs. Im willem marx. Im Joumanna Bercetche. These are your headlines european equities rally and basic resources hit their highest level in more than a month on a report that the u. S. And china struck a trade truce were meeting with china, just so you know china has been paying us billions and billions of dollars. Until i got here they never paid this country ten cents well see what happens with china. Xi jinping touches down in osaka ahead of crunch talks with President Trump at the g20 as Chinas Commerce Ministry calls for an immediate end to all tariffs. Bayer shares are on track for their best day since january as the German Chemicals group bolsters its legal team to address multibillion dollar litigation challenge around its roundup weed killer. And h m reports sales of its summer collection are off to a strong start with the firms shares on course for their best day in three months. If you wanted to get enthusiastic about a g20 meeting, you cant imagine Better Weather than this this is the scene at osaka airport right now as the british Prime Minister, theresa may, she who is always so lucky with the visual context for her appearances as we may remember from some conservative party conferences, she will be deplane ing from that British Government aircraft she suspecting to be meeting with russian president Vladimir Putin, while in japan. That is a highly anticipated meeting as are some other meetings taking place. I hope they have an umbrella ready for her. Doesnt look like a warm welcome. No. Well keep an eye on that and other important meetings happening on the sidelines of g20, namely on saturday morning between president s xi and trump. Lets talk about asian markets we saw a big bounce across all the majors overnight this on reports that the two sides are indeed heading for a trade truce. So we have the hang seng up 1. 4 shenzhen up 1 a bit of optimism there as we head to crunch time when it comes to trade talks knee snikkei up 1 we have xetra dax leading the charge up 0. 7 one name were focused on there is bayer that stock is up more than 6 today on news of an Elliott Management stake in the company as well as news they appointed a Legal Committee to look into case and lawsuits against them that is one particular stock were focused on in general we are seeing a big bounce in basic resources, autos and banks. Lets talk about what the u. S. Futures food looks like. We have all the three majors pointing to open up in the green. Dow seen up 86 points. Nasdaq up about 45 a better session for the tech index yesterday led by semiconductors, which were up more than 3 on the day. In terms of data, watch out for the final q1 gdp reading, as well as core pce thats the one metric that the fed are looking at in addition to the jobless numbers thats something to watch out for later. For those watching u. S. Toll picks, contenders for the democratic president ial candidacy clashed in the first two nights of debates. Ten hopefuls took part in that first leg of two that included massachusetts senator Elizabeth Warren, new jersey senator cory booker and former texas congressman beto orourke jay gray filed this report reporter hoots and hole eho as the candidates take the stage, then the official start of the race for the white house. Round one of the democratic debate opening with a rapid fire format we need to make structural change in our government, in our economy. Reporter candidates sticking to the 60second time limit. There were a few swipes at President Trump. This president is literally every single day ten minutes away from going to war, one tweet away from going to war i dont think we should conduct Foreign Policy in our bathrobe reporter and watching from air force one on his way to the g20 summit he posted boring. Im with bernie on medicare for all. I spent a big chunk of my life studying why families go broke one of the number one reasons is the cost of healthcare. Reporter the first Real Exchange coming as the discussion turns to healthcare the choice is fundamental reporter the back and forth continuing [ speaking Foreign Language reporter as the talks shift to immigration i will make sure number one we end the i. C. E. Policies and the customs and border policies that are violating human rights. Reporter issues like gun control, claimant change continue to hang over the debate the biggest threat to the United States is donald trump. The greatest threat that we face is that were at a greater risk of nuclear war today than ever before in history. Reporter a crowded field searching for any way to grab the elliearly attention of votes the next ten candidates will take the stage tomorrow. Jay gray, nbc news, miami. We are joined by james dubois how confident are you that a progressive candidate from this large and crowded field will make it through to the ticket . We can guarantee one of the progressives will make it forward from tonight and into the primary season the progressives had it easier last night they were far stronger in terms of being able to push their causes we saw people like Elizabeth Warren doing that. Its the moderates who had a tough night last night of course its different to be tempered and moderate in a debate climate like that which rewards people who interrupt and force their issues we saw people like Julian Castro do that and see a spike in his numbers. Does it matter at all if people like Elizabeth Warren promise changes to taxation rules, that say changes to u. S. Healthcare systems, the reduction of private healthcare, thats something she talked about she wants to repeal private healthcare if democrats dont control congress, it doesnt matter, does it . What was remarkable last night is the amount of empty promises being made. Thesecandidates last night and tonight are playing to the Democratic Base. Theyre telling their supporters what they want to hear both senator warren there as well as Julian Castro promising things which are not within the domain of the president to give. Castro, for example, made some Great Strides overnight in polling but he was promising to pass and get on the equal rights amendment, a constitutional amendment. The president has little to do with that. He was talking about passing sweeping Immigration Reform in his first 100 days Everybody Knows theyve been trying to get sweeping Immigration Reform for years its not the president s domain to grant without the support of congress, these ideas are going nowhere. Its like getting a brexit deal through in two months you have to deliver i want to pick up on a point, you said you said theyre playing to the Democratic Base. The Democratic Base has shifted more left and more progressive over the last decade or so theres numerous statistics and a out there that point to that the main two frontrunners today, you have joe biden, the debate is tonight. More centrist, more of an establishment candidate. Haven recently Elizabeth Warren and Bernie Sanders you have the progressives on the left the establishment candidates wasnt Hillary Clinton the establishment candidate last time around . What have the democrats learned from that experience in trying to push forward yet another establishment candidate this time around . Its an interesting and really great question. The challenge you have is one of the reasons that joe biden is doing so well is straightforward name recognition he comes to the table with backers from his time in congress and in the senate and in the white house you know his first debate as a president ial candidate was over 30 years ago he brings with him a lot of weight on that level one of the challenges is is getting young people engaged in this thats one reason the progressive candidates are getting the traction they can make these great promises we saw that last night and well see it tonight a big topic weve been discussing on the show is that of trade it didnt feature at all on yesterdays debate the democrats do not have a stance when it comes to trade. Do you think that will backfire against them given this is one of trumps key priorities at this point you have to remember the candidates can only talk about the questions that they are getting asked. Of course the three moderators last night chose to focus on different areas. Well have an awful lot of debates moving forward i guarantee you trade will come up the suggestion last night were at the closest point to nuclear war in Human History perhaps misses the cuban missile crisis of 1962. All right, well leave it there. Thank you very much for your thoughts very interesting time in the u. S. President trump has said he will not deploy troops to iran, but hes warned tehran that if there was a conflict between the two countries, it would not last very long. The u. S. Leader made the comments in an interview with fox Business News but did not provide details. Iran indicated it will breach restrictions on its stockpiles of enriched uranium levels today. Trump said he is no rush to strike a deal with iran. Iran can do whatever they want its just fine i have plenty of time. They have a country thats in economic distress. Its an Economic Disaster right now. They could solve it quickly or they could solve it ten years from now whatever they want is fine with me whatever they want i have all the time in the world. Im sitting here i have all the time in the world. In the meantime they have strong sanctions. They have to live with those sanctions. Iran should do the right thing for their people im not sure that their leaders care for their people. Boeing shares fell in after hours trade after the u. S. Federal Aviation Administration found a new flaw in the 737 max. The agency said the planemaker must address the risk before the grounded planes can return to service but did not specify whether the issue will require a Software Upgrade or a more complex hardware fix speaking of planes, british Prime Minister theresa may has laned in osaka thats a welcoming committee outside of her aircraft as she prepares to step out in blustery and Rainy Weather in japan ahead of her meetings with Vladimir Putin, the russian president and some of her other g20 counterparts its not that beautiful weather, at least the heat wave is stronger in europe than it is in japan right now. Coming up on the show, we will tell you which surprise source says the chances of a Nodeal Brexit are a million to one. Youre telling me theres a chance thats when we come back unpredictable crohns symptoms following you . For adults with moderately to severely active crohns disease, stelara® works differently. Studies showed relief and remission, with dosing every 8 weeks. Stelara® may lower your ability to fight infections and may increase your risk of infections and cancer. Some serious infections require hospitalization. Before treatment, get tested for tb. Tell your doctor if you have an infection or flulike symptoms or sores, have had cancer, or develop new skin growths, or if anyone in your house needs or recently had a vaccine. Alert your doctor of new or worsening problems, including headaches, seizures, confusion and vision problems. These may be signs of a rare, potentially fatal brain condition. Some serious allergic reactions and lung inflammation can occur. Talk to your doctor today, and learn how janssen can help you explore cost support options. Remission can start with stelara®. Explore cost support options. The first survivor of ais out there. Sease and the Alzheimers Association is going to make it happen. But we wont get there without you. Visit alz. Org to join the fight. Theresa may, the british Prime Minister, has left her aircraft and arrived in osaka. Thats her car there you can see the union jack on the front of the mercedes. She will be heading into town and amongst others meeting with russian president Vladimir Putin. This will be one of her last International Engagements as Prime Minister at least thats what we think. That depends on the conservative Party Leadership race that is still very much ongoing. In that race, Boris Johnson has played down the chance of a Nodeal Brexit he has described the odds as a million to one but he says the conservative party will suffer if the october 31st deadline is treated as fake. He said it is unlikely that parliament will be open to another extension on brexit. Jeremy hunt said he would be open to an extension if a deal is in sight. Liam fox who is publicly endorsing jeremy hunt, told cnbc he is open to working with Boris Johnson if he becomes Prime Minister dan spoke to liam fox at the conference in dubai. What else did he tell you . Good morning. In this conversation we had with liam fox, he was able to explain why this is so important he is in town to break ground on the uk pavilion for the expo we also took this opportunity to speak with him about the ongoing unfinished jigsaw puzzle that is brexit and of course the tory leadership race in the uk. On the issue of the leadership, he said hes still backing jeremy hunt, his commitment is unwavering i asked him if he was backing a losing horse he said no on the issue of brexit, this is on top of the agenda and indeed one of the biggest issues of National Focus now, he said that there needs to be compromise on both sides, and he hit back at that commentary from Boris Johnson which suggested that the uk could be heading towards a nodeal exit he said that would be damaging for the eu and for the uk, and both sides need to come up with a solution listen in. My colleagues in the uk need to understand this is not a yune r unilateral process any one of the eu leaders could decide britain is not getting an extension and were leaving without a deal in a negotiation there are two sides. And i think we need to understand that. We want the European Union in a position where for us to leave without a deal would be damaging for both sides its clear the deal we have at the strength time wont get through parliament if we are genuine about wanting to first of all recognize the need to fulfill the democratic element and honor the wishes of the british people in the referendum and leave the European Union but also do it in a way that causes minimal disruption, both sides will have to compromise. So fox outlining there that compromise will be necessary it really does remain to be seen who will emerge victorious in this leadership race the big question is will they be willing to compromise and will the eu also be willing to compromise on its own side in terms of other conversations that mr. Fox has been having here in dubai, he said hes also focused on engaging with the region as well thats also going to be very important for the uk as it makes its way out of the eu and it attempts to foster and build new relationships around the world certainly showing face in the middle east doesnt hurt back over to you dan, thank you very much for that interview kpmg downgraded its uk gdp forecast in the latest report Business Investment is expected to lag but Consumer Spending will continue to drive the british economy. Our next guest joins us here what has changed over the last three months from your perspective to cause you to downgrade your forecast . Most of it is actually outside the uk weve seen the trade war continuing were expecting a little bit of a pause hopefully, depending on whats happening later on this week we also have seen tensions in ir iran, that will put a squeeze on, and we have europe, we have germany week, still waiting with a potential showdown with the italian budget and theres an environment of really a lot of weakness in europe without even starting to talk about brexit. Lets talk about brexit has uncertainty about when brexit happens and the form it ultimately takes, has that had a different kind of impact on Consumer Spending versus Business Investment . We mentioned your report talked about those two as separate drivers. One positive one negative how has brexit and the uncertainty around it and the timeline around it impacted those two areas . Its interesting. When you look at the labor market, it is very tight when you look at wages, theyre going up quite healthily given where we are in terms of productivity consumers are more or less consuming as usual we can always rely on the uk consumers to spend when you look at Business Investment, though we had this surge in q1, overall Business Investments remain weak. We expect that to continue remaining very weak given the uncertainty. That has a huge implication for even longterm growth in the uk. It is what were really worried abou about. Are companies saying we dont know what the future holds, rather than invest in a new factory, buy a new set of computers, well hire more people is that the dynamic at play . Youre seeing that tighter job market you do see tightening of the job market, but not so much right now. Theyre pausing at this stage. What we worried about is looking forward, youre going to see a potential uptick in Business Investment especially if we have a nodeal. You need to try to understand whether this is additive or a replacement. Your 1. 4 growth forecast for 2019, i guess youre working on the assumption that we get to some tomorrow of a transition agreement by the end of the year which is also the assumption that the bank of england is working on what analysis have you done for a Nodeal Brexit weve done a lot of analysis throughout the year. To be honest with you, numbers dont change if we have a Nodeal Brexit, we advise our climates to assume at least 6 smaller economy what assumptions are you making when it comes to tariffs . The frontrunner to become the next tory leader and Prime Minister, Boris Johnson, seems to think even if theres a Nodeal Brexit, under article 24 the uk can still engage in tarifffree trading on goods with the eu. Other people have come back, liam fox, mark carney, they have said you would need buyin from the eu to do that. What tariff assumption are you working under . We are working under the assumption that well get tariffs under wpo and under the assumptions that well have friction in the borders. Because we do not assume that we will have the borders ready by the end of october to deal with a Nodeal Brexit just a quick followup question i mentioned bank of England Governor Mark carney whats interesting about the bank of england, they still seem to be guiding towards rate hikes. When you speak to businesses, do you tell them they should be thinking about the possibility of rate hikes out of the bank of england if we actually do end up in a transition situation and withdrawal deal is agreed to is that the advice youre giving to businesses and customers . If you look at the uk economy, if you look at the productive capacity, we are at a point where you could argue that were relatively tight unless we get increasing productivity the bank of england, if they raise rates, that will hurt investment so in that case i dont see rates going up significantly i do talk to clients and say you should expect a rise if everything goes smoothly, not just in the uk but elsewhere Boris Johnson as the frontrunner, he has advocated tax cuts for higher income brackets in the uk that kind of fiscal stimulus, what impact would that have on the uk economy longterm i think quite a lot of things have been mentioned. Taxes are one of them. Also numbers on investment and infrastructure generally were in an environment where rates are likely to say low for longer, and if we are going to invest more on the fiscal side, if its an investment that will cause productivity to rise, it makes sense. Its like any business appraisal. I would say that would be good if it just is spending for spending in terms of consumption, maybe less of a case thank you very much for your views there. Lets take you back to live pictures from osaka. This time the italian Prime Minister, Giuseppe Conte seems to be arriving for the g20 summit plenty of interest meetings happening there. Watch out for the meeting between Prime Minister conte of italy and European Commissioner Jeanclaude Juncker as they discuss the potential of italy averting a quick look at u. S. Futures the picture is positive across the three majors wat thats it for our show. Im Joumanna Bercetche im willem marx Worldwide Exchange is coming up the first survivor of alzheimers disease is out there. And the Alzheimers Association is going to make it happen. But we wont get there without you. Visit alz. Org to join the fight. Youre here to buy a usethats smart. Suv. Truecar can help. Its great for finding a new car, but you already knew that. Its also great for finding the perfect used car. Youll see what a fair price is and you can connect with a truecar certified dealer. So no matter what youre looking for, there it is. This is how buying a used car should be. This is truecar. upbeat music mno kidding. Rd. But moving your internet and tv . Thats easy. Easy . easy . Easy. Because now xfinity lets you transfer your Service Online in just about a minute with a few simple steps. Really . Really. That was easy. Yup. Plus, with twohour appointment windows, its all on your schedule. Awesome. Now all you have to do is move. That thing. [ sigh ] introducing an easier way to move with xfinity. Its just another way were working to make your life simple, easy, awesome. Go to xfinity. Com moving to get started. It is 5 00 a. M. At cnbc. 6 00 in osaka, japan where air force one is expected to touchdown within the hour for the g20. Big news crossing this morning that china and the u. S. Are reportedly calling a trade truce ahead of this weekends talks. But not all is well in the world of trade President Trump blasting another trading partner in whfor what h calls unacceptable tariffs at blow to boeing as potential flaw is found in the 737 max. Boom and bust. Maybe back