Transcripts For CNBC Street Signs 20240714

Require the commission not just to say in public that theyll be creative and flexible, it also requires them to private to get into those discussions with us so we get this deal over the line. European markets trade cautiously higher and asian equities rally after beijing cuts the triple r as export data shows the trade war with the u. S. Is taking its toll. Oil prices rally after Saudi Arabia Energy minister and puts in place royal for very first time i caught up with the u. S. Deputy secretary of energy and he says the man has a tough road ahead. Got a very tough road ahead of him, i must say u. S. Production will continue to go up all throughout 2019 and certainly into 2020. Our own ei, and Information Administration is projecting well see at least 13 Million Barrels per day producing United States by the end of this year. And air france shares fall on disappointing traffic figures and speculation it could rescue troubled airline while a pilot strike grounds nearly every british air way flights for the next two days hitting the owner. Well, welcome to the show. Its monday morning and were going to start off by talking about the developments in the uk now, the uk government is calling todays repeat vote an early election the last chance for opposition parties amber rudd quit saying she no longer believes leaving the eu with a deal is downing streets objective. The telegraph reports number 10 is planning to sabotage without breaking the law as the bill heads off to the queen for her royal assent and comes as uk foreign secretary said the government would test the legislation to the limit, quote, unquote. Now the uks brexit secretary has told cnbc in an exclusive interview that the government is working on a deal and needs the eu to be flexible in its approach steve caught up with Stephen Barkley and he joins us live lot to unpack there, steve let me just remind viewers wasnt it last week that the Prime Minister said he would rather die in a ditch than ask for an extension how are they going to obey the law and respect what the Prime Minister said last week. Wheres the loophole reporter by his own words, he said he will not under any circumstances go to the eu on october 31st or before that and ask for an extension to the article 50 process now, of course, as we know today the move that went through in the house of commons last week and the house of lords last week will get royal assent which means that the extension of the brexit process, the article 50 process is written in british law now and the Prime Minister does have to go back to the European Union as you quite rightly said they were looking for all kinds of ways within the law to not have to do that as well Steve Barkley asked him three times will you abide by what the law is now, by what the commons . We will not break any laws we abide by ministerial code, but again was nonspecific on whether they would try to reinterpret that ruling that came from the commons, the lords and now will get royal assent. Incredibly busy agenda of what is going on at the moment, not only has stephen bar clay said the negotiations are on going and meaningful, the Prime Minister is also going to try to get parliament to back an early general election which seems destined to fail in the house of commons. Plus, as i said, you have the royal assent to this extension of the brexit process. And weve had amber rudd resigning over the weekend in fact, i thought our interview yesterday with Steve Barclay would be in jeopardy because of that shocking resignation from someone who gets on very well personally with Boris Johnson but has grave differences of opinion over what this government is doing. She resigned because she doesnt believe the government is meaningfully looking for a deal. Steve barclay refutes that i put it to him, look, is it unreasonable that the ec wants to know that these alternative arrangements actually work he wrote in the weekend pres that the molecular approach of the ec was too much. Agree in principle to this kind of thing look, its not unreasonable, is it they want a bit more detail this is his response. Its reasonable for the commission to want to protect the integrity of the Single Market its also reasonable for the Commission Like the United Kingdom to want to guarantee the good friday agreement. We are absolutely committed to that, but its not reasonable for the commission to ignore the fact that the Uk Parliament three times has voted to reject the backstop so what the Prime Minister has done is narrow down the remaining issues to a single issue, the issue of the backstop parliament has rejected it three times. And so we need to work creatively and flexible with the commission to address that point because otherwise it would require Northern Ireland to take laws over which their voters would not have a say the commission obviously has to be led to believe by the Prime Minister that were serious about leaving october 31st its something that you and the Prime Minister said many, many times as well. Given the fact that the Prime Minister lost control of parliament and lost control of the business of parliament and lost control of his own party by taking 21 members out of the Parliamentary Party and possibly lost control of his cabinet as well with of course amber rudd departing in the last 24 hour. Why should the European Commission spend capital coming to terms with the Prime Minister when perhaps he feels he is not in charge of uk politics in parliament, yes, many mps are concerned about a no deal which is why we need to get a deal over the line and a deal is doable by the 31st of october but only if the backstop goes. The key opportunity is to get on to a future possible relationship that builds on the strong ties we have here in italy between italy and the United Kingdom and other Member States, but we need to do that with a deal because a no deal income will be damaging, whether its security to issues within our relationship with europe so its far better to have a deal thats whats in our interest. Steve, theres a feeling amongst some of the important europeans that you and i have been speaking to here. The ones ive been speaking to says the uk government hasnt entered into new negotiations with new ideas in fact, there arent new progressive discussions going on would you refute that . I do refute that. The european adviser to Prime Minister was in brussels on wednesday for five hours of talk was there again on friday. Im here in italy this weekend the Prime Minister is in dublin on monday. So, a huge amount of effort is going into the talks, but the crux of the issue is whether a test is set that requires continued regulatory alignment in a way that the Uk Parliament has rejected yes, lets protect the Single Market and its integrity we need to look creatively and effectively to get a deal. What i hear from the businesses here in italy is they want to avoid a no deal. They want to have a deal and they want the commission to be flexible in its approach. Many take aways from my long conversation with him. One of them is the fact that basically the government does feel its making progress, which is extraordinary to many europeans who say they just cant see it we have to take the secretary of state at his word. The british believe theyre making progress on the issues. The other thing i thought was very, very interesting before we get to our next piece of tape is that its come down to one issue, its come down to whether there is a backstop or not all the other concerns that the back benches and the dup had about the withdrawal bill, they seem to have just drifted away the concerns about being too tied to europe, not get our own deals on the international stage. Its just come down to one issue, isnt it interesting. Basically mrs. Mays withdrawal bill lives thats extraordinary how close we actually could well be if that one very large issue can be sorted out. Lets move on to one seasoned politician who found himself in a very similar situation in 2015, brand new Prime Minister of his country of greece, potentially looking at some form of grexit. Potentially looking at a huge showdown he promised a huge showdown on the finances of the bail out agreement, greece versus eu. Many people drawing the parallels between himself and Boris Johnson. Incidentally he says he doesnt see comparisons between him and Boris Johnson. What he does say is there is an existential threat between him to europe. I think the huge damage will be if there is a no deal brexit for all the european Member States and especially for the strong states that their economy is very connected with the uk economy. And just to say we spoke to a lot of people this weekend full weekend of working for me and the team here actually as well but we spoke to some very interesting people including the former Prime Minister december ig it in of italy and spoke to the head of the Eurozone Group and well bring that later on. For now back to both of you. Thank you for bringing us those interviews. Sticking to brexit and lets push on, Boris Johnson is set to meet his irish counterset later today but he says he doesnt anticipate a big breakthrough in talks. Willem is in westminster now should we expect anything material to come from this conversation curious what youre hearing on the ground. Reporter well, in dublin where theyll be meeting this morning, we heard already over the course of the weekend hes not optimistic of any kind of breakthrough he thinks the uk is itself being far too optimistic if they think theres anything coming out of these talks. He wants to find Common Ground he said with his british counterpart and the first time the two leaders are meeting face to face since Boris Johnson took office in downing street what his government floated over the last week or so is the idea of the agrafood secretary between the two countries being shared in terms of regulatory alignment but we heard very clearly from the Irish Government that would not go far enough they would like to see all elements of an Economic Zone between the two territories in place if there was to be an obviation of the need for this backstop that was such a difficult part of the negotiated Withdrawal Agreement that theresa may three times failed to get through parliament. What Boris Johnson would like to see coming back from dublin might involve at least some friendly language but of course he himself is under a huge amount of political pressure at home not to buckle, not to bend and it looks very likely that Boris Johnson will come back relatively empty handed in terms of moving this process forward and would leave his Brexit Strategy in even more difficulties than was already the case after last weeks very difficult parliamentary situation. Willem, thank you for that preview. Well obviously look for any news out of that meeting later on today. Were going to take a short break. Coming up on the show, a weaker than expected jobs report puts more pressure on the fed we discuss the options next. At cdw we get that your it staff is beyond busy. Theyre on the job twentyfour seven so they sleep when they can. [ snoring ] cdw services can help. Our experts will design, orchestrate and manage the most complex technology. So your it people have more time to innovate. And get some shut eye. That sounds great. Uh, i got a malware on my shirt. Should we wake him . Probably should but lets wait till the updates complete. To free up your it staff you need managed services by cdw. People who get it. Did you know you can save money by using dish soap to clean grease on more than dishes . Try dawn ultra. Dawn is for more than just dishes. With 3x more grease cleaning power per drop, it tackles tough grease on a variety of surfaces. Try dawn ultra. Learned ao play second language applied to college applied for a loan started a business started a blog shared a picture shared a moment turn your wish list into a checklist. Learn more. Do more. Share more. At home, with internet essentials. Welcome back to street signs. And happy monday let me just go over some of the price action we had, particularly on wall street on friday couple data points to watch out for. Of course we did get that u. S. Nonpharma coming in slightly slower to three month rate of 130,000 but i should say the wage data came better than expectations there and heard from chairman powell and he reiterated that the fed will act as appropriately to expand we saw the dow up quart ore after percentage point and week up about 1. 8 backtoback gains for wall street over night in asia, a lot of green this after asian equities are announcing that china announced the triple r cut on friday and the reaction has been quite positive even though we did get some negative export data out of china as well dropping more more than expectations when it comes to trading with the u. S notably that imports have dropped more than the exports. Thats setting the tone for the asian session. Today we have stock 600 trading slightly around the back foot. Lets look whats going on starting with the ftse 100, what a weekend of Political Developments as we have just been discussing with steve and willem another big day ahead the Prime Minister is obviously in dublin to see if there can be arrangements or changes to the irish backstop and lets not forget theres another house of common sessions thats also anticipated that this session today or tomorrow could be the end of the session so keep an eye on Political Developments we have the gdp coming in half an hours time expected to show a negative print for the month of july. Keep an eye on that. Slightly negative we have air france right at the bottom here down about 8 . Ill show you that stock in a little bit and ftse mib the italian index slightly in the green as the Political Developments there calm down for the time being talking about sectors, i mentioned france klm, travel is under a lot of pressure particularly because of the underperformance in the stock as well as the British Airways strike, so thats weighing on that particular sector we have it down at the bottom. 8 percentage point basis resources in negative mode up at the top we have oil and gas up. 6 following the move in the spot rise and this as we have been discussing as well earlier on the show there has been a change in the Energy Minister in saudi arabia came as a bit of a surprise in the oil market saudi may do more to sure up the price of oil given some support to the sector. Were seeing a bounce in banks up. 6 percentage point lets not forget its a big week for europe and the european banks. We have the ecb this week. Thank you very much. China has reported a fall in imports for the fourthstraight month amid escalating u. S. china trade tensions exports also declined down by 1 versus reuters forecast for 2 rise the shipments to the u. S. Contracted sharply while exports to europe, south korea, australia and Southeast Asia also declined. Meanwhile, Chinese Markets have closed higher after beijing announced further easing in the face of a struggling domestic economy. The pboc cut 50 bases points for all banks to its lowest level since 2007 this is the seventh cut since early 2018 on friday the key data point was that nonpharm payrolls report and saw u. S. Job growth missed expectations in august they rose by 130,000 during the month missing a wall street estimate of 150,000. The Unemployment Rate remained at 3. 7 while average Hourly Earnings rose by 0. 4 . Now to help us break down what those numbers mean and get a look at the broader u. S. Economy, steve blitz, chief u. S. Economist joins us around the desk thank you very much for being with us this morning lets kick off with that nonpharm payrolls report at a headline the number was below what wall street was looking for but importantly we saw that wage growth remains solid, average Hourly Earnings increased by more than what the market had been expecting. Putting it all together, what does this mean for you its a weak report. Lets go to the wages first because, you know, that popped up it will pop up for a given month. Most of that increase was in mining and in information sectors. And also what we saw was a mix shift where the lower paying jobs growth was much slower than the higher paying jobs groult and that will do it. Lastly most important is that wages are really a lagging indicator. People get paid this year on how their firm did next year and the expectation how the firm will do in the coming year what youre seeing in wage growth this year is the echo in the strength of the u. S. Economy in 2018. So whats more important because for the fed you know its about signs that the economy might be slowing. This is a fed that wants to support the economy, wants to get Inflation Higher they want to be addressing this before theres an actual slow down or recession especially when theyre this close to zero bound. And when we look at the growth in nonpharm payrolls, 130,000, take out 30,000 for the census workers, take the 20,000 or so that was health care workers, social systems which goes up every month, even during the recession goes up. Its a Good Business to be in. Take that out because its a noncyclical aspect and look at the rest, you know, now youre talking around 50, 60,000 even the Service Sector x hospitals was very low now, the fed can continue to tell itself that this is just neutral, whatever, but theyre asking for trouble in terms of their objective if they ignore it. Do you think this is a weak enough report that we see the fed cut by 50 bases points. I think its weak enough because of the inversion of the curve, they lost control of the curve, 25 bases point decline wont do very much and need to get the fund rate underneath the two year if they want to have an impact until they do that, they really just shooting ammunition with very little impact and so i think they should cut 50 based on what powell said on friday, it doesnt sound like they are and the retail Sales Numbers for august are probably going to be pretty good, so theyll probably end up doing 25 but i think its a mistake. Steve, to pick up on that point, we have the retail Sales Numbers this week going to be closely watched. You talk about the narrative the u. S. Economy is so much about the strength and the resilience of the u. S. Consumer and indeed a big portion of the economy is services then we had very negative manufacturing number last week how seriously should we be taking the manufacturing data . Actually it is a big part lets talk about consumers for just a second. Consumers are not an entity by themselves right . A consumers needs growth in income and growth in employment. When either or both begin to falter, Consumer Spending will drop off very quickly or if theres a signal such as we saw last december with the sharp drop in the equity market, we saw retail sales just shut down. So, the consumer sector, its strong while its strong, but it doesnt necessarily mean its on its own momentum can keep growing. That takes us to manufacturing percentage of the economy and percentage of employment manufacturing is small when we look at manufacturing as a real value add to the u. S. Economy, its the largest signal industry now, as a whole, services are larger than manufacturing, but manufacturing is still Something Like 14 of real value add what does that mean . When the Manufacturing Sector slows down if its deep enough and long enough period of time it begins to slow its spending to the rest of the economy and the services that it buys and then you begin to get a negative cycle. And you could argue given the slow down that we saw Service Sector hiring in august that maybe youre beginning to see that so manufacturing matters steve, ive got about 30 seconds, but i want to ask you, is there any actual evidence that the strong u. S. Dollar is having impact on the u. S. Economy as well. Oh, yeah, absolutely. First of all you see it in manufacturing first and foremost and thats the most damaging part of it you know, trade is 25, 30 now of the urs economy and thats not even accounting for the fact that Something Like 35, 40 of s p 500 revenue comes from outside the United States. So, yes, the dollar does matter as well. So President Trump is right to be focussed on the impact the dollar is having on the economy. Steve, well leave it there. Steve litz. Coming up on the show, fresh from being sworn in, italys government must put together a budget in the coming weeks thats next. Applebees handcrafted burgers now starting at 7. 99. Now thats eatin good in the neighborhood now starting at 7. 99. Cake in the Conference Room showing em youre ready. To be your own boss. Thats the beauty of your smile. Crests three dimensional whitening. Removes stains,. Whitens inbetween teeth. And protects from future stains. Crest. Healthy, beautiful smiles for life. Welcome back to street signs im julianna tatelbaum. Im Joumanna Bercetche and these are your head lynns. A minister resigns a legal challenge mounts but the uk brexit secretary tells cnbc exclusively that the government is working on a deal denying accusations it is not making real efforts its been going on for three years. We already had two extensions. Lets get this done but it does require the commission not just to say in public that they will be creative and flexible, it also requires them in private to get into those discussions with us so we get this deal over the line european markets dip into negative territory, but asian equities rally after beijing cuts the triple r as export data shows the u. S. Trade war is taking its toll. Oil prices rally after saudi arabia ousts and puts a royal in charge of the oil ministry for the first time the new minister has a tough job ahead. Very tough road ahead of him. I must say u. S. Production will continue to go up all throughout 2019 and certainly go into 2020 our own eia Information Administration is projecting well see at least 13 Million Barrels per day produced in the United States by the end of this year and Air France Klm shares fall on disappointing traffic figures and speculation it could rescue troubled airline while a pilot strike grounds nearly every British Airways flight for the next two days hitting the owner ieg. Were just getting some numbers now. We just got the uk gdp prints for the month of july. So to give you the quarterly number, 0 flat, thats higher than expectations. The market was expecting minus 0. 1, so its still stagnating and looking at a flat number which is pretty much where the june number was as well. We have a june 0 growth, july 0 growth but a little better than expectations as i said. Just to look from a month to month basis, july gdp is up. 3 for the month and for the year that means it is up 1 that is the biggest monthly rise since november 2018. Again a big jump in the Services Output here. And let me just take you as well to some of the manufacturing numbers were getting as well. July manufacturing output came at. 3 month to month, again this is much better than the pull of negative 0. 1 but on an annual basis manufacturing output is still down. 6 but again that is better than the polls. I would say putting it all together, both on manufacturing and on services the numbers are better than expectations but still really hovering around stagnation, as i mentioned youre seeing the sterling currency is bouncing little bit on this news coming in better than expectations here thank you very much for that update on the data front just looking a the pound closer detail, currently trading just under the 1. 23 mark up about 0. 1 this morning and that, of course, comes after some Significant Developments over the weekend with the resignation of amber rudd from the cabinet. Then of course those comments from the uk foreign secretary that the government would test the legislation to the limit and that, of course, the all important legislation that the mps have past prevent no deal from happening at the end of october. This all comes as Boris Johnson meets with his irish counterpart this morning in dublin that of course comes ahead of the ecb meeting on thursday where the big question is what this stimulus package markets have come to expect will look like will it be seen as enough and in particular given that we have seen such a strong rally in european sovereign bond yields lets take a look now at equities its been a little bit of a rocky morning for equities albeit the moves is fairly contained. French and uk stocks trading below the flat line. Mixed picture here and that of course comes alongside the mixed data that we have seen come through with china trade numbers disappointing market expectations, germany on the other hand saw export data surprise to the upside this morning. So fairly mixed signals when it comes to the data. And thats being reflected in Market Movers as well. Finally, lets look at u. S. Futures and see where things stand at the start of this week. Were looking at modest gains at the open for all three of those major indexes. This comes after fridays nonpharm payrolls report was relatively weak report the question of course what this means for fed policy moving forward. Joumanna well, italys government has to formulate its 2020 budget in the coming week before submitting it to brussels next month. He said he was cautiously optimistic about the draft budget and steve you have been in italy and speaking to various thought leaders. Is an air of optimism now that this new government has officially been formed do you know i would say relief plus a little bit of optimism, relief that salvini is out of government and really just comes down to that because to a man and to a woman amber they felt salvini would do a lot of damage internationally and do a lot of damage domestically as well and of course was antieuropean and dare i say looked at links outside of the European Union that were perhaps not suitable for the continent as a whole i think theyre very relieved but know theres enormous challenges ahead lets remember, you know this better than i do, joumanna, the five star and the dp detested each other the five star came about because of the pd pretty much because it was an antimovement and a salvini pointed out now the party that was born to fight the cast has been more cast than cast itself. Very interestingly the bricks that have been thrown by salvini who still polls greater numbers than better polling figures than the five start, better certainly than the pd as well. There is cautious optimism despite the enormous challenges ahead from the likes of mario. Lets listen in to exactly what he said. Its very good that this government the difficult issues that still out there in italy, budget, its going to be a very difficult exercise in 2020, but if we face that, constructive view on the european positions, i think we will have much of a success there. So, yeah. I think cautious optimism is as good as it gets. Theres immediate issues this month for the government plus, they have to find a budget that they have to present later on this month to the country, to the parliament and indeed to the European Union as well a budget which is so contradictory for start they have talkin about expansive budget process but being physically responsible talking about trying to change the stability and growth pact but working within what the eu has man tated. Part of that eu mandate is of the increase if you dont bring that increase in, which both these parties have said they wont in their 29 point provisional program as well, then youve got a black hole and its a black hole immediately of 23 billion euros. 23 billion euros i spoke to a man who worked externally formally for imf but is the pm december z ig it in where do you find 23 billions from the government wants to increase spending for public education, households, support, enterprises for investment, all started individually taken is fine but if you put everything together, its very difficult to say. If this government doesnt succeed, the alternative could be mr. Salvini is that a terrible price to pay for failure to succeed if indeed that happens. I dont think that we can think in those terms this government has to do something for the Italian Economy. I hope they do it. If they dont, the first to lose are going to be Italian Economy that does not grow the implication could be salvini comes back and new political forces, but the main issue is that if this government fails its bad for the Italian Economy. What about working with the European Union, of course, has a lot of european credentials. Is it important the europeans moves on stability, on growth, on deficit procedures in order to help italy . I think so. I think it will be easier for the Italian Government to have a constructive dialogue with the European Union the extent this will lead to a much more room in terms of italian public deficit, im not sure maybe a bit more fundamentally the European Union cannot allow italy i believe to have a deficit of say 3 which is more or less what salvini wanted to do and ultimately at the end is not europe that decides. We dont get money from europe we get money from markets. Markets are quiet now. You know how markets are they change quite quickly. I think we need to be careful. Is there a complacency on that basis that markets are looking at these wonderfully low yields and thinking this could last forever this is what we can base our finances on the back of. So for the moment they invest in this. It will be equally ready to run if the outlook changed. Look, we did a lot of interviews over the weekend here and the market is clearly relieved of what theyre seeing out in italy when you look at the 30year chart comparing the u. S. 30 year paper compared with the italian 30 year paper, let alone the ten year as well, theyre both trading at 2. 03 yield, both exactly the same yield to the second decimal as well that is extraordinary. The ecb package but huge, huge challenges regardless of the government and again to remind people, most governments here last a little bit over a year, 66 governments in around 74 years. A lot of hope but a lot of reality this could quite easily collapse under this very Ambitious Program as well. Just a quick reminder for our viewers on cnbc. Com, i want to thank our team, just to say a lot of the new interviews we have been doing there including general David Petraeus talking about trade and china hes making some very interesting comments about where the right he doesnt call them far right, i call them far right the stuff from Stephen Barclay from the United Kingdom. A lot of comments from him plus plenty more including that extensive interview we conducted which looked about his experiences and where europe goes next. Plenty of copy on cnbc. Com as well as our fan Tasting Program which we still have a few minutes left on. Back to you both. Thank you for bringing all of us lets push on and take a look at another story making headlines this morning saudi arabias king solomon appointed one of his sons, prince abdullah asiz bin salmon as Energy Minister the appointment comes a week after alfalih was relieved. Prince abdul aziz is the first royal to be appointed head a saudi official says there will be no change to the kingdoms oil policy under his direction lets look at the oil price as i bring you some comments, some fresh comments from the saudi Energy Minister. He says that we have always worked in a cohesive, coherent way within opec to make sure that producers work and prosper together, saying that the opec plus agreement with the will of everybody will survive. I think thats key, right the opec plus agreement because theres some concern he would come in and shake things up a little bit, but clearly hes using this opportunity now just to reiterate the saudis commitment to opec plus. And taking a look at the oil price you see on your screen, the progression we have seen this morning trading a touch higher but really contained given largely those comments that joumanna highlighted we do expect that cooperation to continue. Lets get out to hadley who joins us from the World Energy Congress in abu dhabi. Hadley, this decision breaks the long standing convention in the kingdom that family members are not appointed to this position what are the major implications of the princes appointment . Well, being a long time saudi watcher out here, being out here ten years and following very closely the developments certainly after the appointment, you have to remember that this isnt unprecedented in the sense that we have seen, of course, members of the intimate royal family, the close royal family, appointed in the past as ambassadors most notably the ambassador to washington not too long ago and of course his appointment didnt last very long with the death of jamal khashoggi. It isnt unprecedented we see members of the royal family to be put in key positions and a lot of questions surrounding what the agenda is going to be for his excellencesy what we have seen is this hitting across the wires the minister saying they want to aim for this ipo as soon as possible and hope the second half will be better than the first half in terms of that production he gave no indication at least so far anything will change when it comes to that relationship with the russians as well, something thats a key point and focus for folks here at the World Energy Congress and of course we will also hear from him exclusively. All eyes on his comments and what agenda and priorities he sets i did have the chance earlier today to speak first on cnbc with the Energy Secretary and asked him how tough is this going to be for this new minister because remember the big daddy of energy for the last several years was not only the face of saudi energy but was also the face of opec. Listen in to what dan said. He has a tough road ahead of him. U. S. Production will go up our own Information Administration is projecting well see at least 13 Million Barrels per day produced in the United States by the end of this year and that could go up slightly to 13. 5 in 2020 that will have a profound impact on pricing around the world. So, he does have his he does have his work cut out for him if the goal is to raise oil prices. He was really seen as the face of that relationship, the man who could really drive the policy with the jmmc how do you see that evolving thats correct. I dont see that changing to be honest mr. Abdul aziz has had a good relationship, a senior position within his government. He knows the russians well i think that relationship will continue as we have seen it over the course of the last five years. So the u. S. Deputy secretary of energy saying there to me first of all on cnbc that he has his work cut out for him and we just heard in the last few minutes from the Energy Minister for the very first time essentially say we dont reflect on prices. He also said were aiming for that ipo as soon as possible the pillars of saudi Energy Policy are not going to change all eyes on the conversation hell be having later today. Well bring all of that to you live. Very much looking forward to it, hadley there has been a bit of row a in the oil price today. I just want to take you to some live footage we have of the Prime Minister Boris Johnson meeting with his counterpart in dublin lets take a listen in in the middle of the second world war, Winston Churchill and the army chief of staff made a long and perilous journey across the atlantic from washington by plane. They reached the coast of ireland shortly after 4 00 a. M description of the first site of ireland is unexpectedly poetic i would like to finish by sharing that with you. Beautiful moon shining on a sea of clouds. Then out of the darkness, dark patchings loomed up on the horizon which turned o out the be the north coast we soon struck the coast p. M. Was thrilled as i was. I feared the vista when you flew in this morning to very cloudy dublin was not quite as spectacular or thrilling but you come nonetheless at a Crucial Point in our history and the relationship between our two countries. We may sometimes differ but were bonded by our shared past and our shard kinship and i think we have a shared dream, too. One of peace, freedom and prosperity i look forward to our discussions today and i like to make remarks. Thank you very much its wonderful to be here in dublin and i thank you very much for the very warm welcome you have given us in spite of the slightly chilly weather which i congratulate the media on braving as you all are this morning. You and i first met a few years ago when we jointly officiated at the st. Patricks day parade procession in london it was a pretty joyous occasion. And of course we then celebrated the incalculable contribution of the Irish Community to london and there in the vast crowds was of course the living embodiment of one of the densest and most intricate and most vital relationships in the world between any two countries. And together leah we both recognize that our peoples are the beneficiaries of the efforts of our predecessors, politicians and others who put aside differences and who found compromises and who took our countrys forwards together in circumstances that are far tougher than now and the results for both the uk and ireland are immense, not just a peaceful and open border but an Economic Partnership by which we in the uk eat i think 50 of all the cheese and beef produced in ireland, which is a lot. And the very captain of the world cup winning English Cricket Team was born in this city so, i believe our job now is to take that relationship forward and to build on it weve got a uk ireland summit in november i look forward to that and then of course in all the ways in which the uk and ireland Work Together around world with shared values shared interests but as you rightly say, before november, there are two tasks, political tasks, that we simply have to do and we must restore the government in Northern Ireland and i promise to work with you on our shared objective. And of course we must get brexit done because the uk must come out on october 31st or else i fear that permanent damage will be done in the uk to trust in our democratic system. I know that brexit was not to be perfectly frank a problem, a conundrum that ireland wished for. And i think there are certainly questions that we need to resolve. And there are three basic questions that we have to answer for the sake of our collective peace of mind, can we ensure that we continue to have unchecked movement at the border of goods and people and indeed cattle i think the answer is yes. And as someone who went to the border several times before the good friday agreement and shuttered to see watchtowers on uk soil, i can say now as i said many times before, the uk will nemp, ever institute checks at the border and i hope our friends in the eu would say the same can we upheld the good friday agreement in all its particulars. Again i say the answer is yes. And our commitment in the uk to the Peace Process is unshakable. Can we protect the economic unity of the ireland of ireland and the games that games that they have won through the Single Market and again, i think the answer is yes. And i think we can achieve these things while allowing the uk to withdrawal wholly and entirely from the eu. Of course i acknowledge the complexities involved and the symbolism and the sensitivities evoked by the very concept of a border but, strip away the politics and at the core of each problem you find practical issues that can be resolved with sufficient energy and a spirit of compromise indeed, the current treaty must lodgely the problems can be solved or the present protocol would never have been called a backstop so, i have one message that i want to land with you today. That is that i want to find a deal i want to get a deal like you, ive looked carefully at no deal ive assessed its consequences boets for our country and yours and, yes, of course, we could do it the uk could certainly get through it, but be in no doubt that outcome would be a failure of state craft of which we would all be responsible and so, for the sake of business, of farmers and for millions of ordinary people who are now counting on us to use our imagination and creativity to get this done, i want you to know i would overwhelmingly prefer to find an agreement. Our governments have spent three years masticating this problem and so i think its time now to honor the achievements of our predecessors who tackled far worse problems by cracking this one ourselves. I wont say we can do it all today, but i do believe that a deal can be done by october the 18th, lets do it together thank you very much. Prime minister, now we have an opportunity for questions starting with tommy goreman from rte. Prime minister, if i could put my questions to you first, Prime Minister you said that you traveled to the border before the good friday agreement am i correct in suggesting that you have not been there since you were foreign secretary and in your role as Prime Minister and when are we going to see the details of the compromise offer you are prepared to make in order to solve this problem between next door neighbors . A question in relation to the future of Northern Ireland, it is said that direct rule may be imposed in Northern Ireland. If there is no deal. What would be the stance of the Irish Government in that situation in keeping with its responsibilities under the good friday agreement and the Saint Andrews agreement . Thank you. Well, first tommy, who i used to work with many years ago in brussels, tommy, ive seen i remember the old border and ive seen all right were going to wrap up for the show, but thats very importan commentary out of Prime Minister Boris Johnson. Boris saying i want to get a deal so positive signs for the market we have cable bouncing on the news here and positive gdp. Thats it for todays show. Im julianna tatelbaum. Im Joumanna Bercetche. Thank you for watching it is 5 00 a. M. At cnbc. Here is your top five at 5 will this be the week that markets set new record highs were just about 2 away from seeing it, and futures they are higher right now. Oil patch power play saudi arabia sacking its top energy man, replacing him with the kings son it may finally begin to cut production continued unrest in hong kong more violent clarks between protesters and police over the weekend. Well give you a live report from hong kong next. Could the end be near for e cigs one state looking to ban