Our decision italys draft budget may in violations to the fiscal rules ubs trades higher after a swiss lender turns a Third Quarter profit beat. Ceo tells cnbc Market Conditions are tough. It is quite clear that we are more into a permanent challenge for the industry, so we have to think about how to redeploy resources and refocus existing resources. Novartis raises its third year jump beating expectations a warm welcome to street signs. Lets get a check on european markets. A bit of red across the board. It has been a fairly choppy session. The dax is teeterring around the flat line. You can see the cac, the ftse and the mib are in red territory. We are seeing a little retreat after a solid day of gains yesterday. Today firmly in focus. We have brexit front and center. We heard them making the point that ball is firmly in the uks court at this stage. Well look at sterling but we have seen solid support for the uk currency. Looking at sectors. We have the u. S. china trade coming into focus. Providing more support on the u. U. S. china trade Front Technology is the leading sector ams came out with Third Quarter resources. Dipping into negative territory. Putting this into context. Yesterday, a very strong day for resources and banks. One bank in focus today is ubs currently up 8. 1 after the swiss lender beat on the bottom line overall earnings were down on the year the key Wealth Management positions estimated a record 3. 5 trillion. Well get out shortly for detail on those numbers European Council president says a decision whether to approve the uks request for an extension will be made in the coming days. Tusk was speaking alongside who added the newly brokered deal must be ratified in westminster first. Silvia joins us live from brussels very clear message there the ball is firmly in the uks court. A no deal brexit will never be our position what does this mean . The ball remains in the court of westminster . Reporter lets break down some of those comments that happened about half an hour ago. We heard from Jeanclaude Juncker saying brexit is a waste of time and energy clearly that shows how the eu is showing at this stage, lets not forget the referendum happened more than three years ago. We still dont know how brexit actually happened. We still heard from donald tusk who is responsible for bringing together the 28 leaders from the eu talking about the extension process with the different capitals he made the remark that a no deal brexit will never be the eus decision. Lets take a listen. The situation is quite complex following the events over the weekend in the uk and the british request for an extension. I am consulting the leaders on how to react and will decide in the coming days. It is obvious that result of this consultation will very much depend on which the British Parliament decides or doesnt decide we should be ready for every scenario but one thing must be clear. As i said to Prime Minister johnson on saturday, a no deal brexit will never be our decision so clearly these remarks from donald tusk tell us those 27 capitals at this stage for what reason, why should we extent the article 50 process . There are two potential answers. One, what if it is a technical extension . And if the uk needs more time. In that case, the 27 leaders could allow that extension for procedure without the need for emergency summit here. On the other hand, if the uk needs more time for a political reason say to have a general election, then the 27 leaders would call for an emergency brexit meeting here in brussels. I have to say. At this stage, appetite for emergency meetings and more brexit is very, very small on the other hand, it is important to bare in mind this looking at the potential trading relationship between the eu and the uk. How long is this road towards building and forging a Lasting Partnership post brexit between these two regions . If we look at previous trade agreements that the eu negotiated, like with canada, those lasted for five years. That trade agreement has not been fully ratified as well. When you look at the trade agreement that the eu and the uk could put together at the moment the exit agreement stip y stipulates between 20 and 22 let me chair a few figures with you. Sooner rather than later, well be talking about these trade deals on both sides of the english channel. According to a paper by the house of commons, uk exports reached 46 of total uk exports in 2018 and compared for instance with only 13 of uk exports to the u. S you can see there that there is clearly a high level of trade between both sides of the english channel. There will be a lot of questions for both sides in the coming months and years when they do start those trade talks. Thank you for weighing in lets get over to steve who joins us from westminster. Saturday was supposed to be Super Saturday is today going to be the make or break it day it is terrific tuesday. It is going to be busy lets ask one mp what he thinks. This is a brexit spokesperson. Good to see you. How many pages have you read of 110 . None so far having a busy morning. If the government gets his program motion, a busy couple of days how do you feel about the government trying to compress this in three days it is 110 pages long. Lots and lots of detail. We really cant rush this. It is about our future relationship for my kids and grandkids future im not going to rush it i think theyll lose on the program this afternoon you think theyll possibly lose on the motion do you think the government will pull the whole program and plead to give it the general election it craves . Thats what they are threatening. I think the ship is sinking. They want to know who is the captain going to be tied to the mast it is crazy. It is one question, are we going to leave or not . Thats the question. I appreciate you and other mps i spoke to does that mean recordless of what is in the context, youll vote against it. I almost ask why you read it if you are going to deny it anyway. It is interesting to see what is in it all the people in ireland will have to have customs documents it is our duty to scrutinize it. Do the people of wales actually want a second referendum they had a chance to vote. Is that really what your constituents are saying . My constituents are those that voted not to leave. The principality voted to leave, sir they did. There is a shift we are seeing which means and people are getting into the detail. I think theyd like a referendum and i think most would like to stay a lot of questions about ireland and United Ireland and the dups role, about black birt a bird and what it means do you think it is stoking up feelings for wales that had been more muted it had been really huge a lot had been saying well seats see. They are saying lets have a look thats always been our policy. It makes sense we look attire land and scotland. There is one special thing a lot of trade goes through the republic into wales. It is really time crucial to get things to market if they are going to be filling out customs forms going east to west, they are going to go bust. How nice to see you good luck over the next couple hours and days if you do get the accelerated program. The mp there says he believes the country is ready for and wants a second referendum. Back to you. Thank you so much pushing on away from the uk, the Eu Commission has warned italy the draft budget could be in breach of fiscal rules seeking collar indication on the budget plans rome has clashed over the br budget next years are the first to come forward by the Coalition Government saying that talks between rome and the commission had previously been strained but the situation had improved under the new government we have very, very high risks with the commission a number of times for reasons which are understandable and clearly, our was clearly to negotiate with them now it seems to be the issue was improved the main resolve is the interest on the italian paper Interest Rates are down that is certainly easier that is going to be reduced. We are going to squeeze in a short break. Coming up, ubs surpasses Third Quarter estimates. Our interview next clients voice remember that degree you got in taxation . danny of course you dont because you didnt your job isnt understanding tax code. Its understanding why that. Will get him a body like that. Move . That. Your job isnt doing hard work. Here. Its making her do hard work. And getting paid for it. vo snap and sort your expenses to save over 4,600 at tax time. danny jody. Its time to get yours vo quickbooks. Backing you. I dont have to worry about that, do i . Harmful bacteria lurk just below the gum line. Crest gum detoxify, voted product of the year. It works below the gum line to neutralize harmful plaque bacteria and help reverse early gum damage. Gum detoxify, from crest. Im not your charity case. I am not your excuse to buy a new dress for the annual fundraiser. I am not the poster child for your big donation. I am out of debts and in my own home. I am off opioids. Im graduating on time and on my way to a great job. I am. We are. What it means to live united. Welcome back to street signs. Novartis has raised its fullyear targets. Inside the strength of cardio drugs. Just trading a touch lower keeping it in the corporate space. Cutting the fullyear Sales Guidance after a, quote, disappointing Third Quarter. The british Consumer Goods Company blamed the division and uncertainty. Revenue rose over 5 and missed expectations and shares. Trading lower about 5 investors dont like what they are seeing this morning. Ubs shares are higher after the swiss lender beat on the bottom line in the Third Quarter. Overall earnings were down on the Year Investment bank profits more than halved. Surpassing expectations reaching a record 2. 5 trillion shares trading higher this morning. Lets get out to joumanna who is live in zurich what do you think investors like out of this latest report . Reporter we paired back some of the gains we opened up 2. 5 Percentage Points higher. Ubs is still down 5 compare that to Credit Suisse who are up about 15 it does raise a few questions about relative performers. One of the key stories has been that of the movement of the leader there looking at the numbers today, that part of the business is down 2 . Still good numbers they posted inflows. As ever because weve mentioned this a lot the low and negative interest rate, they have managed to compensate on that all eyes on their Investment Banking division down 59 year on year. Ubs down 19 fixed income revenue down 1 i sat down with the ceo and asked him about the challenges facing their Investment Banking unit it is a very challenging environment. In the first quarter, we said we would look at the developments and be prepared to respond we are more into a permanent challenge for the industry we have to think about how to redeploy resources and refocus existing resources thats the reason why we are adapting our business model. It is important for us to be competitive. Not only on a stand alone basis but it is important for our corporate base and wedge management for the appliance has your asian Investment Banking been impacted by the slow down in china and unrest in hong kong . I think in general, the events in hong kong have not affected the overall events but impacting the hong kong and the sentiment. From that point of view, we are now seeing a bit of normalization over the last few weeks. Is now i see while there were small declines in sales and trading. Advisory and underwriting continues to be an issue will you plan to move resources away if it continues to underperform if you look at our Second Quarter performance, we had a very strong beat we had more of a challenge we have more skued towarewed the problem is clear that we have an overweight in the u. S. In comparative ways, it is affecting our performance. I think the key phrase out of today is the realignment of their Investment Banking business this story emerged a month ago that they will be reshuffling a little bit one of the questions is that theyll be merging the two together to create trust they talked about merging their mixed income rates interesting move there looking to create synergies. All of this is a cost cutting exercise in a way of enhancing at 88 for the vest is Investment Banking unit. The market will be watching out as we progress to the Third Quarter. Thank you for breaking down those numbers. Lets get to our guest in the studio in terms of ubss numbers today, lets kick off with the banking side of things ubs does have a strategy to realign their Investment Banking units. What do you think about their prospects . Can they really turn it around the strategy is fine in terms of their units, where they really have the big challenges you look at what is driving that, a lot of it is down to the support functions and increased cost that is something they havent tackled in the same way. What are your thoughts . How optimistic are they to change that. They have tried in the past and havent delivered that cost. 88 are falling way behind their own targets. They have to be radical in the way they think about this business there is a lot more they can do. Thinking how that really works front and back and all the supporting pieces together coming into the wealth managers. Obviously managers are struggling when it comes to margins. How much more can ubs do when inking out those costs they are the Worlds Largest wealth manager that doesnt mean everyone else is after their business. If i look at the business, it is about cost well above morgan stanley. That is something they need to tackle in terms of future business, their stated age is the strategy in terms of the future revenue, we remain to be convinced. Do you think that will force them to look at inorganic solutions . I think that might be hard to do it is more thinking about how to tackle that asian base that is different. They need to get in that and see how they can really deliver something that makes sense shifting gears and coming on to the uk which has been an exciting sector the last few weeks. Weve seen a strong bid for the uk domestic bids what do you think here, if you are going to make a play to try to benefit from the brexit rally, where is the best place to put your money in the uk . In terms of the uk banks, the ones like standard charter, bill winston has done a great job there. The bank has really Clear Strategy and growth. Ubs has been great for growth as well in terms of the more focused banks, i think lloyds has done a better job it has made a lot of head way. Doing a lot around the it Development Needed to transform the banking. Rbs has a lot of work to do, it has had a lot of challenges. Thank you for weighing in there. Coming up on the show, lebanon unveils measures as it looks to quell protests well have more from beirut after the break. Do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Think you need to buy expensive skincare products to see dramatic results . Try olay skin care. Just one jar of microsculpting cream has the hydrating power of 5 jars of a prestige cream, which helps plump skin cells and visibly smooth wrinkles. While new olay retinol24 provides visibly smoother, brighter skin. For dramatic skincare results, try olay. And complete your routine with the olay eye collection. Brand power. Helping you buy better. Welcome back to street signs. Im Julianna Tatelbaum these are your headlines donald tusk says the eu will decide on brexit request in the coming days. We should be ready but one thing must be clear, as i said to Prime Minister johnson on saturday a no deal brexit will never be our decision saying italys draft budget could be in violation to the fiscal rules in a blow to the newly formed government. Ubs trades higher despite a near 60 drop in Investment Bank earnings telling us Market Conditions are tough. It is quite clear that we are more into a permanent challenge for the industry we have to think about how to redeploy resources in the Third Quarter net sales beating expectations lets take a look at european markets. Coming off a strong day yesterday. Gaining about 0. 6 particularly Strong Performance from banks and resources yesterday. We are seeing red across the board here all four Major Regions are below the flat line. Ftse 100 down about six basis points the cac 40 down about 0. 6 we have Seen Movement in fx markets. Lets look there now sterling has come off a bit. Down about 0. 18 heading firmly above the 1. 29 mark we did not see a vote on the new brexit deal. The speaker didnt allow that. The ball firmly in their court again today. The euro trading about 0. 1 lower. Looking at u. S. Futures. Yesterday, wall street saw a solid day for all three major indices. S p 500 closed within 1 of its alltime high. We are seeing a little red across the board yesterday, trade front and center and positive comments around the china statement from larry kudlow come in some optimism there boosted markets but it looks like they are taking a bit of a breather at the moment. In terms of geopolitical risk around the world, one region in focus, the middle east lebanon specifically where the government has agreed on a package of reforms where it looks to calm protest. The moves include a cut to the salaries of past and current ministers. Returns on bank promises hadley from beirut youve been there a few days what is the word, are protesters satisfied on the package put forth from the government. They do say revolutions are the sex of politics. Some calling it a million man protest. A lot taking place just behind me in central beirut it seems the government has managed to hang on listen to the report from last night. Reporter in a sign of how worried lebanon elite have become the Prime Minister finally managed to push through a long away the package as well as a 2020 budget with his cabinets full approval. Aiming to reform power sector, privatize telecoms and cut salaries of president s, ministers and mps by half. And moving up on bank profits and orders the central bank to move should help to achieve a near zero deficit for the 2020 budget the proposal to release current and former leaders financial records. Folks say his economic agenda doesnt go enough. They say theyll continue demonstrating until they get it. Reporter bonds fell in response to the protests running the budget deficit racking up one of the highest public debts on earth. Regaining credibility in the markets and imf will be crucial to avoiding valuation or debt default. Remaining largely peaceful behind me, the economic Miss Management have left this area crippled this will be a catalyst for the final reckoning. We saw resources removing barriers ive been watching protesters reestablishing those barriers and redirecting traffic. Right behind me, marters square hundreds of thousands of people gathered trying to push the government to do more to change their lives. This is a country that has survived somehow decades of political and financial ineffectiveness. It has all come down to crunch time banks closed here for a second day. Atms still full of cash. I found one stocked full the question remains what will happen next and will these Economic Reforms be enough to signal to protesters that their job is done and they could go home and business will resume as usual. Well have to wait and watch thank you for that report live from beirut back in the studio, im pleased to bring in the head of research at yoEurasia Group. Looking at the shift onto the banking structure. To put these protests in concept, it was spurred by the whatsapp tax what do you think of this shift to move away from the people there has to be some form of free balance in this case, lebanese banks own a large chunk of debt. Everyone loses if the country faces currency crisis. It has to be a shortterm measure. The reform package needs to be funded somewhere that is a more realistic outcome. I think over the long term, there has to be a new deal between banking and government over how likely they are to cooperate. In terms of corruption, that is the longterm issue. This isnt just another promise to buy time. I think this is probably the first time the government is seriously considering tackling corruption never happened before. What gives you that confidence we are seeing to actually crack down on corruption this time around. I think as the system collapses, we all lose they are responding with kindness these are politicians that have parties, long establishes. He has a position he does not want to lose it is about legacy, their interest they cut a little bit of corruption to make sure the system goes on the longer term problem is, can lebanon even afford this sort of debt should there be some form of rescheduling to allow for more funding or growth for the public hadley made the note that across the nature of the protests, what does that tell you in the fact that we are seeing the unified approach for the people of lebanon. This is basically going to crack the political system, put a dent into the structures lebanese will delay reforms. Partly because they think the government is lawyer to them today, we are seeing a change in that character protesters organizing around one theme. They want change and reform. Do you think we should be thinking about these protests specifically to lebanon or about potential spill over in other parts of the region. That is already there you see protests in iran over corrupt government we saw some protests in asia weeks earlier. This is really about maintaining austerity. It is more difficult to sustain. There is a broader trend somewhere. Stay with me, please. Wheel chat more after the break. That is head of research at Eurasia Group. Coming up, russian finance minister tells us his country is looking to expand trade with china. More next. Think you need to buy expensive skincare products to see dramatic results . Try olay skin care. Just one jar of microsculpting cream has the hydrating power of 5 jars of a prestige cream, which helps plump skin cells and visibly smooth wrinkles. While new olay retinol24 provides visibly smoother, brighter skin. For dramatic skincare results, try olay. And complete your routine with the olay eye collection. Brand power. Helping you buy better. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Welcome back to street signs. Saying both beijing and washington have made progress. Both sides could overcome any issues as long as there is Mutual Respect he added the whole world wants an end to the trade dispute. Adding it would be ashame to throw away the achievements of previous administrations at the imf immediatinmeetings i washington and asked about the trade between u. S. And china translator our goal with china is to achieve greater levels of trade. The figures come to 200 billion u. S. Working on investment. We have around 70 project, investment portfolio in which we see opportunities. These are projects in the far east and within the frame of the one belt, one road project where our chinese partners are working alongside. We are Building Infrastructure that will help us to create trade. Primarily our chinese partners a lot of plans we have a very good level of leadership between our countries. This speeds things up be it at governmental level or business we intend to further develop our trading and collaboration. Is it in your interests to see a difficult relationship between china and the United States on trade continue for some time here russia may benefit for selling produce into china if the americans are going to continue just raising tariffs i can say russia does not shape its policies on the basis of our neighbors the Biggest Companies are on the basis of the world yes, the restrictions have a risen between the peoples republic of china are indeed leading to china looking for other suppliers. We are ready to participate in minimizing the sanctions our partners in agriculture and ministry are working to compensate for these these are necessary measures i would like to compete that under no measures are they necessary. Working within the framework of our mutual interests if we see a trade war between the United States and the eu, what will that mean for russia will you seek perhaps closer relations with some western European Countries to offset that impact. No withstanding of course. Harmful to the economy. We are opposed to any restrictions or trade wars your question, my answer will be like the one regarding to china. We will likewise cooperate with europe from the point of view. If europe is ready, well develop things further we believe we need to remove these restrictions that exist. Between usa and russia, we believe the trade restrictions are leading us to the situation we are now witnessing. Unfortunately for the fifth time, the forecast for the lower economy has been lowered who is that good for it is the consequence we are discussing now it is not possible to continue with discussions this way. Unfortunately, we dont see any measures or actions to enforce this the restrictions, and sanctions exist and continue also asking if russia is satisfied with current crude price levels translator we are quite happy with the current prize of oils higher prices might rise on the restrictions in the world market in the event of restrictions of the supply to the global arket we are not interested in this. We understand full well the situation wont last long. There will be a fall this fall could be deeper than the parameters currently balancing out. The russian economy to a large extent is linked to Oil Production and refining. Our challenge is to try to reduce reliance on the resources. For this reason, the budget is being based on the roles on the count of 42 per barrel. Well be able to finance our obligations because we have accumulated sufficient gold reserves more than 7 gdp there for, even if they go above 30 a barrel or more, well be able to look forward to the shocks of budget this is for the predictability of oil prices. They are fine. The largest players our market and production of resources. Meeting with his russian counter part today to discuss developments in Northern Syria just as a u. S. Brokered fiveday ceasefire expires lets get back to the leader of research the Eurasia Group i think this deal or meeting is about getting a deal because basically in most areas of Northern Syria right now, it is the Syrian Regime and Russian Forces that occupy the dealsigned or brokered by the u. S. In regards to the kurds and syria is about 100 kilometers of territory. Really erdogan needs putins cooperation. It is a deal that will allow things to deescalate what specifically do you think president putin will want to see i think hell want to see that turkey will cooperate in terms of any future regime and making sure. To have the security arrangement to deal with the turkish pkk or other groups they might feel sensitive to or reestablish that cooperation. Seeing in the latest research that you think the cease fire gives to the meetings. I think erdogan has given a lot of what they wanted. The u. S. Is not there from Northern Syria it has withdrawn most resources in the north it is the russians that are there. They are at the table. I think erdogan takes what he has achieved with the u. S. And asks for an add on agreement with some form of cooperation with russia to make sure that area includes limited kurdish presence in terms of the u. S. Side of things there has been plenty of rhetoric from republicans looking to impose sanctions. But the cease fire, what is that meant to impose against broader sanctions of turkey . I think the environment in congress is still tense. Sympathizing with the abandonment of the kurds in syria. It makes sanctions a little less painful. The more extreme versions become less likely in this situation. All in all, we are heading towards a better environment there. What does this mean for erdogans support at home given the way things have unfolded it seems like this is painted as a bit of a victory for erdogan he would bill it that way in turkey absolutely. I think the idea of an independent state has been a nightmare for kurdish officials. The u. S. Really broke that we are not going to see an autonomous kurdish empire there. So that is good for russia. Absolutely. As this situation was unfolding with the u. S. Pulling their troops, he wasmaking a visit to saudi arabia. How far do you think president putins ambitions go i dont think it is a coincidence that anywhere weve seen the u. S. Pull back, weve seen putin and russia try to expand control president putin is working with a plan it is about expanding his influence in the middle east being a power broker in the middle east is important for him. It is not really about taking sides in the middle east russia wants to do business with all and wants to be a secure economic player in the middle east speaking to the russian finance minister about the russian ambitions when p it comes to china, how do you think about their ambitions . I think the russians have really sown on all of these tensions u. S. Sla u. S. china tensions and tensions in the middle east, all of these are areas for russia to engage and build partnerships thank you for weighing in on a range of topics. Head of research from Eurasia Group. Looking at wall street, after a solid day yesterday. Thats it for todays show im Julianna TatelbaumWorldwide Exchange is coming up next. [ ] want to freshen your home without using heavy, overwhelming scents . Try febreze one. It eliminates odors with no heavy perfumes, so you can feel good about using it in your home. For a light, naturalsmelling freshness, try febreze one. It is 5 00 a. M. Here here is your top five at 5 00. A pledthera of big names reporting. Another twist in the wework saga as softbank looks to take over the company. Boris johnson trying to get a deal and what Mark Zuckerberg says the company is doing now to try to fight false information ahead