Eu Commission President calls for an end to the use of arms in the middle east as she arrives in london to discuss iran with british Prime Minister the use of weapons must stop now to give space to dialogue. We all are called upon to do Everything Possible to rekindle talks. There cannot be enough of that a fatal Ukraine International airline crash. Authorities invest gate the cause and the initial report suggests engine failure. Flush. Welcome to the program iran has launched more than a dozen miceles in iraq in retaliation for the killing of Qassem Soleimani the u. S. Says iran is enemy calling last nights attack on the troops a slap in the face. He has insisted the u. S. Military forces should leave the region ashe called their presence, quote, a source of corruption he insisted if iran were to resume talks, it would pave the way for u. S. Dominance but all is well according to a twitter message from President Trump after the a attacks. The u. S. Department of defense says the strikes struck forces in iraq and the bases had been on high alert. Trump will make a more formal statement later this morning going now to lebanese capital with hadley. Reporter good morning. As you said, these rocket attacks, over a dozen ballistic mi missiles fired folks on the ground telling us when it comes to proportional respons response, they were expecting something tougher. They said irans retaliatory measures are at an end you have to figure that Qassem Soleimani was such a prominent figure whether or not we are going to it in to see back and forth between america and iran and its proxies in the coming weeks, days, months and even years. The effect we saw initially, these knock on effects, the market taking a step back after reaching negative territory early on and a more pragmatic look in the gulf remember, when we talk about the persian gulf, there are so many different variables here we heard some noise about the folks in dubai and where i am in lebanon where those folks might be targeted. If we saw anymore retaliatory measures in the United States. Folks in the mers yan gulf focusing on what will happen next in the oil space. What we saw in those attacks not too long ago, september of last year, were a targeted response to the maximum Pressure Campaign remember how accurate those drone attacks were on taking that facility off line even for a short period of time folks telling me as well that they are much more worried about what we were seeing over the last 24 hours. All eyes will be on washington as we await the response today a great insight into how the greater broughtened. All is well. What is the time of tone what kind of preference do you think President Trump will try to angel when he addresses the nation today we knew several responses were on the table when it comes to retaliatory measures. We saw them really sticking to their word in a sense saying they were not going to marge et in the region. According to them, they hit them pretty hard seemingly signaling to the United States that it was over with saying it was a response the american president even without giving us further details and the damage these attacks have inflicted willing to put this to bed remember, rhetoric on both sides here iran and United States again and again have said they are willing to come to the table and talk about this this putting to bed so to speak is an opening of door to that conversation. Thank you we have some comments from the defense minister saying iran used shortrange missiles in the attacks to u. S. Targets. That con officials what we heard overnight and that irans response will be proportional and also saying President Trump has turned the u. S. Administration into what he calls a terrorist government lets take a look at the european markets quite a different picture to what we saw yesterday the overall magnitude still contained. So phariseeing it as a contained conflict the dax down yesterday the dax was the keyout performer. Ftse 100 down, french stocks down about the same and in italy the mt si mftse mib is down 0. 3. Oil prices trading in the green. Lets take a look at safe havens, which have seen a strong bid. Gold up at 1,580 now hovering around those sevenyear highs. The yen also caught a strong bid striking in the immediate aftermath on those attacks and stabilizing on the dollar. Lets get to oil which is the main way in which investors have expressed risk around the region this morning, wti trading is 0. 2 higher. Dan murphy is in dubai following the oil closely. Dan, in the immediate wake of these attacks, oil spikes. Walk us through what this has meant for wti and brent. Absolutely. Weve seen volatility. Oil in the crosshairs here we are looking to see how the United States responds President Trump set to address the nation shortly investors will be keeping a close watch on his comments to see where this situation could go next. In the immediate aftermath of the attack, we saw wti spiking 4. 5 brent also on the rise lifting around 4 . With he saw brent and wti hitting levels we havent seen since september and april respectively original equity markets also trading lower. We saw those at the start of trade. Equity markets in the uae. Negativity certainly appears to be the theme when you look at the reaction we have seen in oil right now, we have come off those most recent highs. Oil continues to trend lower our first through the session as we track throughout the course of the european trading day and into the United States oil appearing to be slightly weaker here and holding on to that 62 handle for wti bringing across some reaction we have had in the region here. Top officials and authorities commenting on this the opec secretary is actually in an you auabudabi at the mome. He has been communicating with iraq iraq pumped 4. 6 Million Barrels per day. Second largest in opec outside of saudi arabia. Responsible for about 5 of global crude interesting because what we have seen in the aftermath of more recent attacks also with the volatility we have seen with iraq infrastructure there, particularly in the south is highly vulnerable with disruptions and outages. We have heard from the uae Energy Minister calling for calm and stability across the region. He was speaking to reporters today saying there is no immediate risk this is also important that is the vital Oil Choke Point that has been vital in the past including those tanker attacks that we saw late last year no immediate risk to the straight according to the uae Energy Minister. Back over to you now to bring some recent comments from lufthansa, talking in the last few minutes, saying it is canceling its daily flight from frankfurt to iran. One of the few European Airlines that travels that route and also to iraq. They are going to cancel the next planned flight to the north of the country the eu Commission President has called for a diplomatic approach as she addressed the ongoing situation. She suggested weapons must stop and the European Union must act as effectively as possible and that efforts would, quote, do Everything Possible. The u. S. Government has condemned the attack and confirmed that the british troops were also housed at the facility they are urged iran not to repeat the wreckless attacks a war in the middle east would only benefit isis and other terrorist groups thank you for joining us and for a look at market reaction, yes, we have seen a knee jerk reaction investors seem to be dialing back the risk for which they are describing this. What do you think of this market reaction. The gold dollar, yen, et cetera the toning back of some escalations. When you think about the longer term reaction, what you need to think about is how much is this now going to impact the underlying story if you do see, for example, oil prices staying some what elevated that will have an impact this is a supply side oil shock. That could be quickly removed. If that stays in place, this could have different effects in the medium term. You talk about the impact of oil on other areas of the market what about currencies. You think youll see greater differences . 2019 was something of a dull year a bit of fx volatility wouldnt be a bad thing there is not a huge amount of miss alignments. Actually, there is not a huge amount of currently that look a long way away from fair value. That might make it hard to look at the knee jerk reactions in the positioning, if this story develops and if it becomes a Global Growth story. Places where youve got heavy positioning and markets. South africa would come under pressure and global trade come under pressure Something Like dollar rand could be vulnerable to the move higher the dollar is a tricky currency at the moment it is a safe haven currency. At the same time, they would weaken in 2020 if we see odds in the geopolitical risk, that could be more demand on the dollar. How does that affect the green back i think the dollar shows you how good a currency the dollar is it is really what people want to own in these kind of periods but it is also the highest yielding currency. Youve got the carry associated with the risk. In that sense, we still like the dollar we are the counter conscious ses on that risk we see the dollar being pretty resilient. In these events. This shows you the dollar could surge in 2020 we are positive on the dollar compared to the consensus, we are more bullish we see where the dollar could really surge in 2020 how do you explain those routes what is behind that thinking there are two obvious channels developed market and emerging market channel on the developed side, if things slow and if it doesnt pick up, if you look at the ecb, these are right at the end of their limits of the policy they might be forced to do something unconventional that would be one angel slow at the growth in the policy response the fed does have the rate cuts. The other is the em angel places where there is heavy positioning. Yields have come much lower. You have the yield buffer. You are getting the return that you need, the risk there in the emerging markets at some point, those normal yields look too low. There is some kind of shock and there is a positioning now on the emerging markets those are the two channels we look at. The senior strategist we want to bring some comments on the israeli Prime Minister saying that President Trump should be congratulated for acting swiftly and that israel stands by the u. S. And whoever tries to attack israel will be hit hard we are going to squeeze in a quick break. Coming up, the countdown is on as france and u. S. Look to end a digital tax dispute. More after the break janine i used to be a little cranky. Dealing with our finances really haunted me. Thankfully, i got quickbooks, and a live bookkeepers helping customize it for our business. live bookkeeper youre all set up janine great vo get set up right with a live bookkeeper with intuit quickbooks. Looking to get your business off to a fast start in the new year . Its go time switch to comcast business and get fast internet on the nations largest gigspeed network. Plus, complete reliability with 4g lte backup. And, cloudbased security to help protect the devices on your network. Greenlight your business in 2020 with fast internet and voice for 64. 90 per month. Switch now and get a 100 prepaid card when you add comcast business securityedge. Call today. Comcast business. Beyond fast. Welcome back to street signs. Just before the break, willem brought us breaking news from lufthansa who said they are canceling flies to tehran. We are now hearing from tui. They are seeing no change to booking. Another European Airline weighing in on the situation in the middle east. Now separately, from iran, ukraine has confirmed all 176 people on board the flight have died including 82 iranian passengers. 63 from canada, 11 ukrainians, 3 from germany and 3 from the uk they are doing Everything Possible to identify the cause of the crash they are saying engine failure is responsible boeing is also gathering more information. The plane is 737 is different from the newer max model and doesnt include the Flight Software implicated in last years deadly incidents. Samsung expects a smaller profit and points to a bottom for memory chip prices beating analyst estimates in the shares higher. We have this report. Samsung bucking the trend closing higher by 1. 8 despite all the middle east tensions after the chip maker beat on the bottom line in q 4 Earnings Guidance operating profit is estimated to come in when markets consensus was around 6. 5 trillion yuan representing an annual decline but the beat fuelled the market anticipation of a better year to come in 2020 for a semicycle a number of analysts are forecasting last years supply cuts to take effect and return on inventory clearing out and 5g network rolling out this year. Just overnight, surging as they called an earlier than expected improved in fundamentals and market essentials. A 40 of upside on the air samsung electronics, a full Earnings Report is due on the end of the month reporting for cnbc hong kong. Sticking with the tech space. France and United States have given themselves 15 days to come to an agreement over the digital tax that could affect amazon and google it could affect french goods like wine and cheese over the proposed 100 tariff the french minister will meet with mr. Mnuchin he is warned that the eu is prepared to retaliate to the u. S. Tariffs if a new degreement is not reached our french reporter joins us here in the studio so they plan to meet in davos and they hope to come to a resolution what do we know about how and when these tariffs would be implemented if they are unable to come to an agreement . It is all up to President Trump. They came up with a list of goods including leather goods, champaign and cheese they are Holding Hearings from players from the american tech scene and cheese import association, wine import and the impact it could have on u. S. Jobs and economy you have them meeting with the new trade commissioner he is really trying to reframe the competition into the u. S. , eu talk. Because france put the digital tax after it failed to bring it at the eu level. They were on the way last july when the National Assembly voted on the new tax they came place and said they will back france and you have other European Countries have put the tax like italy and austria. They have framed this as a broader conversation between u. S. And europe. He is going to washington next week to meet mr. Lighthizer. In two weeks, they are meeting to see whether they managed to come to an agreement and go back to the network to come up with a global tax and international taxes. Whether that happens or not interesting. Youve got the french government pushing a plan, the european people as a whole saying they are not comfortable with it. When you go back to the u. S. , guys, we need to stand together and that is going to be such a key issue. When it comes to eu, u. S. Trade disputes that solidarity, will it hold . Those stronger power in negotiations like this the interesting thing here is President Trump. He would be the one deciding how and when these would come into place. President trump is in Campaign Mode to be reelected later this year talking to his base. His voters there is an argument that it wouldnt affect his base and it would go on his rhetoric of being a strong man and the unfair tariffs against the companies. Another point to make around this and the dominance of who can get what they want in these negotiations the u. S. Story has been hidden away a little bit. Weve seen progress over the china deal market. We have a risk on rally. That trade story is part of that that isnt necessarily going to go away anytime soon we know President Trump schbt happy with what the europeans have done with the Interest Rates they would probably fall even further the slow down has been more dramatic in europe you look at the german factor. All of the numbers really over the last two years, i think that could be really interesting in the next few months. Thank you for flushing out the conversation and bringing us up to speed. Dominic stays with us. We are going to take a short break. When we come back, airlines are rerouting their flights away from iraq and iran after a missile attack on u. S. Bases well discusitorafr e eak. S me teth we see patterns. Relationships. When you use location technology, you can see where things happen, before they happen. With esri location technology, you can see what others cant. Welcome back to street signs. Im willem marxs im Julianna Tatelbaum. These are your headlines a slap in the face. The Iran Supreme Leader calls the u. S. His enemy and demands the troops leave the region after they fired missiles. U. S. Futures pair back from the sharp losses that indicated a triple point drop for the dow and Eu Commission calls for an end to the use of arms with the middle east. The use of weapons must stop now to give space to dialogue. We all are called upon to do Everything Possible to rekindle talks. There cannot be enough of that the Ukraine InternationalAirlines Crash leaves 176 people dead with authorities invest gating the cause of the disaster after the government blamed engine failure we are now about 1 dotd 5 hours into the trading session markets are under pressure overnight escalations once again as the u. S. And tehran launched those missiles the dax is down about. 7 all of that has come off this morning. Still the magnitude of the losses is contained. No massive, massive moves. Those losses are spread for the most part. Airlines under particular pressure as they have had to make some pretty bold decisions. Rerouting away from the tensions there. Oil and gas has been outperforming as they took a bit of a jump higher after the aftermath of the news of the events overall cautious but muted the yen was the big mover in the immediate aftermath. It has paired back those sharp gains trading flat versus the dollar at 108. 33 sterling up at 1. 3145. The euro going the other direction down to 1. 1138 lets look at u. S. Markets we are looking at losses earlier, we were looking at even steeper losses alongside the trimming of gains and oil price. The overall oil reaction, the same has been seen for u. S. Futures. We are going to start to see the trade for the u. S. But not as negative as initially thought. The key Way Investors are expressing their view. Brent trading higher we did see a 4 spike in oil in the immediate after math top story today, the missiles launched in iraq. Reporting that revolutionary guards claimed responsibility for the attacks. Crucially, of course, Qassem Soleimani was not on his own when he was killed a very Senior Leader from iraqi malitia was with him saying the iraqi response will not be lesser than the iranian response it is worth pointing out, there have been these localized rocket attacks on the positions that include facilities for u. S. Troops and that might there for be an aeks indication of the localized rocket attacks over the territory we saw overnight thank you for the latest. The u. S. Is irans enemy those were the words of the Supreme Leader he called the attacks a slap in the face and has insisted u. S. Forces should leave the region as he called their presence a source of corruption khamenei said it would also pave the way for u. S. Dominance afaa says American Airlines cannot fly over iraqi and iranian airspace Cathay Pacific will not operate flights over iran or iraq until further notice. British airways is assessing routes emirates has rerouted flights and qantas is avoiding airspace for now. Lufthansa is canceling flights from frankfurt and iran and klm is also canceling flights in the airspace swift reaction from those International Airlines bringing in the directionor of country middle east and africa ihs markets. I want to kick off, we heard from irans foreign minister saying the strikes were proportionate measures is that really the case . Can we expect more from tehran i think what the u. S. And iran are trying to do is establish foot youll deturns to avoid going into full conflict i think this is the conflict you want to read his statement they can do more if they wanted to, they are refraining from doing so because they are trying to avoid a fullscale escalation in that sense, that is what he is referring to. In terms of reaction to the other gulf states, saudi arabia is pushing for deescalation. Does that surprise you no. Because that is their war to lose in the energy in the Eastern Province that catch more damage if there is a war. It will be them and the uae that bare the brunt of it not the United States, really. Let me ask you about u. S. Troop presence in the region weve heard from the iranian government specifically. Hed like to see an end to the u. S. Troops. Weve had the debacle over potential withdraw and that letter draft letter to the iraqi authorities. Do you expect to see a repositioning of u. S. Troops in the region and what impact do you think it might have with tehran it is impossible to win an election in the United States on a platform that says we want more intervention in the middle east it is worth remembering that even though both president s, obama and President Trump tried to reduce the level of engagement in the region, they ended up getting sucked into it anyway there is a very weird dynamic where the political elected is pulling in one direction towards disengagement in the region. That is backed by the public the permanent bureaucracy, if you will, the Community Keep insisting that the u. S. Needs to be more involved i think they see the contradiction and the will in the u. S. Is more directed towards withdraw and will try to capitalize further and reenacting and trying to highlight the high cost of the u. S. Presence by striking at regional states and staying below the threshold of the actual war which may be to the countries and the u. S. Itself. What do you expect to hear from the u. S. President when he makes a statement later today . I think it will be a combination of bluster and trying to deescalate, which is exactly what the iranians are doing. Thank you the director of country risk for middle east and africa and also senior ethics strategist who will stay with us you can follow us on twitter street signs cnbc get involved in the conversation u. S. Senators have received a classified briefing on the cyber threat from iran as tensions continue to escalate well have more after the break. I remember thinking about things i did and wondering if that was the last time i was going to do that thing. Coming to the Cancer Treatment centers of america, they treat the whole person. Everything is here. Imaging, infusion. I dont have to go anywhere else. They care about me as a person beyond just being a cancer patient. Theyre my second family. sensei beautiful. But support the leg when i started cobra kai, the lack of control over my business made me a little intense. But now i practice a different philosophy. Quickbooks helps me get paid, manage cash flow, and run payroll. And now im back on top. With koala kai. Hey more mercy. vo save over 40 hours a month with intuit quickbooks. The easy way to a happier business. Some things are too important to do yourself. Get customized security with 24 7 monitoring from xfinity home. Awarded the best professionally installed system by cnet. Simple. Easy. Awesome. Call, click or visit a store today. The president of iran is due to deliver a speech after iran launched more than a dozen missiles in retaliation of the death of Qassem Soleimani. President trump will speak this morning to preview what we can expect, well go now to beirut weve heard some Public Comments from the leadership over the last few hours what else can we expect over the coming days . Weve heard something of leadership two people in particular, donald trump and the Supreme Leader he followed that speech up with some tweets in which he said the attack on the u. S. Positions in iraq was a, quote, slap in the face to the americans. In a followup tweet, he said nevertheless, it is not enough this military action is not enough it is rather an ominous signal but needs to be parsed he is referring specifically to the military action and suggesting there needs to be some kind of other action. It is too soon to tell it is an interesting pr high road iran seems to be taking right now. You look back to just before the strike in iraq iran made it clear they wanted to respond in a proportion gnat way. In their view, this was that they attacked using traditional weapons they are appeared to have some kind of notice because the air raids went off two hours before those were launched we dont know if the iranians notified them because they didnt want to actually kill anybody. Indications so far is that nobody was killed. There are no reports of iran casualties or american casualties nevertheless, this area is still a tinder box where i am in lebanon tharks is the headquarters of hezbollah, the group backed by iran founded by irans revolutionary guard. From the moment soleimani was killed, they are saying they want revenge they held a Memorial Service for him where they said americans would leave in caskets they told the u. S. To abandon all occasions here through more conventional tactics or using the proxy like hezbollah live there in beirut. U. S. Senate has received classified briefing of the threats including the cyber attack and also warned American Business of the growing risk there is a tweet saying they were slapped last night but such military actions were not enough iran has a, quote, deep and complex cyber capability is it widely understood in your industry that iran is among the worlds most prelivic, profishent actor in the intelligence space i would say most advanced countries do have a cyber capability so likely they do have the capability to attack should they want to. We have seen the real woorld physical attack targeting bases where u. S. Troops are housed in terms of the cyber threat, if there is one, it may not target governments, it may target businesses and individuals we live in an unusual world when i was a kid playing football, they would shout all versus all and everybody would start fighting everybody you have a situation today where you have foreign nations carrying out attacks on interprizes. You have state versus state. It is a very confused situation. You have this powerful original nation like a nation state that has the capability to wield against the state. Thats why enterprises, Financial Institutions need to invest so much money to thwart these kind of threats. What is the time frame we are talking about when it comes to a country like iran if they are considering a cyber attack how quickly could they put together one of significant scale where businesses and governments have to address. It is a how long is a piece of string answer they take Different Levels of planning do pechbding on how sophisticated you want to be the tools are commercially available. They can buy tools and use them against the companies. I would imagine with any reasonable sophisticated organization, they can spin these up quickly and already have plans to do this. In your role, you talk to Senior Security information at big Large Companies around the world. Im wondering, do you find these execs are saying, we are concerned about this and the costs. We are also angry, the Government Action could mean we have to spend more on security yes the companies around the world would be on high alert at the moment because of the increased threat level putting this in place takes time this is a matter of years, not minutes. All of the hard work youve done over the years starts to payoff in these situations. Most of them will be comfortable in that if theyve done the hard work, if they understand the assets, what are they defending. If they understand the controls and how they are vulnerable and what those threats might be, theyve got a good picture i cant comment on how they are thinking of politicians. If someone else is causing a problem, we might want to think about how to do that thank you for joining us. The eu Commission President has called for a diplomatic approach as she addressed the ongoing situation in iran and said the use of weapons must stop meeting with british Prime Minister in london today the two are expected to discuss the situation and the next phases when it comes to Brexit Johnson says discussions are set to be based on ambitious free trade agreements over the last 12 to 18 months, what has happened in westminster and brussels a really major baring on the strength of the pound. Now that we are close to the january 31st exit date, as we start what will be complex trade negotiations will those matter as much as the political twists and turns did i dont think so. The market was hold up a little bit. We have the best part of the year there is a chance that could be extended we have the long lead time we saw this in 2017. At the time, we were bare us on the pound. The market just ignored it for the best part of a year, slightly longer. What we are saying now is, look, forget about the politics. You are going to see the headlines. Ignore it. What you need to focus on is what is happening with the uk economy. Weve been through the down turn there is a i chance. A political certainty. That is true relative to, say, europe and the u. S. Where you are seeing a greater slow down if you get a bounce back in consumer confidence, fiscal spending all of that starts to come through. The outlook starts to improve relative to the rest of the world. That could be a big driver for the pound. That is still cheap, still below the fair value we think the currency can rally up to 1. 45 on the year generally, we like the dollar. In this circumstance, ignore the politics, follow the data. Quite a bold call well end on that note thank you for joining us, senior strategist, hsbc we are looking at losses across all three major markets there, not as steep as were indicated earlier this morning investors seem to be reassessing their view of the risk in the middle east. One other thing to flag, boeing shares are seen opening down 2. 3 premarket after the boeing 737 crash belonging to Ukraine International airlines thats it for street signs. Im Julianna Tatelbaum and im willem marx looking to get your business off to a fast start in the new year . Its go time switch to comcast business and get fast internet on the nations largest gigspeed network. Plus, complete reliability with 4g lte backup. And, cloudbased security to help protect the devices on your network. Greenlight your business in 2020 with fast internet and voice for 99. 99 per month. Act now, and get 1 year free of wifi pro. Call today. Comcast business. Beyond fast. Breaking news this morning mideast tensions rising to new heights. Iran retaliating against u. S. Forces over the killing of general Qassem Soleimani last week a flurry of activity from washington to wall street as the president , the pentagon and investors react to all of the news we have complete coverage. All of this as Worldwide Exchange begins right now