Performance in what is normally its weakest quarter. The slumping crude price takes a toll on oil stocks, which underperform the European Market as investors worry an extended output agreement wont address the supply glut. Less than 48 hours to go until the polls open for the final round of the french president ial election. As emanuel macron extends his lead over Marine Le Pen. Good morning. It is friday, but not just any friday. Its jobs friday in the u. S. More importantly here in europe, it is the last trading day and the last friday before the second round of president ial elections in france. Thats all happening on sunday. Lets look at the stoxx 600 and how its doing this morning. Its off slightly to the tune of 0. 3 . Were seeing a bit of a pull back as we see that drop in oil price really weighing on the Energy Sector. Keep in mind these European Markets are close to 20month highs, and close to nineyear highs for the french equity markets. Lets look at the indices one by one. Were driven by the earnings results. The ftse 100 is slightly outperforming the rest if eurn e as pearson storms ahead. The xetra dax is off by a third of a percent. The cac 40 is off by 19 points. When it comes to the sectors, its about the oil sector thats dragging us lower. You can see that we are seeing quite some underperformance there. Retail, basic resources, travel and leisure are trading slightly to the upside. Lets get back to pearson. Shares in the company are soaring after the Company Announced further initiatives to simplify the company. The education publisher said a Strategic Review of its k12 course wear business is underway. This as the removal of the ceo, john fallon has been called for. He spoke to squawk box about the controversy around his pay package. My pay is not a matter for the Remuneration Committee or the board, its not for me. What ive done is ensured that the money you referred to im investing in buying pearson shares, every penny of it after tax to make sure my interests are aligned with the shareholders. And our interest is making pearson as an efish shechbt afi wellrun company as we can. We have announced today that well make a further p 300 milln pounds of efficiencies. At the same time we are investing more than ever before. 750 Million Pounds per year in the digital transformation. We talked about the digital winner, thats what well be. I hear you, but shares are down 16 over the last 12 months. To take a 20 pay raise, and it is a 20 pay raise, whether you invest it back in the company or not, you can see why these times for teachers and workers across the board, that sits not well with many people and wont read well today. I i completely understand the frustration. I hear what youre saying just not take the 20 pay raise. Because i took the view, as i say, that its for the you are m remuniation committee and the board to set that. You would say i will not take it. I thought the right thick to do was to use money to buy shares in the company and demonstrate my commitment and confidence in the longterm future of the company. Thats what i did. Lets talk about the biggest story in the markets over the last 24 hours, its the oil price. Saudi arabias Energy Minister and his russian counterpart say theyre satisfied with Oil Fundamentals adding that its important to work with others to rebalance the market. Thats according to the opec governor who said there was a growing conviction that a sixmonth extension may be needed to rebalance the market. This as oil prices, as weve been talking about, slumped to sixmonth lows erasing the gains theyve made since opecs Production Cut deal last november. Just to tell you, we are seeing that crude is bouncing back above the 45 handle, changing hands at 45. 26. Still down by a half of a percent. Brent crude is down less than that. Off by a quarter of a percent. 48. 26. So were seeing a bit of recovery intraday. We saw a vicious selloff in yesterdays trading session to the tune of 5 . An extremely heavy volume is something that characterizes the selloff. Lets go out to the Oil Market Analyst from energy aspects. Is there one single factor that you can elude to to explain the sudden drop . Is it libya . Overall supply fears . Is it Something Else . Good morning. So, its been a combination of factors. One being ever since the last few weeks weve had the market growing a bit inpatient with the incoming data that weve been seeing especially on the inventory side. Visible inventories have not had as much of a draw down as the market would have liked. And to compound on top of that, weve had the market also extrapolating quite a bit on the opec statements around the deal. As well as some of the Macro Economic data from china. So, those factors have sort of built in to where we are at the moment. On top of that, we have a lot of cta linked selling, a lot of momentum driven selling in the market. Mexico hedging programs weighing on as well. Given the option comments from options market. The big question is now how will opec and nonopec respond to this . We know the opec meeting takes place may 25th. Will we see an extension or will we see a deeper cut . Will that make a difference . Sure. So we are still of the view that we will get an opec extension. And this is to do with a few things. The key ingredients for this are still are already shaping up to be quite strong. One being iran has already said quite awhile back already that they are comfortable with 3. Million b3. 8 mill yoion barrels. Two key ingredients are there. In terms of going into the meeting as well, it does seem like we will get an extension. Just to tell you that the brent crude price has\s p tur t positive on the day. You said opec and nonpoke including russia may be frustrated about the lack of Pricing Power that they got. The fact there is such high tolerance to the cost curve when it comes to u. S. Producers. Is there anything else they can do, aside from the extension . The extension in itself takes time to feed into balances. We had those opec cuts, compliance has been fairly strong. And when we look at the micro details, we see things such as the u. S. Is a great example, in terms of the weakly Inventory Data as well as the monthly stats that weve seen. April numbers have shown a slight drop, but if you would look at 2010 to 2016, historically those have averaged into builds. Once again, its the nature of the data, looking at it relative to the past that, again, brings about constructiveness if we look at it that manner. Can i throw in another factor . That factor is a big one, the china factor. Do you think the recent pressure, not just in oil prices but Commodity Prices overall, thinking iron ore for example, do you think thats down to more reemerging worries about china and tightening liquidity there . Yes. Thats the other factor as well. The china bears are out. We are again of the view that, yes, the chinese story in terms of the macro peck chore u peck still all right. We have the parliament picture coming in as well, they will do whatever it takes on the policy front to make sure things are running smoothly. Before we let you go, whats your outlook for oil prices . I guess its incredibly difficult to forecast at this point given that no one knows whats happening may 25th. Where do you see oil prices in three months from now . We see it drifting towards 60 a barrel by the end of the year. Yes, even though u. S. Supplies are set to rise, we do have strong supplies by the end of this year, ramping up from now to the end of the year, but it gets offset to a large extent with nonopec supply declines. If you look at mexico, norway, china, in terms of domestic output. That offsets a lot of u. S. Production coming through. Overall balances look like theyre heading in the right direction in terms of balancing the market. We are likely to head higher in terms of prices. All right. Always a pleasure speaking with you. London state will stall as a result of brek sit. Spe brex brexit. He said they were already looking at office space in european cities. Lets get out to the member of the executive board at the bundesbank in germany. He joins us from yokohama. Thanks for joining us late in the afternoon. We knew the brexit negotiations would be messy and there would be uncertainty when it comes to the big banks, trying to make a decision where they want to move european headquarters. Do you think this will become disorderly from a Financial Stability perspective . I dont think so at all. Thank you for having me on the show. I personally believe that the Biggest Issue for Financial Stability really is if German Companies or other European Companies do not have excess to product which are presently being performed out of london. Thats a bigger financial risk than any other risk i could potentially see. I know frankfurts message to those banks yes, were open for business. Do you believe if and when emanuel macron wins the election on sunday, he may ramp up that offensive and that message may be more difficult to convey . We dont have a message for the banks who are thinking about relocating part of this, but that they know best what kind of decisions they want to do we continue influence their decisions whatsoever. They make their decisions. Everybody is open for business. But thats how it should be. So, were not trying to advertise or market our financial center. What we are really interested in is to avoid any cliff edge effects which could potentially come out of this. Other wise we are just waiting for potential applications to go into either paris, dublin, amsterdam or frankfurt. Were not advertising our financial center. I hear your point. Youre not trying to actively advertise for frankfurt, but why is it that so many banks that are speaking to you that come to the bundesbank to hear you out about the regulations they would be facing in germany will go and choose germany. Why do you think this may be more attractive to them than other places in europe . You have to ask them. Were not announcing or talking about the discussions were having with the banks. But i find it very, very normal that bankers who are think being relocating parts of their business are trying to meet their potential future supervisors. Theyre not only speaking to the bundesbank, theyre talking to the European Central bank, to other colleagues in other cities. We are as much open to business as anybody else. Again, we want to avoid problems. We want to avoid accidents. But i am european enough to say that its not really most important for us, whether this is done out of frankfurt as much as i would have a personally favorized frankfurt over other cities. Whats important from my point of view is that we have a level Playing Field and a single rule book in the eurozone and in the european union, that the banking regulation is done the same wherever it is being conducted. The bank supervise ion as well. And that we dont compete with each other but Work Together on these issues. I can only promise you that wherever the application is going to be filed, we will work with those institutions in a constructive manner, because we want to have the same products being offered out of london, which legally has to be offered on the continent. Thats what counts most. Relocation is a secondary issue. Understood. Lets change gears for a moment here. Sometime in the not too distant future we will be looking at the first rate hike in europe as well. Already happening in the u. S. Do you think german banks specifically are well positioned to deal with that challenge, especially when it comes to loan books and mortgages . No. The german Banking System is very unusual, even in a european environment. Because were having a very, very large number of german banks. Were still supervising 1800 or so banks. Some of which are very, very small. So, just to give you a feeling of whats going on. In the eurozone, each and every bank above 30 billion euros is being supervised by the European Central bank. Im sitting on the board of Supervisory Board of the ecb. Thats about 85 of the total excess of the eurozone Banking System. In germany they make up 50 , which tells you we have a decentralized fragmented Banking System. The larger banks tend to be much better hedged against Interest Rate risk, Smaller Banks dont have that hedge. Which means that i have to say the german Banking System as a whole, this doesnt mean anything about single individual institutions, does have to pay much more attention to Interest Rate risk than others. Also dont forget that in this search for yields, over the past years in this very low or negative Interest Rate environment, some of those banks have gone long in maturity, extended Real Estate Lending to 15 years or above, which means Interest Rate risk would even be higher than it would normally do. Appreciate your time. Thank you. Sticking with japan, still coming up on the show, great inflation expectations. How kuroda says he is optimistic wages will rise for japanese workers. We hear from the bank of japan governor. D you know slow internt can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats over 6 times faster than slow internet from the phone company. Say hello to internet speeds up to 250 mbps. And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. The shlike a bald penguin. How do i look . [ laughing ] show me the Billboard Music awards. Show me top artist. Show me the top hot 100 artist. They give awards for being hot and 100 years old . Well take 2 [ laughing ] xfinity x1 gives you exclusive access to the best of the Billboard Music awards just by using your voice. The Billboard Music awards. Sunday, may 21st eight seven central only on abc. Shares in iag hit the highest level in over a year, this after smashing expectations to post strong First Quarter operating profit and revenue as field unit costs drop 14 . The British Airways owner said an increase in passenger unit revenue contributed to the record numbers for the period which has usually been the companys weakest quarter. Easyjet shares are riding high after the Budget Airline saw an 11. 7 rise in april passenger numbers. Were joined by tim hayes, chief investment strategist from net davis research. Great to have you on the show. European equity funds have seen their sixth straight week of inflows, the longest positive streak since 2015. Bond funds pulled in 1 1. 4 billion, the most since early january. Weve seen outflows in the u. S. Are you behind that trend . Yes, we are. We were underweight europe for most of last year, just recently the last couple months we upgraded europe. I think whats been happening, investors are looking beyond the political risks starting in february and realizing the fundamentals are good. U. S. Had lagged the u. S. , in that sense that Economic Data and Earnings Data had come through, and now thats started to happen. Clearly it is the showme year for european equities, after they underperformed u. S. Peers for so long, for the last six, seven years, i wonder how long this momentum can keep up in europe. I think it has plenty of momentum behind it well look beyond the next set of elections, the elections in france, this is part of a global trend. We have the vast majority in the u. S. , for example, 82 of the stocks in the s p 500 have beat estimates. Globally we have in the seven regions that we look at including europe, we have the earnings revisions being positive more than 70 of the companies. 96 of the markets have positive forward earnings looking out a year this is part of a global earnings recovery. Europe is at the forefront of this, having lagged up to this point. At what point do you become more concerned about positioning, about this trade europe over the u. S. Becoming too crowded. I think what will happen, eventually if we continue to see the u. S. Has been relatively expensive. If you start to see as the cycle continues, the earnings cycle now, another point i would make, from the march high, things have come down as the market hit new highs. So you have improving valuations as the market continues higher. This will also happen in europe. What will eventually happen later in the earnings cycle, the valuations will start to become more of an issue. You might see that gap between u. S. And european earnings or valuations start to close. And no longer do you have that valuation benefit. Thats something well be watching as we get towards the end of this year and next year. Keep in mind where we are in the monetary cycle. At some point while the fed started raising rates, some expectations will start to change about the ecb. You talked about the Monetary Policy cycle what about the Business Cycle were in. If were talking about such strong earnings for European Companies, doesnt that maybe tell us, hey, were at the peak of the cycle, and it will go downhill from here . The way i like to think about that, the stock market tends to lead the economy, the economy tends to lead earnings. So the vast majority of markets, 90 are above the 200day moving average. This is a sign of global breath what this has done is anticipated the Global Economic breath. We see that in pmi data which is broadly positive around the world. That tends to lead the earnings breath. We see earnings breath not object with trayi ionly with trailing earnings coming through, but broadening earnings. When the market looks less robust, we see economic divergences, earnings divergences, we are getting later in the cycle. Tell us why you like Asia Pa Pacific at this point. If we think about that meaning market, the emerging market index is twothirds asia, half is china, korea and taiwan, evaluations look good economic numbers are coming through. Tim, thank you very much for that. Appreciate it. Tim hayes, chief investment strategist from net davies research. We will go for a quick break. Check out World Markets live, thats our blog. Well be back with more street signs. Hello. Welcome to street signs. Im carolin roth. Full mark fors full mark for for pearson share. Shares in the Education Company spike in the potential sale of its u. S. Unit and increased cost cutting. But the ceo is forced to justify his pay package. I thought the right thing to do was to use money to buy shares in the company and demonstrate my commitment and confidence in the longterm future of the company. Thats what i did. Shares in iag take off, hitting the highest level in more than a year, as the owner of the British Airways enjoys a record passenger revenue performance in what is normally its weakest quarter. We did see a big reversal in the last half hour in crude and brent prices. Brent crude up 1 , wti also up. Less than 48 hours to go until the polls open for the final round of the french president ial election. As emanuel macron extends his lead over Marine Le Pen. Good morning. Yes, it is friday finally. The end of the week. It also means its the first friday of the month. That, of course, means its nonfarm payroll fridays. Expecting a print of 188,000. Should be a nice reversal after the dismal march number. Lets look at u. S. Futures. Were looking mixed. The s p 500 is seen up by 2 points. Dow jones seen off by 16. Nasdaq set to add almost three points after we saw a mixed session for you in stocks yesterday. Stocks little changes despite that huge drop in oil prices which sent the Energy Sector reeling, which was off 2 for the day. The picture in europe is equally mixed. The ftse 100 is higher to the tune of 0. 2 . Clearly on the back of pearson and maybe some changes to the u. S. Business. The xetra dax off by 0. 25 . The cac 40 is off by 0. 2 . Coming back to that big drop in oil prices that we saw yesterday and that reversal over the last half hour to an hour or so want to show you how it impacted the commodity currencies. Actually we saw that the aussie dollar fell to a fourmonth low and the Canadian Dollar which is still slightly under pressure against the green back, currently at 137. 54 fell to a 14month low. Euro Dollar Holding Steady at 1 1 09. 68. Plenty of focus on this story, france will be electing its next leader this weekend in the wake of a president ial campaign that has effectively torn up the countrys political status quo. The latest poll gives emanuel macron a commanding lead over his rival, Marine Le Pen with 62 of the voters currently in favor of macron. However the farright candidate is attempting to narrow the gap after accusing the frontrunner of tax evasion. Claire is at Marine Le Pens headquarters, nancy is at emanuel macrons headquarters. Claire, you just got a chance to speak with Marine Le Pen . Yes, it seems doubt has surged at the Front National. She was deemed very unpresident ial, unprecise on her programs, especially about the frexit, when she did the debate on television with macron last wednesday. Yesterday her niece, who is also an important personality within the Front National, said that 40 on sunday would already be a victory for the Front National. I spoke with Marine Le Pen a couple minutes ago, and i asked her if she had already given up. Lets take a listen. Translator not at all. Victory is within our reach. The media seem not to hear the anger in our country which will express itself in the polls on sunday. To get a real change of politics and a real break away from thre emanuel macron. Shes right about the anger in france. We have seen that within this campaign as you have half the population, half the voting population choosing extremists, either on the right wing or on the left wing with melenchon. So there is very much a sense of unease in the country. I think the Front National has already integrated that macron would probably win on sunday. The polls have been pretty steady in favor. 62 to 40 . Now theyre looking at round three of the elections, which take place in june. They want to be the leader of the opposition, if macron is elected. They also want to increase a great deal their position in the parliament. For now they only have two mps, they want to increase that to 100 mps, which seems a bit farfetched when you look at the projections. Thats now the goal for the Front National. Claire, thank you very much for that. Lets talk to nancy about what the macron camp calls the dissemination of fake news. There is alleged involvement of russian hackers, potentially. Do you feel that mac cron voter will look through these allegations of tax or Bank Accounts and tax havens . Well, we know emanuel macron is not taking any chances. Thats for sure, taking legal action on the allegations of tax evasion coming from Marine Le Pens camp, thats because they dont want any lastminute upsets in the final hour. Yes, the polls are moving strongly in macrons favor, but remember legislative elections are just around the corner. If emanuel macron becomes president , he needs to build his Political Capital quickly. Claire just touched on the amount of anger that defined this election. I would say anger at worst, yes, indeed. But at best, even emanuel macrons voters show a certain degree of apathy. People are not enthused by this election or by this candidate. When we talk about the importance of former u. S. President barack obama coming out last night in support of emanuel macron, people once again will draw parallels to the young candidate that is emanuel macron and president obama when he first ran in the United States. But one big difference, i feel, on the ground here in paris is that people are not as mobilized when we talk about young voters as they were for the spirit of hope that defined obamas candidacy. Here people are struggling to say whether or not they believe emanuel macron is the candidate of change. The candidate of change is crucial here because people still see macron as left over from the socialist party. So here we are, standing in front of his new party, so th y new president , if he becomes the new president , has a serious task ahead when convincing people that change is on the way. We have seen a run up in french equities in the mere hope that an emanuel macron victory reduces the risk in a pull away from europe. Thats seen not just as good for france but the european union. But then the mick refoeconomic wants to put through. Carolin . Nancy, thank you very much for that. To both of you ladies, i know you get one days rest, same here. Ill see all of you again on sunday. Join us for live coverage for the final round of the french president ial election. Well have reaction from across paris asthma routi marine le pef against emanuel macron. Well have a special program which will also be streemd amed online. The company has made the first step in its recovery, this after volkswagen reported a 40 jump in first operating profit. Annette is in wolfsburg. Thank you very much, they are showing us theyre making Good Progress in getting the cars equipped with new software, thats one side. The other big issue here is to present the word of the new models they have outlined for several markets. Youre seeing that in the back drop, the various markets are targeted by volkswagen with different models according to the various markets. One big market is the United States. Before the press conference, i spoke exclusively with the ceo of vw brands, and i asked him how the market in the u. S. Is actually going. Take a listen. In the u. S. We had an extraordinary recovery over the past months. We could compensate all the diesel sales over the past months which is a very good sign. The dealers are very much motivated by the brand. Still a long way to go, but a lot of product momentum to come. We Just Launched the atlas, a big suv. Also another suv in the core Market Segments of the United States are to come this year. That should give us some advantage to also gain back some market share. Lets look at the Diesel Scandal and also the reputation risk as i was referring to. You think the worst is over here . It will still be months, even probably years to fully recover and get the full trust of our customers back. And to make the brand shiny again. I hope the worst is over. We are well on the way in repairing the cars worldwide. Customers are happy with the fixes were offering. I hope the worst is over. In china, this market is, according to what i read, the future there is very much immobility. Are you getting prepared for that market . I think were very well prepared. Were investing heavily on electric platforms. We showed the first three cars a few weeks ago in shanghai. To show the car was really very positively received. We are well prepared with both of our joint ventures to enter the new phase of mobility in china. How is demand going in china and overall . The chinese economies has also been cooling down a bit. We had a slow start in china. But we also see over the past weeks a recovery and we are confident that china will show growth this year. Also we have good product momentum so im optimistic for china. Volkswagen is home of the 12 brands, but the vw is the most important. Also when it comes to revenue and profit. So the restructuring case here super important for the Volkswagen Group itself. We had low margin for many years. Profitability problems with the vw brand itself. This is changing now. He is restructuring the company, cutting costs quite aggressively, which is not going down too well with, for example, labor counts, the trade unions here in wolfsburg, but after a rocky start this year, things have eased down a lot as the head of the labor union here are getting along with each other a lot better. So the key theme for vw is pushing profitability up towards the target or levels seen by competitors. Of course, cost cutting is very high on the agenda. With that, back to you. Annette, thank you very much for that. Appreciate it. Ill let you get back to the actual agm which is going on behind. Coming up, a Senate Battle looms as the house of representatives passes a bill to repeal and replace obamacare. Has trump effectively pulled the plug on obamobamas landmark legislation . More on that after this short break. Welcome back. The bank of japans governor has said the output gap is shrinking and the labor market is tightening. He began by talking about the impact of exchange rates. We expect about 1. 5 Economic Growth this year next year. 1. 5 is not great, but in japan, it is well above medium term potential growth rate, meaning the output gap continues to shrink, and becomes positive. And then the labor market continues to tighten. So that the prices would eventually rise to achieve 2 inversion target, around fiscal 2018. Okay. By the way, the point is that the control has been functioning quite well. And when and if this zero percent 10year target could be changed, of course every Monetary PolicyCommittee Meeting the policy board will decide, discuss and decide whether it should be adjusted upward or downward. But i i feel that since the economy is likely to grow at around 1. 5 , and the prices would start to accelerate in coming months and years. I think we should for the time being maintain this around zero percent operational target. The u. S. House of representatives passed a bill to repeal and replace obamacare by the slim margin of 217213, with ten republicans opposing the bill. President trump hailed the victory saying his predecessors signature legislation is essentially dead. The bill now goes to the senate where several have questioned the legislation. Kristen welker has more. Reporter tonight, President Trump taking a victory lap. This is a repeal and replace of obamacare, make no mistake about it. Reporter its only a first step but mr. Trump turned it into a made for tv celebration, flanked by republicans in the rose garden. How am i doing . Am i doing okay . Im president. Hey, im president. Can you believe it, right . I dont know. Its i thought you needed a little bit more time they always told me, more time, but we didnt. Reporter the event came after a dramatic vote in the house that went down to the wire. The ayes are 217 and the nays are 213. Reporter republicans jubilant, they say the bill will lower premiums but democrats warning people could lose coverage. I guess their desire to give a tax break for the rich just trumped everything. Reporter on the house floor, some even singing and waving goodbye to House Republicans saying they will be voted out of office for supporting the bill and outside, chants of shame. Shame shame shame reporter what does the bill do . Republicans say it will lower the price you pay for health care, two popular obamacare provisions remain. Children can stay on the parents plan until 26 and caps on annual and Lifetime Coverage are prohibited. What is changing . It scraps the individual mandate meaning youre no longer required to have Health Insurance it changes the way people with preexisting conditions are covered. States can opt out of requiring insurers to cover people with preexisting conditions, 8 billion in federal funds will help them pay for the increased costs. And the controversial Medicaid Expansion will be frozen immediately, instead, each state will get a fixed amount of money every year to help pay for lower income americans. Under this plan the winners are younger, healthier and higher income people. The losers are those who are lower income, have preexisting conditions and certainly older americans. Reporter the gop vowed to overhaul obamacare for seven years and their first shot at it failed spectacularly in march. We did not have quite the votes to replace this law. Reporter since then, republican lawmakers have faced fierce backlash from angry constituents at home. Obamacare saved my life. Reporter tonight, the president one step closer to making good on the pledge that helped sweep him into office. You break it, you own it. If they take apart obamacare, they own it. And anyone who loses their health care as a result of this will blame republicans. Lets get back to the markets. Investors are eyeing a more robust nonfarm payrolls for april, following a weak march jobs report. Economists surveyed by dow jones expect a consensus 188,000 jobs to have been added to the u. S. Economy in the month of april compared to only 98,000 number in the month of march. Were joined by steven blitz, chief u. S. Economist from t. S. Lombard. The market is looking for 188. What are you expecting . A number a little lower than that, probably closer to 175,000, 180,000. You mentioned the march number was weak. But it came against the january and february numbers that were extraordinarily high. The average for the three months is 177. Thats been the average for the last 12 months. And i would suspect that april kind of comes in around the same level. We know the fed is squarely focused on the jobs picture. Thats incredibly strong barring the mr. Muarch number. How bad would todays number have to be for the fed to take a step back from hiking in june. That seems to be 100 priced in to the markets now. I think you need a number well under 100,000 to get the fed to really adjust their trajectory of looking to raise the funds rate in june, and then again in september and december. I think were getting to the point here and have been to that point for a while and the fed is trying to communicate the point that the monthly jobs numbers, while important, its not telling the whole story about the economy and not telling the whole story about the trajectory of fed policy. Its shifting now. We can assume growth. So by assuming growth, you can assume a decent number every month. And 120,000 is replacement. So as you get above that, you keep getting into less and less productive workers, higher impact Going Forward on wages. As a result, this is what fed is looking at, Capital Spending by businesses, by households, buying homes. So their focused moved from the general top line number of employment. Sure. Steven, some people in the market will say that maybe today could be the turning point for the treasury market. We have already seen yields k s creeping higher. If we get a blow out jobs number, the passage of replace and repeal by donald trump of obamacare, could that reinvigorate the reflation trade . Yeah. But people call it reflation trade. While, you know, our own house view is for higher inflation Going Forward, higher wages, these are increases that reflect growth. When i go from a real Interest Rate on the tenyear around 35, 40 basis points towards a longterm average of 2 , im not even sure in this cycle we can get there because of the various changes in how the world works, nevertheless, these are positive increases, not negative. The fed is not tightening, all theyre simply doing is raising Interest Rates, allowing the market to reflect interest have Interest Rates reflect what general growth is. Its something in our weekly publication, u. S. Watch, something weve been hammering home for a while. Steven, thank you very much. Before we close the show, i want to bring you fairly entertaining comments coming from jeanclaude juncker. He says in his state of the Union Address in brussels that i will do my speech in french as english is losing its importance in europe. Always juncker there. European enlarge. Was not a mistake, he also said brexit is a tragedy, not a small event. They are abandoning the european union, not the other way around. The difference will be felt. Thats mr. Juncker speaking there from brussels. Lets have a quick look at u. S. Futures before we close the show. We are looking at a fairly mixed picture. The s p 500 is seen up just modestly by 1 point. The dow jones seen off by 20 points. The nasdaq opening a touch higher by 3 points. Thats it for todays show. Im carolin roth. Worldwide exchange is up next. Well see you on sunday for the france votes special. If you want to stay on top of your health, one simple thing to do is take the pledge to go and get screened for the cancers that might affect you. So stand up to cancer and take the pledge at getscreenednow. Org it only takes a minute to take care of yourself, and nothing rhymes with org. Good morning. Crudes trying to stage a comeback after oil tumbles to the lowest levels of the year. Warren buffett backing out of big blue. He tells season as soon as he has sold a third of his stake in ibm. Exclusive details on that coming up. And uber under fire. Why the Ridesharing Company faces a criminal investigation. Its friday may 5, 2015. Worldwide exchange begins right now. Good morning. Welcome to Worldwide Exchange on