Transcripts For CNBC Worldwide Exchange 20140912

Lets implement what we have done and then we will see. Scotlands alex hammond accuses David Cameron of creating a of fear. They will want to become the singapore of europe would be my bet. And 250,000 a day, yahoo reveals the u. S. Government had threatened massive fines if the company didnt hand over data on users. In the broad expansion of the Government Surveillance Program. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. Welcome to the show. Lets have a look at european markets. As you can see, broadly flat so far. They did edge up earlier in trade at the moment, up just over 0. 07 . Lets look at the individual markets. Whats ultimately taking the wind out of european bourses sails today is news of more sanctions imposed on russia. On top of that, weve had rising treasury yields which markets and investors have had to contend with this week. The ftse 100 up just 10 basis points. Germany down 0. 35 . Cac 40 down 0. 23 and italy flat. Were going to look at the russian markets which perhaps seem to be shrugging off these sanctions. The announcement came from the eu yesterday that the sanctions would take effect today. The dollar is strengthened. The bit against the ruble, carlsberg, down. R rozneft is up 1. 4 and gazprom is up, as well. Treasury yields, 2. 565 . Bonds in germany up over 1 now. And gilt in the uk over 2. 5 . Italy just below 2. 5 . Moving on to currencies, earlier this week weve had significant declines. The yen has fallen 2. 1 this week against the dollar. Its currently trading at 107. 15. That is with the nikkei up significantly. The euro has settled a bit today as has the pound. Both have been weakened in recent days and weeks. Lets check in on markets in asia. Sri jegarajah is in singapore for us. Good to see you, sir. Its fairley patchy in the asian markets as we round off this week and look ahead to the major risk event that is the fomc. So were still very much in the strong dollar environment. Yes, the weaker yen is benefiting the nikkei. Made to run of 16,000. Didnt quite get there. Pretty tough hurdle to cross on the market. Elsewhere, a focus on the democraticer china market. As we head into the weekend, we have a major risk event in the form of data breaking on saturday which includes fixed asset investments, Industrial Production and retail sales for the month of august. The shanghai composite, oddly enough, you would have thought that there was a lot of caution in the Greater China markets. But shanghai is one of the top performers today. Hang seng, though, lagging by about three technical . We get closer to the data deluge over the weekend. Perhaps the shanghai market is running the prospects of more calibrated stimulus. Remember, wilfred, inflation data. The consumer level and the factory was relatively subdued. Thats where we stand right now as we round off the week. Back to you now, sir. Many thanks for that, sri. Were getting flashes that barclays has announced who its current chairman will be. David walker will be replaced by john mcfarland. That will take place after the agm in 2015. So a little time away from that announcement coming out today. The barclays new channel will be John Mcfarlane who is also currently chairman of aviva plc and first group. In the last few hours, the eu has put its latest round of sanctions against russia into effect. It targets the leading members of congress and its largest corporate. Steve is in conceikiev with mor. Weve had a busy past 24 hours speaking with past president s and president s of as well. I put it to him that sanctions could potentially have adverse effects. After a bit of a hiatus, which youll see in the tape, they also asked him about the role of secessionists in a new ukraine and would there be more revolution, whether this is a Sticking Point between russia and ukraine. Lets listen to the tape and well talk about it afterwards. Do sanctions make the situation worse for ukraine given the fact that were in the autumn now and the winter is coming or do u. S. And eu sanctions improve the position of your country . The sanction is underneath to punish russia, this is just an instrument to sit at the table and find out a very important solution not only for ukraine, but for the whole world. And it is very important that introducing the sanctions with the message that European Union and United States are ready immediately to lift it. Its the end of the month. Lift it later. If the key element of the piece what is the key element . Very simple. Three points. Point number one, total withdrawal of the foreign troops from the territories of ukraine. Point number two, close the bottom. Just preventing the supply of new troops, weapons and ammunition. And point number three, Immediate Release of is this status of the region is the you dont see the status of the region in the parliament. Sir, sir, where is my am ka man . Hey, where is my cameraman. Is the major Sticking Point is the major Sticking Point, sir, between russia and indeed ukraine the status of the regions held currently by not at all. Not at all. The major Sticking Point is the independence sovereignty and territory integrity of ukraine. This is the main point. Pet rapport shenco confirming that major pore the major break away is the russian involvement in his country, as well. Its all very well talking about sanctions in the spring when youve got the long summer ahead, but ahead of winter and the grip that russia has on fuel, not only in ukraine, but also within the wider eu where ill reiterate it supplies around 30 of european gas, and you can see that they have a whole different context in this time of year. The russians have is already retaliated on food goods from the eu going into russia and theres talk about automobiles and possibly flight plans for eu lifted flag carriers, as well. Let us not forget this is a dual crisis for ukraine, as well. Its a crisis of economic proportions, as well. We have a gdp seen down 4 for the year. Now seen down as much as 8 for the year. So a lot of issues, both economic and indeed geopolitical still to come, but i suppose we have to look at the bright side, we have a ceasefire in the south of the Country Holding for now. Thanks, steve. That was great. Oscar pistorius was cleared of premeditated murder and murder. The big news still to come today is whether hes convicted of plan slaughter. We have live shots of the trial for you there. Weve had two smaller developments, which is that hes been cleared of a first charge of firing his pistol out of the sun roof of his car, but he has been convicted of illegal use of his gun while in a restaurant. We are still awaiting the big call on whether hes convicked of man slaughter later today. Coming up in todays show, i speak to the ceo of moscow based securities lab on whether he thinks the world is ready for mobile wallet. Carl icahn gets his way with some management changes, but how is the search going for a new ceo . And after the break, we hear from one ceo who says scotland could try to be the singapore of europe. Dont go away. Guys youre not gonna believe this watch this. Sam always gives you the good news in person, bad news in email. Good news fedex has flat rate shipping. Its called fedex one rate. And its affordable. Sounds great. [ cell phone typing ] [ typing continues ] [ whoosh ] [ cell phones buzz, chirp ] and we have to work the weekend. Great. More good news its friday woo [ male announcer ] ship a pak via Fedex Express saver® for as low as 7. 50. Welcome back. Oscar pistorius has been cleared of murder. Weve had another announcement by the judge that declares Oscar Pistorius not guilty of murder. Sorry, correction, ive got that wrong. This is the man slaughter charge hes been cleared on. Murder was yesterday. The South African judge has acquitted Oscar Pistorius of man slaughter. So he was found guilty of firing his gun in a restaurant. But so far, that is the only thing he has been found guilty of. Yesterday, cleared of man slaughter. This morning, those are live pictures you can see of Oscar Pistorius right now. We will keep you updated on that right now as we get more news. A scottish seesaw, thats the latest information shows as momentum shifts back to the no side in the Scottish Referendum debate. The polls narrow significantly with the yes compare narrowing the gap. Support continues to gain transaction from the corporate world with a growing list of firms highlighting the potential breakup of the European Union. Prime minister David Cameron has been accuseded of committing a scare campaign for the businesses. It will be a small margin in favor, but its going to be very small. I think that in a way, and ive said this before, may be the worst result because it introduces a level of uncertainty. For a moment, a yes Campaign Wins and ask you to put a slightly different hat on. Lets face it, you never know where your clients are coming from. How are the newly independent scotland market itself . Even if theres a yes vote then currency becomes critical. Who is the lender of last resort . Will the bank of england still be the lender of last resort . Its a very complex situation. I think the very interesting thing it raises, what is scottish Foreign Relations going to look like . You know, the chinese, im sure, will be interested in investing in scottland. And maybe even other countries, too. So interesting in that respect and raises a lot of Foreign Policy issues that i dont think people have sort of started to examine. But the approach from a sort of marketing point of view, trade investment point of view i think would mirror singapore so far survi surviving mr. Salange, who is a wonderful politician. But as was said, politics is different than government. So well see. Our uk Business Editor helia joins me on set now. Helia, as we go into the final week of xaping, how significant is it that all these visitors have put their vote behind the final campaign . I think it is a big deal. Its been a campaign that essentially has failed because they had this massive lead in the polls which has been squandered. And most of the debate was centered on this currency issue. You cant have the pound, were not going to give you the pound. Well, that hasnt gone down very well with scottish voters. What weve seen in the last few days is suddenly, not just the International Markets waking up and worrying about scotland and the effects of the uk economy, but also back seats. Because the one thing business doesnt like is instability. That includes risk and thats not a good thing. So we have had news that the banks, whether its lloyds, rbs, theyre all going to headquarter outside of scotland. That could lead to jobs being lost. We have comments from lloyds, from citigroup, essentially its going to have a bigger resonance with voters, this simple message that if you have an independent scotland and you have the two years of instability, its definitely going to lead to an increase in prices and thats something consumers can relate to easily. So a week of shock and awe, that those polls feel very, very tight. And i want to talk about those polls in particular and how theyve narrowed. Another individual, Neal Ferguson was speaking yesterday. Hes very much in the no camp, but hes very critical of how the no campaign has been run. Whatever the result next week, how much credibility has David Cameron lost . Oh, massive amounts. People are talking about whether its going to lead to his resignation. There was a shadow cast over the whole policy, whether giving scotland the reaction or the choice with the referendum that he should have. So thats a big deal, i think, the campaign. And weve also just heard this morning, of course, that barclays is changing its chairman from david walker. What is your reaction to that . Well, i was having a chat with some very senior people with barclays and on the board. I can they think this is a firm happened. This is going to be positively welcomed from shareholders. Barclays is a bank that has been mired in a lot of controversy. So it still has many years potentially to steer out of this. And the comments that i got was he was a pretty resolute kind of character and hes going to help this team which by and large could be seen as an experience. I also spoke to a key shareholder in the bank and they were pleased to remember that weve had news that potential candidates have been rejected in terms of taking back chairmanship. He understands banks. Because of that avivas experience, he has experience with regulators and thats going to be very important for barclays going forward. With barclays in particular, its going through a lot of changes itself. If there was a yes vote, can they steal the market share . I think you would see that in that case. But that was possibly if he look at the share price for lloyds, banks have outperformed the other banks by a country mile, actually. Barclays, mean wile, has underperformed the banks. So barclays for many analysts think its cheap. Insiders will tell you yes, there is a possibility in the separation even getting people down from london is going to create some kind of shock. But this is good news. This is a good day for barclays. So i think theyll be pleased. Helia, thank you very much for joining us there. Well be back with helia later in the show. Were going to update you on the Oscar Pistorius trial again. Im afraid earlier we got that wrong on the culpable homicide call. He has now been found guilty of culpable homicide. Yesterday he was cleared of murder and this mortgage in the last couple of minutes, he has been found guilty of, quote, culpable homicide. Those are live pictures youre looking at at the moment from the judge and Oscar Pistorius has been found guilty of culpable homicide. Earlier this morning, he was found guilty of illegally using his gun in a restaurant, but clearly of using it while in his car. The Significant Development, then, this morning that he has been found guilty of culpable homicide. Helia, is this largely as were expecting, still found guilty of a very significant crime . I think what people are talking about in terms of this trial is that its a trial that is being provided over by a judge and the decision that we had yesterday was a very legalese decision and may be different to one a jury would have come up with. Even during the trial, the judge was saying that Oscar Pistorius, i dont think that your story is credible. Its not believable. However, the prosecution hasnt managed to prove that your story isnt correct. That would have come to a huge shock to reef ya steenkamps family. There was a lot of question about whether there was a sensitivity about a black judge ruling on a white case. That was debated yesterday. But today, i think what will be interesting is the sentence. If he has been found guilty of this second charge and the firearm, how many years of jail will that incur . Helia, thank you very much. Im just going to recap everything related to the Oscar Pistorius trial. Yesterday he was cleared of murder. Then earlier today, he was cleared of using his gun while in his car. He was convicted of a second similar accusation of using his gun while in a restaurant. But the most Significant Development so far today is that has been convicted of, quote, culpable homicide. Pistorius has taken that relatively passively today compared to what we saw yesterday. So convicted of culpable homicide. Now lets get back out to steve who is looking at the latest round of eu sanctions against russia. Jeffrey piatt joins us here on cnbc. Thank you very much for joining us, as well. The eu has announced more sanctions. The u. S. Said it will follow soon. Can you tell us what those sanctions will look like . These will focus 09 sectors of energy, finance and defense, a clear signal to russia that we are continued to carry the price were going to do to jointly with our european partners. So sanctions havent worked so far. Many would say why are they going to work now . Were getting to the stage of the year are the russians have quite a grip on the Energy Supplies especially. We believe the sanctions, in fact, have helped to create breathing space for ukraine. Theyve deterred some of the more ambitious and aggressive plans that russia had in mind. We work jointly with our european partners. We want to steer russia to a diplomatic experience to this crisis. So far, we havent seen enough from moscow to sdpaurt implementing that framework. So senator mccain of arizona, we know he is one of the more strident hawks and critics of the obama administration. He said theyre young conscript, ukrainians are getting slaughtered in the east, as well, because were not giving them intelligent, body armor or anything at the moment. Is the u. S. Going to move to the Ukrainian Army . We are doing more. We welcome the engagement senator ukraine has had here and were up to about 70 million in Security Sector assistance to ukraine, to the army, to the border guard, to the militias and were going to continue to identify opportunities to help build the capacity of the ukrainians to defend themselves. But this crisis doesnt have a military solution. Sir, is the view of the United States that the current ceasefire which is tenuous, is the view of the u. S. That it has a chance of being sustained, this ceasefire . Its the best opportunity weve had to stop the incredible violence thats taken such a toll on the ukrainian people, largely because of the actions of russia. Were going to do everything we can to support president poroshenko, but were also going to stand with the ukrainian people. I spoke to mr. Yushenko, as well. Do you believe that we are in a longer term situation where its going to be russia versus the west once again . I dont think this is another cold war. Russia is not the soviet union. Eats an economy which is tied to Global Markets. We want to engage russia, but thats only going to be on terms of respect for the independence and territorial integrity of all of its neighbors, importantly ukraine. Ambassador, thank you very much. Youve always been very generous. Thank you very much, indeed. Ambassador jeffrey piatt, United States ambassador to ukraine. Still to come on the show, ecb board member likenen tells cnbc that the central bank has more ammunition to back up inflation. But its keeping its finger off the trigger for now. I dont doubt and i dont go further than what we have devalued now. Lets implement what we have done and then we will see. Ukraine cheers on a fresh round of u. S. And eu sanctions against russia. Oscar pistorius is found guilty of culpable homicide. Scotlands alex salmon accuses David Cameron of creating a campaign of fear in the corporate world in an attempt to hurt the yes camp. Scotland does their independence. Theyve had some multiples to look at. They would want to become the singapore of europe would be my bet. Only the ftse 100 is up about 20 basis points across the region. New sanctions imposed by the eu on russia has weighed on sentiment this morning. Germany off about 0. 25 . France and italy slightly down, too. Forex and the biggest move this morning was in the dollar yen no, its basically flat now, but nonetheless, the yen is near a sixyear low against the dollar. Euro dollar and the sterling dollar are both roughly flat today after significant losses in euro and sterling in the last week or so. Australian dollar down significantly today and as the carry trade continues to unwind. These are live pictures youre seeing. To recap, yesterday he was cleared of premeditated murder. Today in the last ten minutes or so, he has been convicted of man sha slaughter. This comes after two earlier smaller charges came out that he was convicted of using his gun illegally in a restaurant. The big news cheered yesterday of murder, convicted today of culpable homicide. Moving on, pull your weight, thats Mario Draghis message to the european government. Speaking in milan, he urged lawmakers to ramp up investment and structural reform saying, quote, if we dont management to get investment going again, we will weaken the economy in the short run and undermine its prospects in the long run. Cnbc spoke to the governor of the bank of dpn finland about what issues he has with that abs market. We already have many figures, but theyre mentioned in this whole package. One is the lpros, which are demand let. So banks decide how many they want to lend in the outright purchases, which be decide. So they are a different part of element. It goes with time. Looking right now at the abs market, it doesnt seem to be big enough, right . What do you want to choose especially by buying those assets from the bank . Actually with abs program received package in lpros. Very important. Abs designed but covering theyll all be three together, not only to size and volume, but there are geocratically. Its all well known that in this market in europe its not but we also want to develop european markets. So you want to develop it back to what it was before the financial crisis . Not really. We all know that before the financial crisis, it went quite far. People didnt know what they were buying. Better abc is clear, perhaps simpler, its a really products which are traded and in that area because utilization can be used to launch credit society. But if you dont know the impetus are, of course, then it can be also a risk. Rink in this crisis we have shown that we can learn from the mistakes, but at the same time we want to keep role for the segregation, so be able to guarantee to the economy. And annette is in milan at the ecothin meeting for us. Annette ta. Yes, its very interesting. Its the First Time Since the ecb decided to announce abs and covered Bond Purchase Program that the central bankers and the finance minister come together at todays meeting. And, of course, there has been a lot of discussion, also, voun surrounding the fact whether the state, the individual states would actually give guarantees to more risky parts of abss or not and also whether they like the fact that the ecb has announced that or not. But overall, there seems to be a welcoming note about the action of the ecb. I quickly spoke to the head of the euro group. Take a listen to what he had to say about whether he liked it or not, what the ecb has done . I do welcome the efforts of the ecb. I think theyve been very accommodative to the economic recovery which we so badly need. And the main key issue for us ministers will be what should we do, how can we step up our efforts to take advantage of the time that basically the ecb is giving us. So it seems that the ecb got the message that now they can deliver further, but it seems to be limited now in their firepower. So now its up to politicians and it seems that they have got that message. Ill be trying to speak to more finance ministers during the day and keep you updated. Thank you very much, annette ta. Head to cnbc. Com for more with that exclusive interview with the bank of finlands governor. Now, edmund shing is joining us live from paris. Weve been talking about the ecbs most recent set of actions. That pushed bond yields very low, but cash yields very low. And i was reading in your notes that the savings levels in the uk, u. S. , germany at record highs. Why is that when yields are so low . That is an excellent question. Five years into a stock market boom rally, why are people not investing in equities . Why are they still leaving their money in cash . I think there is still a large amount of uncertainty, i would say, and a lot of lingering doubt after the great financial crisis of 2007 and 2008. So i think people are very mistrustful of risk assets such as shares. And, of course, you know, they like bonds. But as you noted with bond yields this low, the oneyear german bond is trading at a negative yield. That means youre paying the German Government to take your money and keep it. That is unprecedented. Finally, we will see Retail Investors starting to move their cash very slowly, zero interest yielding deposit and looking for a bit of yield somewhere else. Does it not mean, ed monday, were were going to get the growth coming through and, therefore, theyre being very, very cautious . Well, i think there is some element of that and i think they would be right. If you expect strong growth within, lets say, the eurozone or even in the u. S. , i think they would be very much mistaken. Clearly we need a lot more reform in europe before we can think about stronger growth and we still have the overhang from the financial crisis. We still have the debt overhang still with us. That still has to be worked up and that will take a number of years. But having said all of that, do you really want your savings to lose value in real terms . Inflation is clearly well above cash deposit Interest Rates right now. And because you have that view that you think people will reduce their savings in cash and put it into equities, you have a positive view on Asset Managers, is that right . Thats right. I mean, i do like Asset Managers as a theme because generally they are very cash again rafb business, they are very light on asset and they are geared to abdomen improvement in stock and bond markets. Clearly, if you are of the view that the current stock market valley can continue into next year, which is my personal view, then actually Asset Managers are a very good way to play that while enjoying very high dividend yields, for instance. They stock a lot of cash and a lot of that cash is turned into dividends, which frankly, if you can get a four, five, or even a 7 deal as you can with some of the ooushg Asset Managers, i think its quite a return toer a an asset which could see quite a bit of growth going forward. Edmond, i saw some comments in the press. What did you make of the retail numbers we got out of some of the leading uk names yesterday, morrison, ricardo, john lewis and the like . Obviously, its a difficult situation. If we were to look at, for instance, morrisons, i think they were negative 7 . So really a tale of woes similar to that. And that tells us, i think, that the middle ground in terms of retail is getting tougher and tougher. And youre getting more porlerzation still towards the high end. In food retail, thats still the discounters and, of course, within general retail, Companies Like poundland, which is recently floated. These companies are still seeing the growth. There are others which are again towards the bottom end in home wears doing relatively well, but that middle ground is getting more and more squeezed. Thats because of real income, but the average household is continuing to be squeezed by below inflation rate or wage growth. Edmond, thank you very much, edmond shing, Global Portfolio manager at bcs financial group. Now out to steve in kiev. I have a fantastic guest for you now. The president of the parliament. Youre one of the few europeans who turned around and said look, we need to be qualified about sanctions. There is a danger they could back fire on the European Union. Do you want to just flesh that out a little bit, sir. When we agree about sanctions and we want the sanctions to have the effect on the russians, we should not hide to our own people that our repercussions on the economy. If we affect the russian side, gas will become cheaper for the europeans. Or the exports of meat for some countries to russia has stopped entirely. But the repercussion of the Agency Sector in france or italy or other countries. Yet you say we as europeans will work to protect the sovereignty of the ewe crepe. How will we do that . This dialogue doesnt appear to be working. We need those the repercussion on our people doesnt mean im against sanctions. But sanctions will only have an effect if theyre united. The application of the sanctions should be put in doubt. This is one end. The other side, to hold on until the russians have withdrawn their troops. And if they withdraw their troops, we must tread, but we must keep the door open for negotiations. If i can move on, we have had a new commission coming up, a new, younger commission. What do you think of the mix there . I think you have a few strident views. He won the election and i supported him. Im a little bit surprised about summary actions. We are claiming in the and we just lost sound there, but were going to go back out. Weve no, we have lost the sound there. Lets bring you up to speed by some of the Corporate News we have today. Shares in aviva sinking down 21. 8 after the company warned the First Half Results would be hit by currency headwinds. Now, eun regulators have given bskyb to acquire Rupert Murdochs Pay Companies in italy and it will buy outright. Bskyb has offered to buy out minority shareholders for the same price. We are going to go straight back out now to kiev where steve will continue his interview with martin schultz. We were talking about how you think theres more bureaucracy coming into the union when many argued for less, as well. The other way around. I think suggested to have only 20 commissions with the concrete portfolio. And him serve as six Vice President s who are dealing with political items, for example. For more growth, for regulation on the Financial Markets, we will see. So theres a i think a step forward. You knew i was going to ask that. Do you think hes a radical european . Or are you misquoted . No, no, i never said that. I was asked and what i said is if he has done at the we will discuss it, but i met him and he hasnt. So i think lord tille is in the party to which he belongs. Perhaps one of the pro europeans. I think there will be a lot of discussion about his portfolio. He should get a fair chance to go to the hearings at the parliame parliament. There have been a lot of question marks about whether given the United Kingdoms stance going forward, whether the uk should have that agreement. Ive talked to the members of the policy. You will understand for sure that the president of one union will not affect the proposal of the president of another institution. But it is quite clooer reading the newspapers and looking for the comment, lynning to the comments of a lot of colleagues. I know the reasons why youre suggesting that, but its up to them to tell them to the outside world. On the private conversation between you and uk cameron. One more question if i may, sir. Scotland. I want the scottish in, im a brit. But what do you think . F scotts were to leave the United Kingdom, could it be chaos not only for catalonia and others . Does it send a very negative message for the whole of europe . We have to respect the outcome of the referendum. Now its up to the scottish to decide. Im always in favor of united. Im for united europe. I would hope that you like a kingdom as for united europe. Its a question i have no answer to. I raise the question to myself. What is the harm . We do so much for the brits. Im sure youll make your flight even though we kept you. Nice to meet you. Martin schultz, the president of the european commission. Back to you in the studio. The president of european parliament, even. Thank you very much, steve. Bskyb given the go ahead to take over, flat from that move priced in. But moving on, whetherspoon up 1. 4 . It expects a reasonable outcome for the year. We asked for his thoughts on the Scottish Independence vote. I think theres no reason in theory why scotland shouldnt be able to do very well. And new zealand has its own currency and hasnt joined up with australia. And switzerland does pretty well and the singapore economy is the world for the world. Scotland, they meet even reduce the ap. We will be laughing. Still to come on the show, banking on scotland. We find out what a yes vote could mean for the Financial Sector as rbs and lloyds put contingency plans in place to move south of the border. Supports for a no vote in the skoetish referendum continues to gain tracks around the world. Scottish banks have indicated theyll move south of the border if scotland votes to leave the union. Rubs up about 0. 4 and lloyds up 0. 2 . Joining us now is edward gordon. Also with us is helia. Ill start with you. You are positive on the rbs and lloyds in the shortterm and the stock prices . In the shortterm, yes. The situation is quite binary. If you get the no votes, which the betting odds tell us, i think its 1 5 on for a no vote. That ought to see some of the selloff in the last two weeks unwinding. If we look at the move in cable, do you think Financial Markets have been overreacting, as you say . Cable is focusing more on the perceived Downside Risks of a yes vote. Cable has priced in the risks more than equity markets have fought so had so. Do you think theres a growing insecurity with consumers . Hearing an ek an ek dotally, are you expecting to see that spliet of capital . In canada we have that, deposits disappeared and, in fact, even though there was no separation, those deposits didnt return for a very long time. I mean, the short answer i think is no, which sounds very complacent. I cant put numbers on it. Its difficult. But in broad terms, less in terms of a deposit base with lloyds and rbs is in scotland. Unless you were thinking of a capital flight. For the impact on the Overall Group well talk about less than 1 . So could there be a flight of capital on lloyds or rbs . I think the sample answer appears to be no. I dont think weve had any new news at all, but as we confirm what the market has assumed to be their contingency plan, mainly redomiciling operations from scotland to england to regulatory issues and concerns and go somewhere to what do you make of whether its the domicile or a gold marking exercise by rbs . Is that Human Capital going to disappear in the case of a yes vote . On day one, i guess the answer is no. That, of course, in the next year or two, there could be wider developments. On its painly support operations for the business. There is no reason for the call center. Theres no directory to cross. I want to move on from the scottish debate and ask your direction in the change in barclays. What is your view on that . Its a perfectly sensible appointment. In terms of barclays, i think he wont see any material reaction because barclays strategy and recovery profile for the next two years has been set out. I think well see a far greater reaction where theres a potentially more direct impact. Very happy with it. Do you think theres still a big project ahead for barclays . And importantly, he does have some Investment Banking experience. Is this a fiveyear package, a sixyear package, a tenyear . Not the new chairman of appointments last that lomg. Barclays has a plan. The plan gets revised every so often. So i guess my answer is its a threeyear plan. Lloyds for the next year. Brilliant. Thank you very much. Still to come on the floor, yahoo is seeing fines from the u. S. Well tell you that full story after the break. Xkc welcome to worldwide exchange. Im wilfred frost and these are your headlines from around the world. The eu unveils its own measures on over 100 officials and if 23 countries for sanctions but stocks in moscow shrug off the news. Oscar pistorius is found guilty of culpable homicide. Karlt icahn takes on another big company and whips again. Sending shares of the car rental firm hertz soaring. And 250,000 a day, massive fines if the company didnt hand over data auto users and a broad expansion of the Government Surveillance Program for yahoo . Announcer youre watching worldwide exchange, bringing you Business News from around the globe. If youre just tuning in, thank you very much for joining us here on worldwide exchange. Lets have a look at u. S. Markets on the open. The dow looks like its going to end the week in the red. The s p down slightly this week and is expected to open frangzally up. Whether or not it will end the weekend in the green or the red is uncertain at this stage. The nasdaq is expected to open down for today. European markets, theyve struggled with momentum for the day. Expecting more from the u. S. Later today. Also just because of the aspect of rising bond yields in general. The if it is 100 frangzally up. And italy roughly flat. The annoy has strengthened again today. Sterling has sort of settled in the latter half of this week, having weak nd significantly in the first half of the week and the ruble is at an alltime low against the dollar. Strengthened the dollar today by about 30 basis point. Well go back to the euro dollar, which is at just below 1. 3 after the ecb announced the pressure stem ewe husband measures last week. President mario draghi last night called on eurozone governments to pull their weight. Cnbc spoke sclousively to ecb board member and bank of england governor likenen and asked him if they could have gone further when it com comes to easing. Lets just say that we have taken measures. To properly prepare and implement them. But whether we have said at the same time and reiterated that if there will be for long he period of low inflation, which is, of course, with the european economy, no commitment to take new measures if necessary. And our commitment to price stability. When you come to detailed measures, of course, independent people have their own opinions. I dont doubt and i dont go further than what we have decided now. Lets implement what we have done and then we will see. Joining me now is camilla shaffer. As ever, monetary decisions are in the lime line. Do you think the fed meeting next week could see a significant change in forward guide jans . Absolutely. I think thats the key focus and weve seen the markets really reacting into it. Increasingly, the view is that well see a change in that considerable period of time before Interest Rates are moved higher after the end of qe will be stripped out and well have a focus more on how the economic lapped scape is unfolding and on top of that what Financial Markets are doing. And i think thats a key part. For the fed to make this transition to a more hawkish tone and pull forward that expectation for Interest Rate hikes, it does take a very, very difficult balancing act to see it smoothly in a way where the em markets and the risk trades wont be substantially hit and we see a slight increase in yields as opposed to losing control of the bond market. And so the balancing act of the fed has next week is a very important one, but increasingly, it does look like theyre about to remove that considerable time period that theyll be waiting for in order to hike Interest Rates and well be replacing it in terms of whats going on in our underlying economy and whats going on generally in Financial Markets. And will rising u. S. Rates be negative for the Canadian Dollar . Well, you raise an interesting time, you know. Weve seen both in 1999 and 2004 when we had the feds moving ahead of the bank of canada which is whats expected again this time around, that the Canadian Dollar actually rallied. So i think its too simplistic. Whats important for canada is that the u. S. Economy is doing very well and were in a period where it looks like the fed sees the economy strong. And thats a really good thing for the Canadian Economic back drop. For the oil market and also for canada in general. On that front, the markets are still forward looking. For the Canadian Dollar, its a very different story where its likely to be somewhat range bound. That is a very different thing thats unfolding with the yen and the euro and sterling and some of the other interesting stories where were seeing these currencies, its been big, big moves and its been stabilization for a bit. We started with new zealand at the beginning of the year, then it moved into sterling, back into the euro and back into sterling. So weve had these big waves and i think weve already completed the wave in europe for the near term. If youre looking longterm, its still 1. 24. In terms of dollar yen, were still in the mix of it. And if the vote is for a no vote, then we have a problem back up to 1. 66. And if its not, its right down to 1. 55. Fascinating currency markets. I want to touch on one of those stories quickly, the dollar yep. The yen is at a sixyear low against the dollar. Do you think that means the market is expecting a major collapse in the japanese economy . Weve had a 109 in dollar yen for a long time. At times, thats difficult. The story for dollar yen is they have a tremendous way to go. They have policy thats incredibly loose. I think that the currencys reaction to that reacted in a way thats quite typical. The expectation is yesterday we had the bank of japan tell us theyre trying to ease the expectation for further easing. I think in many ways what we will see is the bank of japan that will be forced to take on further easing and we will see a rougher role than what we had expected. I think all in all, its driving dollar yen to those highs. Thank you very much. For now, lets give you a look at whats on todays agenda in the United States. August retail sales are out at 8 30 eastern. At 8 30, we go august import prices. Just before 10 00 a. M. , Consumer Sentiment followed shortly afterwards by July Business inventory. Garden restaurants preparing for olive garden and longhorn steakhouse which has been under pressure in recent weeks. Lets take a look at todays other top stories. Yahoo says the u. S. Government threatened to fine the company 250,000 per day in 2008 if it didnt comply with the command to hand over user data. Yahoo thought the threat was unconstitutional. A federal judge ordered the case to be unsealed. The digital Surveillance Program was revealed by former contractor Edward Snowden last year. Carl icahn has won three board seats at hertz. Less than a month after the 7 stake. At the time, icahn says he plans to push management for changes. Now he says he wont pursue a proxy fight. Two of the three new directors will be a Search Committee after the ceo steps down this week. On the trade so far today in fraj further, its significantly up. Also a Strong Performance over the last six months. Now, after months of speculation, Oscar Pistorius is found guilty of kul possible homicide. Find out what that means and where we are from here. We get reaction on the ground straight after this short break. You know what my business philosophy is, reynolds . No. Not exactly. To attain success, one must project success. Thats why we use fedex one rate. Their flat rate shipping. Exactly. It makes us look topnotch but we know its affordable. [ garage door opening ] [ sighs ] honey, havent i asked you to please use the we dont have a reception entrance. [ male announcer ] ship a pak via Fedex Express saver® for as low as 7. 50. Welcome back. The white house is set to unveil fresh sanctions against russia as moscow shrugs off a new round of eu measures. Oscar pistorius is found guilty of culpable homicide, the equivalent of map slaughter for killing his girlfriend. Carl icahn has three Board Members and boosts the share of the firm. Oscar pistorius has been found guilty of culpable homicide and could face up to 15 years in prison. Duncan joins us now from victoria with more. Good morning. A large crowd is gathering outside the courthouse waiting to see what happens. Will Oscar Pistorius get bail . Theyre talking about that right now. But it was just a few minutes ago that he stood up and he heard what he was guilty of and not guilty of. The judge clearing him of murder and discharging a firearm through his sun roof and finding him guilty of culpable homicide and discharging a firearm in a restaurant. Those two charges, one with a maximum sentence of 15 years, the other a maximum sentence of five years. Afterwards, during a brief break after the verdict were delivered, pistorius hugged his sister. On the other side of the courtroom, the steenkamps were hugging the family of reeva steenkamp. Right now theyre talking about bail, not surprisingly, the prosecution is asking that he be kept in custody. Really, nothing has gone their way. Yesterday the prosecution said he had deliberately tried to murder his girlfriend. Instead, she believes pistorius when he said that he fired thinking it was intruders behind there. He could have called for help, he could have called for security rather than firing through that door. Thats why she found him guilty of culpable homicide. One of the other aspect thes i wanted to tell you is the state can appeal on points of law. So plenty still to play for, wilfred. Duncan, thank you very much for that. The u. S. Will outline in its latest round of sanctions against russia later today. Its expected washington will take action against fair banks, the countrys largest bank, as well as its energy and defense sectors. Steve sedgwick is in kiev for more. Steve. Thank you very much. The ukrainian point of view wants to internationalize this. From the Russian Point of view, they want to see it is ukraine and this is a domestic issue. And, of course, theyre denying a large part of their involvement in this country. In the meantime, of course, the eu and u. S. Sanctions have been ratcheted up incredibly slowly, somewhat tepid over the course of 2014. But now we have a new round of sanctions coming in from both the eu and the United States, as well. And some are saying, actually, is it going to have negative effect for not only the eu but also for the global economy, as well . I caught one petro poroshenko, his only english language interview that hes had today. And i started off by asking him whether sanctions could be detrimental to his cause. Do sanctions make the situation worse for the ukraine or do the eu and u. S. Sanctions improve the bargaining positions of your country . The sanction is not just neither to punish russia, not to bargaining something. This is just an instrument to sit on the table and find out a very important solution, not only for ukraine, but for the whole world. And it is very important with the European Union and the United States are immediately still listed. A could element of the piece. What is a key element . Very simple. Three points. Point number one, total withdrawal of the foreign troops from ukraine. Point number two, close the border. Just preventing to supply new troops, weapons, and ammunition. Point number three, Immediate Release of the is the status of the region is the the region in the parliament. Let me just hey sir, sir, where is my cameraman . Where is my cameraman . Your cameraman is here, please. Its a major Sticking Point. Cnbc. Is the major Sticking Point between russia and ukraine the status of the region held currently by not at all. Not at all. The major Sticking Point is the independence sovereignty and territorial integrity of ukraine. Thats whats called a scramwell. Also the president helping me find my cameraman. Indeed, steve, throw back to you. As you said throughout the day, theres lots of european and indeed u. S. Leaders, past and present on the ground with you in kiev today. But surely this ingoing debate can be settled only by moscow, now by kiev . Well, i would suggest all parties, really. If you look at the economic problems that the eu is having on the back of its sanctions with food, import bans into russia potentially punitive action against the Automobile Industry and against the flight path that has been talked about. And on the russian side, as well. There are more than one or two parties involved in this, as well. The ukrainians are very keen to make this look like an int International Ukrainian issue. It gets them wider support throughout the world. One, it is a it is being portrayed as a purely ukrainian dispute. All of these parties need to be part of a longer turn settlement. Larry somers of Harvard University will be joining us on worldwide exchange. Brilliant. Thank you very much for that. We discuss whats ahead for the currency with less than a week to go before the big vote. Stay with us here on worldwide exchange. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. The s p is expected to he up frangzally. Both of those looking like they will finish the week in negative territory. Now, increasing momentum for the campaign to scotland to break from the uk has driven volatility this week. Sir Martin Sorrell said the situation is creating huge uncertainty. Even if theres a yes vote and currency becomes critical, who is the vendor of last resort . Will the bank of england still be the lender of last resort . Its a very complex situation. And helia joins me on set now. Still with us from toronto, camilla sutton. Camilla, ill start with you on the sterling issue. Beginning part of this week, huge volatility. Its settled a little bit in the last couple of days. What do you think will happen over the next week as we get closer to the vote . I think its interesting. In many ways what you expect is that we have a lot of the potential uncertainty now priced in. So the big shock really came last week from the beginning of september until the last couple of days. So pricing him in that uncert n uncertainty will bring that forward. I think what it means from here is were likely to change in a choppy range. But all in all, i think were in this choppy range until we get in this vote. If we have a vote for separation, then we have a drop back down in sterling, probably to about 1. 55 been and then if we have the reverse, i think what we do is retrace. Of the losses, not all of them, because its not as if the issue disappears. Were no longer in the zone where were going to have 170, 1. 72. What are the fundamentals now for the uk . What are the fundamentals now for sterling . And i think when you look at them fundamentally, its still a pretty good story. So you still have a central bank likely to raise rates. You still have the fundamentals that are quite improved. You have the overall story of being one thats much wert than the u. S. Or europe. On all in all, you continue to see that retracement. But next week is an important week for sterling. Camilla, im going to ask you what your trade is for the next week. Overall, if we get a yes vote, tell me what life is going to be like for scotland with a peg currency. Theres a lot of debate here in the uk about whether thats a viable outcome. Absolutely. Even if we get the vote for separation, its not as if everything changes overnight. Rink that all in all, if we get that yes vote, what you end up with is a very uncertain period. Its a really big question that will face the pugh areas. Certainly weve heard from the political side that sovereignty does mean youve had your own currency. That would then suggest you had your own central bank and your own policies. However, the uncertainty around that if we get a yes vote and its very, very difficult and one thats likely to lead to further Downside Pressure in sterling. Camilla, thank you very much for joining us. Helia, this time next week, we will know the results of the vote. What are you expecting, do you think . Do you go with the polls or do you go with the bookies . I think its going to be narrow and i think thats going to mean a long period of healing for the uk. Difficult week to come. Indeed. Still a lot of uncertainty. Well be on that story all of next week. Still to come, the white house will roll out their own measures and what that means for the economy. Stay with us on worldwide exchange. When change is in the air you see things in a whole new way. Its in this spirit that ing u. S. Is becoming a new kind of company. One that helps you think differently about whats ahead, and whats possible when you get things organized. Ing u. S. Is now voya. Changing the way you think of retirement. Woke to worldwide exchange. The white house vowed to unveil fresh sanctions on russia after the eu unveiled its own measures. Stocks in moscow shrug off the news. We have a verdict, Oscar Pistorius is found guilty of culpable homicide, the equivalent of man slaughter for shooting his girlfriend, reeva steenkamp. Carl icahn takes on another big company and wins again, securing three board seats at hertz. And 250,000 a day, yahoo reveals the u. S. Government threatened massive fines if the company didnt hand over data on users and a broad expansion of the governments Surveillance Program. Announcer youre watching worldwide exchange, bringing you Business News from around the globe. If youre just tuning in, thank you very much for joining us here on worldwide exchange. Here is a look at how markets are fair ahead of the futures. The dow expected to open down about 7 points. The s p expected to open fractionally down. The nasdaq expected to open down about one point. European markets struggling for steve so far today. Thats partly because of the new sanctions imposed by the eu on russia. Also on the aspect of rising treasury yields in the u. S. , which has put pressure on invery fasters. The ftse 100 fractionally up, germany down about 30 basis points. France and italy down a little bit, as well. Now, after months of speculation, Oscar Pistorius has been found guilty by a south africa judge in the killing of his he girlfriend. He could face up to 15 years in prison. The large crowd is gathering outside the courthouse waiting to see what happens. Will Oscar Pistorius get bail . Theyre talking about that right now. But it was just a few minutes ago that he stood up and he heard what i was guilty of and not guilty of. The judge clearing him of murder and discharging a firearm through his sun roof and finding him guilty of culpable homicide and discharging a firearm in a restaurant. So two charges, one with a maximum sentence of 15 years, the other a maximum sentence of five years. Afterwards, during a brief break after the verdict were delivered, pistorius hugged his sister and on the other side of the courtroom, the steenkamps were hugging the family of reeva steenkamp. Right now, theyre talking about bail to see when Oscar Pistorius could go free. Not surprisingly, the state, the prosecution are asking that he be kept in custody. Really, nothing has dpon gone their way. Yesterday and today, the judge picking apart large parts of the prosecutions case saying that they had failed to prove that he deliberately tried to murder his girlfriend, the judge believes he fired through the door believing there were ip truderses in there. He could have called for help, he could have called for security rather than firing through that door. Thats why she found him guilty of culpable homicide. Gm has issued a stop delivery on the 2015 corvette. There may be an issue with the air bag and the parking brake cable may not be engaged. The 2015 corvette has been roaring off the lots. Gm in frankfurt, trading is up about 1. 5 so far. Now, several state attorneys general who are investigating comcast takeover of Time Warner Cable have expanded their pros to another big deal. At ts purchase of directv. The deals have raised concerns about the loss of stocks and higher pries for consumers. And coming up, yahoo s fight with the u. S. Government, details about protecting customer information and its overreaching Surveillance Program. Thats coming up next on worldwide exchange. And that became our passion. To always build something better, airplanes that fly cleaner and farther on less fuel. That redefine comfort and connect the world like never before. After all, you cant turn dreams into airplanes unless your passion for innovation is nonstop. Unless your passion for innovatbig day . Onstop. Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. Welcome back the the white house is set to unveil fresh sanctions against russia. Oscar pistorius is found guilty of call punishable homicide, the equivalent of man slaughter for shooting his girlfriend. And another victory for carl icahn, boosting shares of the car rental firm. So the u. S. Is set to outline the latest details of its round of sanctions later today. Steve hats more for us from ewe crepe. Well, thank you very much, indeed. Without much to do, lets get straight to the comments we had earlier from the u. S. Ambassador to ukraine, talking about the latest round of sanctions both the eu and u. S. Are doing. Lets listen in. We believe that the sanctions, in fact, have helped create breathing space for ukraine, theyve clearly deterred some of the more ambitious and aggressive campaigns russia had in mind. We want to steer russia. So far, we havent seen enough from moscow to support implementing that framework. I can tell you, ive been taken aside by professor Lawrence Summers. Lar larry, you were basically talking about this inside for now, what we can do against ukraine rather than what we can do against russia right . Its right to if for on responding to what russia has done. Ultimately, ukraines future is going to be determined by what happens with its economy. These last 20 years have not been easy years for ukraine economically. Obviously, the conflicts greatly magnify the challenge and yet theres really no alternative. If ukraine is going to flourish in the 21st economy. That needs to be a both for both side in providing party pore ukraine can the international solutions. They didnt complete their imf programs, larry. Plus you have this layer of being one of the most corrupt countries in europe, as well. Theres of issues to be sort out. But if the west does not provide support, given erlgs, there may not be an doesnt for those issues to be sorted out. So this is a time for both sides to step up, for support to be provided in a strong and comprehensive way and for the ukrainians to do what they have to do. The imf mass recognized strength in ukraines efforts in recent months and has recognized the extraordinary difficulties inherent in a situation. The problem is, when the imf came in in late april, larry, we had an economy which was contracted about 4 now. 8 at worst potentially. Theyve lost around about 25 of their industrial exports, as well. How do you stabilize a situation like that when youve got a war going on . Youll need to magnify the quantity of support thats available. Youll need to recognize this isnt a short run problem. There is likely to be a need to replace loan finance with grant finance because these difficulties are going to be with ukraine for some times to come. There is going to be a need to look at the Energy Situation and to find ways for ukraine to have access to alternative sources of energy. And those those kits are going to be handled. Wooerve talking about the u. S. Energy support. Does the u. S. Have a role to play in exporting more product to europe . That is not going to be a crucial issue in the next months, but it is going to be a crucial issue in the next years. There is no strategic opportunity in the United States more important than the opportunity to become a substantial exporter of both natural gas and energy. So have the kind of influence because of its Large Scale Energy capacity that audi arrange ya has wielded traditionally. That opportunity is before the United States and we can take advantage of it with both a comprehensive domestic strategy to develop our resources and a commitment to allow their exports. There is no easier Public Policy question phasing the United States than the wisdom of permitting expanded oil exports. Did say generally where thits the the politicians or sur vif that haen in 35 years. Having to do with concerns that almost all serious economists regard as misguided, that if you permit the export of oil, you will somehow raise the price of gasoline, when the reality is you will ruse the price of dpas lean by raising the world pool of oil and, thereby reducing its price. I hope that we will get to the right place on that issue quickly in the United States. Do you think that issue, taking us back to russia is going to encourage the russians back to the table, huge Energy Reserves there. Do you think the kind of action for i think the United States becoming a larger scale Energy Exporter and becoming more prepared to deploy its Resources Global globally will be a contributor and bringing about a world system that is better integrated in ways to serve the interest of all nations. Talking about a better integration, what about scottland . You have a line on this you were telling me last night. I think that it would be a grave mistake for scotland to leave the United Kingdom. My hope and my expectation is that the very troubling polls of a few days ago will be a wakeup call that will bring this issue into serious focus. And my expectation is that as people see whats really involved with a Scottish Independence and the very grave consequences that we follow, they will cast a vote for the future rather than a vote for frustration and so ironically, in the consequence of all that has happened in the last few days, i am more optimistic about a successful vote that will keep the United Kingdom united than i was a week ago. You took me to task, but i got a oneonone, lawrence, so even better for me. Professor Lawrence Summers of harvard eifert joining us. Also some very interesting comments on scotland. Back to you. Thank you very much, steve, moving on from that. Carl icahn has won three board seats at hertz. The Car Rental Company is inviting his nominees on to the board less than a month after he with an 8. 7 stake. At a time, icahn said he plans to push management for changes. Now he says that he wont pursue a property fight. Two of the three directors will sit on a Search Committee to replace mark fezora, who stepped down this week. Icahn told cnbc he acted the move saying hertz acted responsibly. Hertz shared today up about 8. 5 pefrs. New documents show the u. S. Government one threatened thousands of data today. Morgan brennan has more on that story. Thanks. The government appeared ready and willing to impose types of 250,000 a day against yahoo back in 2008 if it didnt comply with the demand to hand over data. A request the tech giant believes was unconstitutional. On thursday, a federal judge ordered more than 1500 pages of documents unsealed from yoohoos schalg to the expansion of laws in 2007. The company lost its case and a subsequent appeal before the foreign streetive intelligence core. Yahoo s lot loss required the country to be one to first start tryinging anytime to a system that give pfizer, deck. Now, eventually, most other big companies, including google, facebook, apple and aol comply with the governments demands. Nsa documents show microsoft had already joined the program. Before the yahoo ruling, aversion of the ruling had been released in 2009. But was heavily redacted to make it hard to determine which want was involved. Yahoo came under heavy criticism. Last september, Marissa Meyers discussed the case at the tech conference. Have a listen. In 2007, yahoo filed a lawsuit against the new the patriot act, parts of that. We fought that. We were the key a lot of people have wondered about that case and who it was. You look . Right. Right. So we fought, we lost, if you dont comply, its treason. Yahoo hailed the decision to release the documents in a tumbler post where general counsel ron bell says this underscores how we had to fight every step of the way to challenge the u. S. Government surveillance effort. Part of the documents still remain classified and yahoo is now pressing the court to make those public, as well. Back to you. Thank you very much, morgan. Now, several state attorneys general who investigated comcasts takeover of Time Warner Cable has expanded their post to another big media deal. At ts 48 billion purchase of directv. Some two dozen states are working with the Justice Department to interview supporters and critic of those mergers. The deal raised concerns. At t is fractionally up 0. 7 in frank in thank further. Eu and trust regulators have given bskyb the go ahead to acquire Rupert Murdochs pay tv cops in italy and germany. Bskyb is looking at buying out share josht owners. Fox shares are up about 3. 34 and bskyb is down 1. 6 . Still to come, did u. S. Retailers bag a win with the back to School Season . We preview all the details after the break. Tigers, both of you. Tigers . Dont be modest. I see how youve been investing. Setting long term goals. Diversifying. Dip you got our attention. We did . Of course. Youre type e well, i have been researching retirement strategies. Well thats what type e s do. Welcome home. Taking control of your retirement . E trade gives you the tools and resources to get it right. Are you type e . Open port twentytwoohoneseven on the firewall for customer db access. Install version twopointthree of db connector and ensure verbose flag is set in case of problems. clapping sound isnt the cloud supposed to make business easier . Get the one that can connect to the systems that you already have. Today theres a new way to work. And its made with ibm. Welcome back. In europe, markets are down slightly to flat. Italy basically flat. France off slightly. Germany off about 0. 25 . And the ftse 100 fractionally up. Lets look at u. S. Futures. So far this week, its been three days out of four down. For both the dow and the s p. That is expected to continue today. The dow expected to open down about 10 points. The sorry, about three points. The s p expected to open roughly flat and the nasdaq, which has been up three days out of four looking for its sixth straight week of gains is expected to open roughly flat. So et will be quite interesting to see if it can continue six weeks a row of gains. Were joined now by michael gurka. Michael, so far, second half of the week, markets have lost a bit of steam. Looking ahead perhaps to the fed meeting next week. What are you expecting from that meeting . Well, im expecting a lot more rhetoric in regards to how the tapering scenario dissipates and more importantly, the new onset of how the eu and the ecb in particular are starting to implement their new strategy. Really, well have some fed speak. Lets say twisting their heads. Right now, at least, i think its not just two different dynamics, but the biggest cue from the fed, at least what ive seen in the last two weeks, is how the dollar has traded against the euro and particularly the british pound. I think the Dollar Strength will continue. It will probably be more of the mindset for the rest of the year and for those reasons, i think thats the impetus starting to watch. Growth in the u. S. Starts to pick up. So its wildly bullish about the u. S. Economy or in general the u. S. As ive seen. I think the markets have predetermined already and put that into the forecasting measures and shown up this week on how trading has happened. Again, lastly, lets not forget how much commodities continue to sell off. Indeed, lets touch on that. Oil is at about a 17month low. Is that bullish for the u. S. Economy in general . I dont think its going to hurt right now. I think a breech of 90 is going to set up a whole new parameter. Were going to see some selling on those and bounce back to where we are today. Much like you raise your head above new highs and eek out even further in equity land, i think thats the commodities space. Particularly gold has started to show that this downward channel is nothing more, i think, than a buying opportunity. But the problem is, well be in these ranges probably for the next quarter. Michael, lets have a quick chat about retail sales. The back to School Season is obviously important for the retailers. What are you expecting . I would not be surprised if those numbers are excellent. Im not just going to say were going to exceed those numbers, but right now at least i think i am seeing a return of the consumer in these type of seasonality scenarios. And for those reasons, i look for very good numbers today and i think the markets will react very favorable to that. Michael, thank you very much for that. Thank you for joining us, michael gurka. Thats it for the show today. My name is wilfred frost. Squawk box is next. Have a lovely weekend. Good morning and welcome to squawk box. They could be waiting for the iphone 6 and 6 plus. Reorders for apples latest gavenlths are under way. And new documents coming to light about the pressure the government put on yahoo to turn over customer data. T friday, september 12th, 2014. And squawk box begins right now. Good morning, everybody. Welcome to squawk box here on cnbc. Im becky quick along with joe kernen and andrew ross sorkin. Believe it or not, there is a bit of a chill in the air in the east coast this morning. Only ten days of summer remain. Is that right . Yeah, okay. 22nd. But some parts of the country are getting a blast of snow, believe it or not. Up to 10 inches in some places. Well tell you where later in the show. We are focusing on the consumer. The headline number expected to rise by 0. 6 . When you strip out autos, economists forecast a smaller increase of 0. 3 . Other economic reports of note today include import export prices at 8 30 eastern time. Later in the morning, well get september Consumer Sentiment and July Business inventories. By the way, the dow and the s p are on pace for the first weekly drop in six weeks. The nasdaq, though, is poised for a sixth straight week of gains