resolves itself. theresa may hopes her speech in florence will break the brexit deadlock as she prepares to offer better protections for eu citizens as well as outline the divorce payment plan. l'oreal shares jump as the death of heiress liliane bettencourt puts the beauty company's agreement with nestle under review, opening the door for a stake increase or even a full buyout. good morning it's friday. let me get straight to some data in the form of the eurozone flash pmi for september. we saw prints coming out of germany and france those were much better than expected what you're seeing from the eurozone is better than expected flash composite is 56.7 verses a forecast of 55.6 and an august print of 55.7. that's better than expectations. the euro/dollar pair is rising on the back of these prints. up by 0.4% still below the 1.20 handle. currently at 1.1990. let's look at how european stocks are faring. the stoxx 600 off just a smidge. just really a busy day not just for the markets, but also for politics. everyone is waiting with bated breath for that brexit speech coming out of florence from theresa may. we'll get through in a second. first let's show you what the indices are doing. there you go the ftse 100 under a slight bit of pressure. xetra dax is off by 4, 5 points. that market is still trading close to two month highs as we go into the elections sunday the ftse 100 is suffering from fatigue in basic resources this came on the back of the chinese credit rating downgrade yesterday. let's take you to the sectors. this is what you see some of the cyclicals underperforming. basic resources the biggest drag off by 1.4%. food and beverages up by 0.5%. and this might be the l'oreal effect we were talking about theresa may aims to change the course of brexit talks during her speech in florence. she will reportedly offer 20 billion euros to the eurozone. this would be paid over a tra transitional period where the uk would still have single market access we sent our own gemana to florence, italy. why florence, and what could theresa may realistically say to turn the chorus of the stalled brexit talks >> good morning. yes, it's a glorious morning in florence will she delivery glorious brexit speech? we'll see later. people were asking why she decided to give the speech in florence, the official line is that she wanted to emphasize that, y tshg yes, the uk may ben the eu but it is still a part of europe and plans to be a part of europe in the future and striking a more conciliatory tone than we've seen from the government in the past it's worth bearing in mind that the context at this current point in time, the negotiations are a bit of a standstill. many people are watching to see whether she will give further details on what type of ultimate treaty agreement the uk does envision with the eu and give more color on the security partnership, that's very important now following the terrorist attacks that have happened in the country. the more pressing issue we're expecting to hear from is that of the transitional framework. this is something that liam fox, phillip hammond have talked abot over the summer. one by where the uk does maintain access to the single market and customs union for a defined period of time so they avoid a cliff-edge brexit come march 19 today we expect her to spell out the conditions of that short time frame arrangement and then also how much they're willing to pay to continue to have access to the single market the number touted in the media was 20 billion euros that would net out 10 billion euros a year, in line with the net contribution of the uk to the eu budget last year will that be enough? will that constitute enough in terms of the divorce bill that the eu negotiators are looking for? we don't know. hopefully we'll find out later >> hopefully thank you very much for that on that note, let me bring in callum pickering let's kick things around the 2 billion euros, whatever the number will be is that the number for the divorce bill or just for any pay-in to get access to the single market? to me it seems like the media lumps them together. maybe no one has a clue what do you think that number stands for? >> that seems to be the number that the uk is willing to pay during the transitional period the eu wants the divorce bill which are the commitments through probably 2021. i have a sneaky feeling markets could be a little disappointed today. the conservative party conference is in a couple weeks, the beginning of october i think theresa may, after a very confrontational summer within her party, which would eventually reconcile, will want to use that as a full stop to the bickering. if she takes a position on the key issues, citizens rights, brexit bill, what type of deal the uk is aiming for, that will ultimately prove to be a divisive pillar, which could cause problems at the tory party conference i think she focuses more on the conference than the speech today. >> will be enough for the likes of michel barnier? they're sitting in brussels, they're waiting, they've been twiddling their trum thumbs be there has not been much progr s progress will they be disappointed after this >> they may be disappointed on detail british politicians like to be vague. the eurozone wants money, bedroom wan theresa may wants a trade deal we may have to wait until the end of the year, with a little more time pressure before she signs off the brexit divorce bill which will allow the trade talks to move forward. >> you say maybe the speech today is not so much about playing into the fears of the european partners about finalizing some details, maybe it's about the leadership struggle within the conservative party. we saw that article being written by boris johnson, the backseat/front see the argat ar. do you think boris john sason h chance of running the party? >> the story is that the core conservative base has been driving party policy, i'm not sure he would be popular publicly almost half the people in the country did vote to stay inside the eu from a market point of view, here's my sense, the market is ready to go for the uk it looks good. 18 months of okay rowth. a central bank ready to tighten. sterling is undervalued. if the trade deal looks okay, like the swiss deal, i think markets go to the races. so they're hoping may provides clarity so that, you know, they can actually invest in an economy which is doing okay. >> seems like theresa may at this current point in time, she is making major concessions. we'll have to offer you some money before we talk about a post-brexit transitional deal. do you think she'll have to make further concessions? is she becoming too soft already in the eyes of some of the hard-liners? >> the key trait of the hard line brexiteers, they see benefits so the question iswho is driving the underlying forces? my impression is since the election, the remainders, chancellor hammond, amber rudd, but i'm not sure how much theresa may will publicly want to shift the dial from the hard line brexit talk that she had before the election to the more moderate i think mostly this will be a public relations exercise, not to divide the conservative party. and we'll see next week when talk begin again some detail on whether or not the uk is ready to make that payment to the eu >> let's look at sterling. 1.3585 against the u.s. dollar callum you've been one of the few ones out there watching the boe saying they'll be turning more hawkish sooner rather than later. now it seems like you're right how dind kavindicated do you fel do you think 90% of what sterling is doing is down to the boe, not so much brexit or data? >> the reversal over the last two weeks, the uptick against the euro, the dollar and on a trade weighted basis is because of the bank of england the reason sterling is low because of economic fundamentals is because markets continue to price in the chance of a hard brexit so you and i sit here in front of our screens, even if industrial production is better than expected, we don't price it in because in two years what might it look like the bank of england is responding to underlying economic conditions where growth is kind of okay, it's not that exciting, but demand is slowly creeping ahead of supply with very few resources in the economy, that means without interest rate hikes, inflation will begin to tick up. >> callum, we have to leave it here callum ickering. you can watch the prime minister's speech from around 3:00 p.m. cet, go to cnbc.com. the uk posted its smallest budget deficit for august since 2007 standing at 5.7 billion pounds the figure is down 18% from a year ago the strong performance has been driven by record sales tax revenues coming ahead of november's budget. it could give chancellor hammond room to increase government spending. the white house is temporarily softening its stance on trade in order to preserve republican votes on tax reform that's according to cnbc sources. a senior administration official said most members on the house tax writing and senate finance committees are free traders, noting that trade actions like withdrawing from nafta or slapping tariffs on steel wouldn't sit well with them. jpmorgan ceo jamie dimon says the u.s. economy could be doing better speaking to a cnbc affiliate in india, he said he was on board with the decision to start unwinding qe take a listen. >> raising rates is not a big deal >> inflation is disappointed in light of that. >> i think the economy is growing strong -- i think it would be strong if americans did better policy. the fact is unemployment is coming down, labor is working, wages are starting to go up. there's plenty of slack in the system, so the housing is in short supply there's more things to do. as long as they raise rates or reduce qe in a strong environment, i don't think it's a big deal i think they're doing the right thing to start the process >> is a dichotomy here the fed's view is probably four or five rate hikes in the next 12 months but the markets are not pricing in half that whatcht what's the outcome if the fed is right? >> you can't look at one thing separate from the other. if the growth picks up from here and the fed is right, and they raise rates a couple times more, that's a good thing. they're not going to raise rates if growth is much lower. so they're looking -- it's har to fo d to forecast the future, but at one point they would be more right than the market. >> wouldn't there be volatility in asset allocation? should emerging markets worry if the fed were right >> little bit. but we see today in the world, it's not synchronized, but growth in japan, growth in china, growth in europe, growth in emerging markets, growth in the united states. brazil going from negative four to positive. that's a good thing. if america is doing better and rates go up a bit, slightly changes the flow of funs betwfu between other countries and the united states, that trumps that growth i wouldn't be that worried about it. >> commerce secretary wilbur ross will speak to cnbc today at 13:00 cet. do e-mail the show, you can find us at streetsignseurope@cnbc.com you can find us on twitter, streetsignseurope@cnbc, and @carolincnbc. coming up, angela merkel is urging voters to get out in force for sunday's election. we'll be crossing live to berlin in a few minutes you won't see these folks at the post office. they have businesses to run. they have passions to pursue. how do they avoid trips to the post office? stamps.com mail letters, ship packages, all the services of the post office right on your computer. get a 4 week trial, plus $100 in extras including postage and a digital scale. go to stamps.com/tv and never go to the post office again. welcome back let's get back to l'oreal shares, they're rising on speculation over the future relationship between the cosmetics giant and nestle following the death of l'oreal heiress liliane bettencourt. a joint agreement when nestle and the bettencourt family over its 23% stake in l'oreal will expire in six months bettencourt, the world's richest woman died yesterday aged 94 ryanair's flight cancellations could cost up to 53 million pounds in compensation ryanair shares closed yesterday's session in negative territory amid concerns over the mounting costs resulting from the staffing shortage. the low-cost carrier is in the midst of a recruitment drive and offered many existing pilots pay rises as it seeks to prevented further cancellations. lufthansa is set to acquire the bulk of the bankrupt airline air berlin easyjet and condor are to take over the remaining assets. negotiations between air berlin's creditors and the bidders are expected to continue until october 12th, push back the original september 25th deadline ahead of the election at the weekend, chancellor angela merkel had this to say on the situation. >> many people here are considering what will happen to my job to be clear, there are pilots from air berlin that we've wished all the best to, like all people who would like a job and would like to keep it, we've shown ourselves accountable in relation to this, i believe. once again, worrying news out of north korea the country may test a hydrogen bomb of an unprecedented scale on the park ocean. the comments come from the regime's foreign minister. north korean leader jim jong-un has promised to make a mentally deran deranged donald trump pay for his own threats. both comments come after the u.s. president said he would totally destroy north korea if the regime threatened the u.s. and its allies the comments from pyongyang come as president trump imposed new sanctions on the country >> reporter: a united front at the u.n. today as president trump ordered some of the toughest sanctions yet against north korea, flanked by the leaders of japan and south korea. >> a new executive order will cut off sources of revenue that fund north korea's efforts to develop the deadliest weapons known to human kind. >> reporter: the sanctions target all individuals and companies that do business with the rogue regime, including trading goods, services and technology and in a surprising move china's central bank has ordered its other banks to cut off north korea. mr. trump has been pushing china to get tougher for months. >> that was a somewhat unexpected move, and we appreciate it. >> reporter: analysts say china's involvement is critical. >> if there is any country that has the ability to move the north koreans towards negotiations and a more peaceful outcome of this crisis it's china. >> reporter: the sanctions assign the president still wants to give diplomacy a chance, even after unleashing this threat earlier in the week. >> but if it is forced to defend itself or its allies, we will have no choice but to totally destroy north korea. >> what would be the definition of being forced to defend ourselves? >> an attack on us or our allies >> an actual attack? >> of course, of course. >> reporter: still, the president's combative language >> rocket man is on a suicide mission for himself and for his regime >> reporter: prompting north korea to compare him to a dog barking. the rogue regime has escalated tensions by testing 22 missiles since february, including a nuclear bomb in recent weeks >> i want to show you the market impact of this renewed war of words. spot gold is up, 0.51% the yen and the franc, they're up against the u.s. dollar with the dollar/yen at 111.97. another sector i want to draw your attention to is the basic resources sector that's been suffering overnight, also australia on the back of weaker metal prices. this was a direct result of the downgrade of china's credit rating china has hit back at s&p's decision to downgrade the country's sovereign rating over debt worries the finance ministry said the move was mind boggling as the rating agency provided no new information. >> reporter: it's all about china's ticking debt bomb. s&p downgrading its rating for china citing unsustainable debt growth s&p is the last of the three major agencies to issue a downgrade, moodies did this a few months ago and fitch in 2013 china is hitting back hard the finance anyoministry saying s&p is wrong and ignoring sound fundamentals the language echoes a state media editorial that says western ratings agencies don't get the middle kingdom and that just because it doesn't look like a western model does not make it wrong. the timing of this is embarrassing for beijing it's a few weeks out from the biggest political event in five weeks time, where we will see a leadership shuffle china has been working all year to clean up risks in the financial system some analysts disagree saying debt levels are improving here and markets have posted a muted reaction to the news s&p raises a salient point that debt growth outpaces income growth this is something that experts, economists have sounded the alarm bell over for many years, it does underscore china's big tough balancing act, which is to install reforms, root out risks, all while still trying to prevent a sharp deceleration in growth cnbc, beijing. in mexico, workers are racing to reach survivors after the earthquake that killed at least 282 people miguel almaguer reports from a school in mexico city. >> reporter: after the frantic calls for silence, the rescue teams burrowing deeper into this elementary school. conflicting reports of who may be trapped inside. earlier rescuers saying it was children tonight the mexican navy says they're all accounted for, but they are picking up signs of life inside this courtyard the center of the rescue efforts, there is a clear sense of urgency, a race against time for first responders who haven't slept or eaten in days. one of the volunteers, an electrician, christian jimenez, from l.a >> the third floor, it came all the way to the ground. it's really bad. it's really bad. >> reporter: this rescue mission is dangerous as search teams crawl through small pockets where wooden support beams could snap at any moment children who survived the quake have come to watch as their parents cling to hope. i have no words for the family says gabriella rodriguez. it hurts to know their pain. heartbreak is rattling the region overnight, three people pulled from the rubble. 36 hours after the earthquake. but tears still flood rescue sites. beatrice diaz has been looking for her nephew since tuesday and fears he is still buried alive at work. here at the rescue site, there's a new concern. they're worried that the school still standing could collapse on rescue teams below the search and rescue for that possible survivor continues a few feet away. coming up, catalan's foreign affairs minister that's an interview you don't want to miss i founded lendingtree 20 years ago, and i've never seen a better time to refinance your home, than this summer. why? because right now we're seeing our average customer save $20,000. but 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ceo thinks investors should stay calm >> i wouldn't price a crisis in north korea or nuclear war into the market geopolitics is always a surprise sometimes positive, sometimes negative the history of mankind usually resolves itself. theresa may hopes her speech in florence will break the brexit deadlock as she prepares to offer better protections for eu citizens as well as outline the divorce payment plan. l'oreal shares jump as the death of heiress liliane bettencourt puts the beauty company's agreement with nestle under review, opening the door for a stake increase or even a full buyout. the big headline from the u.s. markets yesterday was the dow snapping its nine-day winning streak it hit many, many records over the course of that stretch let's see what it's supposed to be doing today based on futures. maybe another down day for the dow jones, seen off by 13 points the s&p 500 seen off by 2, the nasdaq off by 10 points. this as the dow and s&p saw the worst day in two weeks i don't think there was a specific reason. maybe some fatigue about record levels setting in or maybe markets were more spooked about the hawkish stance from the fed the day prior. european markets today, they're looking a little bit mixed very quiet the xetra dax is just off by 0.1% ahead of the very important elections in germany this week the ftse 100 is off by 12 points ahead of theresa may's brexit speech the cac cac 40 has a modest gai 0.2% when it comes to the fx markets, we had another threat from north korea. that's helping some of the safe haven currencies such as the yen. that's up by 0.4% against the u.s. dollar. and euro/dollar benefiting from the fact in part that the pmis out of europe were much better than expected. we saw a surprisingly good number out of france the german private sector expanding at the fastest rate in 6 1/2 years. >> thousands of protesters gathered in barcelona to call for the release of officials that have been arrested over the region's independence referendum catalan leader carles puigdemont said he will press on with an october vote with a split from spain despite a tumultuous week of raids, arrests and demonstrations as the government sought to derail the vote that it says is a violation of the country's constitution we're joined by maria badi badia cutchet, the country's foreign affairs secretary. she joins us on the line thank you very much for taking the time do you think the until dags tactics coming from madrid are working or backfiring? >> well, what we see in bars lone nash barcelona, because of this repression of the people, more people are in the streets, and more people decided referendum needs to be done on the 1st of october. i think it's a bad way that the government of spain that decided to take in order to ban the referendum apart from that, many of the fundamental rights have been violated six people have been arrested. all of them are senior officials especially from the vice president department, and i think we need -- i want to thank you for giving us the opportunity to explain it's needed so that everybody can see and know what is going on here. and this violation of the fundamental rights in catalonia. >> the madrid government at large, they would claim that calling this referendum is unconstitutional in the first place. it's not exactly within the bounds of law, is it you know, the constitution, the spanish constitution doesn't say that the referendum cannot be celebrated it just is a question of political will this is the law, and many laws you can put inside you can have many kinds of readings of the law. in fact, we have many experts in constitutional law, and of different countries in europe, and many of them, they say there is something in the spanish constitution to celebrate this referendum in cat lonya. t catalonia this is a political discussion then the way to solve this is to sit at a table and to discuss and the problem is the governor of spain has never wanted to discuss it the only way they have taken is the way of the police, we are there now. >> what's interesting is the lack of any interference, the lack of comments from other leaders. do you think other eu leaders should be interfering more or do you understand their hez tans becau >> now at this moment it's the respect of fundamental rights and democracy. i understand the european union institutions should start saying something about this demanding respect of fundamenta rights this is why i told you before that i appreciate it very much, they have to know what's going on here. just -- we ask just to exercise the democracy. because we have a mandate, a democratic mandate from the last electi elections, the political forces in catalonia that won the elections, they had this problem that they were going to celebrate the referendum for the independen independence this is a democratic mandate now it's a political issue it's not a judicial issue. this is why at this moment it's more about independence. it's a question of democracy and the violation of the fundamental rights this is why i think the institution should say something. >> are you not deterred by the messiness of the brexit talks? you are not deterred by the calculation of potential economic costs that would be at the detriment of catalonia after this split i'm looking at numbers of potential job losses in the hundreds of thousands, loss of income, loss of wealth are you not worried about that >> yeah. well the -- as you know, after the last two days, with the action of the government of spain, the situation is different in relation to celebrate the referendum but we are decided to show, and we are able to show in different conditions, and about how do we pay or how we don't pay in fact, we have to view this at this moment, i don't know what will happen tomorrow. i don't know what government of spain is thinking and doing tomorrow at this moment the government of catalonia and people in the streets have decided to celebrate the referendum on the 1st of october we can do this we are ready to do this. >> thank you very much for your time in the meantime, the ecb president, mario draghi, he's been delivering a keynote speech about youth unemployment at trinity college in dublin. he's been saying some progress in reducing youth unemployment has been achieved, but more generally the strengthening of the recovery in the euro area will continue to reduce its extent he says monetary policy is supporting domestic demand and the employment recovery. beyond that he has not touched on monetary policy as many market watchers had been hoping for. doesn't seem like glancing at the euro/dollar, we're not seeing a sizable impact. still coming up, opec and non-opec nations meet in vienna with an extension of oil supply cut deals on the line. more after this short break your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember. welcome back angela merkel urged supporters to go out and vote in sunday's election this amid fears that a low voter turnout could provide a boost to the far right alternative for germany party. a poll shows 34% of voters were undecided or not planning on casting a ballot that's higher than the 29% who did not vote in the last elections in 2013. merkel's lead is down to her campaign message of continued annuity and familiarity. that's according to ubs's chairman who tells cnbc that german voters are looking for consistency. even though merkel's party leads in the polls, she faces a challenge to form a coalition government >> it is true that all opinion polls show merkel with a very strong lead, so she will win the election that's less of the question. the real question is who is she going form a government with that's going to be difficult the obvious choice will be a third ruined of a grand coalition. that's been hugely unpopular with social democrats. merkel will look to try do everything possible to get into a coalition with the potential the liberals and eventually the greens that means we will have dragged out negotiations to form a government until december, and that will also mean in europe, a few thing also remain on hold until the new german government is in place, which is not a problem in the medium term on content, merkel has been running her campaign with a simple message the first part is you know me, that's continued knity. no experiments was the second line given the volatility in politics after the election in america, after brexit, this was a welcomed mood changer for the german election. people know her, it's her fourth term, she's been in power for 12 years. germans are up for this continuity at the same time the economic situation in germany is good so this is not a period where anybody in germany makes the argument that the eu or the euro have not been to the benefit of germany. and i think keeping that going and getting new momentum into the eurozone and into the eu after the british have decided to leave is going to be the key challenge for both merkel and macron and do this together in a united message will be what they're looking at let's get back to annette in berlin i think you and i both agree that this has not been the most exciting campaign of the major political parties. i guess it's a nail biter as to who forms a coalition with whom. >> that's the key question now it's quite clear merkel will be on top of the government again who will be the coalition partner is the big question mark just caught up with a very well known biographer who wrote a book about angela merkel and her world back in 2013 i asked him what he thinks would be merkel's favorite coalition >> merkel has achieved two major goals, or will achieve two major goals, she will be the strongest party and without her there will be a coalition her favorite would probably be the spd. on the other side, she preferrinprefers the liberals and greens for one reason if she picks the social democrats again, the right-wing afd will be the strongest opposition in parliament.meri >> so if it's possible, she will go for what we call a jamaica coalition? >> jamaica, difficult to negotiate, find common ground, i expect movrnnths, and you still have to ask the party members of the greens and probably the liberals if they go along with i guess this will be the solutio solution >> you're an expert on merkel. perhaps you can share your view of her being able to do that >> she was actually thinking of not running again last october and november and the final decision was actually made after donald trump was elected. she saw the west tumbling. she decided germany could not afford that same fate. >> is that also the reason that she's sort of the anchor of stability in germany, that she is so high in the polls, or actually quite successful with voters in germany? >> she stands for something that the germans like stability, calm, predictability. she's down to earth. she's not pretentious. since we're living in extremely ideological times, this woman is what's in fashion. this is her success story. >> let's talk about her vision of europe. it seems she's getting carried away with mr. macron, about how europe could look in the future. do you think she'll enact bold changes within the next four years. >> macron is trying to carry her away she's totally opposed to this strategy merkel is not the vision type. she's not the one who stands out, grandstanding, posing she doesn't have a grand europe idea her vision of europe, if you want, is basically to keep the continent together if europe falls apart, this is the biggest catastrophe to germany. in her eyes, it's to keep east and west, france and poland, the poorer and neglected south together what macron envisions, this second budget, 3% of the gross domestic product, this is not in her mind. she's a realistic woman. don't expect her to change his assessment that we will see a jamaica coalition, a coalition between merkel's party, the liberals and the green is something i'm hearing more and more often on the ground that's only because everybody is afraid of what role the afd, the right wing party, which for the first time would ender parliament could play in parliament if they were the third biggest party. i think that rational is appealing. we could see a three party coalition going forward in germany. back to you. >> that should be interesting. we'll watch what happens over the next couple months annette, thank you very much for your coverage. opec and non-opec members are meeting to discuss a potential extension of the oil supply cut deal the pact runs until the end of march. ahead of that meeting, oil prices are not really doing anything wti flat at 50.54. with opec looking to sure up prices, we sat down with an interview with royal dutch shell's ceo to get his outlook for the global oil market. >> oil prices are going to go up over time as a result of the tightening -- >> what price are you looking at >> again, hard to say. because a lot will, in the end, be driven by sentiment we said it's not unreasonable to expect that if we want to make financial projections going up in the future. we want to make projections around $60 oil by the end of the decade we want to show at $60 oil, it's not an unreasonable assumption to make, we will be making a very significant higher amount of free cash flow then we used do when oil was $90 a barrel it doesn't mean i believe it will be exactly 60, but it shows that we have transformed the company to be much more resilient than a lore oil prilo price. >> some say the u.s. shale producers will play a bigger role at supporting oil price at $60 a barrel do you agree >> i think in the short-term there's a certain degree of range boundness, which is the result of shale. i do think shale has a relatively good capacity to respond to price signals it goes fast compared to the more large projects that the rest of the industry is involved in yes, i think shale has the capacity to buffer but i would not say that has made opec irrelevant far from it. opec is still a very, very significant stabilizing force in the market it also doesn't mean that the future is just going to be shale. bear in mind this is still a small percentage of total supply picture. also bear in mind that small imbalances in the market, 1%, 1.5%, can have a major effect on pricing. >> let's talk more about the outlook for oil prices and this opec meeting that's happening today with paul higgins. this meeting today in vienna, this is the monitoring committee. it's not the wider group should we expect anything to come out of that today >> i think the first thing they're looking at, which has been opec and non-opec are coalescing around is exports how they can measure and monitor exports. it's been a bit of a credibility gap between the compliance of the production deals has been good, at the same time that has not translated into the same reduction into the markets opec is aware of that. they're trying to coalesce around a way of measuring exports. saudi arabia has led by example. they cut exports inaugust, trying to do that again in september and hopefully leading by example and getting all those around the table to get towards a deal that can move exports to that production deal >> maybe they see that it's working. oil prices have rallied to some extent over the last three months brent is at 56 crude at 50, but maybe that's a sign that, yes, it's paying off. or do you think higher oil prices are the result of a better global economic backdrop? >> i think opec has definitely done a lot of good things. compliance is good stock levels are coming down also that the market has moved across the curve that's all good things, but clearly more needs to be done. not just in terms of exports but in terms of exemptions, nigeria and libya have been brought to the meeting today. they need to be brought into the fold at some point they added more than 500,000 barrels a day to the mix over the past year. that's been a problem. also the extension issue, which has been another factor they need to consider it's difficult to get that november, december, the november 30th meeting, that could be a point where the extension is discussed again. the decision needs to be extended in march 2018 if you say the current output deal is work, why extend it? >> it is working, but it's been slow what happens is that as prices -- as this floor under prices is up $50 a barrel goes towards $60 a barrel, it incentivizes shale and u.s. from duck sh produ production >> paul, thank you very much for that you can catch the prime minister's speech on our live stream from around 3:00 p.m. cet go to cnbc.com this is the brexit speech to europe some say it's a speech for the conservative party you'll have to listen in and find out that's it for today's show i'm carolin roth "worldwide exchange" is up next before we wrap up the show, here's a quick look at u.s. futures. we're looking at another down day potentially for the u.s. markets. the dow jones snapping its nine-day winning streak yesterday, seen off by four, five points. the nasdaq seen falling by 9 points see you on monday. you won't see these folks at the post office. they have businesses to run. they have passions to pursue. how do they avoid trips to the post office? stamps.com mail letters, ship packages, all the services of the post office right on your computer. get a 4 week trial, plus $100 in extras including postage and a digital scale. go to stamps.com/tv and never go to the post office again. what should i watch? show me sports. it's so fluffy! look at that fluffy unicorn! he's so fluffy i'm gonna die! your voice is awesome. the x1 voice remote. xfinity. the future of awesome. north korea threatens to test launch a hydrogen bom while iran promises to step up its missile capabilities the latest on both stories straight ahead. geopolitical risks intensify. the impact on the global markets coming up. and brexit front and center today as theresa may is set to deliver a major speech it's friday september 22, 2017, "worldwide exchange" begins now.

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