Next few days, sending sterling to a high. And kim jongun declares north korea a Nuclear Power after the latest test proves the weapon can reach anywhere in the u. S. I can only tell you we will take care of it. We have general mattis in the room with us we have had a long discussion on it is a situation we will handle good morning yes, youre watching street signs. Glad youre with us once again what were witnessing one hour into the trading session is a fairly strong rally when it comes to the banking stockses. I do want to tell you what the banks are doing, theyre on track for the best day in two months we have the european banking index on a tear. This is on the back of comments coming from the fed chair jom , nominee, jay powell. We have progress when it comes also to the tax bill all of this is positive for the u. S. Banking sector which had a spectacular day yesterday, up by 2. 6 the best single day performance since early march on the back of those comments from mr. Powell were seeing the translation effect on this side of the atlantic as well the nominee for Federal Reserve chair, jay powell, he also talked about Monetary Policy he hinted at but stopped short of confirming a december rate hike in his Senate Confirmation hearing. Powell essentially assured senators the status quo is likely to remain presuming he is confirmed to take over from janet yellen Steve Liesman sends this report. Reporter the more the fed chairman nominee jay powell spoke, it seemed the more the market liked what it heard the fed governor appointed by trump to replace janet yellen spoke about his views on Monetary Policy and Bank Regulation what did he say . Well, the first thing he did was dance around the minefield of the current tax bill before congress thats one area that could derail the confirmation. Heres what democra democratic r asked him about the 1 trillion bill for the new tax cut i think our responsibility is to carry out the mandate you have given us, which is to maintain stable prices and we rely on you for data all the time i respectfully dont think you rely on us to score fiscal proposals. Thats not really our role reporter more importantly powell indicated he would continue the gradual policies of janet yellen, both in reducing the Balance Sheet and in raising rates. He even seemed dovish on the outlook for employment and the effect on inflation. What we can do is we can push harder on maximum employment i think were doing that i think we are looking at an economy that will go under 4 unemployment reporter powell said he wasnt certain why inflation was so low, but it allows the fed to go slowly on raising rates and he supported some easing of banking regulations, especially for smaller and midsized banks, calls bank stocks to rally the other big move coming out of the u. S. Markets yesterday, one step closer the republicans have scored a big win for their tax overhaul after the Senate BudgetCommittee Approved the bill. Two senators threatened to vote no, but eventually supported it after being assured their concerns would be addressed. Well cross live out to washington later in the show you can check out our website for why hazards still remain for the tax reform plan. The ceo of the london stock exchange, xavier rolet is stepping down. The trouble started in march of this year, thats when the eu blocked the 24 billion pound tie up that the exchange hoped to have happen. The news created a tense standoff with Donald Brydon being accused to forcing rolet out of his role. As part of the lse statement, Donald Brydon has said he will not stand for reelection as chairman david warren said he would take over at the helm tci previously criticized the lse for not having a clear successor to rolet lets look at how this continuing sg continuing saga is impacting shares selling pressure on those shares, off by 2 . North korea claims it has successfully tested a new icbm that has the potential to hit all of the u. S. Mainland this comes a week after President Trump put north korea back on the list of nations that supports terrorism reporter north korea fired one of its biggest and most controversial missiles today, similar to this one launched last september, an intercontinental Ballistic Missile, which in theory can reach the continental u. S. But not the way north korea fired this one it went almost straight up, peaking at an altitude of nearly 3,000 miles. Traveling a distance of just 600 miles before crashing off the japanese coast President Trump today kept his cards close. It is a situation well handle reporter defense secretary mattis added a little more detail went higher than any previous shot reporter why now political payback perhaps. President trump threatened the regime while in south korea earlier this month the president followed up with a tweet saying he would never call kim jongun short or fat kim jongun was in no position to respond, three u. S. Aircraft Carrier Strike groups were nearby now all but one has left and may be entering a new cycle of escalation in hawaii officials let reporters listen to the states new attack Warning Siren starting in december it will be tested every month possibility of attack today is very remote but we believe its important we be proactive that was Richard Engel reporting. Right now i want to get out to seoul where chery kang is standing by. What was the response coming from seoul well, the south korean government called for the International Emergency meeting, an Immediate Response to the latest development that takes everything back to zero after some 70 days of relative calm and silence here i think putting two and two together, it will make it difficult for the south korean government to continue to continue its calls for dialogue with north korea at this point certainly north korea looks like its about achieving higher leverage in potential negotiations with the u. S. , because its not interested in negotiating anything with the south korean government at this point. So, the message seems to be very much clear that its not using it for preemptive strike, but they got the weapon, and that it works, it goes far enough, long enough, and recognize it as a fug Nuclear State and Start Talking with such understanding that seems to be the framework that north korea wanted to build with this latest missile test as well as that important announcement that followed quickly after the launch this morning. Now, as far as the specifications of the latest Missile Launch, it is something that has been tested before. Back in july, price. North korea claims that it has been upgraded version it boasts higher altitude, range and the longer flight time at this point. I do want to point out were at a point where we need more information about the true capabilities of north korea. Chery, thank you very much for that update. We need to talk about brexit some things seem to be moving finally. They say were still working on it, thats according to the eus chief brexit negotiator when asked if a financial settlement of brexit had been reached with the uk speaking in berlin, Michel Barnier said he hopes to report to his colleagues in the coming days about a financial agreement. It happened yesterday that an agreement of approximately 50 billion euros had been reached, that led to a spike in the pound sterling against the u. S. Dollar were seeing that continue into todays trading session. 1. 3401, a twomonth high for this currency pair. The ecb called for the creation of a europewide Trading Platform for bad bank loans. The proposal is part of the Central Banks biannual Financial Stability review due to be released today german investors and households are underestimating Financial Risks according to the bundesbank the german economys eightyear strength of growth has caused investors to underrate risks risks had built up in the area of low Interest Rates, included an overheated Real Estate Market and trouble at some banks. Joumanna is in frankfurt last time we heard from them in may there was concern about rising bond yields whats the focus on this time, do you think exactly i thought the comments were interesting. It is an admission in some sense that perhaps Interest Rates being too low could have been a factor for financial instability. Thats an interesting angle. Lets take a step back and go over what some of the main concerns were back in may. Back then the focus was on rising bond yields, and the effect rising bond yields would have on debt sustainability, be it in the private sector, public sector, also another major concern was Bank Profitability in an environment of lower growth since then what weve seen is European Growth picking up, but bank profitabilities has not done that much perhaps Bank Profitability will be front and center of todays stability report be it there are a lot of issues to be addressed there. Lets take a look at how yields and how the markets have done since may to give context. Weve seen yields have done nothing since may. In fact, the tepyenyear bund l is about 10 lower, the currency is stronger, periphery yields are 45 basis points lower, so they cant point to bond yields being a major instability Going Forward, but the Banking Sector notably is down 5 thats another reason im expecting and the market is expecting the Bank Profitability pillar to come up in todays financial stable repoility repot we need to Pay Attention to european political risks and i will be sitting down with the Vice President of the ecb in a few hours to ask him some of these questions and what the real Financial Stability risks are. Back to you. Thank you very much for that. Join us on twitter at streetsignseurope cnbc you can also tweet me at carolincnbc. Were also going to get out to vienna. Steve . Thank you very much i never tire of topec some say look, you guys, get this right or the market could tank a lot of people are look at the message and the deed itself. Well be back after a very short break here on street signs. Were playing hide and seek with kids battling cancer at st. Jude childrens research hospital. Shhhhh. Sorry. At st. Jude, no family ever pays for treatment, travel, housing or food. Because all a family should worry about is helping their child live. You think theyll find us . Not a chance. Ooops. Give thanks for the healthy kids in your life. Donate now at stjude. Org or shop where you see the st. Jude logo. Welcome back oil prices are still under pressure this morning. Thats on rising doubts that a deal to extend output cuts will be reached opec and nonopec members meet in vienna today to talk about an extension. Wti up 0. 6 . Brent crude off by 0. 75 the cartel was widely expected to continue production curbs throughout 2018, but theres growing concern that russia may not back the new plan. Steve is in vienna thank you very much are we being gamed here or are there genuine concerns out there that opec and nonopec allies, russia, will balk at a full nine month extension that is due to finish the end of march . I want go backwards one step and say look, for all those people who keep saying opec is dead, shale is there, there can be symbiotic coexistence. And opec has kind of won over the last year. It got the prees up ice up, inv is down, and it has full compliance it set out to do x, and has achieved that. The contention is about today, tomorrow and Going Forward lets loisten to what the uae Energy Minister said to me we are waiting to meet with everyone its not practical to give you what is going to be discussed before the discussion. What we can tell you is we will discuss several other options. Were a funny lot here at opec all the ministers have their idiosyncrasies, the pack is very delightful i met someone who has been around a long time at opec, youve been coming here longer than i have. So, you know better than i that its about the interpretation of the deed as well as the deed your comment, which i teased before the break, they better get this right on message. Tell me more the reason why they have to get it right, the market is expecting a ninemonth extension. Its built into the price already. So if they dont get that wrapped up nicely with a bow, then theres risk for downward pressure on price, just alone from that. The other reason why they have to get it right, actually, according to our analysis, when you come into the First Quarter of next year, the fundamentals are weak we are showing a large implied stock build of over Million Barrels a day. Theres two reasons why to get it right why is there such a big difference between what mckenzie says, the iea says and opec are saying theyre talking about extra demand on the opec call, up to 33 million the iea is saying we think there could be a build up in supply. Why such a difference . Its a huge market. Its global. Were talking about 95, 100 Million Barrels a day. Youre trying to gather statistics from 80, 90 countries. When we look back at the demand forecast, they get revised a lot. Heres an interesting take for opec generally the last few years, our demand forecast and others are getting revised upwards. It could be opec is justified in this our best analysis is more in line with the iea in terms of where we stand on demand thats interesting. Ive been looking at the chinese demand we spend a lot of time looking at supply but not perhaps enough in the market world. Thosekom mrcome latelies are annoying, arent they . Talk about annoying optics showing up lets say it partially kicked off with the hurricane that shut in refineries in the u. S. Gulf coast. Were talking about almost 5 Million Barrels a day. Where is the oil going to go production didnt shut in. It started partly from that. The dynamics in the market, the economics are wide brent wpi spread that gets sold to asia easily. Its a nice, light sweet crude that is well known by now. The Oil Export Ban was lifted in 2015 for the u. S this goes to the heart of those concerns, those session concerns if we are holding the line and were 300,000 barrels down and not growing on new greenfield projects, those oil guys are taking our chinese market. Thats it, isnt it . It is in the middle east they have to sit and watch the u. S. Absorb market share lets keep one thing in mind, crude quality. The u. S. Crude is light sweet. Russias crude and the crude out of the gulf is heavier, medium thats what people want right now. From that point of view its better for opec and russia to watch this what about the bromance, they werent Holding Hands when they arrived last time around, the middle of the year, they came out in the same car, the message is clear, this is a longterm relationship. Do you believe that . Do you believe that saudi and russia are entering a long term cohabitation of the same space yes, i kind of do, but this meeting will be a test of that bromance theres a little bit of disagreement no. Issues have to get ironed out. How do we end the agreement . How do we tail off on increasing production and bringing it into the market without collapsing prices this is a test of the relationship in terms of the solid base of this bromance, king salman was in russia for the first ever russia this goes above, dare i say, it goes to putin and king salman and mohammed bin salman. So in terms of this Going Forward, we think it has longevity what about the politics we knows there a lot of politics in the middle east and different sides of the syria dispute can it survive the politics . Thats the question we got this meeting. Can it survive that . Its looking okay. We have the ongoing political issues in the middle east. Syria has been one stumbling block. Russia is more tight alliance with iran than the saudis would like we have political issues to get through. It looks like for now the saudis are tempting to wade through that with russia and avoid head to head confrontation. You are a longterm opec watcher. Im a longterm opec watcher we never met im thrilled we addressed that its very nice to meet you. How nice to meet a new face on a beat youve been doing quite awhile you go. Steve, youre making new friends in vienna, thats always nice. Philips lighting is trading lower after philips cut its stake in the lighting business the sale worth around 550 Million Euros ends philips control of the lighting company. They intend to fully sell down their stake in years to come shares off by 2. 74 . Siemens is reportedly going to choose frankfurt over new york for the listing of its healthcare division. According to reuters, the german conglomerate could make an announcement as early as today after a meeting with the supervisory board. The medical equipment unit could be val rued at about 4 40 milli. We spoke about the timing of the listing earlier this month, and there was an indication of when they could pull the trigger. When it happens depends on market conditions. Knowing that i cannot much do about the car mmarket conditioni want to make sure my company is ready and we go when there is opti