Deal tesco hales a strong start to the year but uk sales slow in the latest quarter and a calmer day in hong kong after massive protests against the extradition bill turned violent forcing the closure of government offices while beijing looks to allay investor concerns about the unrest good morning its been a relatively strong start for the day across europe you can see the ftse is 0. 15 higher dax in germany trading 0. 40 higher in paris, the cac 40 is slightly above the flat line. In italy, the ftse mib trading about a quarter percent higher lets look at the sectors behind those numbers to see where the positive signs are coming from the healthcare sector up almost three quarters of a percent. Telecoms trading twothirds of a percent higher real estate a half percent up on the day. The bank stocks, you can see across europe, they are trading lower as are Household Goods and some of those media companies. A huge focus of the media space in europe over havent days. That will be something that invests watch closely. Beyond those sectors, lets talk about whats happening in asia in particular the oil price as well because of this incident he weve seen over the course of the last few minutes and ours, coming out of the gulf of oman brent crude up nearly 2. 9 on the day. It was at a fivemonth low just yesterday lunch time that incident just off the arabian gulf coast seems to be one of the reasons that markets when it comes to oil are focused about that that surge is after that fivemonth low yesterday this follows two incidents involving separate tankers in the gulf of oman dan murphy joins us now. What can you tell us about those incidents. We understand that u. S. Naval forces actually received two separate distress calls in the early hour this morning just after 6 00 a. M. Local time this incident involved two separate vessels the first is a vessel bound for taiwan its believed a fire broke out on board this particular vessel and the crew was forced to abandon ship that makes it quite significant. Its unclear what caused that fire the second ship is a chemical tanker that was moving from saudi arabia and bound for singapore. It was reported to be hit at around the same time as the other ship a statement from that ships operator said the ship had come under suspected attack causing a fire in the engine room. According to reports that vessel is still safely afloat the hull of the ship was breached just above the water line on the starboard side but all crew are reported safe in terms of how authorities are responding to this significant incident off the coast of oman, uk maritime trade operations say they are aware of the incident and are investigating but cannot provide Additional Information to the media we have also attempted to contact the u. S. Navys 5th fleet based in bahrain they have been light with information. But sources and a recent line from them suggests they are working to provide more information and that u. S. Navy ships are indeed in the area and ready to render assistance this is significant for the region because this comes at a time when we have shinzo abe meeting with the iranian leader on the ground in tehran. It also comes at a time when regional tensions have been significantly heightened following another attack on ships off the coast of the uae on may 12th. What weve also learned is that the uae, saudi arabia and norway told the United Nations in the aftermath of that attack that it was highly likely that limpert mines were used on those attack on may 12th. Those countries also said those four attacks were part of a sophisticated and coordinated operation carried out by an actor, most likely a state actor. We know so far the finger of blame has been pointed towards iran however we cannot determine and it cannot be determined if these incidents are indeed linked. This is serious for the region certainly an escalation of tensions, a continuation of an escalation of tensions in the reej he region thats the information as we know it. We will continue to update you as the headlines come through. Clearly a serious incident off the coast of the gulf of oman and thats certainly causing oil prices to spike. Back over to you thank you very much let look at how the Chinese Markets closed over on that side of the world the shanghai comp is up slightly the shenzhen closing 0. 3 higher in hong kong, the hang seng failing to get above the flat line today trading more than 0. 15 down that following those protests that turned violent yesterday. The fact that government offices closed there for the rest of the week and looking at how the renminbi is trading, it looks like the dollar is strengthening against both versions of the currency there. President trump declined to set a deadline for further tariffs on chinese goods he still expects to meet with president xi at the g20 later this month but he thought a deal would eventually happen. He said u. S. China ties remain strong despite the current dispute. I think well have a deal with china we have a good relationship. I think they have to make a deal a lot of companies are leaving china as you know. Theyre going to vietnam, various other places theyre also coming to the United States to make their product because they dont want to pay the tariffs there is no tariff if you do it in the United States scott audrey joins us today what happens if trump and xi cannot see eye to eye at the end of this month . What does that mean for invests in chinese equities . Meet yacimmediate reaction w negative and people will ask why is that. Though this friction point started on trade, it evolved into technology, and even the u. S. Are asking china to roll back the states involvement in the economy, which is directly against what president xi is promoting as a growth model. Lets assume there is a deal or there isnt a deal, what does this do to Business Confidence when it comes to investing in china . What does this do for domestic businesses in china and consumers in china most people are trying to figure out what is the impact for trade on gdp, but youre asking about second and third order impacts. If youre a billionaire and investing in china you will think twice or three times we saw in the Fourth Quarter of last year Consumer Confidence was lower, so they are keeping control more of the domestic media. Absolutely that will hurt investment authorities in beijing have promised that they will give support to continue trading. How confident are you that the authorities there have enough fire power and tools at their disposal to continue the continued growth of their economy . They have lots of small tools. They are deploying them. The limiting factor is the debt within the economy youre seeing investment pick up, fiscal expenditure and tax cuts we should see more of those. The limit is the debt and the transmission mechanism for that debt getting into the economy which appears to be weaker so you want to be shighly he selective about which parts of the economy you invest in. Lets talk about the ratio against the dollar, if that is broken how much further could that fall, do you think . Its an interesting point its such an obvious level that everyone globally can see it i was in china eventually, everyone assumed that the authorities could imagine a gradual depreciation, but Financial Markets continue work like that. You want to look at closely the foreign Currency Exposure of chinese corporates and where they have their debt and there you can start to see issues so, you know, i personally think its an obvious line in the sand, should it go through, it could move much further more rapidly. What about foreign investor inflows . It becomes cheap to put your money into chinese equities for an american investor or european investor, yet you have concerns about what the trade damage will be to the corporate sector how do you make that call as to whether this provides value for you . If youre a denominated investor, if you have the currency starting to weaken, thats a headwind. You have to offset that, so you have to balance those. Perhaps for the next few years you will see some currency hedge. But absolutely, a weaker currency is a head wiwind President Trump not taking a position on hong kong. From your perspective, do you have concernsthat the kind of antichina sentiment we already see in the u. S. Congress could increase around the kind of images we saw from hong kong yesterday and that could have an impact on the way the Trump Administration deals with president xi i think President Trump knows he has many levers he can pull so he could start using some trade negotiations in here but, you know, i think that they both need a deal actually. If you look at the state of both economies, theres some signs that both need a deal and the trade tariffs may be rolled back or some concessions. Over the next two, three years you are in an antiglobalization type of era. You see china turning to russia as friends theres quite a lot of geopolitical evolution going on. Thank you for joining us this morning. Appreciate it. President trump has declined to offer his opinion about yesterdays violent protests in hong kong. When asked whether beijing was overplaying its hand, he chose to talk about the scale and size of those protests. The massive demonstrations, i looked today, that really is a Million People a lot of times people talk about they had 2,000 people. It was really 1,000, 200 i see it all the time. I see it all the time. When you look at this demonstration, they said it was a Million People that was a Million People. That was as big a demonstration as ive ever seen. I hope it all works out for china and hong kong. Are you sending a message to chi china . Thats a demonstration theyre having i understand the reason for the demonstration. Im sure theyll be able to work it out i hope they can work it out with china. Hong kong government offices will remain shut for the rest of the week as authorities strengthen their security measures you can see People Holding a silent protest, holding up signs in hong kong, possibly in response to the violence that we saw yesterday on both sides. Almost 80 people were injured yesterday. Thats after clashes broke out between demonstrators and police a spokesperson for Chinas Foreign Ministry says it is not necessary for there to be concerns about the investment environment in hong kong chery kang filed this record Hong Kongs Legislative Council is at a standstill given wednesdays protests hong kongs Central Government offices are shut for the rest of the week we do see protesters around this area where im standing outside the hong kong Legislative Council building but they are in a much smaller scale. Its peaceful demonstration for the most part. Still calling on the Hong Kong Government to retract this bill, but we do detect some tense moments with the police as well. In the meantime, in a rare move, hong kongs Bar Association coming out with a statement expressing grave concern over this unrest and calling on the Hong Kong Government to question itself in pushing ahead with this current proposal to change the law to make arrangements to extradite criminal suspects of hong kong to Mainland China for trial. As of yesterday hong kongs chief executive carrie lam said she will go ahead with this amendment but she wont do anything thats not in the interest of hong kong and its people im chery kang for cnbc hong kong. Coming up, well be live in luxembourg where they are discussing the ongoing challenges around italys debt do stay with us. Unpredictable crohns symptoms following you . For adults with moderately to severely active crohns disease, stelara® works differently. Studies showed relief and remission, with dosing every 8 weeks. Stelara® may lower your ability to fight infections and may increase your risk of infections and cancer. Some serious infections require hospitalization. Before treatment, get tested for tb. Tell your doctor if you have an infection or flulike symptoms or sores, have had cancer, or develop new skin growths, or if anyone in your house needs or recently had a vaccine. Alert your doctor of new or worsening problems, including headaches, seizures, confusion and vision problems. These may be signs of a rare, potentially fatal brain condition. Some serious allergic reactions and lung inflammation can occur. Talk to your doctor today, and learn how janssen can help you explore cost support options. Remission can start with stelara®. Explore cost support options. Applebees new loaded chicken fajitas. Now only 10. 99. Hey i live on my own now ive got xfinity, because i like to live life in the fast lane. Unlike my parents. You rambling about xfinity again . Youre so cute when you get excited. Anyways. Ive got their app right here, i can troubleshoot. I can schedule a time for them to call me back, its great you have our number programmed in . Ya i dont even know your phone anymore. Excuse me . what . I dont know your phone number. Aw well. He doesnt know our phone number you have our fax number, obviously. Todays xfinity service. Simple. Easy. Awesome. Ill pass. Welcome back to street signs. Corporate news now tesco says sales growth slowed in the First Quarter of this year it blamed tough comparative figures for the same period last year when britain enjoyed unusually warm weather and big sporting events. The company said it outperformed the uk market which remained subdued. The uks former foreign secretary Boris Johnson promised to take the uk out of the eu by october 31st with or without a deal hes the bookmakers favorite to replace theresa may. As he launched his bid yesterday he warned Party Members that a nodeal would mean defeat. He also said its time for the country to come together now is the time to unite this country and unite this society we cannot begin that task until we delivered on the primary request of the people, the big thing that they asked us to do after three years and two missed deadlines, we must leave the eu on october 31st. We must do better than the current Withdrawal Agreement that has been rejected three times by parliament. Im not aiming for a nodeal outcome. I dont think that we will end up with any such thing british mps rejected a motion from the Opposition Labor Party that would have seen mps take control of Parliamentary Business in the future the measure would have given opponents of a Nodeal Brexit time to introduce legislation that would have blocked that possibility. In italy the Prime Minister says he is confident that italy will be able to address eu concerns and insisted the countrys debt will be reduced faster than even we expected silvia joins us from luxembourg. What can we expect from these meetings well, we can expect a general discussion about italy, the eurozone finance ministers are gathering in luxembourg. We should expect some detail when it comes to their demands for lower debt in italy. At the same time different sources told me we should not expect an official decision on whether to open an excessive deficit procedure. We mentioned this process quite often. So lets take a moment to understand what this means this is a step by step approach that will monitor whether a country is working to reduce its high debt or its high public deficit. And in this process the commission suggests ways in which by which the country with achieve that. And if theres no action by that member state that is when we talk about fines and potential sanctions against that member state. When it comes to italy, i have to point out that we are only at stage two out of 17 possible steps. So this means discussion about fines and sanctions is too early to be on the table what we expect from the euro group is just a general debate the italian finance minister will debrief the other finance ministers, explain his plan for the italian economy, and then the earliest possible date we could expect the finance ministers to step up their scrutiny on the i talian economy is next month when they gather once again in brussels the two things we should monitor are the developments in rome, the politics there, and the dynamics between the two deputy Prime Ministers and then of course Market Reaction last week the point was made that the Market Sentiment could be much more effective in leading to policy change in italy rather than european processes. You know there are plenty of issues to look at when we look at the eurozone economy, but also theres plenty going on in terms of Political Development in the aftermath of the european elections. Lets not forget that there are different discussions going on about who should be the next president of the European Commission, of the European Parliament so ill be addressing these issues with the Prime Minister of luxembourg within the next hour thank you very much we look forward to that interview. The Swiss National bank has kept Interest Rates on hold to ease pressure on what it describes as a highly valued franc. Joumanna bercetche joins me with more there were no major surprises about the rate hold, but did the team have anything new to say he compared to recent statements . Thats it, nobody was expecting them to do anything major on the Monetary Policy front. The