Threatens to escalate the trade war with china if a deal isnt reached. He says the deal is close but provides view details. Spains ibex is the worst performer. The party is still short of a parliamentary majority and tullow oil and the iea wants global demand. We are live at the ubs European Conference where well be hosting a global panel in about 40 minutes time. Charles plosser and peter praet, the former chief ecb economist good morning one of our top stories today, trump has called on the fed to cut Interest Rates to negative he resumes criticism of the Central Banks policy and insisted the bank has restricted the u. S. We are actively competing with nations who openly cut Interest Rates so that now many are getting paid when they are paying off their loan. Negative interest. Whoever heard of such a thing. Give me some of that our Federal Reserve doesnt let us do it later today, Jerome Powell is set to address the state of the economy to congress. The central bank said the rate cut was necessary to support the u. S. Economic expansion. Lets look at how banks across europe are fairing spanish bank santandar not performing well. Exposure in hong kong and deutsche down 3. 7 to make sense of some of this, dan scott is with us today is this about negative rates you would think so. I think in the rates perspective, it was clear that fed is open to the fact that it cant move or set rates in ice lake when europe is in negative territory. When japan is in negative territory, its clear the last 25 basis point hz to come. Now it is up to debate well get another cut before year end. We dont think so. We think in 2020, well get another 25 basis points. The economy doesnt need another rate cut of course, it would be skpeedent for trump to heat up the economy before the elections thats understandable but the u. S. Economy doesnt need another rate cut at the moment do you think it is rational for some of these asset markets to react the way they do to the latest of what President Trump may or may not make . Thats the world we live in now really held hostage by the tweets of trump. Trade wars and other tweets are the short term driver of the market at the moment lets talk about trade wars, there was no specific detail about a time line between u. S. And china. Weve heard Different Things last week about tariffs being reduced and ways to get to an agreement. How are you dealing with the announcement we spent most of the year risk off and having the positioning. We felt risk was to the down side if anything was getting worse. Since then, weve neutralized the position we felt that it looked like we were moving in a more positive direction and trump was getting into a situation where we were bringing a deal home the more the pressure was on him to bring things home from that perspective, thats what the market has been doing it has been trying to catch up look at the gains and trying to not miss out on this rally we have in equities had some of these highs and people like you looking at risk on we are nearer to a deal than we were absolutely. What keeps many out is the memory of q 4, 2014. Thats one thing that is still used as reasonable to underweight these markets. It doesnt make sense to overweight there still are a lot of risks out there. Growth is going to be lower in 2020 in 2019, we think the valuations are not as expensive you are talking about catch up in the u. S. china agreement. Tomorrow is the deadline into the carmakers to see whether there will be a decision from the white house or not it could be punted again how would you position yourself for tariffs on carmakers a big negative obviously, the u. S. china trade deal and weve been underweight and seen a troufing we have manufacturing data out of germany a positive dynamic at a very low level because germany has been in a manufacturing recession already this year. We are hoping the data starts to catch up with the positive consumer data in germany a negative call for Auto Industry would be bad for the European Union and german who also manufactures cars in the u. S. And exports them to asia the market thinks the extension to the time lane to this trade deal is going to happen. Well have to wait and see thank you dan scott with us here. Some investors hoped trump might announce a concrete deal with beijing he said the two sides were, quote, close to an agreement but he did warn of significant consequences if things fall apart. If we dont make a deal, well substantially raise those tariffs. Thats going to be true for other countries who mistreat us too. Weve been mistreated by so many countries. I dont blame them if you can get away with it my colleague is in paris with views some investors might want to hear. Here now with the secretarygeneral of the ocd with he were just talking about trade wars ocd mentioned that was shed about 1 of gdp in the world what is your view on that . Yesterday, he made a presentation at the Economic Club he said yes, maybe we are close to a deal. We are betting on that what can i tell you . The rate of growth of trade has come down from 5. 5 at the end of 2017 to basically flat. In fact maybe as we speak now, trade has gone negative. Investment as a consequence because of the uncertainty goes from 5 growth to 1 growth and slowing down further growth has dropped over a very short period of time this is why we are forecasting over a year ago. If we continue to take decisions over the problems of trade, et cetera, there are more tensions. Then the consequences can be even worse in the same speech, President Trump criticized the fed saying if rates were cut quicker and more, the American Economy would be doing better. Do you agree with that the question is that the American Economy is doing better this is why the out look for Economic Activity and inflation is higher and there for Interest Rates can keep pace with the out look one other thing one has to say is that today in a number of countries, the reason why there are negative rates is that the out look is very dire. Much worse than the u. S. Lets say the good news and the better economic out look will produce higher inflation and higher Interest Rates. When we look at europe, there is concern about germany and mrs. Lagarde said as so much Central Banks can do, is it time for dpe germany to draw its balanced budgets . The Central Banks are the heroes theyve been at the center of getting us out of a very rough patch. Interest rates are at zero or even below that means that there is only so much Central Banks can do Going Forward. When i mean governments. I dont just mean germany. I mean all the fiscal space that are going to pay less Interest Payments because rates are going to remain very low for many longer being looking at the equalities it was said, equalities is a time bond. It is a view from many people. Including jamie dimon. One solution in this debate was wealth tax do you agree with speaking of the French Economy that billionaires should be abolished and well distributed i think i was the one who used the word time bomb and said 10, 10, 10 the income of the lowest fits 10 times in the income in the highest 10 in terms of revenue. The problem is that one generation ago, this was seven times. We have gone from seven to 10 times in one generation. That means we are going in the wrong direction and very fast. The problem is of course moral, is of course ethical but it is very, very economic. The qualities are an obstacle to growth and also a very serious political problem. Look at all the elections and the results of the electoral processes. Look at the strife in the u. S. , in canada and europe, you have unexpected electoral results where even the most enlightened leaders cannot make the necessary decisions because they have these four or five Party Coalitions and they are so fragile and vulnerable. Are you saying a real crisis and recession would put in danger our market economy . A number of countries are growing flat i dont think we have a country that is growing negative today but certainly we have gone back to very flat growth. You mention germany. The uk is reducing to a low in many, many years italy is another you are talking about the largest economy. France is less vulnerable to trade tensions and investment problems because it depends less on these it depends more on domestic consumption and investment but what you have is a rather unprecedented slow down and then the problem is one bad decision, one big mistake can actually bring us under the line that is something we dont want to see we know what the consequences are of increasing the trade tensions why . Why do you invest . Why do you produce you produce to sell. If you cannot sell or dont know if you can sell at what rate or tariff, whether youll have a quota or no quota, then you dont invest you refrain. This is happening millions of times and this is why the economy is slowing down so fast. One final question. Ocd had the initiative on trade tax. Can you give us a consultation on how this is going last september we presented what we call the blueprint we expect by next january, well have all the elements in place and by june well have a road map. This is the idea we are on track. It is hard work. It is really the whole of the world that is going to agree on the final solution on how to tax digital. Thank you for joining us. And back to you there in london. Lets take a look at how european markets are getting on. You can see the ibex in spain down 1. 35 stay with us on cnbc welcome back to street signs. Shares in tullow oil, the africa focus firm blamed problems in the field in ghana saying the output there had not met expectations globally, oil demand will see a slow down after 2025 according to fuel slow down. But saying it will not peek for another 20 years the iea says under that scenario, average demand for oil will increase to around a billion barrels a day. My sedgwick is at t abu dhabi conference. This latest out look sounds focused on a guide for investors. What can be done to hit those 2014 Paris Agreement goals i think what is very clear is that everybody here gets it. This is as hydrocarbon as you can get in this planet producing a vast amount. They are one of the greatest trade fairs. They are looking at renewables the ioc, and noc and those people providing the services. Keep the lights on and two in the transition as alluded to talking about demand growth Going Forward. We do need to ensure the stability p Going Forward as we go through the transition. Talking very well about Climate Change also very important to add the barrels or equivalent of security over the next 10, 20, 30 years i just heard his excellency talking about the fact that net net gradually growing. I heard you talking about the tullow story from africa to get to 100 Million Barrels you have to produce a heck of a lot that will come off the table. What about in the short term what about the people on the planet who dont even have access to energy at the moment that is the other thing. I heard an interesting phrase called grown colonialism the west preaching green to a whole set of countries that dont even have energy supply. I mentioned that and had a panel and we were talking about barriers to getting everyone on the grid and getting them the supply they need the barrier is having a realistic look at what we need to do, capturing the low hanging fruits first, prioritizing our energy mix and trying to avoid burning coal for example when the coal price energy unit is almost equal to the gas or alternatives we should be logical in our choices. If the people select to go 100 renewable, we should not fight it if someone is wishing to go to that environment, that is fine with us. The growth and demand we feel is not a worry. It is going to be there. The worry is to fall into an environment of fighting fossil fuel where we dont have enough to supply the world and the world is not ready for that time we need to ensure that the investments is continuing as a pace that is required. We know the transition is happening. We know that more energy would be required in the future and we need to keep that balance. That is the biggest challenge or barrier. As the former opec president speaking to me a lot of pressure not the least of the december 5 and 6 meeting in vienna. It looks like the case that the tailing off the u. S. Production increases the opec slar of the market will increase ill hand it back to you coming up later, cnbcs talkg thinwi peter praet coming up at 10 40 cet. Robinhood believes now is the time to do money. Without the Commission Fees and account minimums. So, you can start investing today, wherever you are even hanging with your dog. Ooh, like her. Shes probably investing right now. Taking charge of her money, making it happen. Shes not going to be happy about that pillow. Its time to do money, so what are you waiting for. Download now and get your first stock on us. Robinhood. Welcome back. These are your headlines President Trump threatens to escalate the trade war with china. He says an agreement is close but provides few details about negotiations banks head to the red after trumps attack on the fed. He calls on the central bank to introduce negative rates give me some of that money. I want some of that money. Our Federal Reserve doesnt let us do it hitting back at trumps criticism and praises the work of Central Banks in years. The Central Banks are really heroes in the last 10 years. Theyve been the center of getting us out of a very rough patch. Interest rates are zero or below. That means there is only so much Central Banks can do and spains ibex is the worse performer in the world the two parties still short of a parliamentary majority weve watched some numbers out of the uk. The core output below 0 on the month. Still up 1. 3 for the year up 0. 8 on the year. We can see the core cpi when you strip out energy, food and tobacco, that is up 0. 1 for october. More or less in line with expectations cpi without those stripped down 0. 2 for the month of october. Against the reuters call year on year. Weve seen employment numbers call weve seen output stag nate slightly some may be hitting the call on the data some have seen the economist some parties promising major stimulus after the december 12 election thats following news of the government in spain the leading socialist party unexpectedly have reached a preliminary coalition. That happened quickly after the weekends election after the fourth vote and failed to produce a clear winner still falling short of the majority requires of 350 seats. The chief economist. Thank you for being with us. How long does this take for the smaller parties to get on board for the majority good morning. It is quite complicated. I think what the socialist party wants to do now is they have an agreement with the group that they can go to the other party that are closer to try to bring them into the table. However, it is true it is very difficult to reach the majority without the support of the separatist party that makes it truly complicated. It is going to be a process that the social party proves to be very short however, that is not devoid of the challenges and the outcome has shown is more divided and more challenging in terms of reaching long lasting agreement. Not just for the reform of the government but also and more importantly to improve a budget. For those that may be watching us closely, can you explain, is this a problem once again in terms of big picture in catalonia . Yes when you look at the different combinations of the parties, it is very unlikely that they reach majority to form a government without the support of the separatists and without the support of the bask separatists. In one way or another, it is going to be a difficult position for a government that may have to take what i would say is important positions relative to the positions in catalonia next month. There will be significant discrepancies and in the unified position and the socialist party has always held relative to more or inclined to the determination and independence as a separatist or a party have. You are talking about the political challenges if that is the route that the socialist coalition decide upon. There are political challenges why is the market reacting the way it is . Are there also going to be economic challenges to those parties. If you think about the Economic Program of the far left, what you can see is a very interventionist program in which they are demanding intervention in the Banking System and regulated activity and that affects any of the ibex companies and the internationalation in terms of earnings of many of them additionally, if you look at the proposals that have been signed or are very vague in the agreement, there is going to be a massive tax hike in order to demand Big Government spending programs i think those two things are the ones affecting the equity market we have seen the 10year Government Bond in spain spread versus germany widening despite the ecb stepping in at the beginning of the month i think all these things are putting a little uncertainty on a program that is very aggressive in terms of spending in a country that is already suffering from what the rest of the eurozone would see as significant down grades in terms of growth and also creation has been suffering in the past month. For context, the election in april was called because there couldnt be an agreement in passing the budget we are heading towards the end of 2019, is it possible spain goes essentially two years without anything being achieved . It is possible. In spain l