Embarrassing this country and throwing the election of donald trump. Lets make a deal. Vw shares get a boost after report that german automaker could be nearing a deal with the u. S. Justice department and shares of lufthansa over challenges to Earnings Growth. Good morning everybody. And welcome to the show. Very glad to be back and glad youre all with us for this hour. Still a new year for many of us. The stock share of 600 opening to slightly mix hadded this morning as you would have seen edging just a little bit lower despite the positive data from germany. A 2. 2 rise in the year to november. A 5. 6 rise in exports as well. That was quite a bit better than anticipated. In europe were still just moving a little bit lower. When it examines to some of the sectors and our main markets that trend is reflected in the markets. Autos bucking the trend. With regards to some of the auto sales figures looking quite perky. Basic resources higher and telecoms off by right around 1. 3 . Well be talking more about what broad band speed a little bit later on in the show as well. Its live tv but we fixed it, luckily. Very glad to be back. Happy new year to you. Happy new year to you. We were toiling it away last week. Lets talk about some of the auto news. The fbi has reportedly arrested a volkswagen executive. Authorities took in him in who led the Compliance Office in it u. S. , accusing him of defrauding the United States. His arrest mark as significant ramp up of the criminal investigation into vws emissions cheating scandal. The head of the volkswagen brand says auto maker hopes to settle the probe as soon as possible. Now shares invokes wagon heading towards the top of european trade but hitting the highest level since september of 2015. This after some of the reports that the german car maker is moving ever closer to the u. S. Justice department. And also hit almost 6 million vehicles up by 2. 8 thanks to significant grossing especially in china. Sterling is slumping after uk Prime Minister indicated that britain will leave the eu Single Market and seize rr not interested in keeping quote bits of the membership. May said she wanted to get a deal with the rest of deal to get better control of immigration. Its wrong to look at this as just a binary issue. As you have control of immigration or a good trade deal. We will outside the European Union be able to have control of immigration and set our rules for people coming to the u. K. From Member States of the European Union and as part of that brexit deal will be working to get the best possible deal with the European Union. The Prime Minister went on to say that she will be setting out her Brexit Strategy in the coming weeks and her brexit plan was muddled. While may admitted that the government had been taking its time, she argued that it is about getting a fair deal. And ja head of ethics strategy. Good morning. I wonder why does the currency market react this way . Because what we heard wasnt entirely new. Its not entirely new but its an afferimation of what she said in october when she started to amplify this presumption of a hard brexit scenario. And in a sense what were seeing now is that as far as sterling is concerned, its a battle between politics and theyre seen to be negative predominantly by markets and economics on the other where weve seen pmis. Consumer credit being very robust. This morning, Prime Minister may has really amplified and sterling is trading accordingly. Lets get back to the politics side for sterling. How long can she get away with not offering any major details on brexit and how long will the currency market give her the benefit of the doubt . Well, theyve stopped doing that and in a sense we have that clock ticking to that in march deadline if were assuming the government follows through with its word which goes back to that stop watch of Prime Minister may in october. And of course we have other variables at play. Were waiting on the Supreme Court judgment on article 50 as well. And clearly markets are looking for more information and whenever we get that from the government, or the Prime Minister and i think thats a distinction. There are different strands of government. But from the Prime Ministers perspective it seems the primacy of immigration control and thats a negative for sterling, and macroeconomic performance accordingly. We were at 145 before the brexit vote. Were at 121 and a bit. What do you think happens over the next couple of months . As you see the politics play out, its still going to be relatively challenging for sterling. Having said that. I think theres opportunity for that Political Risk to play out again. Back in the beginning of this year is reasonably encouraging and they will look to sell any sterling rally. Well see them examining under pressure against the dollar and i think we will see euro sterling continue to grind higher and once we get to 87 and a quarter, that might be the near term top. The long dollar, short sterling, given trump coming into office and we could be looking at strong dollar continue sng. I think the problem for the dollar side of the equation is i think weve discounted a lot of the good news and theres a lot of Political Risks still and well see how that plays out. Yes, we assume theres going to be oo fiscal expansion and tax cuts but how soon that impacts the economy is a mute point. One of the things is we see the dollar having a good start to the year but i wouldnt expect that to be extended and i think the fed meeting was in that regard and i think there is a presumption that allowing the dollar to continue to strengthen will mitigate the growth story in the u. S. U. S. Dollar up in the first quarter, maybe part of the second quarter, but i wouldnt extrapolate that trend throughout the year. A little bit disappointing on the headline number under 156,000 jobs created in the month of december. And the wages number is the best since 2009. How much further, because were close to 3 er that the fed would like to see. How much further can we expect the fed to talk up the economy to let them over heat it . In terms of the labor market, because of the resilience of the labor market and creation of jobs, we shouldnt expect enormous month to month increases. Its well in excess of the 100,000 required to continue to create jobs and bring down the unemployment rate. Were seeing signs of Earnings Growth ticking high and that cause as little bit of concern. I think thats one of the thing m themes that had been in play. Were starting to see that and thats one of the reasons i think the fed will be consistent of their mandate of looking to tighten policy a little bit faster than weve seen in subsequent years. I think a lot of that is already discounted in the market. I dont think necessarily that in itself is going to be the catalyst to see the dollar go up exponentially. I think thats still the case on the presumption the growth story is reasonably constructive. And weve seen a slight change compared to last year and i think there is still a relatively strong case as things stand now to play out in terms oof that three hike scenario. How are you getting home today . I do take the train so hopefully i wont be dependent on the tube thats not running today. London is set for potential travel chaos. Members of the tsa unions and they plan to close ticket offices on the underground. Theyve warned that the majority of underground stations in Central London will be closed due the walkout 6 00 local time tonight. The mayor of london called the strike pointless. Ive been looking on tweeter and people writing things like spare the thoughts for the tourists without the pick dilly line. Theyre 50 seconds apart. You can walk it. Very true and its not as cold as last week so shouldnt be so bad. I have to say its very irritating the strike but i like people to be at the ticket offices. Because when stuff goes wrong and you cant get through, theres nobody to ask. Mobile pay, whatever. Mine doesnt work. What do i do . Do i jump the thing . Do i walk to the next station . Always walk to the next station. Thats what ill do. Lets talk politics in italy. And grillo has ask writing that he has achieved its Political Goals and the group no longer has a common objective. Instead he has pushed for a new coalition with liberals and democrats. The former belgian Prime Minister has declared his fwrid the presidency of the european parliame parliament. Hes leader of the alliance for liberals and democrats in europe will compete with the European Peoples Party and geony putella for the post. A german vice chancellor has signalled his had central left democrat could form a coalition with the environmentalist in an interview, he said quote we dont want a new edition of the grand coalition. It faces an election in september of this year has been in coalition with spd since 2013 and they say they dont want be to in a coalition with mackles party and simply dont have a choice. Come election day and well see if the spd wants to be in power, they have to partner up and the story next is the election. Theres more to it. Gab real saying her fiscal policies could lead to the break up of the eu. Its raised serious Political Risks and contributed to the rise of poppialism in those countries and added that the idea of the eu breaking apart is no longer unthinkable. Former french Prime Minister has lost his lead over rival ahead of the countrys socialist primaries. A poll published showed the former minister is slated to win 52 in the case of a second round vote on january 29th, while a second poll published said montebourg would win 53 of the vote. The actress as usual, cnbc. Com and were all on twitter. You can tweet us directly of course. carolyn cnbc or louisa boysen. And its two years since apple revolutionized the iphone. Well discuss after this. With the xfinity tv app, anything with a screen is a tv. Stream 130 live channels. Plus 40,000 on demand tv shows and movies, all on the go. You can even download from your x1 dvr and watch it offline. Only xfinity gives you more to stream to any screen. Download the xfinity tv app today. Hi everybody. Welcome back. Youre still watching street signs. Mcdaonalds has sold a stake in its chinese business. Mcdonaldss retaining 20 . Lets check in on the broader markets out of asia. Singapore and japanese markets arent trading today. It closed for a holiday. Thats correct. Its the coming of age holiday in japan. So tokyo markets are closed and the main asian markerates probably pushing higher even though tokyo is closed. The shanghai composite up half a percent and we saw that the rally there was led by defense stocks as they continue discussions about mixed ownership as part of state reforms there and the yuan was in focus after the volatility we saw over the weekend. And the fs reserves down to 3. 3. 01 trilli as china continues to try to prop up. And lets take a look at the asx 200. The fifth straight day of gains. Financial and hairk stocks leading the way. And earning season gets underway. And the concern is that Prime Minister modys drive to ban the 500,000 rupy notes at the end of last year put a dent in consumer demand and had a knock on effect of corporate earnings. But were seeing corporate earnings season getting underway back to you. Thank you, very much. Now shares in lufthansa have been flying even higher as the companys trading out look disappoints. The stock hitting a two month low and unit revenue will fall. Good body Stock Brokers called the out look underwhelming and others saying Earnings Growth remain as challenge. And they were concerned that yields will remain depressed in 2017. And the u. K. Government has further reduced its share in the bank. David richie is stepping down just days after a profit warning. He missed its completion target. Financial director will run the business until a replacement is found. Shares are languishing at the bottom of the stock 600 after the german dialysis provider received a subpoena from prosecutors investigating the ties to the American Kidney Fund which helps patients pay for kidney dialysis. And hit by unexected football and horse racing results in december. The operating profit came in at 260 million pounds. Thats at the lower end of the guidance range. Dialogue Semiconductors Jumped by 5 according to the german listed firms preliminary results which showed full year revenue at 1. 2 billion. Apple ceo tim cook has taken a pay cut after it missed isz profit goals. His total compensation was down from the 10. 2 million he received in 2015. Im not sure we should feel sorry for him. Still a lot of money. But theyve completely changed the world and on this day 10 years ago. 10 years now, apples founder, steve jobs unveiled the companys very first iphone. And jobs announced that apple was reinventing the phone and from the last 10 years to the year ahad head now our next guest says Brexit Britain needs to super charge its broad band inf infrastructu infrastructure. Dave millet is a director at eq equinox and here with us this morning. 10 years since the iphone and its completely changed the way we look at the industry. And blackberry, 10 years ago. Hundreds of billions of pounds of turnover and now a fraction of that. So the world is changing. And that means we need these high speed broad band connections to work. Fiberoptic conctions to work. They dont in the u. K. , is your point. They dont. The u. K. s language is about 50th in the world for 4 g connection. Bottom in europe for fiber to the home. Fast super broad band going directly to the home. Were lagging well behind the rest of the country. Partly you could blame b. T. Because they focussed on Residential Homes not for connecting businesses. Trying to sweat their corporate assets. The government is far behind many other countries. I find it curious that whenever i land in south korea, you have 5 g and you land in eeth row, it takes ages and then its mediocre 4 g. But with brexit, is it possible that the gufrmovernment is goin neglect this even more because thats not on their list of priorities. If you look at hammers and nails recently, compared that with south korea. Now its 1. 6 billion to get 5g ready by 2020. And recently said the aim of the u. K. Was 2025. And its expected to reach 2. 3 trillion pounds by 2025. Is the u. K. Ready to have the internet as a daily part of our lives if we dont have the right infrastructure . Gardner said about 20 billion devices globally connected. Driveless cars, if you dont have good 5g, you cant have them. Nearly 8 of u. K. s road have that coverage. Its not just that. Augmented reality. We all got caught up in the pokemon craze last year but theres many business applications. Youre looking at a house, the floor plan could come up and you can look lat of that. You do need that connection if the internet is going to take off. Had hin my small flat i decio dedicate an entire room to an office. Its an office. Set up the office, etc. , etc. No internet connection. Its not stable enough for me to use it. So i have to carry my laptop into the living room every single time. Its ridiculous. But just because theyve announced measurers, its going to take a lot of time. And thats setting an ambitious time scales. If you look around the center of london and not just london. There is just no fast broad band unless youre prepared to pay top prices which hurts small businesses. So if youre looking at the attractiveness of the country, why cant you play 50 pound when Money Companies are having to pay 5 or 600 pounds a month. You say Free Services like whats app. It enables people to talk abroad for nothing, comparing that with roaming. Theyre going to lose their roaming revenues later this year. So the challenge for many of these services, really unless they have media content as part of their revenue stream, theyre going to start seeing pressure from these free to air services. Thank you very much. Director at equinox. Remember the time you thought twice before calling somebody abroad because it cost money and now you just do a whatsapp call. And i believe june or july of this year youre not going to pay roaming in u. K. Huge. And check out World Markets live, our blog that runs throughout the european trading day. We will be back in two. Dont go away. Welcome back to the show. Yes, youre still watching street signs. Im louisy and your headlines this morning. Teresa may has no plans of keeping a bit of eu membership. Donald trump accepts russia conducted Cyber Attacks during the u. S. Election but says only stupid people would question closer ties to the kremlin. He wont punish moscow. They attempted. They did not succeed. They did not succeed in embarrassing the country and throwing the election of donald trump. Lets make a deal. Vw shares get a boost off the report that the german automaker could be nearing a deal with the u. S. Justice department. And ridsing fuel costs and challenges to Earnings Growth. And lets have a quick look at the currency markets and a pound against the uks dollar. This is on the back of teresa mays comments saying that they would britain would leave the eu Single Market rather than trying to keep bits of the eu. Those comments are not necessarily new but once again theyre a stark reminder of where britain is headed. We saw a fairly strong u. S. Jobs report. That was below expectations but wage growth was the highest since 2009 and thats epihhelpi some of the u. S. Dollar. And were seeing the ftse 100 up by 0. 3 thanks to the weakness and pound sterling. Elsewhere some profits being taken. The ketra dax despite the fact we saw better german industrial n