in finding a path of the budget which is sustainable that in italy is high. >> do you think italy is taking the scandal with european officials because italy is not first one to break budget rules? they're not the first one to go down this path of ignoring the budget discipline. do you think they're saying others have not been punished, that perhaps the eu is bluffing and they simply won't be able to punish us because we're too bill to fail? >> that's -- hopefully not there is a limit to -- and it's a risky gamble on top of that, italy has a high debt so i think it will not be good for the markets, for the credibility. there is a tension between the commission, european union and italy. what happened in the past has been excessive and created moral hazard hopefully, you know, we see this with brexit also there is a tendency for the rest of the union when you have somebody that tries to depart so strongly or to confront too strongly europe as a whole, then the other countries unite. >> right >> so there is a risk of italy getting into a corner. so i think the dialogue is the only way

moscovici has an eye on markets outside of italy. commentsrence -- the of not seeing contagion risk, i think he is saying that was fingers crossed behind his back. there has been a lightning in spreads -- widening in spreads over the last week. there are spanish factors at play. it looks like spillover from the italian markets. was this only an italian concern? keep the wants to focus on italy but it is broader than that. vonnie: i want to broaden things out a little bit. we don't want to downplay the move in italian market, up .5% now. tell us about things you like at the moment. what markets are you nibbling at? we have a preference for european equities from a regional perspective. that has been a possession that has not enjoyed the strongest of tailwinds. but on a valuation basis, we think they are likely to perform over the medium-term. moving away from the equity space, we have been looking at the discount building emerging market fx and sovereign debt. it looks interesting to start nibbling at. the broader picture would be we

the same feeling in italy. i can say from the side of, for example, migration, there's a significant difference for example, migration, there's a significa nt difference between for example, migration, there's a significant difference between italy and uk. the uk... people are very mixed with each other and there's no comparison with the delete. one must question, a lot of people of race. why is populism seen as a negative? do you see it as a criticism that somebody is populist?” do you see it as a criticism that somebody is populist? i think the term started in a negative connotation but a lot of populist would actually be very proud of it. i think salvini himself... he likes it. he likes being called a populist because their message is we are the people as opposed to the elites... yes, i think it is a classic example in which our terms shift as com pletely in which our terms shift as completely meaning depending on who's using it. i am afraid we have to do it off the television because time is up. thank you

you have been doing a lot of work on italy. let's talk about italy. it does seem to be moving the market. call me nerves in the markets. you think that is the right move? >> i think it is the right move by the reaction has been excessive. i'm not sure we will sustain a long-term reaction. it is positive the italian government has reacted to market threats. uptick for euro made sense. they are showing a lack of understanding of the gravity of the situation. adjusting the target, it is too late. a worrying stage for yields, they start triggering a kind of negative spiral and become self-fulfilling. i am not convinced this will be sufficient to put the italian debt to bed. ec -- is thethe largest risk to markets. does that sound the markets they could step away from? makes it very difficult. october was the month they were scheduled to cut their purchases. worrying.htly not guaranteed to head scenario.oom if officials do not understand the gravity, this could get out of hand. ying is particularly worri is the fact that many of the way measures are about

is flexing its new muscle by shooting down italy's controversial budget draft but does italy care and will the markets have a say over the country's growing deficits. and could tonight be your lucky night most likely not but someone has to take home the biggest u.s. lottery jackpot ever we'll tell you how much. i'm stephen beers with your business report the u.s. is facing pressure over its arms deals with saudi arabia following the killing of dissident journalist the us president donald trump says the stakes are too high to cancel the agreements but the actual figures that is the amount of money and the american jobs they create are hard to pin down. intent on protecting arms deals and economic ties with saudi arabia president donald trump has so far rejected sanctions she's normally only too happy to impose. but i would prefer that we don't use retribution cancelling one hundred ten billion dollars worth of work which means six hundred thousand jobs but as the global outrage at the creatures keep killing mounts so to trump's numbers. i don't want to lose the big. i don't want to los

i don't think that they will junk italy. it's something which investors will be watching pretty closely. atimately, it will be measured response. manus: does our risk increase with the taper from the ecb? it has been the backstop in for those peripheral nations. is that the risk we are under assuming as we travel through taper? good point.ly we're in a shift right now whereby the ecb clearly is winding down its net bond purchases. 2015, the ecb has been buying more than the italian government has been issuing on a net basis. that's a pretty powerful backstop. premiersome risk increase, some spread widening across other assets within the euro area, it is warranted as part of preparing for the ecb winding down its qe program. in your conversation with clients and investors, what are they most worried about now with italy? >> there are some concerns about contagion, not only to other broadlys but also speaking italian assets. worried about what this means, does this mean the risk of default has gone up for italy? does the risk

italy is in the e.u. to stay that's the message of prime minister josep a contact who says his country won't leave the european union but that it will stick to its deficit hike that's despite criticism from brussels conti argues the economy needs a lift of the blocks biggest member state germany has warned rome to be careful with debt and moody's has recently cut italy's credit rating. italy's prime minister has defended the deficit busting budget insisting his country needs a new approach to stimulating the economy because previous efforts have failed in the second quarter growth slowed to its weakest pace in nearly two years in. the middle of a big market draft as well constructed and well formed the provisions for growth are very good in respect to what we are doing at the moment. he has pledged that next year's deficit won't exceed two point four percent of g.d.p. but that's triple the previous government's forecast the italian leader said it would fall below two percent by two thousand and twenty one

a huge drama happened yesterday in italy. let's take a look at the markets and see how they are bouncing back. we have gains on the major equity indexes. france is up and england is up. but spain is down and germany will change. this is bloomberg. ♪ ♪ matt: let's get your top headlines. chinese markets rally in late trading as the country's top regulators promised to control risk in financial markets. coal markets in europe are up. hity-germany bond spreads the whitest in more than five --rs after italy the sizes criticizes the budget. and president trump says missing journalist jamal khashoggi is likely dead and warns of reprisals after steve mnuchin withdrew from a conference in riyadh. good morning. this is the european open. i am matt miller in london. presentation to investors in oslo. this stock up. this software stock up. let's look at the downside. thee are the losers on stoxx 600. this french computer stock down. and this stock down after warning on margins in their construction business. 6.8%.y michelin,s o out

now moving on to italy. italy is in the eu to stay. that is the message from prime minister giuseppe conte day who says his country will not leave the bloc. he argues the economy needs a lift. germany has warned rome to be careful with debt, and italy's credit rating has been cut. reporter: italy's prime minister has insisted his country needs a new approach to stimulating the economy because previous efforts have failed. in the second quarter, growth slowed to itsts weakest pace in nearly two years. >> this budget draft i is well coconstructedd and formed.d. the e provisions for growth are very good in respect to what we're doing at the moment. reporter: he has pledged that next year's deficit will not exceed 2.4% of gdp. but that is triple the previous government's forecast. the italian leader said it would fall below 2% by 2021 and guarantee the national debt to gdp ratio would decline. he also dismissed any suggestion that italy would leave the eu or the eurozone. >> for italy, there is no chance, no way, to get italexit. there is

italy escapes junk rating. the stock market risings after moody's put the country in a stable territory. the international backlash grows against saudi arabia against the death of jamal khashoggi. ♪ francine: good morning. this is "bloomberg surveillance.

on the one side, italy has sound economic fundamentals, but because of the dimension of its debt, italy is quite vulnerable. but on the other side, europe as well, one third of the italian debt is held, so third of the italian debt is held, so that means around 4000 billion euros. an eventual run of the italian debt would imply large losses for investors abroad, not to say about the consequences for the euro. so i think there will be a negotiation around the timing, the design and implementation of the fiscal expansion. it's been really good to talk to you, thank you for speaking to us. the clock is now ticking, as sally said, for the third largest economy in europe, and they have until noon today to get that revised plan in. i wonder if the italian budget clock is on the wall next to the brexit clock on the walls of the european commission! let's take a look at some of the other stories making the news. investors around the world have pulled $650 million in funds from saudi arabia's equity market over the past week. that's according to the financial times. that trend may continue in th

chzech republic and italy was double or triple a and italy is triple b and itathe basic make o economic strength of our country is so much stronger than anyone else it's a game in itself. >> we have to bring in the latest on brexit we'll come back to your conversation in a minute theresa may is going to tell parliament that 95% of the brexit deal has been agreed. addressing mp may will attempt to demonstrate that the government has made progress on brexit talks despite recent setbacks they will confirm that the u.k. has settled many issues including security and the future of gibraltar adding, quote, the vast majority of the agreement is now clear speaking to cnbc they explain the agreement between brittain and the eu over the status of the u.k. territory post brexit. >> the protocol will be between the united kingdom and the european union, not between the united kingdom and spain it's an annex to the withdrawal agreement. it will set out how gibraltar will form that as you know, gi brbraltar has h different status, a differentiated membership which called for a differentiated process

coming up, italy rattles european markets. investors concerned about a proposal to increase budget deficits. we will take a look at the impact on italian assets and the euro next. this is bloomberg. ♪ shery: this is "daybreak: asia." i'm shery ahn in new york. haidi: we're told italian assets are under pressure amid concerns of the populist government. the dollar pushed hires while emerging markets slid. we looking at italy as becoming something of a proxy threat, particularly for emerging markets this point? >> italy's main problem for emerging markets is its impact on the europe. it is emerging-market currencies versus the dollar tend to follow the direction the euro moves in versus the dollar. italy has hurt the euro, pushing it down to this mid-115 type of level. that has moved the dollar stronger versus emerging-market currencies. if italy has an issue and this italian war on the eu continues, and it suppresses the euro-dollar further, it will put upward pressure on the dollar versus other emerging-market currencies, in

it doesn't mean italy is going to drop out. i know you cover investment grade, but are there better opportunities in investment grade or high-yield? the sub investment grade space, particularly loans. you have a floating rate asset class. much in thehad as u.s. market. in the area to look at. investors are looking at at the moment. juliette: you are talking about brexit. don't forget the irish in terms of the hard brexit. sticking point at the moment in terms of the brexit negotiations. what happens to that border. they want it to be as open as can be. opportunitieshe for the u k to stay may be bit closer to the eu. these are interesting negotiations. nejra: we are seeing lots of headlines coming through. netflix, just one example. something like five deals pulled in the last few weeks. u.s. a more opportune market at the moment when it comes to credit? >> you have had volatility in the market. even if you look at u.s. issuance, it has called down -- calmed down. is an interesting one. they had results and they were better than

italy is tested. italian debt could be seen as too risky. ♪ manus: welcome to "bloomberg daybreak: europe." cash bond traders are back at their desk. this is how the bond market looks. 250e waiting for over billion dollars worth of supply. worste looking one of the routes in the bond market since 1976. the merrill lynch index. this is ramping and boring throughout the bond market -- rampant throughout the bond market. will the u.s. go for a currency manipulator on china? you see the strongest running streak since july. anna: good morning. they have just had their lunch break over in the shanghai markets. a little stronger after the lunch break. what a change from yesterday, where we saw a lot of selling by foreign investors in particular. lot k to focus here on -- of focus here on the offshore yuan. we understand treasury secretary mnuchin is under a body of pressure.- lot of 3.5% was breached by the italian 10 year yesterday. that as it to watch opens up today. we will hear from the finance ministe

italy has a lot of debt but they owe it to italian banks. but italy is a much larger economy. italy leaving the eurozone or hinting at leaving the eurozone is a much bigger event it's not something that the eurozone would be able to sustain. so, you know, even a hint of italy saying we've had it with the rules coming out of brussels, we don't like being told what to do, that's a larger situation. it's not necessarily a financial contagion because it's much more contained, the banks are better capitalized, but it's something to keep a close eye on it's one of those things that unwinds over a much longer period of time than necessarily what we typically are looking at things that happen over quarters this is something that happens over-years it's the tip of the iceberg, if anything upsets the apple cart in the eurozone and make that experiment not go well, it could be italy not being impressed >> i could not upset your apple cart i tried to throw you under the bus with the italy thing, couldn't do it art hogan, thank you very much. >>> a big upgrade to tell you about that follow

onto italy. we are not man and we're not been a soweto appeared this is the head of the lower houses budget committee. he added the populace government has no plans -- joining us now is the deputy director from brussels. thank you for joining us. anxious markets so about? >> i think they probably are. tore has been a agreed number that will be consistent with the fiscal policy. anything from this is reason to worry about. the numbers are small. they are not insignificant. they could really cause a problem, because the problem is that the deficit. it is the debt. have you bring the debt in a position that will help italy recover? this is the issue here. any deviations on economic terms can be quite detrimental for italy. beyond the economics, i think the importance here is the symbolism. how does a country like italy go against the commission? we are in for possibly a fight between them and the question is how it's going to end. francine: when i spoke to the , he may, is about the euro and he said

also coming up tonight italy's debt spending has to stop the european commission today rejected italy's budget for twenty nineteen sending a signal that e.u. countries must keep their spending in check and scientists here in europe say they've detected plastic particles in human stool samples proof that plastic waste has now reached the top of the food chain. it's good to have you with us the worst cover up ever those are the words of u.s. president donald trump describing what he says was a bad plan by this all these to kill critical journalist jim all. his comments followed a speech by turkey's president read. the one today saying that his country's investigators have determined that she's brutal killing was meticulously planned with all wise on saudi arabia and any involvement that its leaders may have had in the killing crown prince mohamed bin solvent resurface today in public for a key business meeting. satisfied was the word crown prince mohammed bin solomon used to describe how he felt at the high profile future investment initiative conference in riyadh. despite the prince's sm

italy should be flying. italy should be doing very well. an institutional setting that is not allowing it to breathe. that is correct. there is a fundamental difference between italy and greece. i was prepared to take negotiations to the bitter end grexit if it was the only way. i did not want to get out of the eurozone. i am a european us. tos a great wish disintegrate the european union and for them to get out of the euro. insisting onment policies that don't work in italy are bring in the european union closer to disintegration. david: is the eu really willing is an that risk and there theoretical possibility of sanctions. given the fact that italy said we are willing to withdraw, does that mean they are calling the bluff and saying you're not going to really hurt us? yanis: not yet. fruition a fewo years from now. .urope is the birthplace there is this process whereby the government goes to brussels for approval. brussels would say no. they will go back to rome. they will go backwards and forwards for many months. russell doesn't have a

is unhappy with italy over its big spending plans brussels says it is being blackmailed. that story and all of your business headlines with them for the one coming right after. the. time for an upgrade. our furniture there grows old by. a house with no. poor design highlights you can make yourself. trends tips and tricks that will turn your home to something special. upgrades yourself with d. w.'s interior design channel on you tube. is known as. you know the banks. and so was the language of the bank. speaking the truth global news that matters g.w. made for mines. saudi sordid investments sophia rain is economic reputation is under question following the disappearance of a prominent journalist. and brussels braces for a contentious trask's budget from rome it promises to new heights on the debt front the european commission doesn't like it what about the monkey. i've been physical and let's do business in use just in u.s. president donald trump says he's sending secretary of state might on peo to saudi arabia immediately he's making selman of a missing dissident journal

but today we start in italy. the italian government could be on the fast—track to a spectacular showdown with the european commission later. it's all because of it's spending plans. like the other 18 eu countries that use the euro as their currency, it is due to submit its 2019 budget plans to brussels today. but there's a problem. the coalition government — which came to power earlier this year wants to spend more — it's promised a boost to infrastructure spending and welfare payments and lower the retirement age. too good to be true, many say. the eu and imf are already warning these plans are unaffordable and will only add to the government's $2.6 trillion debt pile. that's more than 130% of the size of the economy — in the eu only greece has a bigger debt burden. investors are worried that number isn't coming down and the government won't be able to afford it's debt repayments so as you can see the cost of borrowing has been rising in recent weeks. and that graf says it all. sally... federico santi, e

italy's debt now 132% of g.d.p. which means it's worth more than what the whole economy produces in a year. it's also the second highest in the eurozone after greece. anchor: real budget battle on their hands. got it. how is that affecting the stock markets? reporter: we have italian shares in the red today. but investors had largely priced in that move from the european commission. so not much -- too much to upset the european markets. you can see gains across the rest of the european markets. we're keeping an eye on shares in the british bank barkley. on the currency markets, euro trading for just under $1.15 and sterling has take an dip over the latest brexit uncertainty. we're also keeping an eye on the price of oil today. slumped sharply on tuesday. the benchmark international brent crude down again today. it was almost at $80 a barrel just two days ago. $76 a barrel now. we've seen the price stabilize for now at least. anchor: italy's competition authority has made landmark decision about smartphones. reporter

now to italy. the mayor of a small town in the south of the country, a man who became a symbol for welcoming migrants to italy has been placed under house arrest for allegedly aiding illegal immigration. our rome correspondent covering the story for a spirit she joins us from rome. give us the details on this things --it >> everyone across italy's is asking how is it possible that the mayor of -- come of this tiny town, domenico lugano could be accused of crimes. after a lengthy investigation by the police, they have accused him of aiding and of aiding illegal immigration, promoting marriages, and misusing public funds for the allocation of garbage contracts in this town. he has been a hero for many people, not only in italy, but around the world. he was named by fortune magazine as one of its top leaders in one of -- just a couple of years back. he has rebuilt what was essentially a ghost town, one of these towns where many people emigrated abroad and had a dying population. migrants whowith reene

has a lot on its plate i ask craig elam senior market analyst at wanda in london whether italy is too big to fail well i think they would certainly have to. support the economy because the alternative is that italy with actively have to tumble out of the euro out of the you and i think that be far more catastrophic and even more dangerous than the u.k. voting to leave so i think the alternative would be that they have to throw in their support the question is how they do so this is effectively what the program from the e.c.b. was created for. all markets in struggling economies but that would mean a bailout program it would mean more imposition from brussels not less on the question again is would the italian electorate vote for. there's also no solution in sight for an orderly breakfast if you're already said that italy dropping out of the euro would be worse than break state but after sunday's talks failed the e.u. now seems to prepare for a no deal breaks it and we've seen that the pound is or and ready under pressure how is the u.k. financial world preparing for such as an aria. w

commission rejects italy's budget due to the country's rising debts we'll have a look at what happens next between brussels and rome coming up in business with ben fizzling and also you're going to the top of the hour. time for an upgrade. our furniture that grows all by. house with no roof. or design highlights you can make yourself. against tips and tricks that will turn your home to a special. upgrade yourself with d w's interior design channel on you tube. every journey begins with the first step and every language with the first word published in the cook. recoat is in germany to learn german why not learn with him it's a simple online on your mobile and free shop d w z e learning course nico speak german made easy. after. a showdown between brussels and rome italian populist say they're not backing down on plans to triple spending e.u. projects its budget plan in a euro zone first. and us judge upholds a verdict finding by as one sound so liable for failing to warn its weight killer can cause cancer. and more foreign investors flee pulling out of a key investment summit in saudi

just one notch above junk status a credit ratings downgrade for italy of one of the markets wide and one of australia's last piano makers adds a full two walk to his latest creation but will the instrument keep an age old craft alive. i've been physical and let's do business just about everyone's bailing out now the saudis a struggling to get their international summit up and running. siemens chief executive joe kayser is the latest to pull out of the future investment initiative following the killing of journalists. the german engineering giant is one of the last companies to decide against sending its top executives to the posts in the days that many companies including j.p. morgan and ford had canceled as well as u.s. treasury secretary stephen moved. to give a response to this story from pocas blitz a financial corresponded frank but how. is this going to have knock on effects i mean we're talking about just one called friends but is this going to have no one affects on the economy as a whole for saudi arabia. a lot of people are not going to want to hear this but it's probably g

you're watching news still the comp italy's banks are in trouble again while growing the e.u. are at loggerheads over government spending now moving since downgraded the country's credit rating to one notch above junk status. gardell first has that story and also in business headlines coming up in one minute. i'm not laughing at the gym i just sometimes i am but most of the things which are the result of mistakes deep into the german culture of looking at the stereotype the question but if you think you see from countries that i now know. you know you did see me take from his grandmother. you know it's all about a new i'm rachel join me for me the gem from d.w. . post how about taking a few risks you could even take a chance on work. don't expect happy endings. as roman brussels are at loggerheads over the debt movie no sound it leaves government debt to just about junk status but markets trot off the downgrade as long as it doesn't get any worse. dryness as some of the profits were down as a result of expensive fuel and crew strikes and it faces criticism of its handling of a

also italy threatens to close its airports if germany goes ahead with rumored plans to send back migrants break knotting the debate over how to fairly distribute asylum seekers across the e.u. . and in m.m.a. scandal russian mixed martial arts fighter of their mum got me out of that face disciplinary action after his title fight victory over i are superstar kind of mcgregor and that and a mass brawl. a very warm welcome to the program from all of us here at r t h q in moscow thanks for joining us for your global news update this hour. polls in germany for both arias upcoming regional elections don't look good for merkel the chancellor is a key coalition ally the c.s.u. looks set to lose significant ground for the first time in decades the c.s.u. is projected to garner less than forty percent the greens are predicted to double their seat in the bavarian parliament all right wingers the a.f.d. are set to make their debut and as artist peter oliver explains this could have serious ramifications for the balance of power in berlin. this coming sunday angulo merkel's coalition partners and sist

just one notice above junk status that's not a nice place to be a credit ratings downgrade for italy but why aren't the markets wired. a new study shows developing countries a woefully underinsured for natural disasters. and gibraltar's border with spain a walk in the park. for workers things could get tricky post breaks it. i mean physical and let's do business and where starting with some breaking news siemens chief executive joe kayser has just announced that he will not attend the future investment initiative conference in saudi arabia following the killing of journalist john mica shockey the german engineering giant is one of the last companies to decide against sending its top executives to the davos in the days it many companies including j.p. morgan and ford had previously pulled out of the event as has u.s. treasury secretary statement. italy is here to stay prime minister because he says his country won't leave the european union but that it will stick to its deficit hike that's despite e.u. criticism he argues the economy needs a lift biggest member state germany has warne

it's four months since italy's new government was sworn in. the populace coalition swept to power, saying they'd end poverty. they promised tax cuts, better pensions and new social welfare policies, all of which come at a cost. and now the d raft of which come at a cost. and now the draft of the budget to finance those pledges has put the country on a collision course with the eu. it says italy's proposed government spending is too high, and the country's public debt breaks eu rules. translation: country's public debt breaks eu rules. translationzlj country's public debt breaks eu rules. translation: i have three questions for the italian government, how will it pay for the new measures? who will meet the additional costs? and how will be debt be reduced? italy's plans would set the budget deficit and 2.4% of gdp to allow for greater spending. that's actually below the eu's deficit limit of 3% of gdp, but the country already has huge debt. it currently stands at 131% of gdp, second only to greece. and its memories of the greek crisis that hang

within italy there is some sense that european institutions are against italy, the italian economy. this is very much related to the problem of immigration. in the italian government is thinking about the next european elections. they hope that the balance of power within european institutions might change in the next spring, and i think there might wait for that. we shall wait as well. thank you very much for joining wait as well. thank you very much forjoining us. there has been another angry exchange between the united states and china over trade. this time, beijing has hit back at the us secretary of state over his suggestion that chinese involvement in developing economies doesn't always help the local population. our asia business correspondent karishma vaswani is in singapore. nice to see you. so what is this latest twist? well, sally, if you needed any further evidence that the war between the us and china is not just a trade war, you really don't have to look any further. it looks like it is a war on all fronts, frankly. this time we are seeing strong words on chinese state

benjamin: italy is clearly a concern. when i talk about europe, i talk about european businesses and many of which operate in emerging markets not just in the health markets. italy is a destination for --panies that are italian italy as a destination for companies that are italian is small. i do not have a particularly differentiated view on italy. it does serve to reiterate the point around value and valuation. we are in an environment where some of these highflying stocks to not reinsert -- reassure on growth going forward and they are getting punished. we talk about emerging markets recovering and that is a little bit of a value trade. we have seen some of those situations before in recent years. it tends to have been relatively short-lived. i'm thinking the 2016 trump rally, if you will. in a higher interest rate environment, in an environment where consumers are not judging by the american express numbers, they will feel the pinch. i feel they will with amazon raising wages. that is going to bite the u.s. consumer wh

italy. valuations are also not that high >> i think we have not seen the valuations in italy to come down to a leveli ieyet where they reflect the risk from a more political perspective. overall i would say we continue to be a little cautious. >> he also explained how mucho an impact brexit uncertainty has had on his company's outlook >> what's affecting our business decisions is the uncertainty around brexit and we don't know what form it will take and how it will be implemented that's something that in all of our portfolio companies we're looking at it's something we're looking at for ourselves, how can we distribute our products throughout europe if we're headquarters in the uk there's a lot of uncertainty today that our industry faces what we're looking for is certainty. today we don't have that >> if you now look at political risk versus economic risk, which is bigger in your view >> no question political risk is bigger >> let's look at the recent selloff and whether you think this is l

italy's real per capita g.d.p. is now lord and the euro while the euro zone experiment began in two thousand in one thousand nine hundred eight even greece has actually registered some growth but italy hasn't while this supposedly populous politician say that your hasn't delivered for italy don't they actually have a point that's why they won the last elections yes they have a point the people the general the people they feel to be who are concerning the chase power and but the problem is that in the last years we were affected by a huge world economic financial crisis and we had also to to put that in that would compare isn't we the european crisis that we had after two thousand and five when the european constitution was rejected then we had the huge prizes india little zone no we don't really we do not really have a lot of resources. to deliver to deliver to the defense was to do to the to the military is as we may say and maybe often later this month the european commission may take an unprecedented decision of

let me start with italy with you. how is this playing out in the wake that you look it european credit? >> european credit as a whole has suffered from the italian and now you have stress and tension. that's all in the price. there has been summary pricing. there are still opportunities. one of the sectors that has been financials, whether it is because they have debt with turkey, whether they happen to be italian investors, there are good companies there. they are being punished because of the fiscal risk. manus: they are being punished. to what extent do you want to pick up the credit from the bank side? it is about the bank credit. let's have a quick response from the mliv team. they have their question of the day. does the italian debt crisis only blow up if the country's credit rating is downgraded to junk? ofwill take a cacophony rating agencies to go to junk to make an impact on the ecb. would you agree? how would you answer that question today? to be honest, italy has been trading with some stress anyway. if w

liefgreen you, dan joining us out of italy. we have three minutes to go until the european market close this afternoon. this is how the majors are trading. a negative session for most european markets today. this is bloomberg. ♪ ♪ guy: 30 seconds until the clothes -- the close. the ibex trading down. italy has actually recovered. is lee in gray, the italian market rallying into the close. let's talk about were btb spreads are. that is the situation. we see this pickup in the bones btb spreads -- the months -- the bunds btb spreads. let's show you where the main at,ets are and look exactly what is happening at the stocks we are focusing on as well. we were talking to anna bolton earlier. she was talking with francine lacqua. siemens down 2.85%. about the main markets finish. thell be able to show you ftse and the banks. it was the cat that came under the most pressure today. it has lately been outperform them because the luxury sector has been doing reasonably well. and terms of the other functionalities worth paying attenti

one factor is what is going on with italy right now. italy, there's no plan b. destab il -- how destabilizing can this be? unprecedented compared to the previous [indiscernible] we are talking about .6% deviation. guy: their point will be that very few countries in the past -- have done it with the debt burden that italy has. not at risk of having an unstable bond market -- bund market. --eisa ali is vulnerable italy is vulnerable to what the government is doing. being announced would amount to 5% to 6% gdp fiscal expansion. if investors are looking for an opportunity to sell, this is a minister that could trigger it. : if the european union union allows us to go ahead, other countries would be demanding as well, especially er countries. the french have already said they will do the same. we are wondering how much solidarity there will be between 10 she's in the end. it is not the year -- how much solidarity there will be in the between countries. it is surprising to see such a big market reaction to these stories. we have a populist government in place that nee

europe still going to fall apart because of italy's big budget a promise from italy's economy minister he says substantially raising the deficit will boost growth not date. diesel gave fumes a go for audi as german prosecutors slap an eight hundred million euro fine on the german comic for emissions cheap. and the business world won't pull allan how the microsoft co-founder used his vast wealth to pursue his passion and ambition. amid fizzle and let's do business european commission president. says italy must stick to its commitments rome managed to get its dropped budget in on time by midnight last night along with all of the eurozone member states but the commission's been warning italy's proposed deficit represents a significant deviation from its agreed economic path the populist government wants to stimulate the economy with a spending hike of thirty six point seven billion euros next year almost two thirds of that will be funded by a higher deficit a much higher defense at that is two point four percent of gross domestic product all the programs it wants to fund sound nice raisin

debt spending hasta stop the european commission today rejected italy's twenty nine thousand budget sinning a clear signal that each country's must keep their spending in check and campaigning with donald trump at her. you follows the republican senate candidate in the state of arizona a race that republicans need to win to keep their own razor thin majority in washington. it's good to have you with us tonight we begin in turkey reports say that investigators are checking whether items found during a search of these salty consulate vehicle belong to journalists. now can show he was killed two weeks ago inside the stamboul compound turkey's president. today shared some of his country's findings in the. investigation saying because shelby's brutal killing was meticulously planned with all eyes on saudi arabia and any involvement its leaders may have had in the murder crown prince mohamed bin solomon resurfaced in public today for a key business meeting take a look. satisfied was the word crown prince mohammed bin solomon used to describe his mood at the high profile future investment

turkey has questioned the saudi royal family's connection to the istanbul killing also coming up tells italy to get in line and the european commission has rejected at least twenty nine thousand budget brussels is sending a clear signal to the e.u. won't accept a drastic rise in debts for its member countries. it's great to have you along i'm leyla iraq the saudi royal family has been improper embroiled in controversy since journalist from official she was killed earlier this month in the saudi consulate in istanbul as the high profile future investment initiative kicked off in riyadh crown prince mohammed bin some on has made a public appearance he told reporters that he was satisfied with what he saw despite that several international companies have stayed away in protest the saudi government has admitted it is facing a quote crisis because of the controversy earlier king solomon and prince muhammad received kushal she son and brother in riyadh were there too or else express. their condolences radio reports infrastructure use son has been banned from leaving saudi arabia. and earlier turke

italy and spain often are compared. let's take a look at what is happening in terms of the individual stocks and names that we are watching. wirecard under significant pressure. this is the tech company that took over in the dax from comments bank. obviously a significant step in the landscape. this is a stock increasingly being shorted. it is trading down 11% today. we were talking about the aluminum market. hydro up higher by 3.9%. to want to bring you some of the italian banks. bpm trading down today by 5.8%. let's find out what is happening with the u.s. markets. the bond market is closed, but there is still market action we need to pay attention to. >> we do have the equity markets open in the u.s. unlike europe, we have to clients for the major averages. you can see the tech heavy nasdaq is underperforming, down about .4%. its worst three days since july. you were mentioning the fact that the bond markets were closing. rising yields really pressuring equity investors to wonder what the price of risk will be. bonds

daniel: i do not think it is contagion just from italy. these countries have all but abandoned reform in the last three years. the new governments are trying to push a very aggressive agenda of increasing expenditure while a moresame time, having than optimistic assumption of revenues. isks when the ecb support starting to fade and at the same time, your imbalances are rising , obviously come in the shape of bond markets and spreads widening. support,hat the ecb the spreads are extremely low. it is very unlikely investors will buy bonds at these yields when the ecb stops buying them. guy: where does that leave the ecb? does the ecb stop buying them? daniel: i think it has to because the ecb finds itself between a rock and a hard place. if it does not do what it has said it will do, the signal it will send to markets is things are a lot worse than they have seen because of things do not start normalizing the policy, they will run out of tools when the cycle changes. additionally on the other side, if they continue to buy, what happens is th