Forecasts and comes in below expectations. And theres a vitamin boost for dsm shares as the Nutrition Business performs well the ceo says he expects more of the same in 2018 we expect to deliver above the target set, growth above the market, further Financial Results and capital efficiency. And police in johannesburg are targeting zuma acquaintances and the family fullyear 2017 gdp rises for italy 1. 4 , 1. 5 workday adjusted those are the italian gdp numbers coming out this morning. A bit of an improvement, for the quarter up 0. 3 against a consensus of 0. 4 and matches the yearonyear percentage of 1. 6 you can see there very Little Movement in the italian bonds. Talking about the european equities, the stoxx 600 is trading in positive territory. The stoxx 600 up 0. 9 . If we look at specific sectors that are driving, you can see that specifically there the massive changes across the euro 600 up 0. 4 . Theres been a lot of movement in the financials. Credit suisse posted its third consecutive annual loss as the impact from u. S. Tax reform pushed earnings into the red the swiss bank saw assets in the Wealth Management hit a record and had a strong start to market based activities in 2018 with net revenue in Global Markets estimated to have grown around 10 yearonyear joumanna bercetche, i want to talk to you about some efforts the bank has been making to transform its business Wealth Management seems to have done quite well so far yeah. Absolutely this is part of a Transformation Plan that mr. Thiem introduced a couple years ago he said were through 85 of the process when it comes to hitting revenue targets, about 75 of the way through when it comes to hitting cost targets in terms of numbers, they gave guidance back in november as to what we could expect from each division, and they came in line with the guidance in november. So no big surprises there. Of course the tax writedown was widely anticipated digging many deeper, if you look at market revenues in the Fourth Quarter, they were down, that is in line with most other banks, u. S. Banks, european banks on the back of the low volatility environment that pisexisted then it looks as though things have started to pick up but of course Credit Suisse has been in the news for that inverse vix product. I asked specifically about that product and his views on volatility i looked at the 279 pages, it says this is a trading tool, its a note, not a fund. Its a trading tool for sophisticated investors. This is the language we use for daily trading risk management. We say the value of the longterm value of your etn is zero, and we say this should not be held over the longterm because youre likely to lose all or a substantial part of your investment. So its a daily trading instrument for sophisticated investors. Its zero value. Its not an Investment Vehicle its not a proper Investment Vehicle. We also said because of that, because the price can vary so brutally, if the price goes down by more than 080 , we can close it on the 5th the vix went from 17 to 48, the value of that instrument went from 100 to 5. Once youre at 5, theres no prospect of recovery even the vix went back down to 17, this would only go down to 10 so the product was no usable anymore. One more point, it continues trading until february 15th, so tomorrow the closing value will be the value tomorrow then the owners will be paid on the 21st so all that was clear from the beginning. And i think thats all there is to say on this matter. Are you not concerned about the hit on Credit Suisses reputation i think other players made the same decision on that night. Its a legitimate market instrument that serves a purpose, is useful for marketing and risk yes, it has had a lot of attention because of this short vol trade was run by a lot of people at their own risk you know, it worked well for a long time until it didnt, which is generally what happens. Going forward are you expecting a higher volatility environment . I think volatility is everybody wanted volatility go back up. Theres some discomfort because people realize with volatility the market can go up or down its a sign of recovery of the economy. Same thing with Interest Rates when the economy is healthy, you have good gdp growth, you should expect a healthy level of volatility, which allows Market Participants to make more money. Is credit sweet taking advantage of that . I think we are. Its the best it has performed since i arrived. We made some high quality recruits and thats paying off a couple of points to pick up from that. The first is with respect to the inverse vix product, he ran through the prospectus and said that investors who read the p prospect t prospectus would have known that the product could jump like that he said they were not concerned about the Reputational Risk because they were not the only bank out there structuring such products picking up on the second point, the fact that volatility picked up in general, he said thats a good thing for the Banking System and for Credit Suisse they made a lot of key hirings in that space, and theyre set to benefit from that were already beginning to see it he said the first couple weeks of this year have been strong for them, pointing to revenue up 10 already for the first couple of weeks of 2018 last year market revenues were 5. 6 billion. He said theyre still on target to make that 6 billion for 2018. He seems to be quite pleased with the progress so far interesting that the bank ceo feels he has to say to investors who bet against vol that if vol jumps theyll lose money i want to talk about u. S. Tax reform a lot of huge u. S. Corporates have been able to give extra money to employees, to shareholders, talking about dividends, buybacks, it seems like this caused a lot of write joups. Wi with Credit Suisse, what is the result of that tax overhaul . They said the impact would be sizable relative to other european banks to the tune of 2. 3 billion swiss francs we saw that in the numbers today. Thats the main reason that Credit Suisse posted its third annual loss in a row without the tax impact he said they still made and generated profits of 2 billion swiss francs, so Going Forward the underlying business has that momentum and Going Forward hopefully the market can look to look past these oneoff impacts. The dta impact, the writeoffs onof some of these deferred writeoffs is very much particularly to the Fourth Quarter but Going Forward the fact they have to pay less taxes is a good thing for a banks earnings potential. Back to you. For more on the third consecutive loss by Credit Suisse and i would theyre adopting a cautious shortterm outlook, head to cnbc. Com. Credit agricole saw net income rise 33 in the Fourth Quarter despite a 384 million euro charge caused by french and american tax law changes that have also hurt other lenders the banks cet 1 ratios stood at 11. 7 at the end of december dsm has beaten forecasts on the top and bottom line boosted by both its nutrition and its material businesses. Fourth quarter profit rose 14 to 359 Million Euros the dutch Specialty Chemicals company says it will raise its dividend 6 to 1. 85 euros per share. Earlier the ceo said that the spread of the business was good. At this moment we feel balanced, we feel okay lets realize the u. S. And europe offers great Growth Potential with good momentum in europe and it continues good momentum in the u. S. But like you mentioned, the rwanda project, we are picking up in africa, strong position in china double digit growth in china. So the spread of the business around the globe is something we feel happy with. Moving to germany, net income at thyssenkrupp has increased almost ten fold in the First Quarter coming in at 78 Million Euros compared to 8 Million Euros a year earlier net sales rose as higher steel prices supported the industrial firms earnings. And h m expects slightly better results in 2018 saying physical store sales will continue to buck the trend by growing. The worlds second largest retailer expects Online Retail to increase by 20 clariants fullyear net profit missed estimates as the company was hit by onetime costs following a dispute with an activest investor which forced the swiss chemical maker to avoid a planned merger. Coming up on the show, investors zero in on u. S. Inflation data coming out later today. Well see what number forecasters have their heart set on after this break. You know whats awesome . Gigspeed internet. You know whats not awesome . When only certain people can get it. Lets fix that. Lets give this guy gig really . And these kids, and these guys, him, ah. Oh hello. That lady, these houses yes, yes and yes. And dont forget about them. Uh huh, sure. Still yes xfinity delivers gig speed to more homes than anyone. Now you can get it, too. Welcome to the party. Welcome back investors are keeping a wary eye on u. S. Inflation figures due out later today. Analysts expect cpi to slow to 1. 9 in january, down from 2. 1 from the previous month. The core inflation figure is expected to slip to 1. 7 anything above could rattle investors. The recent downturn in u. S. Stocks has economists wondering how much that will impact economic growth. Steve liesman gets us up to speed whether the wealth effect will bite gdp. Were you spending more because your stock portfolio was way up or go out for an expensive dinner or buy that boat you always wanted if you did anything like that you contributed to the wealth effect, buying more and saving less when stock and real estate values rise. Estimates are people spend 3 to 5 cents per dollar from the windfall from their portfolios Goldman Sachs estimates that may have added a half point to u. S. Growth over the past year. With the market down and the outlook for stocks not as rosy, that wealth effect could turn neutral, and that would be try ae rou around the world since 2009, u. S. Household wealth is up and 3. 5 trillion may have been wiped off. Lee instances where surging stock and real estate values prompted americans to save less and spend more going back to 1995 the savings rate has recently plunged while stocks have surged there will be offsets in the u. S. , but americans could be thinking twice about that fancy vacation or that loaded car with the options until stock market valuing stabilize. Steve liesman, cnbc business news. Moving to the middle east, Benjamin Netanyahu has promised to stay in office after police recommended indicting him for bribery. The countrys attorney general will decide whether to file charges which could be a long process and twice in the past has not happened police say netanyahu accepted expensive merchandise from several individuals over the years, though his lawyer says those were just gifts from friends. In anned a la ed address last n netanyahu said he would stay and fight. Im not here for personal ga gain, if that is what was driving me, i would have been somewhere else long ago what drives me is the future of our state. Our government will see out its days together with all the government ministers we will turn israel into an international force. In south africa the country is on edge as people wait to see how president jacob zuma will react to the ancs demand that he resign. However the president ial office says no official communication has been issued about a Media Briefing for today despite local reports that he would be speaking publicly. Key members of the anc want zuma to set down and threatened to recall him party leader Cyril Ramaphosa is in line to take over the presidency the traders worry a tough power struggle could be ahead if zuma does resist calls to leave this morning South African Police made arrests following an Early Morning raid at the gupta family home in johannesburg. The gupta family are Close Friends with zuma. They previous i will have been accused of corruption and influence peddling from johannesburg this morning were joined by our correspondent joining us from outside the offices of sahara computers, a gupta business. I want to ask how much of an impact could this have on the corruption charges weve seen against jacob zuma if it seems like the police are pursuing the gupta family more aggressively it would see the guptas have come here and the hawks are investigating the guptas they raided the family home this morning. We can confirm one of the family members from the guptas has been arrested behind me is a harracompany cali sahara they built fortunes in south africa because of close ties and relations with the government, especially in the last nine or so years under the presidency of jacob zuma that is coming to end. The president is being debated were not sure he will give south africa a valentines president by resigning as a head of state it seems the chickens have come to roost for the gupta family, and now those who he has closely worked with is tumbling down at the moment thank you very much for that. Im also joined in the studio by simon evans, emerging Market Strategist lets talk about south africa. After those raids, a friend at the wall street journal said get the popcorn ready, were expected to hear from jacob stoo zuma that popcorn has gone stale over the last week or so the rand has been the best performer since early december in emerging markets on the currency side. If you look at it versus the basket of euro and dollar, its actually 12 , even through this noise on u. S. Equities that were seeing looking ahead i would say that the likelihood of mr. Zuma leaving his office or being forced out of office through a no confidence motion or an impea Impeachment Vote is high ahead of that the rand will be volatile and definitely on a positive note. Difficult to trade around this fastmoving news story. It is, because the rand has done so much appreciation already in the last couple of months whats going on with the u. S. Dollar from your perspective what does that mean for the dollar, for the lira, some of these other currencies i think its a massive challenge if we look into this year many countries and china have been building up debt over the last couple of years most of that is domestic debt. So they are relatively protected on that front. Theres no question that if we see an appreciation of the dollar, it will start hitting the dollar debt in many countries that weve seen in previous crisis times. However because the dollar has deprecated so much already, and the u. S. Is going through this big budget deficit scenario, were not seeing impulses on the inflation side yet, that tells us from an emerging Market Experience the dollar continues to deprecate over the next few months what about emerging market debt, in terms of the dollar thats been an interesting story as well absolutely. Interestingly, i as an emerging market person over the last 20 years, i dont think anyone would have seen this, local currency bonds in emerging markets have been the best performing asset class in the world. So i think this comes as a big surprise given the fx in emerging markets have been stable if we were to get a big turn in the dollar you would see hits on the fx side in emerging markets. Where would you be looking for exposure when it comes to em debt given that the u. S. Is in hiking mode, monetary tightening mode, same in the eurozone, probably at some stage in japan, were saying be a little bit more cautious on that side, on the local currency side, be more exposed to the stories that give you more carry, but in dollars and that is the em credit space. There you have a number of countries like argentina, ukraine, subsaharan african countries providing you with some buffer. But in general, if you look at the diversified were looking at 4 , 5 of yield return just including the spread you talk about hiking in the u. S. And europe and japan, weve also talked about the impact that the weaker dollar is having around the world especially in em would you want to be a strange bankcentral banker in those places in. I think central bankers have done an amazing job over the last four years. They hiked rates in places like turkey, brazil, russia, even mexico on a forward looking basis. Real Interest Rates are 3 plus. Current deficit accounts have been brought down. In india we moved away from this five story, but i would like to be a central banker. As one said, it is a lonely job, you can only speak to other central bankers out there but it would become more lonely if the dollar were to turn more meaningfully crude oil prices have pulled back again, and on the back of forecasts yesterday, it doesnt seem well be short of supply any time soon. Where do you think you can gain solid Energy Related exposure in the emerging markets well, i think most investors would tell you the corporates that are giving you the spread pick up versus the sovereigns, the likes of petrobras, these provide with a spread pick up. There are other companies for example in russia. Russia is an interesting story s p and moodys are looking to upgrade them to Investment Grade probably sometime in the next few months there will be a race there many investors will focus on the likes of gazprom or some oil names out there. But this is depends on the oil price. I cant forecast the oil price i dont think anybody really can. Real leave it there thank you very much. That was simon evans coming up, the leader of ger