For 2017. Nbc news reports that russian president Vladimir Putin was personally involved in the campaign to disrupt the election and divide American Allies by undermining the u. S. As a credible Global Leader. Good morning. Welcome to street signs. Big day with Global Markets reacting to the fed decision. In europe a decision coming from the Norwegian Central Bank. The expectations going into the decision were for the rates to remain unchanged. Thats the decision from the norges bank today. Rates unchanged at 0. 5 . The dollar just a quarter percent weaker. Interesting that we continue to see the dollar index moving higher overnight after the fed expectations for next year were more hawkish. The Norwegian Central Bank says activity in the economy is picking up at a somewhat slower pace than projected, and that prospects of inflation will be lower than projected as well. This will come as interest to many who have been watching the moves in oil prices, wondering if a sustained momentum to the expectati expectation. A slightly higher probability of a decrease than an increase in key policy rates in the year ahead. Also worth noting, some analysts wondered whether or not the bank was at its lower bound when it comes to reducing rates. They suggest the key policy rate will most likely remain at the same level in the period ahead, but a slightly higher probability of a decrease in the key rate next year. Also some data on the eurozone. Weve been watching pmi data come out throughout the morning. Specifically interesting when you look at germany coming out neutral, a bit better than expected on manufacturing, weaker on services. For the overall eurozone, composite pmi flash estimate of 53. 9, just shy of the forecast for 54. This is the rate in december. When you look at the manufacturing component, thats coming in at 54. 9. And that is higher than the forecast of 53. 8. Again, similar story for the eurozone that we saw in germany. The services disappointing slightly. December services pmi at 53. 1, thats the flash estimate. That comparing to an estimate of 53. 9. The euro still showing weakness against the green back after that huge rally we saw overnight. Well get into that in more detail in a bit. We have to got to bring you up to speed with how european equities are trading. A bit of a mixed picture. Stoxx 600 holding on to gains just shy of 0. 2 . Weve seen financials und underperform, to the down side, weve seen miners. Lets give you a closer look at those sectors. Surprises with wti dipping overnight as well. We will get into oil and gas in a minute. If we can give you a look at banks, higher by 1. 7 . Technology holding the ground higher by 1 on the down side. Basic resources off 1. 9 . Utilities also weaker. Giving a look at insurance, also pointing higher in tune with financials. 0. 6 . One of the biggest stories of the night is whats going on in the bond curve. The tenyear yield still pushing higher, about 2. 598. Leaving many wondering when that tenyear will hit 3 . Well get to that question in a minute. You can see the tenyear uk pushing higher, 1. 487. German buns at 0. 367. The japanese bund yield, 0. 088. The u. S. Federal reserve raised its key Interest Rate for the second time in a decade and increased the target range by 25 basis points. The fomc says it sees three further hikes in 2017, up from a previous estimate of two. That was a big surprise for markets. Despite the higher guidance, janet yellen also acknowledged the new presidency brings a level of uncertainty for the central bank. Answering repeated questions about donald trump, she addressed the rally in equities which has been fueled by expectations of more fiscal stimulus. The changes, the Financial Market changes that you described, particularly the increase in stock prices, increase in longer term rates and the strengthening of the dollar suggests many Market Participants anticipate expansion or fiscal policies that would raise Interest Rates somewhat in the United States relative to abroad, and would cause a strengthening in the dollar. But Market Participants are uncertain, too, but i would expect changes in our understanding of what is going to happen to also affect market prices in final markets as we move forward. There you have it. Thats janet yellen talking about the changes underway in the marketplace. For more lets bring in nick garzite from jp morgan asset management. Nick, good morning. What happens next really . You look at yields on the u. S. Treasury specifically, still pushing higher this morning. How much higher do they have to go . They go a lot higher. By the end of nextyear people should be eyeballing a tenyear note around 3. 5 . The fed is talking about three rate hikes next year, the reality is probably four if not more. Were in a new regime. Think of the underlying dynamics. We will get a big fiscal boost. Thats great for growth, great for inflation and terrible for fixed income. Some investors were caught by surprise when the fed hinted at three. Youre saying four or more. That suggests we have a big adjustment to go in bond markets when you look at how investors are pricing expectations today. What happens when we get above that 3 level on the tenyear . Will we look at liquidity concerns . A negative knock on effect on equities . No ultimately thats the tenyear rising for the right reason. Its rising because intrinsically growth is stronger, inflation is stronger. Remember, we are in a new regime now. People need to latch on to that. Monetary policy is dead, its about fiscal policy taking over. That really ignites froth. The big difference between fiscal policy and Monetary Policy is the fiscal policy has plenty of loops to jump through to get approval. Theres so much uncertainty still over what exactly Donald Trumps fiscal package will look like, what he can get through to congress. Does that suggest there are still some risks in investors getting ahead of themselves or is it coming either way . Its coming either way. Yes, theres some implementation risk, but i expect a lot of those policies will get through. The other thing it does is ignites animal spirits. When you get that going, think what economies are. It ignites confidence. Gives investors the ability to invest that marginal dollar more. Thats great for growth. Do you see those animal spirits jumping across the atlantic . Will we see coattail effect . There will be a spill swroov effect. This year europe could well outgrow the United States. Already you have europe growing above trend the ecb is still remarkably accommodative. Theyve just given us more Forward Guidance and extended qe to the end of next year. That may explain why were seeing this massive gap still between the u. S. And the german bund yields. Highest in 26 years. You seem to think Growth Prospects are better than what you expect. Its about the differential in central bank policy. The ecb, look at inflation, its not satisfactory. Even in 2019, they have inflation at 1. 7 . Way beneath target. They keep going on that monetary easing. We see a wider spread germany, u. S. And euro still takes the strain. If you are invested in european fixed income, where do you go . High yield. When you look at european high yield, great offer, 4 . When you look at the credit risk there, all that growth underwrites credit risk. Thats an environment where default rates go lower and lower. The other unique event is the le election risks, first and foremost in france. You are nervous as an investor . No look at this year. We had two major shocks, brexit and the election of donald trump. Ultimately what markets do is go back to the fundamentals. They look at the impact on growth, inflation, and the case there is more robust. I do wonder if it is a cause for concern for the ecb, for president draghi to hold pat. Draghi has been crystal clear. He looks at inflation. Thats the one lens he looks at. Way beneath target and even with that latest increase in oil prices, it doesnt do enough to boost eurozone inflation. All right. Nick, real pleasure to have you on. Nick gartside from jp morgan asset management. Weve had the fed, we had the Norwegian Central Bank and also looking at the Swiss National bank which has also kept rates on hold. The smb decided to maintain Interest Rates at the Current Record low as they continue to contend with a significantly overvalued swiss franc. They would remain active in the fs market and kept the fullyear growth and inflation targets unchanged. Well speak to the snb chairman, Thomas Jordan, later on on cnbc. The bank of england will announce a Rate Decision today at 13 00 cet when they are expected to leave rates unchanged. Well bring you that decision a bit later on. Russian president Vladimir Putin was personally involved in the campaign to disrupt the u. S. Election, that comes according to an exclusive report by nbc news. Nbcs Senior Investigative correspondent Cynthia Mcfadden has the full story. Reporter tonight, nbc news can report that Vladimir Putin was personally involved in the russian attempt to disrupt the u. S. Election. Two Senior Intelligence officials with direct access to all the information tell nbc news the new intelligence is derived from diplomatic sources and others including spies working for americas allies. Specifically a high level intelligence official tells nbc news, putins role was directing the use of the hacked material. Putins objectives were multifaceted. What began as a vendetta against Hillary Clinton morphed into an effort to show corruption in american politics and to split off key American Allies by creating the image that other countries could not depend on the u. S. To be a credible Global Leader anymore. Hes had a vendetta against Hillary Clinton. Thats been known for a long time. He wants to discredit american democracy and make us weaker in terms of leading the liberal democratic order. And most certainly he likes president elect trumps views on russia. Now it sounds like we have evidence to support those hypotheses. Well, get in touch with the show. Send us your thoughts on all things d. C. Politics related and the fed market reaction. Well follow it through all Asset Classes this morning. We want to hear from you. Streetsignseurope cnbc. Com or get in touch with us on twitter, streetsignseurope cnbc. Plenty more to come on street signs, european banks getting a boost following the feds second rate hike in ten years. Well look closer at what to expect from the financial sectors after this short break. Good morning. Welcome back to street signs. Weve been taking a closer look at the dollars sharp rally after the fed move yesterday. Now taking a look at the japanese yen, which has fallen to a tenmonth low versus the greenback after that decision from the fomc which they signal they will rise rates at a faster rate than many in the market had expected. As you can see, the dollar still gaining against the japanese currency by 0. 6 . Pauli pauline has a look at the broader market. The tokyo market was the only market that benefited from the stronger u. S. Dollar and the weaker yen as the nikkei 225 closed up a tenth of a percent. It did lose ground closer to the end of the session. Asian markets are closing lower more broadly because of that stronger dollar and the pressure on emerging market currencies. Its also putting pressure on the resource sector, especially in australia the asx down 0. 8 . The asx mining index down 2. 3 . Hong kong ending down 1. 8 . Energy stocks leading the declines there. Central bank activity, the Hong Kong Monetary authority also raised rates by 25 basis points. The hong kong dollar is pegged to the u. S. Dollar. Bank of Korea Holding rates steady for the sixty month in a row. The bank wants to take that wait and see approach to see how the fed rate hike impacts the economy. Back to you. The government should fight for the city of london in brexit negotiations and should not be ashamed to stand up for britains banks expertise. Thats according to the house of Lords Eu Financial Affairs subcommittee. The committee is believed to have been warned that big banks will start making decisions next year as to their longterm future in the uk. The report went on to say the danger is that in the absence of clarity firm also restructure or relocate on the basis of a worst case scenario. Elsewhere, eurozone lenders put a short term debt relief deal for greece on hold. Greek Prime Minister alexis s cyprus announced the program. The esm already criticized the speech on monday, but a parliamentary vote will be held today in an effort to rally domestic support. And lets bring you the latest in italy the new Prime Minister, paolo gentiloni, won a confidence vote in the senate allowing his Coalition Government to take office. He faced criticism from opposition parties over his decision to keep almost all of Matteo Renzis key cabinet members. Shares in bmps were temporarily suspended in trading after rising almost 7 . The board of the lender will discuss plans to launch a last ditch attempt to raise 5 billion euros. A decision will be announced later today. As we highlighted at the start of the show, we are seeing outperformance in the sector. You can see euro stocks banks higher by 2 . Strength in deutsche bank. Credit suisse higher by 3 . Across the board looking at green arrows. Bmp higher by 3. 4 . Joining us now for an outlook on the sector is the Senior Analyst from axiom investments. Thank you for joining us. So much to discuss. Lets get with the broader outlook. What do you think is driving outperformance for banks . Typically new rate environment following the fed hike yesterday. Potentially good omen for rates as well in the eurozone, but also in sterling. Banks will be age to transform more risk and generate more profits over the next 3 to 5 years. Thats what the equity market is watching. Which banks do you think are most positioned to benefit from the rate hike . We have the bank of england expecting to hold, the ecb doesnt appear to go anywhere soon. Who benefits . Global banks, if you think about some banks in the uk, like hsbc, that has a Balance Sheet in dollars, but also some banks active in the u. S. , typically the large commercial banks like bnp, social general, and maybe deutsche bank. And those are some of the top gainers today. Lets talk in more detail about the situation in italy. Highway optimistic are you that bmps can get this resolved by yearend . They went high early in order to pitch their industry plan as early as last july. When you look at what unicredit announced on tuesday, it seems like monte dei paschi could get away with less capital, a bit mpls to offload. As we say in italian, [ speaking Foreign Language ] and they could benefit stepping back and how they could optimize their transacti transaction. Youll have to give us the italian translation on that one. Do you have a preferred bank . Unicredit. I have been impressed by the scale of changes and transformation that the new french paratrooper is taking to the country. It is expensive. We are talking about a serious sum there. You think he can deliver . Yes, i believe he can deliver. It gives high level of power and ownership to his staff, time as we well. He definitely tries to give interest to the organization. When you look at unicredit for investors, its commercial, simple bank, which in fact, if you believe that the eurozone and the eu will tease, its a good place to sit. So nice to have you in the past. Thank you for joining us this morning. Thank you. Lets give you a check on shares of edf, they have slipped to the bottom of the stoxx 600 after trimming its 2017 outlook on weaker expectations of nuclear output. The french utility says it now expects ebita of between 13. 7 billion to 14. 3 billion euros in 2017. Investors dont like that news. Shares off about 12 now. This comes after edfs board approved the partial sale of the companys power grid unit to the state bank. And to fly and to serve. A promise some British Airways cabin crew may not keep this service. More than 2500 Union Members have voted to walk out on december 21st. Saying the airlines pay rate is indefensible. A statement says it is disappointed the union is creating uncertainty for customers. Travelers cant seem to get a break this holiday season. As we count down to the holiday, so much more coming up on street signs. Fresh data from the uk on retail sales, this ahead of the big bank of england decision. Stay right here. Good morning. Welcome back to street signs. Im nancy hungerford. These are your headlines. The gap between the u. S. And german bond yields hit the highest level in 16 years after the fed projects three rate hikes next year. European banks rally, but the euro comes under significant pressure after the fomc projection sends the dollar to a 14year high. Mediaset sees its worst decline in four months after vivendi raises its stake in the firm to 20 and threatens a hostile takeover. Nbc news reports that russian president Vladimir Putin was personally involved in the campaign to disrupt the u. S. Election, and divide American Allies by undermining the u. S. As a credible leader. Good morning. Welcome back to stre