Youre watching Worldwide Exchange, bringing you Business News from around the globe. All right. Hello. Welcome. Weve got two hours of the good stuff coming up. Were here at work today. Thats the good news. Im still here today and tomorrow. I love working with you, ross. But yesterday i got to work with louisa and we talked hockey the whole time. How do you beat that . You dont. Working with louisa is an unbeatable experience. Ice hockey . No, field hockey i can do. Field hockey . I dont know. The canadians, we dont consider that you should. We have lots of fun stuff to talk about today. Lots of politics still. It is day two of the u. S. Government shutdown and there appears to be no quick resolution in site. How republicans tried to get three bills passed tuesday to fund certain programs, National Parks and operations for the district of columbia. But the measures, which needed a twothirds majority vote all failed. Democrats and president obama opposed the piece mail strategy. Aids say the president may introduce different options today and only need a simple majority to pass, but theyll likely die in the senate. Treasury secretary jack lew has started to using tools available to him to avoid hitting the debt ceiling. They will have less than 30 billion to pay its bills. The president is expected to meet with members of the Financial Services forum at 11 30 eastern, and theyll discuss xhm economic issues, including raising the debt ceiling without delay. And our very own john harwood will be having an exclusive interview with president obama today on closing bell at 4 00 p. M. Eastern. Thats an exclusive john harwood with the president of the United States. 4 00 p. M. Today eastern, 22 00 cet. That is a very big interview. That is why you watch cnbc. When you have all the infor you need. So simple question today. Ahead of that interview, we want to ask you what would you ask the president of the shutdown, debt ceiling, you name it. You can join the conversation here. The possibilities are endless. You can ask the president anything, more realistically, what would he be prepared to answer . Thats a good one, too. It is. Email us your questions, worldwide cnbc. Com, twitter, cnbcwex. rosswestgate, deecnbc. Follow the conversation, look up obama on cnbc. Talking about the partial Government Shutdown, lets check in on markets in asia, how they reacted. Li sixuan is standing by in singapore. Theres still a little bit of risk taking, at least. Youre right. In fact, not factoring in japan, asia traded higher. As the political standoff in the u. S. Has investors banking on a tapering free october from the fed. And this is sending the emerging markets higher b, like indonesia and the philippines, gaining 1 or almost 3 at the moment. But japan is lagging behind, over 2 . Also the sales tax hike announcement overnight. Now for a look at automakers, toyota may cut its 2014 Domestic Production as sales are expected to fall on the tax hike. Meanwhile, all three automakers saw modest declines in september u. S. Sales. As shares of toyota, nissan and hon darp all honda were all in reverse mode today. This on reports with watches over the next 12 to 18 months. Meanwhile, prices continue to track higher, lending support to some Hong Kong Developers with holdings gaining almost 4 . Back to you. 82 decliners currently outpacing advancers on the dow jones stocks 600. Were on the session low. Down around about a percent. Tenco not doing so well there. The ftse 100, xetra dax and cac 40 all down less than 1 . The ftse mib, there seems to be disunion city in the pdl party. First of all, tesco is very much in focus today. Worlds super market chain is posting flat sales down in august. The stock off 4 today. The telephone ringing quicker at smile arrival. The Company Reported a 2 rise in sales as Stores Opened more than a year. So its still down 2. 4 . Tesco announcing a big deal in china, as well. Gives them 20 of the chinese market, albeit theyll lose the tesco brand. Euro dollar, 1. 3530. Dollar yen at the moment, 97. 43. Just off the onemonth low and sterling still up at least to ninemonth highs near 163. We have construction pmi coming out fairly shortly. And we show you where we stand with bond yields, remember, we hit 2. 9 for tenyear treasury yields. Currently at 6. 2 . Italian yields over here, 4. 39 . Were all the way up to 4. 79 two trading days ago. The Prime Minister says the country runs a fatal risk if it doesnt back the current government. Letta, who says politicians must seize the moment is set to address the lower house this afternoon. Meanwhile, Sylvia Berlusconi is facing his own crisis after the pdl secretary called on the party to back the government. Meanwhile, we have the latest start for mr. Berlusconi. He says he will listen and then decide whether to back letta or not. Joining us in rome, claudia. This is interesting. He said although were resigning, we think we should support the lesser government in a confidence report. Is berlusconis influence over the pdl splintering . Clearly, it is at this point. Overnight, several members of the pdl have moved over to the letta side of the wall. And it looksic as though they are going to be voting the confidence for letta who, in fact, is speaking right now to senate. In his address, he started out as you were saying talking about seizing the moment. This is a moment in which a decision to support this government could be vital, could be crucial for the italian economy. He made mention of Sylvia Berlusconi in his speech that is ongoing. But he made mention of berlusconi in his speech saying in a democracy, a sentence must be served. Almost implying and saying pretty much clearly that yes, you are allowed to a defense, and it is not fair to be either against nor to get special treatment, either. So he is speaking, again, about stability that has been the big word that he has been using in the last weeks regarding the future of italy and he has apparently seized the moment quite well in the sense that a breakup of this pdl is a big step. The number is crucial. They need about 24 votes in order to get a majority and to move forward with this government. So just in a few hours time we will know whether hes been able to do that. The ecb Vice President who is quoted ahead of the centralbacks meeting today in paris, draghi is expected to hold rates at 0. 5 . He may give further clues as to the possibility or timing of another ltro to support the currency block struggling lenders. Annette is live in paris on germany ahead of the meeting. Annette, over to you. Thank you very much. Of course, the lower than expected inflation as is the strength of the euro. Of course, the feds tapering is off the agenda for now. Yields are coming down. But the euro is extremely strong and the implications of that im going to discuss now with my guest. Chief european economist of standard and poors. Thank you very much for joining us. So my first question would be the strong euro, is that a major headache to the european recovery and also to mario draghi . Well, obviously, whats happened between the previous meetings and this meeting is the fact that the u. S. Have decided to delay, to post opponent the quantitative easing in america. Maybe its impact has been felt on the Euro Exchange rate. We are now at 1. 35, 1. 36 to the euro. Whether the consensus sees the equilibrium rate up around 1. 20. On the other side, the Exchange Rate does not have an official Exchange Rate target. This is not part of their fundamental charter. Im sure during the press conference later today, well see many questions about the strength of the euro. And im very keen to listen to mr. Draghis answers because, obviously, you know, he should be concerned that he cant say too much about the euro. This is not part of the charter. Well, the official mandate of the ecb, of course, is price stability, i. E. , inflation. Inflation, the eurozone is far below the target. Do you think there will be another rate cut . Clearly, its the inflation rate is well below the ecb target, inflation is not an issue in the eurozone at the moment. The issue is really the recovery, the strength of the recovery, and the Monetary Union and how it works. Many times, mr. Draghi has said that its a Fragmented Union that we have at the moment. The transmission of monetary policies to the real economy is not functional. Its not optimal. Which is why i dont think were going to have an Interest Rate cut today. For the simple reason, which is i think if we had such a cut, it would not necessarily transmit and cut down to the which is still seeing Interest Rates higher than in the northern part of the Monetary Union. One of the reasons that whole transmission mechanism isnt working on the banks, this brings me to a question on another ltro, mr. Draghi was already hinting at. Do you think well hear more about another lto today . I wouldnt be surprised to have more clarification about the key indicators, the key variables that they are following to decide when to trigger this new ltro. Excessive liquidity has obviously come down. We are now at about 200 ml billion euros, which is viewed as really getting to the minimum acceptable. So i think an ltro is probably in the pipe. Obviously, the price of the euro is likely to come down. But on the other side, i think this is probability a bit more immature. An ltro around this number or at the beginning of 2014 seems more likely to me, but its hard to tell. What about the voting power not the voting power, but the attitude of the bundes bank. What do you reckon . Are they further against it and do they have enough power and enough other countryies behind them . Well, the bundes bank has been playing the good guy bad guy thing with the ecb. Many times, the bundes bank has come to remind the ecb, so to say, of its fundamental charter, its open investigations, etcetera. But at the same time, there is an agreement between the European Central bank and the German Central Bank that germanys problems are very linked to the eurozone problems. Of course, the German Economy is much stronger, doing much better than many countries other countries in the eurozone. But they are part of the same union. Thank you very much for your time. Ross, that is it for me for the moment. More from paris, of course, during the press Conference Starting at 2 30. And as well, soon here. With that, back to you. Thanks very much indeed for that, annette. Plenty more to come from paris. Its a wednesday, as well. Normally on a thursday. We just heard from the Prime Minister who said the future of government must be kept separate from berlusconis legal problems and the government can only continue if theres a firm accord over the priorities. Its only possible with stable government as longterm prospects. Euro dollar is just up at the session high. Were still below the eightmonth high that we had yesterday, 1. 3570. Mario draghis press conference from 1300 cet. And, ross, maybe later in the day, well be speaking to jeanclaude trichet. A russian Advocacy Group will be in moscow for local reaction in an exclusive interview. Obama got one, right . Its only fair that putin gets one. You know what else were going to talk about . A nation on vacation. The ministry in china looks at who is on holiday. Well look at what happens when the nations biggest nation goes shopping. Never go shopping in china on a holiday. Get out of the country before. Exactly. Not when erchblts is traveling the. It is day two of the u. S. Government shutdown. Who will break . Well obviously be talking about that. And tesco, as well, underperforming rival sainsbury in the latest battle between the uk super market giant. We compare and contrast right after the break. You really love, what would you do . [ woman ] id be a writer. [ man ] id be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] id be an architect. What if i told you someone could pay you and what if that person were you . When you think about it, isnt that what retirement should be, paying ourselves to do what we love . Because what you dont know can to dhurt you. Urance, what if you didnt know that its smart to replace washingmachine hoses every five years . What if you didnt know that you might need extra coverage for more expensive items . And what if you didnt know that teen drivers are four times more likely to get into an accident . sup the more you know, the better you can plan for whats ahead. Talk to farmers and get smarter about your insurance. We are farmers bum pa dum, bum bum bum bum welcome back to Worldwide Exchange. Sill vooe via berlusconi has called for a United States of europe. He has urged his senators to seize the moment to avoid any risks and says italy must be strong and credible in 2014 eu presidency. Fep, this is just ahead of a confidence vote later today. We will see what happens later today, but this could be a huge knock against Sylvia Berlusconis party where some of his ministers have resigned, but some ministers of his party look set to side with the coalition. It lit might be one of the few places where actually the local people maybe wouldnt mind a fetored europe. I. E. , getting rid of the positions in italy and having a higher level of government somewhere else. The politics are clearly dysfunctional. So they might be the one country thats able to you know, a bunch of knob italians running the country. Could it be worse . I dont know. They could get some americans. Maybe that would be worse. Yeah, who knows. That would be worse. Yeah, theres a good vote. What would you rather have, american politicians or italian politicians. We did this yesterday with louisa. There were funny comments, one said who is a deeper shade of orange, john boehner or Sylvia Berlusconi. Maybe boehner once he has some vacation time. He has off, by the way, for the confidence vote. Hes clearly feeling good about himself, good about his chances of winning, i should say. So the confidence vote is going to happen. That will happen later today. Meanwhile, turn our attention to retailers. A battle amongst britains growth as its heating up. Jay is out. Sales of sainsbury have reported flat sales in the uk and theyve fallen first half profit. It comes as the joint venture with chinas resource enterprise to the tune of 44 million pounds. China res enterprise will hold a 20 stake. I think it gives them around 20 of the chinese market. Joining us with his views, shawna. Nice to see you. Actually, both tesco and sainsbury stock are down today. So its clear we didnt like either that much. How much pressure is tesco under . I think clearly we look at the uk, its all very well to talk about tesco and sainsbursa. Sainsbury is doing the best of the lot out of the uk. Largely because it has slightly higher in demographic. It has more of the southeast which is generally better than the uk. The bigger issue, if you look at the bigger picture, the big four are underperforming in the industry hugely. Youve got the discounters, they told us sales were up 41 . Running a near double digit like for like. Compare this number to that 10 for retro. Basically at the high end and at the discount end, these companies are losing significant ground. We look at the numbers early. They had about 35 billion pretax profit with just over a billion or something. So theyre not making a huge amount on big turnover. Well, thats the industry, anyway. Generally its been high turns instead of low margin business. Is it getting more squeeze . Absolutely. And i think tesco has the margin down. And its been happening for some time. The same problems that youre seeing in the uk are spreading into the overseas business. Europe is a real shocker in these results. Whats happening, again, its convenient stores, its discounters are eatinger markets for lunch. All these companies are largely exposed to that format. In this is afforded a 70 fall in markets. Even though the uk is stabilizing a little bit for them, that was more than offset by the same problems spreading to europe and frankly in asia. Tesco is retreating from its international market, right . And i want to ask you specifically about this china resource. Its essentially giving up brand presence in china, but gaping a larger share of the market. Do you think tesco could have kept at it . Instead, sort of just paring up and having its name sort of replaced. What do you think about this deal . I think this is a much more paragraph nationalic tesco. All about weve got to plant a flag everywhere and effectively we are tesco and the market will come to us eventually. If you dont have the right partners, if you dont have the resources, it can take a very long time. Theres no real end to this game. I think it is a fairly wide move, but it does flag a slightly broader retreat as far as tescos focus in the overseas markets. They are going to stick to markets that they will have a chance of winning in. I think china was too far down that road. They were too early. Tenco tried to get into the u. S. Didnt disease. They were trying to do some interesting things like bringing ready meals to a consumer that never had them, things like that. It goes back to the same issue. When youre a small operator that starts to mushroom up somewhere in such a big country, very established players, its very hard to get on the consumer radar screen. Nobody else is going to come such a way to find that. Thats a huge scale problem. Also, it comes with a lot of prove nens. People have known the name for a long time, but it stands for that whole area of organics and healthy eating. It has a significant brand awareness. Its almost become movement where its almost like a cost that you create behind Something Like whole foods which tesco has not been able to. And in at the of the difference performances from the countries, sainsbury is getting more business from its online site. What is tenco doing on that level . Tenco is actually sainsbury grew 15 , but