course, is what's going to happen in the u.s. with that jobs report. so a little caution going on and profit going on ahead of that report. the nikkei 225 ended up 0.2%. the kospi up 0.7 ers. but take a look at the shanghai composite and hang seng. these are getting hit big time. there was talk about tightening monetary policy, government researchers saying china will not tighten policy before developed nations do so because it first needs a recovery in ex ports. still, a lot of investors are worried that's going to happen. in terms of oil, this is how it looks for nymex and brent. nymex light sweet crude is looking 67 cents lower, $71.29 a barrel and brent is trading lower, as well, $74.23 a barrel. looks like it's all about jobs here in asia. looking ahead to what you guys

are going to give us, bertha. >> very big numbers, christine. very big expectations. the estimates range from about 320,000 jobs to goldman sachs which now says it thinks maybe we only lost 250,000 jobs, only. that's nothing to sneer at, however, that would be a significant drop-off in the rate of declines. we have markets right now below fair value. we've got the dow down about 20 odd points or so. we've got the nasdaq just above, actually. today it's switching. yesterday the nasdaq was above fair value. but overall, we're with likely to be flat. the bund in germany has been edging lower, the yield edging higher ahead of the jobs number. we had the ecb, of course, keep rates unchanged yesterday, but signaling they do see inflation

picking up towards the end of the year. taking a look at the ten-year yield, we are at 3.74%. taking a look at gold, gold remains an important element of monetary reserves. gold has been lower for the last two sessions and continues to trade lower at this hour right now at $961.65, off just over 1 point or so. in the u.s., goldman sachs believes the new bull market is here. that, according to the president of its global market institute, abby joseph cohen. >> we do think that the new bull market has begun. it may prove that it began in march of this year. clearly, many people were looking for better signs on the economy and we're now getting them. >> cohen now things that the year-end target for the s&p is

around 1,100. joining us now to discuss is albert william and kim doe. howard, let's start with you. it seems as though over the last week or so people have become very bullish on this market, as much as everyone was skeptical that this was just a bear market bounce, a lot of people like abby joseph cohen are convinced this is a real thing. what do you think? >> i've seen it, i felt it, i'm afraid i disagree with it. i worry about bulls being still born and this may well be the case. i am extremely concerned about nasty inflation. at some point, we have to have an exit strategy. we haven't got that exit strategy from the stimulus

packages that both got faired and the various central banks around the world have made. they've done a fantastic job. they have pulled us away from the march. but no, this is small signs of recovery, but it is nowhere near an indication to me that we are heading to a new period of growth. >> kim, what do you think? is this basically a stimulus, liquidity driven rally that we're seeing? people certainly believe that's the case in china. >> well, i think to answer that question, one has to look at asia and the emerging markets group versus the developed markets group. i think developed economies are going to be able to grow, but at the subpar rate compared to what they have been doing over the past ten years. but as far as asia is concerned, we believe a stronger balance sheet and the economy wishes --

actually, at the better balance than that of developed economies, i do think that the stock market rise is justified and i do believe that what china is doing, i think that's the right thing from a long-term standpoint. if you want to have a look at the debt profile from china as a proportion of gdp is only 20%. so i don't think it updates anything to worry about at the moment. >> this is christine. invest everies here are really worried about what kind of jobs figures we're going to get in the u.s. do you think markets here will continue to decouple from what's happening in the u.s.? >> in a way, i think from a medium term viewpoint, the house of bearing believes the decoupling between asia why and the u.s. will continue. as i mentioned before, the

sustainability of growth in asia is much more ashoours shurd than compared to that of the u.s. and the balance sheet of asia is still quite undergeared, versus the u.s. which was very highly geared and it has to now deleverage. and the deleveraging process is always a bit painful. if anything, i think that it is more deflationary than inflationary. so i think that the decoupling will stay for at least the next three to five years. >> howard, do you agree with what kim just said? do you share his bullishness about asia? >> i certainly share the bullishness about asia and particularly china and i would add in moving a little further west. i would bring in india, as well. india will be an economy we will take far greater notice of as the years go by. i agree totally in the decoupling. we are continuing to see that shift in economic power from west to east. we have too just to it. you have to adjust to it.

far more severely than we do. it isn't something that is going to go away. but it cannot done and we will do it. but whether it will be deflationary or not, i'm not quite sure. >> meanwhile, howard, if i can just change tax slide, a large part of the rally in europe has been from financials. but we heard from rbs today who added realism. >> yes, they did. it has been an amazing week. yes, we were very glad the it's all over. what a week for banks. the good, the bad and the ugly. well, if the ugly is royal bank of scotland today, then we can actually live through it. but you know, the bottom line is that there's still a massive write-off here. banks are not performing in the way, the manner which they need to. there's a lot of clearing of

decks to do and there's a lot of change of strategy still to come. but well done to those like hsbc and barclay's that have come out of this extremely well. the others have a lot of work to do. >> how do you view the financials now in your region, kheim? >> we believe the financials in our region are fine. i mean, it depends on where you look at. but overall, the balance sheets are fine and we think that banks have more ability to lend. because if one looks at the loan to deposit ratio of the asian financial sector, it is somewhere around 75% to 80%. in some countries, it is as low as 65%. in fact, in the case of china, some banks are operating about 65% long to the deposit ratio. so based on that, i do believe that the ability for asian banks

to be able to lend out more in the future is important. we've got development going on in aesh ya. that will fit in with the supply/demand equation which i believe will be quite favorable. >> howard, this is christine here. we have a report out of japan saying that a public fund, apparently the largest in the world is going to invest a substantial amount of money. we don't know how much yet. does that make you more bullish about emerging markets? >> oh, it does. definitely so. i've been bullish about emerging markets for a considerable while. a ship that began to set sail 10 to 12 years ago hasn't often been rocked off course yet, knows where it's going. emerging markets are something which i take great interest in and i'm very positive about. >> howard, thanks for that. kheim, thank you, as well.

so we talked about rbs. investors today just sent the stock a little bit lower. the majority state-owned bank had a cautious outlook and posted a lost for the first half of the year. rbs has been hit by bad loans. the bank has warned results will be poor for the next two years ago a forward recovery takes time. in a move that just about completes the change in its top management team, it rounds the addition of an additional member and today we'll speak to the ceo of rbs, stephen hester. ooubs and the u.s. are nearing an agreement. the judge is holding a status call with lawyers after a deal

was reached in principle a week ago. the trial is tentatively set for monday in case the parties fail to sign a formal settlement. socgen executive jean pierre mustier has stepped down after being named under investigation for insider trading probe. one of the bank's nonexecutive directors, as well. both of them deny the allegations. >> ross, earnings continue to be in focus. japan airlines has reported a first quarter net loss due to the recession and globe influenza outbreak. in the first three months to june, its net loss widened to $1 billion. revenue slank to $3.5 billion.

in a move to cut costs, the company plans to reduce service on two international routes. meanwhile, japan airlines lost 0.6% today. dbs reported a better than expected profit today, lower than the $453 million it earned before, but still beating analyst forecasts. bad debt, charges surged to $324 million or eight times more than it was a year ago. that's despite improving business conditions in its key markets, singapore and hong kong where loan growth saw an 8% gain. checking on dba shares and how they are trading in singapore, down 3.6%.

here is a look at gourmet shares. officials are a ware of reports that a hong kong court has ordered the assets of its founder to be frozen. gu they also the matter is not related to the company. he and his wife are under investigation for alleged economic crimes. hong kong securities and futures commission has asked the court to prohibit them from disposing of or trading in the company's shaers. >> the u.s. economy is still shedding jobs and may have done so at a slower rate last month. the unemployment report due out at 8:30 new york time. forecasts are calling for a 275,000 drop. that would be the smallest decline since last august right before the credit markets collapsed. the unemployment rate is expected to hit 9.7%, which

would mark a 20-year average high. those stats, though not great, are part of the reason president obama says the u.s. may be some light at the end of the dark reseg tunnel. the president spoke thursday evening at a campaign rally for virginia's democratic candidate for governor. he offered a series of events taken. i'm convinced that the actionses we've taken in the first six months have helped stop our economic free fall. we're losing jobs at half the rate we were at the beginning of this year. our financial system is no longer on the verge of collapse. housing prices are up for the first time in nearly three years. so we may just be seeing the very beginning of the end of this recession.

>> the president's comments came after the report showing that fewer people filed for jobless claims last week, raising hopes that the job market may be on the mend and that the economy is stabilizing. earlier, thursday the white house economic adviser cautioned that the economic recovery will still be painful. ross. still to come on the program, the biggest public pension fund in the world says it could address that next year. the cfo of ally i can't answer yanz will be joining us. sxin investors are sitting tight ahead of the u.s. jobs report.

let's bring you up to speed with equity markets. james, let's kick off with you. we closed up for a fresh high for the year yesterday. >> profit taking today and i think we are going to get some calm before the storm but we're down 51 points or so. in the uk, we're looking at this

rbs story. it's the big story at the moment. that is going to dominate first thing this morning. rbs shares taking a pummeling today. rbs shares are the big issue. we've also had numbers from logica. evidence gearing up towards these nonfarm payroll data this afternoon and the employment data, even though it's seen as that bit of a lagging indicator. anything positive there may bring back this whole risk trade that we've been looking at, get rid of the profit takers and maybe push this market higher again. >> what's the problem with rbs, is it the contrast from what we've heard from them and other banks? >> i think it is and the fact that we were expecting to see much bigger in terms of actual profit than maybe the 15 million we got. the write-down we thought we were going to get, anyway. but the whole issue is the way

we saw lloyd's and their write-down, the worst is over and now we can move on, things aren't being seen as the same way at rbs. i think retail banking is under a lot of pressure. retail banking is really under pressure at the moment and while that's the case, banks are going to struggle. >> patricia has the story in germany. >> we did expect that, but what we did not expect was the reaction on allianz after they came through with their numbers. the combined ratio is something that the analysts were looking for and didn't get. this is why allianz is trading down about 2.3%. bank of america merrill lynch did reiterate their buy stock on

that company still the market is taking it lower. commerzbank, about 2.3% for that company. deutsche telekom, up about 2.3%. commerzbank upgraded the stock today. we heard the numbers coming through yesterday. some said it was a bit of a mixed picture. others say it was more stable. tomorrow we get -- strangely enough, on a saturday, we get real data coming through on the greek division, otce, that might give us a bit more clarity when it comes to future trade. but in terms of volume, slightly lower. adam. >> thank you, patricia. in north asia, we saw some resilience out of japan and south korea. take a look at the major indices.

once again, we saw significant leadership out of the chip plays in japan. elpida memory was one of the strongest performers as dram chip prices saw very strong exchanges in taiwan. meanwhile, the latest to tell you about, the latest coming from toray industries. they cut their loss estimates to 5 billion yen from 15 billion yen. but the rest of them, of course, they were under a lot of pressure, particularly aoc which is the second largest oil and gas refiner. numbers were very bad in terms of their q1 numbers. operating numbers down 80%%. that's forecasting an operating

loss of 300 million yen. in terms of greater china markets, there was not a lot of weakness, particularly once again in shanghai, a lot of concerns about market liquidity after the finance ministers said they're going to pay special attention to the stock market. the market did close down heavily. back to you in the u.s., bertha. good morning. >> here, of course, the july jobs report is going to grab most of the headlines. that's due out at 8:30 new york time. there are a few other items of interest on the calendar today. june consumer credit figures will be out at about 3:00 new york time, 3:00 on a friday. it's a much smaller line up of earnings reports as we're winding down earnings season. we're going to hear from ambac financial, liberty media, edison international and mirant. and the summer movie season could go out with a bang this

weekend. g.i. joe: the rise of the cobra will be on something like 2,800 screens here in the u.s. it's based on the hasbro toy line, projected to take in about $51 million at the u.s. box office this weekend. i'm going to go see julie and julian about julia child. but that's your global stock watch. i'm always about the food. well, coming up on "worldwide exchange," we have jobs, jobs, jobs. investors are bracing for today's nonfarm payrolls. >> and we've got the latest set of producer prices out of the uk. we'll dig into that.

i'm bertha coombs. today's job reports means fewer people are being laid off, but unemployment is not hiring. >> the nikkei hits a ten-month high as investors bought shares of companies with upbeat earnings. >> and i'm ross westgate in europe. rbs posted a net loss of over $1.7 billion for the first half. talking about the uk, we're

waiting for producer prices to come out there. of course, the uk reacting yesterday to the extension of quantitative easing from the bank of england. indeed does sterling take a hit. we're just getting those data out now. uk output ppi up 0.3% on the month, down 1.3% on the year. it was forecast plus 0.2% on the month, down 1.6% on the year. input ppi down 1.4% on the month, running minus 12.2% on the year. that is weaker than expected. the input was minus 0.5. the core output ppi up 5% on the month. the output ppi posted its largest drop since november 2001. rob connell, chief economist at ing joins us now. rob, your reaction to that? >> i think it's going to be a while before any of these input price figures or output price figures from ppi causes any real concern and there's a huge

amount of spec in the uk economy. >> in terms of extension from the qe from the bank of england, i presume that's because their inflation expectations, they'll get to to shoot their inflation expectations. what does that mean for how we should view long-term yields? >> well, i think it's interesting the way the newspaper is reporting in this morning, which i think is wrong, which is that the bank has some kind of secret knowledge or there's a smoking gun that the uk is headed for the mire. really, all this is is the uk thinking we don't know how sustainable this improvement in data is going to be. it could be a post lehman's bounce. let's wait and provide insurance in the market. doing so drove yields on guild down, but i think as the economy

continues to show further signs of improvement, we ought to expect yields to start edging higher again as they have been previously. >> ross, stick around. we're going to talk ahead of the jobs number later, as well. meanwhile, global equities, the ftse cnbc global 300 has been down around 15, 16, 17 points or so. european stock markets were closing at fresh highs for the year. on the currency market, pretty much still in the ranges, really. dollar/yen, 95. euro slshl dollar flat 1.4357. sterl was above 1.07 yesterday. currently at 1.6728 against the dollar. christine. >> hi, ross. this is how the markets are

looking. a bit of prot taking. the nikkei 225, a ten-month high. corporate earnings continue to be in focus. pushing this market to reverse early losses. the kospi is up 0.7%. the shanghai and the hong kong market tanging today because of all the concerns of tightening in the chinese liquidity market and the bombay sensitive index is trading down almost 2%. bertha, it's all about jobs and we're keeping that in mind here in asia, bertha. >> yeah. it's all about jobs. let's take a look at the futures. we're likely to be fairly flat ahead of that 8:30 east coast releast. we've got -- well, we've got the dow futures now moving down. dow futures now below fair value on the back of those british numbers, it looks like. we've got right now the dow down about 22. we've got the nasdaq futures also moving lower. they had been higher earlier in the morning and s&p futures right now are off about 4 or so.

taking a look at the bond market, of course, that's the big issue that folks will be watching today. the jobs report. we've got the yield ticking up here on theback of the uk economic numbers. we had been around 3.73%. we're up to 3.75%. some of the technicians are saying if wealth through this 3775%, 3.76% on the yield, watch out for about 3.88% on the top side and we start moving back to a four handle. let's bring back rob to talk about some of this movement. the worl is watching these sdwrobs numbers here. it was interesting, you were talking about the newspapers getting it wrong when you were talking to ross. i can foresee we get what we consider a good number, maybe a loss of 250,000, 275,000, the markets will think that's great, but the newspapers tomorrow and the evening news cast are going to focus on that 9.7% unemployment number and that's

what everyone is really worried about, that that number continues to climb. which should the market be watching here? >> i think that's a very difficult question. the fed will be watching the payrolls number. but they will also be looking at that unemployment rate. i think one of the things that we've had hinted at by ben bernanke is there's going to be no real change in fed policy until growth is sufficiently strong so start bringing that unemployment rate down. that could be a way off, especially if -- i know you don't mention the unemployment rate from payrolls, but the equivalent of household surveys are registering around the 300,000 level right now. at that point, you need 150,000 jobs created. 12 months, maybe, but by then you'll be well over 10%.

>> does that mean that the fed will have to take a page from the ecm and work on quantitative easing? >> a lot of people are suggesting that they need to come up with a statement saying they're going to wrap up the quantitative easing in september. i don't think they need to do that right now. to do that would be painting themselves into a corner. almost anything could happen. we don't know what the stock market is going to be doing in six to eight weeks time. why would they want to make a precommitment to that? i think they can wait until september and see what's happening in terms of bank lending. the financial sector is showing sdeept signs of recovery and then make a decision. possibly there may be an extra

program to maybe slow it down a bit before pulling the plug. >> this is christine. today we have the rba raising its growth forecast. how soon do you think the australian central bank will hike rates this year? >> well, it could be before the end of the year. if you look at the futures for interest rates, practically every central bank around the world is priced in to do something by early 2010. the rba is an exception. and the futures are probably a little late on them. >> background. rob, thank you very much for your thoughts. over in japan, we are keeping an eye on japan's public pension fund, apparently the largest in the world. it is reportedly considering investing in emerging market

equities such as china and india starting from next year. according to the nikkei, the fund has about $2 trillion in assets. for more on japan, nie ohmy finck. how much of the move do you think is because the fund loss record of $100 billion in the year that ended in march? are they under a lot of pressure to perform? >> the pension fund is one of the longest investments around. it must produce and payout pensions upon retirement. so i don't think year on year results are all that relevant.

however, i think the allocations of assets have to be revisited. the gif is reducing their holding of debt. the euro/yielding japanese regional and filp debt and allocating these more towards what it calls market assets. unfortunately, a lot of these have gone to jgbs, which don't yield very much more. so there has to be an al cage out of the jgbs into foreign stocks and funds as well as japanese stocks. this announcement doesn't surprise me. it's one of the necessary diversifications in order to raise pension returns over the long-term. >> naomi, do we know how much allocation will be given to these emerging markets? >> as far as i'm aware, the gps

does not set specific guidelines for emerging markets stock. it does have a guideline that it sets for foreign stocks, and so the emerging market assets will fall within this guideline. there is spevenlg leeway for these markets and most recently in october and march, in october especially, we probably hit the down side barrier, which meant that automatically gpif had to accumulate assets. so so the question is not whether we're going to get more stocks than the japanese assets, but we ought to look e at the allocations in other areas such

as the u.s. >> well, that brings me to my question, naomi. it's bertha here in the u.s. what does this mean in terms of allocation towards u.s. treasuries? for example, a lot of people are very concerned about foreign buying and foreign appetite for u.s. debt. >> well, that's a very good question. not only in context of what the gpif is doing, but also in context of a potential change in government in japan. now, what we have heard so far from the dpj is that it wishes to perhaps bmp a little less dependent on the u.s. aside from foreign policy, this also means perhaps die verging from the model, the export-led growth model whereby japan shores of models of u.s. treasuries.

it means much less room to buy new treasuries. within that context, the gpif is heavy on japanese bonds. the last thing it really has to do is diversify into equivalently low-yielding assets. so unless the yields on u.s. treasuries long bonds actually rise, it's hard to see treasuries operating a much larger space in the gpif. >> naomi, the elections, how might they change general investors' attitudes towards japan? >> well, there's a potential that the elections can change quite a lot. for instance, currently, many foreign investors are worried about the approach of japan towards these large companies and many had talked about return on equity being linked to

greater deregulation and greater roll of free markets in determining the price of japanese assets, including credit assets as well as stocks. now, we are seeing the formation of a credit curve as we see record bond issuance among large corporate in japan. now, if a new government encourages the formation of a credit curve of capital markets, perhaps we might see greater interest in equity assets, as well. the other side of that, of course, is reform within corporate, which is separate from government reform and that probably has to come in the form of greater corporate governance. so perhaps if government policies feed towards not only deregulation, but greater corporate conferenceance, then foreign investors will be very interested in japanese assets.

>> you raise some very interesting points, naomi. thank you very much for that. good talking to you, naomi fink. let's head over to india, mumbai in particular and talk to ayesha faridi for the india business report. >> thanks for that, christine. the markets are down about 1.5% for the sensex and the nifty. in fact, it's just about latching on to that 4,500 mark. 77 points down, that's the state of the nifty right now. the sensex down about almost 215 odd points. now, typically wa we are seeing in today's trade at the leg of the past week's rally, your banking stocks, auto stocks on the back of those monthly numbers and even a couple of the cement stocks, they're giving away. so the auto index, down 3.5%. the bank nifty down 2.7% and a

couple of the real estate stocks is down about a full 3 odd percent. meantime, power space cut nspc. the ipo today was subscribed fully within minutes of the opening bell. in fact, oversubscribed right now about two odd times. that is bringing some bit of flurry amongst the entire power space. so nppc, the valuations are being stocked up against that. that stock has been in focus. with that, it's back to you. >> ayesha, you have a good weekend. that you can very much for that. elsewhere, australia's central bank says interest rates could be expected to rise to more normal levels as the economy shows signs of improvement. in its quarterly statement and reserve policy, gdp forecast is up to 0.5%. this compares to its earlier prediction to 1% contraction. markets are pricing in a rate

hike by the end of the year which would make the rba the world's first central bank to employ monetary tightening. the aussie dollar booefl got a boost on that news. now lower against the dollar, 0.8 75. meantime, we're watching gourmet shares close lower in hong kong today. officials of the electrical appliancesmaker says they're aware of reports that a hong kong court has ordered the assets of its founder to be frozen. they say the matter is not related to the company. he and his wife are under investigation for alleged economic crimes. hong kong securities and futures commission has asked the court to prohibit them from disposing of or trading in the company shares. >> the u.s. taxpayers' bill from the housing market slump just keeps growing. fannie mae says it needs nearly

another $11 billion from the treasury. fannie and freddie mac were seized by the government last september. fannie has received about $34 billion in aid so far. meantime, aig reports second quarter results before the opening bell today. analysts say progress on efforts to sell or spin off assets and the insurer's ability to retain or attract customers will determine whether the quarter is considered a relative success. citigroup may give control of its commodities business to andrew hall. that's the energy trader who made headlines for demanding a $100 million payday. citi could spin off the unit into a partnership run by hall, giving the bank a smaller share of the profits. other options include winding down the business, but that idea could back fire since fibro is very profitable. the times says citi tried to sell the unit berkshire

hathaway, but talks went nowhere. citi shares are up about 4%. ross. >> and investors with royal bank of scotland today investors shared a cautious outlook in the and posted a loss in the fist half of the year. the bank has warned the results will be poor for the next two years, as well. in a move to overhaul its top management team, rbs approved the appointment of bruce vansohn. come up within we'll have an interview with the ceo of rshs, stephen hester. stay tuned for that. shares in allianz are low today, as well. net profit was up 22%. operating profit hit by lower income on investments and underwriting. allianz delivered a cautious outlook.

we'll get more on that when we speak to the ceo, dr. helmut perlet. coming up, the central bank says it's ready to hike interest rates if needed. what other economies could follow suit? >> we'll talk about that and take a look at the kwurntsy markets on the employment report. snoor

ekfy markets, a little caution ahead of the employment report, dollar/yen steady at 95.14. euro slshl dollar, 1.4371. sterling/dollar came back to 1.6727. an at this a, good to see you. how is the employment figure going to play in today? >> well, we have seen the old trading patterns being trade over st past couple of days. good u.s. dey data is negative for the dollar because risk aversion sings and people have more risk appetite. we expect this pattern to

continue today. however, since we have seen kind of like strong recovery of euro over the past couple of days and stock markets are much less friendly over the past couple of days, i would say the u.s. stock market is sharply positive for the euro. we may have another look above the 1.44 handle. but after that, i think profit taking after this strong week for the euro and for stock markets will continue and that we want to see euro/dollar around these levels. we currently see 1.4350, maybe 1.4320. i wouldn't be surprised to see the euro ahead of the weekend lower. >> what are your sort of short-term targets? what's the maximum euro/dollar could get to and cable for that matter, as well? >> well, in euro/dollar, i think we won't see it above 1.4450 or even 1.4475, which was the high we saw over the last couple of

days. sterling basically the same, but i think sterling will have even more trouble to recovery against the u.s. dollar, even on a positive u.s. employment report because this quantitative easing is still weighing on euro and cable. so i think it will have much more trouble to recover. specifically, as i said, i think that the reaction and the negative iraqi for the dollar on the employment report is rather low this time, rather moderate this time. >> antje, we just had the boe surprise everyone and extend quantitative easing. what are you looking to hear from the fed next week? >> you know, nothing, really, specific from the fed next week. i think they're going to keep all the measures they have in there at the moment.

they may put a little more of the tone on the fact that they know about an exit strategy, that they are very well aware of the fact that in case the economy recoveries they have to take back their unconventional measures. i think that may be a little bit more stress this time, but overall, it shouldn't be a big surprise for the markets. rates are going to be at the same low level and there won't be any major changes in the policy. >> antje, hi. this is christine over in my neck of the woods they're watching the central bank carefully. how bullish are the on the aussie dollar? do you think a rate hike has been priced into the currency? >> well, the rate price is hiked in november or even october. that may be too early because we shouldn't forget that the australian economy is running through a shallow growth, not a recession probably, but times of almost now zero growth.

so i think the australian central bank will still keep rates at a pretty low level over this year and probably think about hiking rates only next year. so i think that the markets are a little bit ahead of what the rba will do. but oeshd, sure, commodities are recovering and we still have 3% key rates in australia, which is rather high compared to other industrialized countries. and that means that the australian dollar should remain one of the good bid currencies over the last couple of weeks and months. i would expect the aussie to remain at high levels, 86, 87, probably the but remember that a high currency may have a negative impact on ex ports and they are pretty dependent on their export industry in australia. so i think that really fastly rising australian dollar isn't really good for the rba and they may try to dampen that rise of

the aussie, that fast rise. >> antje presska, thanks for that indeed. still to come today on the program, investors have sent royal bank of scotland shares down after the bank bostoned a $1.7 billion look in the first half and a kaush i couldn't tellus outlook. however, the ceo is more positive looking ahead to the second half. >> i believe that we are on a path, we have set out extraordinarily clearly that path today. we will get out of the risk positions that we need to. we will restore the bank to stand-alone strength. we will create shareholder value along the way and we will allow the government to get out, i believe, at a profit.

i'm beth ya couples. it's all about jobs this friday. and i'm christine tan in asia. worries about the job market push moss markets lower. >> and i'm ross westgate in europe. rbs has posted a second net half

lost. if you're just joining us in the united states, welcome to the start of your global day. we broadcast live from asia, europe and the united states. right now we have got dow futures down about 12 points below fair valuable. we've got nasdaq futures pointing about 1.5 and s&p futures pointing just about three or so. taking look at bonds, we saw the ecb talking about the process of installation rearing its head. the ten-year yield is down just a basis point where from it was an hour ago.

ross, how is the market g responding to that ppi data coming out from the uk this morning? >> look, i don't think inflation is a problem.g it's one of the reasons the bank of england extended quantitative easing yesterday, bertha. global equities are lighter today or down like the futures ahead of the employment for the ftse cnbc global 300 off 17 points. but you have to remember, yesterday we closed up at highs for the year on the uk and the french market, as well. resources, banks, insurance slightly weaker. telecoms and utilities are up at the moment. dollar/yen, still around the 95 mark that we've been at. euro/dollar, 1.4359. sterling has just hit the lows

at 1.6722. >> hey, ross. here in asia, a bit of profit taking going on as people brace pore what kind of number we're going to get. investors apparently late session started picking up earnings. the shanghai composite and the hang seng tanking today. a lot of concerns that the easy money we're seeing in the chinese mainland with all the talk about liquidity tightening. oil is moving lower, a lot of concerns and uncertainty about the global economy pulling nymex recruit down $71.11 a barrel. brent is down, as well, trading around the range of $74.08 a barrel, down 75 cents. ross. >> let's wrap this all up. joining us for the rest of the

hour, esterin barton. we've got the employment report coming out today. but this comes on the back of a pretty amazing rally, doesn't it? can it continue? >> i don't think there's that much more legs left in the rally. possibly 5% more. clearly the stimulus that has been generated has generated a mild recovery. but the question is the sustainability of it. the government can't be the sector that is providing all the emphasis for growth. it has to be the private sector. >> everybody has talked about sustainability. this is sustainability of the earnings, but it hasn't stopped. investors keep buying stocks. >> and investors move to waves

of tremendous optimism. right now we're in a period of tremendous optimism, expecting the recovery as if this was a particular recession. and i believe that it is not. this remains a balance sheet recession, unwinding of ee norm yulus build up of leverage and that will take time to unwind, many, many years. >> espin, that's one of the questions i want to ask. a lot of folks will be like a bottom line/top line situation as we've seen with earnings. folks will likely be encouraged if we get a lower number as far as job losses. but that employment rate here in the u.s. ticking closer to 10% has to be a bigger worry long-term. >> sure. and the point being, losing 300,000, 400,000 jobs is going to force the unemployment rate up. you need to say certainly a positive number before you're

going to start seeing the unemployment rate fall. especially you have newer graduates, newer workers that keep on answering the labor force. >> you were talking about this bond in equity markets not being sustainable, particularly in the bond market, where do you see things headed there in that we've got quantitative easing happening in the uk and not sure what the fed will say next week, but we certainly continue to have more debt issuance next week here in the u.s. how is all of that shaping up? >> sure 37 it's true that the government is issuing large amounts of debt. but the private sector is issuing a lot less debt. so net -- there actually isn't that much debt creation going on and i expect in terms of bond prices, i expect government bond prices to rally over the next 12 months. i don't believe that inflation is going to return. and i expect the federal reserve to copy the bank of england to

later in the year and up the ante with regards to quantitative easing. >> espin, i understand you are interested in banks. does that mean you believe the worst is over for the sector? >> i'm definitely not interested in banks. you've had an enormous rally in banks. i would not own any of those equities here. i like tobacco stocks. you look for sustainable yield for businesses that can pay off a good amount of cash flow in the form of dividends which is sustainable and aren't going to be subject to as much totality. >> thanks for that. still to come, it's jobs, jobs, jobs friday. the u.s. economy likely to have shed just over a quarter of a million jobs in july. we're going to set the potential market impact. >> allianz may have beaten

expectations for the first quarter, but how much of that is due to one off gains? we'll speak to the cfo shortly. e

woesh to "worldwide exchange." the u.s. economy is still shedding jobs, but may have done

so at a reduced rate last month. forecasts are calling for a loss 275,000 nonfarm payrolls. that compares to well over 460,000 lost in june and it would be the smallest decline since last august, just before the lehman brothers' collapse and the credit markets freezing. the unemployment rate is expected to tick up to 9.7%, marking a 20-year high. and it's those kind of stats that have president obama saying the u.s. may be starting to see some sort of light at the end of the dark recession tunnel. the president speaking thursday evening at a campaign rally for virginia's democratic candidate for governor said that -- well, he offered a spirit of defense with policies implemented in his first six months of crisis to combat the economic crisis.

>> i'm convinced that the access we've taken in the first six months have helped stop our economic free fall. we're losing jobs at half the rate we were at the beginning of this year. our financial system is no longer on the verge of collapse. the market is up. housing prices are up for the first time in nearly three years. so we may just be seeing the very beginning of the end of this recession. >> president obama is slated to address the economy again this afternoon. those comments came after yesterday's reports showing that fewer people had filed for jobless claims last week, raising hopes that the jobless market may have been on the mend. earlier thursday, white house economic adviser christina romer cautioned not to get too excited here since the economic recovery is going to get very painful. >> so ahead of the employment report, global stocks just weaker at the moment, james

hughes joins us now from cnbc markets to give us a wrap-up of what's going on in london. james. >> well, we are looking lower at the moment. i think these are going to be the real key ones. we have had big data this week, financials and today has been rbs and they've disappointed massively. their shares are off 15% or so. the write-downs are around 7 billion which are causing a problem. maybe we should pour cold water over this banking rally we've seen in the last weeks. really, we've seen pretty strong rally in terms of these banks. but i think in terms of rbs, it has been this write-down that's the issue again, this troubling retail banking side. the rbs side has been profitable, but not enough to turn things around, so negative in terms of those naturally dragging everything at the moment. of course these numbers have the potential to turn it all around and a slightly better number

there would make a world of difference for this market. >> yeah and the ftse 100 closed up at its highest level for the year yesterday, james. are your clients still willing to bet on further gains? >> yeah, i think so. what we're seeing at the moment is this calm, very low in terms of volume first thing. but you get the sense that people are waiting to see the volumes. we may get a slightly better than expected payroll number. of course, there's the fear that this is so far bhoovend the curve. still, a better number there or in line is going to boost things. >> james, thanks for that. have a good weekend, james hughes cnbc markets. the focus in earnings is very much on allianz, patricia. >> also the trade, ross, it's down about 3.7% as we speak. certainly not very pleased in terms of what the company had to say and also about the combined ratio. i think that was something that the market was very disappointed

by. down 3.7%, thyssenkrupp also under pressure. it is nervous trade yao here. you would expect maybe the market to trade sideways, but it is quite volatile. deutsche telekom and deutsche bank, the outperformers this morning. interesting to see what bmw had to say about their sales figures in july, down about 12.6% for the entire group. mini brands down about 7.3% and bmw, the luxury brand down there about 18% for the first half year. on the other hand, the sales team at bmw says that they do expect that gradual bettering improvement of sales to continue for the rest of the year. bmw not in our gainers or losers is down 0.35% as i can see right now. volkswagen is just up to the flat line. in terms of the other data which was very important to us in

germany as it is still an export driven economy, we had great export numbers coming through, up 7% on the month. it's the best result in the last three years. also, the trade balancing, 11 billion. it was a stunner for a lot of these people out here in the market. so while we're still waiting for this domestic demand, figures they have shown is not just happening just yet. if the ex ports come through, of course, that will very very good news. all in all, i have to say, midcap down about 1.5%. cap ex down 0.9%. huma numbers, we had those out earlier, as well. when the majority owner of kuma came through, the numbers were good, the outlook, a little luke warm, especially for the second half of the your. we are waiting for the nonfarm payroll numbers, christine. >> of course we are, too, patricia.

in south korea, shares ended 0.7% higher. chinese stocks, they were the big losers today. monetary tightening concerns there, sending shares lower 2.9%. this despite comments we saw from various policymakers that indicated that china won't change its macro policy. and the shanghai market has profit taking intensifies in some of the mainland banks and property stocks. over in australia, weak ps in the commodity markets. down 0.6%. let's find out how tokyo markets did today with nozomu kitadai from the nikkei. >> hi, christine. the nikkei index held firm, finishing 0.2% higher at 10,412. its highest closing level so far this year. processes were supported by investors that recently upgraded

their earnings outlook. poorer industry shares jumped 7% after the synthetic fibermaker upgraded its earnings outlook to reflect a $12 billion net loss. its profitability improved on solid demand. the latest figures by the tokyo stock exchange show the recent rally here has been driven by foreign investors. foreigners were net by 445 billion yen last week, the biggest amount this year. in july they bought 1 trillion yen more than they saw, a figure not seen since may 2008. this is significant because foreigners account for about half of all trading on the tokyo board. analysts say there's greater investor confidence in buying japanese stocks because an earnings recovery for key manufacturers like electronics firms and automakers has become clear from april/june quarter

results. meanwhile, japan airlines said it posted a record loss of $8.9 billion yen in the quarter. the red ink was worse than the $77 billion yen loss seen in april to june 2003 when the sars scare was in full swing. looking forward, the airline expects demand to recover somewhat in the july to september quarter thanks to the absence of fuel surcharges and these concerns over the swine flu. but with uncertainty ahead, it left its forecast of a 63 billion yen net loss for the year ending 2010 unchanged. that was the nikkei business report. back to you, christine. >> thank you very much for that. bertha, over to you. >> thank you, christine. the july jobs report is going to grab most of the headlines today when it's released at 8:30 new york time. but there are few other items of

note on the calendar including the amount of debt standing and june unemployment figures. it's a much smaller lineup of earnings, meantime. we'll hear from the likes of ambac financial, liberty media, edison international and mirant. the last major block burst of the season "g.i. joe" the rise of the cobra hit screens in the u.s. and 27 other countries. it's based on the hasbro toy line, a 1980s cartoon. it's projected to take in about $51 million at the box office this weekend. and that is your global stock watch. whoa, take a look at the eiffel tower being destroyed. >> it's amazing what you can do with graphics these days. still to come, allianz may have beaten expectitions of the

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shares in allianz are trading lower. net profit jumped 21%, almost

$2.7 billion, but the operating profit nearly halved by hit lower income and investments on underwriting. joining us for more is helmut perlet. herr perlet, thank you very much for joining us. >> thank you. >> you're forecasting the business is going to remain challenging. what's the underlying picture? >> well, i think the underlying picture is we had a strong performance in this quarter. i would just like to comment on news that strong extraordinaries or gains, that is not the case. we had less gains than we had in the quarter last year. we have a solid performance, yes, pnc is suffering a little bit from the overall environment, but still the underlying combined ratio is strong and we expect some improvement for the remainder of the year. but overall, the environment is challenging in the sense that

you have still lower interest income and you have some impact from recessionary claims. >> yeah. what is the new normal for insurance, for the insurance business? >> well, i think the new normal is we have to cope with this lower interest rate environment and we see in pnc you can hardly grow faster than the overall economy, so the cake is going to be somewhat lower going forward and that will have some impact on overall revenue specations. >> yeah. when you say pnc, you're talking about property and cash. are you saying basically we have to get used to lower underwriting in that unit? >> in the foreseeable future, at least over the next 12 to 18 months. >> what's happening to the renewal rates? >> still strong in pnc and in life and in particular our

assets are very sticky. we have in the magnitude of 4% annualized, which i think is a remarkable development. >> and i see equities have developed in your total investment at 9% at the end of june. will that balance change if a recovery takes hold? >> well, i think short-term, i don't see that we increase our share in ek advertise. longer term, that may well be as the economy recovers. but for us, solid capitalization and protect otherwise against potential market turbulences and downsides in our capital position is absolutely key because we want to be a reliable player pore our customers and our investors. >> thank you for joining us. 6/he's talking about the new normal, the new environment that we're operating in. what do you make of that? >> well, his comment about the

weakness in government reflects the fact that interest rates have been cut around the western world. clearly, there's also a risk that i think a lot of people don't appreciate and that's the reinvestment risk? if that goes down to 2.5%, for example, you're reinvesting at a lower and lower rate and that becomes a real risk for someone to insure there. >> translating that, you're looking for dividend. >> sure. >> the important thing about any stock is reinvesting the income, isn't it? >> sure. that's why i said businesses like altriia in the u.s., sustainable ones that have a free cash flow and a degree of pricing power. because i think most of the economy will notch that pricing power, weak inflation if not mild deflation over the coming year. >> espin, stick around. coming next, australia's

central bank says it's ready to preempt the world and raise rates if necessary. we'll assess whether other central banks could follow suit. >> and we're been checking the stock markets ahead of that u.s. jobs report. does it come before a storm, or not?

>> it is half past the hour. here in the u.s., it is the jobs report that will be the biggest deal. fewer people being laid off the, but companies still not hiring. >> and here in asia, first worries about credit heightening in china pushed most markets lower. >> and here in europe, british banking giant rbs posts a net loss of of $1.7 billion for the first half. >> hel hello if you're just joining us in the u.s., welcome tort start of your day on this jobs friday. we've got futures pointing

modestly lower. everybody is waiting to see just what that number is going to be, whether we're going to see a modification in job losses. job losses right now, about 10 points or so above fair value. taking a look at the u.s. ten-year yield, we've been up at around 3.75% and that is where we have holding steady here. there are big expectations for there to be a big modification in job losses this past month. >> yes. ahead of that, european markets are down. off the lows for the ftse 100. 0.9% down. xetra dax off 0.5%. sterling/dollar, weak after yesterday's expansion of qe from the bank of england, 1.6745 against the greenback. christine. >> hey, ross. here in asia, caution setting in. people here, investors here

bracing themselves for that jobs report. the japanese market managed to retain early losses. the kospi up 0.7%. the shanghai market and the hang seng tanking. a lot of concerns that the easy money in the chinese mainland is coming to an end. the bombay sensitive index trading down 1.7%. overall, it's all about the jobs report, jobs, jobs, jobs in the u.s. bertha. right, christine. and the expectation is that what we're going to get some signs, that the economy is still shedding jobs, that it will be at a reduced rate. the july jobs report is out at 8:30 a.m. new york time. that would be a big drop from what we saw in june, which was over 460,000. the smallest decline, in fact, if that were the case since last august just before the credit market collapse.

the unemployment rate, on the other hand, is expected to tick up to 9.7%, which would mark a ten-year high. joining us now on -- let's call it a super friday. this is a very big jobs data. leo tillman, president of l.m. tillman and coauthor of "financial door wantism" and "max well clark" and i don't know if we're going to get a picture, but we've still got espin. leo, i want to start with you. the expectation some people say might be a loss of 250,000 jobs. and i'm sure the market would likely cheer that number. but are we getting head of ourselves if that unemployment number continues to tick higher? >> well, good morning. in our view, recession in the united states hasn't at some time in the third quarter. so from that perspective, this employment report is not really

about stabilizing the economy, but more about the prospects of the economy going forward. so the markets are looking for signs, whether the recovery is going to be as anemic as we think it's going to be or it's going to be stronger. from that viewpoint, this report is extremely important. >> what's your thought on that, maxwell? >> well, i mean, i feel like i should take less and less stock in the unemployment rate right now because i think the biggest catalyst for upward pressure in the unemployment rate are people re-entering the workforce. even as we see job declines desemester rating, we're going to continue to see the unemployment rate push higher. even if, for example, we saw the off chance that we have actually positive gains this year, at least in one month, i still think we could see the unemployment rate pushing heighter even into year-end. and i don't necessarily see that as a pullish sign, but if it's stemming mostly from the fact of

people re-entering the workforce, that's not necessarily a bad thing. throughout this -- throughout all these the declines, for much of them, anyway, the unemployment rate has been understated from people exiting the workforce and i think at this point this is a very versal of that. >> max, hi. this is christina. do you think the corporate sector will feel more rain at all and what's going to push the corporate sector to lay off more people? >> at the end of the day, it's their bottom line. however, so many corporations are incredibly thin when it comes to labor and those sorts of things that they have to start preparing themselves for the recovery. if they're too lean entering the recovery, they're not necessarily going to be at the head of the pack when it comes to earnings potential. so to some extent, you'll have to have corporations weather the storm even if that doesn't bode

well in the near term. however, in order to be viable or much more profitable moving forward, you can't necessarily cut into the bone. and i think that's probably where we are right now. i think as -- you know, just from a manufacturing perspect e perspective, inventory cycles have -- well, inventory overhang looks like it's been almost thorough le depleted. so if you don't necessarily have people to help replenish that inventory or manufacture, you don't necessarily have a viable business model. so from that standpoint, even though things are necessarily lean, they can't necessarily go leaner, you know, just because of the bottom line. but they are going to be driven by that. >> espin, was your view of how this is going to play? >> i think employment will inch up, we'll probably get up to 10% or above within the next 12 months. the question is is it going to fall or will it continue to hover up at high levels? and that will be a drag going forward if it continues to be so sticky.

i think companies have been incredibly successful in cutting their costs, in the face of revenue pressure. the real question, if there isn't a sustainable recovery, what will happen next in the face of a revenue decline? and clearly there isn't so much fat that can be cut off any more from businesses without having to curtail production. so that would be something i would look at going forward. >> max, what happens, once we peak with the unemployment rate, does it stick there for a while? >> yeah. i mean, i've spoken before on this program about the spread between the u6 and the u3 unemployment rate where the spread, really, defines the amount of underemployment in the economy and that's right now at an all-time high. i think you ultimately have to say people relegated from part-time to full time imaging back before new jobs are

created. i think it's ultimately that dynamic that slows the unemployment rate. i'm in agreement with pretty much everybody else that the unemployment rate will push into 10%, but i think at some point you have the sticking point in the handle well into 010. >> and leo, where does that web then, impact top line growth for companies? >> well, there is only an extent to which you can cut expenses and drive revenue growth through that measure. it's extremely defensive. it's probably appropriate to do in a recession, but you need to take a much more proactive stance in creating shareholder value. so in financials, for instance, we see tremendous differences between companies, the ones that took risk and capitalized on this environment versus the ones that setback, cut expenses and were defensive. and the same applies to industrial companies, etcetera,

so we will see as we get more signs about the extent of economic recovery, the unemployment and other measures to which extent companies will become more dynamic in captioning market shares and being aggressive in this environment. >> leo, stick around. thank you, max well clark. thank you very much, as well, espinp sdmroop now, the shares are down 12% with rbs. our very own guy johnson has been out speaking to the ceo and he's back. >> i certainly am. the provisioning significantly worse than anticipated. the net loss certainly worse than anticipated, but the pret spread going into these numbers in terms of analyst expectations -- >> big. >> -- was wide. so don't read too much into that. i think what the market is latching on to is how downbeat hester is.

now, he's playing to the politics. he's playing to the general public and he has to be aware of who owns his business fundamentally. nevertheless, given the economic data, and this is the kind of point that we picked up in the uk, given the economic data, i was surprised that we twaent able to start to talk about making a person. i put that to him. why was he so pessimistic? >> this is a marathon and not a sprint. there are many things that we have to get through and in terms of the head winds of the global economy, which are not going to return overnight. even if a recover happens sooner, there are many headwinds that the world economy has to get over in the next couple of years. so i think i'm trying to inject a dose of reality, but underpinned about the optimism about the future of rbs because i am optimistic. and we see in the first half

results both what i'm talking about. we see our core businesses, the ones that will create future shareholder value make 6 built pounds of profit, powered in particularly by a bounce back demonstrating the benefit of the diversified business model. but we also see through the 9 billion loss in our noncore, the legacy that rbs has from the past that we have to work through and that would not happen overnight. >> let's talk about financial markets in just a moment, but let's talk about provisioning. does it get worse than here? does it get better from here? what is the story? >> i think there is a great risk in overinterpreting relatively small amounts of data. so if you had asked me two or three months ago, i would have had the peak of provisioning will be second half of this year or first half of 2010. it might be that i'm wrong. it might be that we have just

passed the peak. but i just thinkite too soon to say without any confidence. >> other than the investment banks stelg market that they think q4 is sustainable. you are not saying that. why? >> the profit levels for the first half of this year are better than normal. now, it is a very difficult industry to predict. so i don't know what will happen in the second half. i think it is likely to be slower than the first. >> talking to citi, the government is readying northern rocky for a possible dis-moosal probably before the next general election. give me you're timeline for what you think is going to happen with rbs. >> clearly, i can't control what any of our shareholders do. it's my job to create the

conditions for sustainable recovery at rbs, reduced risk, increase shareholder value to serve our customers. i believe over the next five years we will do that. i would expect over the next five years that would be probably several share sales over time as the government reduces its stake. but that's really for them. >> it's interesting, actually. it's a significant overhang that now exists. it will be interesting to see how that gets unwound and how the markets digest that. yesterday, the government in the uk made a profit in this investment. today, it happens. obviously, there will be a lot more ooupt utility still to come. mr. hester said, he doesn't have a lot when it comes to his garments. >> thanks very much, guy.

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welcome back to cnbc's "worldwide exchange." here are some of the top stories we've been watching from around the world. in the u.s., texas pair keeps growing. fannie mae says it needs another $11 billion from the treasury department. fannie and freddie mac were seized by the government last september. fannie has now received about $34 billion in aid and the tab keeps growing. aig meantime is reporting second quarter results before the opening bell this morning. analysts say progress on efforts to sell or spin off assets and the insurer's ability to retain or attract customers are what will determine whether the quarter is considered a relative success. and citigroup may give control of its commodities business to andrew hall. that's the energy trader who has been making headlines for demanding a $100 million payday that he says is due under his contract. the "new york times" says citi could spin off the unit into a

partnership that would be run by hall, giving the bank a smaller share of the profits. other options could include winding down the business, but that idea could well back fire. the times that citi tried to sell the unit to berkshire hathaway, but shares weren't nowhere. southeast asia's largest bank, dps, reported a better than expected profit with $384 million lower than the millions it earned before, but still beating analysts forecasts. but the company's chairman remains upbeat. >> asia is in better shape

economically than the rest of the world. the recovery actually has been a little bit more rapid than we originally anticipated. for most of our customers, i would say liquidity is not a concern today. >> dbs shares lost 3.5% today in trade. ross. just ten minutes to go until "squawk box." carl is with us with a preview. morning, carl. >> ross, you know what these first fridays of the month are like over here. it's like the world cup, super bowl, pick your sports met for. there is only one thing on our mind and that's is jobs watch. our coverage this morning, though, will take a bit of a dernt spin. 30 of the nation's cop economists are gathering in the woods of maine with our own

steve leisman this morning to compare forecasts and fish, of course. we're going to take you there live for a unique look at what's widely considered the most important report of the month for the markets. we've got a lot of other stuff going on today, as well, ross. what's the point in talking about it when jobs will troud trounce all of that? we'll begin our coverage in about ten minutes. >> okay. looking forward to it. thank you. >> only steve leisman finds a way to be able to go fishing to do his reporting. quite the boone doggel. coming up next, we'll take a look at the trading day ahead.

woept to we want to bring back leo tillman. leo, a lot of folks are very enthusiastic and optimistic about today's number. is a good number pretty much priced in at this point for the market?

>> i think it's a very optimistic number. 2.5, that's your quote is extremely optimistic and a huge drop from previous months. we are not as bullish. we are expecting something in the 350,000 range and it's going to be a significant reaction, either way, in my mind by the markets in both long-term implications and short-term implications. long-term, consumer credit today telling us about the nature of the recovery going forward. short-term, the markets priced in significant green shoots as the narrative goes and they will react significantly to this appointme appointment. >> now, we've seen a big move in the markets. we have had a lot of data and, of course, today, we'll all tee up the fed next week. we haven't heard from them in a mil while. what is it you want to hear from the fomc next week? >> i want to hear that there is no risk for deflation on the one

hand and i don't think there is one unlike europe and unlike japan. i want them to reiterate the stance on controlling inflag, on the other hand. so elementing it to both sides, which is very, very important and i want them to reiterate that it's probably going to be a jobless strat by. some of this job loss ways, we've fought a tepid market, should the fed leave things on hole or talk about readiness? >> i think it's very important to talk about their readiness to remove accommodation at the first signs of inflation. pcd indicator is right in the middle of the fed aps range,

which is very encouraging, but they need to reit right that despite the massive amount of accommodation in the system through a variety of sources they're ready to take it back. that's what's going to anchor inflation expectations and not allow inflation to get out of control. >> all right, leo, thank you so much for joining us this past half hour, leo tillman, president of the company that bears his name. that is goinged to it for us on what has been a very busy week and we gear up to another one in the come week woox. i'm bertha coombs in the u.s. >> i'm ross westgate in europe. >> and i'm christine tan in asia. thanks for watching "worldwide exchange." 

♪ you've gone fishing there's a sign upon your door ♪ ♪ i'm real gone now you ain't working any more ♪ >> good morning, everybody. welcome to "squawk box" right here on cnbc. i'm becky quick along with joe kernen and carl quintanilla. and our top story today has to be the jobs report. the july report is less than two hours away right now. about 2 1/2 hours away. forecasters predicting the economy lost another 275,000 jobs last month.

the unemployment rate is seen to rising to 9.7% and average hourly earnings are expected to tick higher by 0.1%. this is a number that people have been watching because it's been continuing to climb towards 10% for unemployment. this time around, though, markets could be watching closely to see if that 275,000 number shows there is starting to show some pull back in the decline. >> we've gotten some clues this week. >> actually, the four-week moving average is down about 10% from last june, so people are pointing to that as an indication that maybe we're starting to see a -- >> well, now if you hit ten, you're hoping not 10.5, right? >> if you have someone like diane swank, the spooel she'll

tell you that the shadow unemployment number is much higher. >> she's on today. >> she's on today and i think she said it's closer to 14%, 15% unemployment. >> the shadow one. >> yes. >> a release this big, this important calls for special coverage. our steve leisman accepted that challenge, as he does every year. he has gathered in the woods of maine with the nation's top forecasters and, of course, more than a few fishermen looking awfully snazy there in the short sleeves, steve. good morning to you. are you ready for today? >> i'm ready. i'm going to do the best i can. you know it's difficult. we got here yesterday and we happened to have some time to go out and catch a few small mouth bass on flies. it worked out pretty well. we got immediately and started doing some forecasting and surveys. we did a survey of the 25 hedge