high rate of ranges, with these high increase in business expectations because, of course, the expectations at some point in time in october and november have to be confirmed by business with activity and that is, with indeed, going to be difficult. so i think it reflects a bit of optimism and it's a slight disappointment for markets. it might give a little push for bond markets this morning. >> very well, yes. that could very well be an idea. thomas, what do you think is behind the drive in expectations at the moment? are people looking forward to the stimulus that's been put in place? are people looking at the return to revenue on some fronts? i say return to revenue under very low levels. what's driving the actual sentiment? >> cash for clunkers in germany has been an incredible success. ex ports have been holding up a

little better. we have seen dynamic, a lot of industries and all summer has been actually a surprise, how much dynamics we've been seeing. so i think today reflects a bit more realism, for example, that cash for clupger program has come to an end and so it's hard to image for the next three months or the next six months that there's going to be additional incentives. so i think we are in a stage where we are on the -- back on the growth path, actually, pretty much as the fed confirmed last night, the markets took the fed statement. there's a confirmation that we are back on some time of a low growth path, which is good, but equity markets seems to be living off rising spktations and rising expectations from these high levels that we've seen is going to be difficult and today is the first glimpse how difficult it's going to be for the next three months to have additional rising expectations in leading indicators. and so i think a bit more

realism is reflected in the numbers. >> thomas, in one word, are you an optimist or a pessimist? >> optimist. >> okay. i will be a pessimist, then, for the time being because the ifo is saying there's an even balance between the optimist and the pessimist over the six-month outlook. so we'll weigh each other up for the time being. stay with us for a second, thomas. let's move on and show you what our markets have been doing this morning. the ftse cnbc global 300 index indicating that our european markets started off on the session slightly lower for many of these markets, down by small 0.5% on the broad based index. the markets in general, though, lower between 1% to 1.2%. we're seeing a bit of selling in sterling against the dollar. christine, lovely to see you, as usual. >> hey, louisa, lovely to see

you, always always. here in asia, a lot of reaction to the fed statement. a lot of people are taking the statement to believe that the fed is contributing to the poor economy. the kospi, down 1%. it's prompting a lot of foreign sellers to get out of this market, foreign investors to get out of this market. the shanghai market managed to recoup some of its losses closing up 0.4%. the hang seng is down 2.5% and the s&p is down 0.7%. the nikkei managing to close up after a three-day holiday break coming back and doing positively well. in terms of crude oil, a lot of pressure there after the that high buildup we saw in crude stocks yesterday in inventory level, down 71, trading pretty much flat at the moment, $71.55 a barrel. brent is down 38 cents, $67.61 a barrel. julia, good to see you, as well. >> good to see you, too, christine.

let's take a look at how the markets are looking ahead on the open. futures are pointing to a lower open. nasdaq s&p 500 pointing to a lower open. let's take a quick look at the treasuries, the 10-year bund yield is down 0.51 to 3.31%. and looking at the ten-year note, the fed did say it would lower its yield. now it's down slightly. and gold is bouncing higher today as the pressure metal is still being supported by the underlying weakness in the u.s. dollar. spot gold is up to $1,010.60. let's get some market strategy with thomas tills and ameal

volta, from rbs. ameal, let's start with you. now that we've heard from the fed that this is going to be a gradual pullback and it extends some of the housing lending through the first quarter. what is your sense of what the impact is going to be of this lower quantitative easing and who will step in to fill the void? >> everything is likely to be marginal. as far as investors in asia are concerned, i am the primary issue of importance is that we are talking about a subdued outlook. what that signifies to me is that interest rates should be set higher, even if there is a gradual removal as far as quantitative easing measures are concerned. most of the sort of impact ratio's monetary policy linked in the sense that a lot of

policymakers out here link their decisions to where rates are in the u.s. and so with no signs that u.s. rates are about to move higher in a hurry, i expect, actually, that conditions will remain very benign for financial assets in the region. >> thomas, what's your perspective? what's your reaction to the comments we heard from the fed yesterday about their new, slouer approach to quantitative easing? >> well, i think it's fine for financial markets because what we need, indeed, economic development will be fragile over the next six months. we'll need more incentives. we need the quantitative easing to continue in some way. and it looks to me like they will think of ways to continue and that's actually, for me, a first positive sign because it means a continuation of what we call the liquidity driven incentives for markets that we've seen over the past six months. of course, what's going to be

the difficult part is that on the back of the rising liquidity, we've had rising business expectations, past rising business expectations and very fast rising equity markets. and the difficulty is simply going to be with asian equity markets, that we've seen a lot of rising markets and what markets need the next three months is the confirmation by corporate earnings and by economic development for what leading indicators have been showing. and i think that confirmation is probably not going to come in the way markets need it. so we'll be in a volatile developme development, but overall, i think the shaky period will end on a positive note. because the liquidity driven period will then enter into a more period driven by corporate earnings in the first quarter and the second quarter next year and we expect that to be positive. >> thomas, we were talking about positive and negative a couple

of seconds ago and i cannot help but think how much -- i cannot help but wonder how much the stimulus packages have to do with market recovery at the current time. especially now, when the fed is indicated that ta they're going to be leaving rates on hold for quite some time and you're saying we could be looking at positivity coming around in the corporate earnings. but if rates are on hold and we're looking at low interest rates, that's going to be very hard for the banks to start making money again then. >> well, actually, banks are making money. the rates are so low in the u.s., they have a steep yield curve and that is the basis for raising operating profits that we've seen in the u.s. banks. so i think that the low interest rates on the short end is actually a prerequisite that banks are operating profits and continue to do so for the next couple months. and that's one way historically

we've seen that in 1991 at the savings and loan crisis. that's one way how you help restructure at banking systems. so it's the cornerstone of restructuring the banking system to keep a steep yield curve. so that's actually, i think, a positive for markets. >> hey, emil, let's talk about your investment strategy post fed. you like taiwan, thailand, singapore and new zealand. what's the basis for your pick these? >> i think what we are seeing is basically an outlook for asian markets which is relatively benign. we do acknowledge that obviously there's been a recollection back in share prices and as such, what we suspect will happen in the coming six months is that prices will move higher on a regional basis but the environment will be dominated by

rotational trading and a search for where the relative value is. so the key to doing well in that particular environment will be to search out where there are areas in the market where there are fundamental improvements in place. and watching those particular criteria, we feel from a geographical point of view, there's taiwan and ultimately it's a positive view towards the technology sector where we think it's not just the short-term rebound in earnings, but it's the long-term revision in what's going on and what the growth that that sector can deliver over the medium to long-term is likely to turn out to be. and then we think rather than being in an overcrowded and possibly risky space that is the financials. asia, you should seek out various segments of the industrial phase. so actually, there are some very interesting pockets of value to be had. >> and i see, emil, that you've left out the greater china

markets of hong kong and china. why is that? >> well, i think in the short-term, in fact, an overarching theme for me is that the first part of recovery was very much about being positioned, it was very much about china coming out, surprising people's expectations on the upside and i guess being able to pull through this growth number of 8% and then the subsequent -- or in the follow on from that, leaving great support in the consumer sectors and across commodities, etcetera. but at this juncture, you're not going to surprise a lot of people by saying, listen, china is going to grow by 8% in 2009. we feel positioning needs to be rebalanced away from the domestic growth story which is crowded, which is subject to possibly excessive expect ages and instead focus on a recovery in the rest of the world which is likely to surprise on the

upside. and so that is the overarching theme. clearly, within china, some of the heavy sectors are materials, consumers, financials, all of those we feel do not have a lot of upside in terms of incremental expectations from an investment point of view. and equally, there is a short-term supply issue with a rising number of ipos coming to the market. >> emil, thank you so much. we're going to have to leave it there. i want to thank you both for joining us. thank you both. world leader res gathering in pittsburgh, pennsylvania today for a two-day g-20 summit. high on the agenda will be a global economic revival and financial regulation. in particular, european leaders will be fighting for strict rules regarding banker bonuses and executive pay. but with limited american support for such salary caps, the europeans may have to act

alone. there will be discussions on international trade and climate change. >> but the question everyone is asking is how much can the g-20 leaders actually achieve? not all of it has been delivered on. that has been an area of concern for the british prime minister, dpordon brown, but despite being recently hailed in the u.s. as global statesman of the year, the prime minister was unable to get a one-on-one meeting with the u.s. president. barack obama reportedly turned down five separate requests to meet with brown ahead of the summit, opting instead for an informal walk and chat-type visit on his way out of the u.n. headquarters. >> so louisa, where might the g-20 reach an agreement? the plan would see a reduced surpluses in exporting countries like china while savings would be boosted in heavily indebted nations, including the united states and britain.

the value of the chinese yuan and the u.s. dollar will surely be discussed, but analysts believe the meeting is unlikely to deliver any public attempt to bolster the dollar. >> thanks, christine. you can always get more news on the g-20 plus today's market moving news at cnbc.com. coming up right here, america's economy is picking up. the fed issues its most up beat assessment in 18 months. will this be a head fake as the u.s. central bank heads off measures? plus, timothy geithner says we cannot walk away from the u.s. financial crisis. and g-20 leaders pledge to bring the u.s. economy out of recession when they met in april. five months later, what have they achieved?

hello there. welcome back. this is "worldwide exchange." straight up to the global equities market roundup. we have becky talking about london and stephane talking about paris. becky, quite a lot of news flow this morning, a lot of it political, though. >> yes. and let me just recap. the markets are declining overall by 0.7%.

we seem to be fairly steady, as well, at these levels. tlt not a great deal of fluctuation. some of the stocks are moving lower. british airways, the biggest decliner down about 3.9%. the british airways stock has had a decent time of it in the last few weeks having lost ground in the last few weeks under the difficult environment in which they're operating. today, the analysts at citigroup have cut their ratings and ubs generally has started coverage of the sector with a neutral rating, as well. so certainly not the top pick in the asian sector and that's having an impact on the shares. stow fan. natixis is outperforming the market today after saying it was pleased with the results of its

hiv vaccine. it's a small decrease, but still shows that the vaccine is possible against hiv. the stock is down by 0.4% right annoy. there is a accelerating for klm, which is below the current price for the airline and on the downside, the banks ahead of the g-20 meeting in pittsburgh, nicolas sarkozy admitted yesterday in french television that no agreement was reached yet regarding the plan to cap bonuses in the banking sector which now i feel is very unlikely. we've got all the banks now in the red. let's have a look at the german market with -- >> actually, we are going out to the german market, you're absolutely right.

a slightly new guest for us. robert helser is from bada bank. robert, very pleased to have you with us. germany this morning, what are some of the key issues that you think investors should be aware of coming out of germany? >> we see profit taking at banks and cyclical companies. we have some unclear sectors, the pittsburgh summit starting today and our national election next sunday. that leaves some open questions and some investors are not keen to invest today in ekts, so they take profit. >> and on other issues, we've just had the business ifo climate index out, indicating a bit of disappointment, not quite the level that had been hoped for, but we're looking a six-months of gains. >> ifo is better, but that is why some say, okay, let's see how is the sustainability of

this economic upturn, especially for germany, who is still very keen on export markets. that is why they are factors in common and say let's take some profit today. if you had to choose what you would be weighing more of if your portfolio, what would you advise people to pay close attention to? >> we see some tremendous, tremendous cost cutting and this would be for them german cyclicals and also the german banks. >> okay. robert halver, thank you very much from baader bank. >> thank you. >> moving on to singapore, adam is waiting patiently in the wings. adam, we've had a lot of activity outs of the ipos. >> louisa, there's been a lot of concerns about the number of

companies coming to the market here. sinopharm came to the market and that came on at a 40 pe ratio times 2010 earns. metallurgical corp. of china was the latest one to hit, very disappointing day of trade here, ended down 13.2%, which was worse than what the gray market was suggesting. the gray market had the stock dropping about 4.6% here. the asia sing which was on monday over in shanghai didn't end too well, as well. in fact, it's been down every single day since it listed on monday. it fell another 5% today, priced at about 25 times earnings, which is the average market pe. speaking of which, it was in negative territory this morning but managed to close up in the green. overall, the hong kong markets were very, very weak today because we had base metal prices lower and nymex light sweet crude prices were lower, down $68 a barrel.

that hit a lot of the resource plays in hong kong with the china plays listed on the index. japan coming back after a three-day public holiday. the market did fairly well in the face of what had been weak. export numbers were down 23% year on year and then the third, the jab japanese yen was strong versus the dollar. but did nothing to stop the supporter stocks. sony in the forefront after its ps3 gaming consoles rose 300% after slashing the game console price. nintendo, they announced today that they're cutting to price of their wii, down to about $199 effective september the 27th. on that note, back to the u.s. with julia. >> thanks so much, adam. u.s. investors will be a pair of economic reports today. weekly jobless claims are out at 8:30 a.m. new york time, forecast to rise by 5,000 to a

total of 550,000. at 0 o'clock a.m., existing home sales will be released, expected to jump nearly 3% last month to an annual rate of 5.3 million homes. at 4:30 p.m., the fed reports on its balance sheet. the senate committee hearing will hold a hearing o $700 billion t.a.r.p. neil barofsky will testify. while several representants have repaid the government, it's unlikely they will ever see a full return on their investment. christine. >> coming up next on "worldwide exchange," we've been talking about this, shares in china aes metallurgical ipo dropped. >> plus, you will find them in the kitchen, barack obama forces uk prime minister gordon brown to walk and talk after

reportedly snubbing requests for a formal one-on-one. we'll look at the possible division at today's g-20 meeting. uuuuuuuuuuuuuuuuuuuuuuuu

quantitative easing strategy. >> hello there. welcome once again. you are still on "worldwide exchange." the ftse cnbc 300 index indicating that markets in europe have opened slightly lower. just down 0.5%. we're seeing selling especially in basic resources, in retail, construction, banks and travel, banks being weaker pretty much across the board. deutsche bank, ubs being among the main losing stocks out of the main chips in europe. currency markets, we continue our currency discussions across the channel these days. if you have any currency

questions, anything that's bothering, write in, worldwide@cnbc.com is the address. christine, how are the asian markets doing? >> hi, louisa. most asian markets tracked losses on wall street. the nikkei 225 bucking the overall trend after coming back from a three-day holiday to play catchup. up 1.7%. the kospi index lower by 1%. the shanghai composite recouped earlier losses to recover 0.4%. the hang seng index is down 2.5% and the s&p is down 0.7%. overall, pretty bearish with the exception of japan. >> in the u.s., it looks like we're point to go a lower open.

the dow is down about 15 poivents from fair value. nas dax and s&p pointing to a lower open. this comes on the heels of the dow closing down 80 points and staying below that key 10,000 mark on wednesday. now, looking at the ten-year yield, the 10-year bond yield is down 3.41%. we're going to be looking at more issuans of treasuries. we're going to continue to watch that number. that's the yield on the ten-year note. christine, over to you. >> julia, australia and china relation res in focus once again, this as china approved a mining investment near a missile testing range in outback australia. but australian defensive officials have rejected the deal saying it would be a breach of security. this comes as ties between cambora and beijing remain

strained over the arrest of rio tinto executive stern hu. the two sides are working closely together on the case. right. let's move on to our next story now. there was, of course, china's ambassador to australia, we were supposed to get that sound bite. louisa. >> let's move on because the widely watched ifo survey of the german business environment came in worse than expected. that news sent the euro lower against the u.s. dollars. total sales fell by 3% year on year due to sluggish consumer

spending and unusually warm weather in many parts of europe. but third quarter profits did top expectations rising to $695 million. it all spends on when you go out and buy your next season's clothing, julia. the fed would use so-called reverse repos that would drain liquidity from the financial system by borrowing mutual funds using assets as collateral. the fed believes banks would be willing to lend money because they're under pressure to stick to less risky investments. paul volcker is calling on restrictions for banks as part of the financial overhaul.

volcker will testify before the house financial services committee at 9:00 a.m. new york time. he says commercial banks should be prohibited from running hedge funds and limits should be placed on proprietary trading. that's because these banks are potentially limited from taxpayer bailouts in the event that they failed. a former moody's analyst who went public this week with allegations, credit agencies are still inflating their ratings takes his case to capitol hill today. eric tolchinski plans to tell lawyermakers the industry is still plagued by interest. he says he was suspended by moody's after warning the firm's compliance group after what he believed to be a securities violation. christine. >> julia, you can get more news, videos and blogs all at one place, cnbc.com.

coming up, promises, promises, have leaders in the world's most powerful economies helped to kick start trade inspect we'll look at the road to today's g-20 in pittsburgh. >> and we are continuing our focus on the currencies these days.

welcome back to "worldwide exchange" for a look at the indian markets, we have reema ten due car joining us live for the india business report. >> it's turning out to be a bit of a sticky session. so the index has managed to get themselves into the green. so the breath has recovered considering what it was trading, but still marginally favoring the declining side. we have stocks lying in forces hindalco is sporting a cut of about 4%. we have sterlite and hindalco down, as well. and on the gaining side, we have banks, which are holding up

quite well and they have been for the past many days. hscc bank, up about 2%. bharti is up, as well, about 2%. one thing as we watch out for is the options expiring. and it's very pertinent that a nifty holds the 4900 mark otherwise a lot of pressure will be coming in from the futures and options space. so not a long trading day ahead, but a very long trading day ahead. back to you. >> reema, thank you very much. let's move on to an ipo story, the world's second largest ipo in hong kong, metallurgical corporation seeing its ipo plunge. are ipos drying up or is this a

temporary setback? lewis, is this fall in metallurgical something specific to the company or more worrisome that maybe the hot ipo market in china is starting to cool down? >> okay. i think it's partly due to its rather pricey valuation and participately impacted by its debut performance on a share markets. because mcc was listed before the listing of its shares in hong kong and its share performance on the first few days after the debut were quite disappointing. so it impacted the performance of its debut today in hong kong. and in a short-term, i'm afraid that there may be continuous selling pressure because speculators may be forced to dispose of the shares in the coming week. >> okay. you're talking about mcc in

particular. what does this mean for future ipos in shanghai? could this affect maybe the pricing or the supply coming into the markets? >> yes. i'm afraid the upcoming ipo a bit, but if you look at it from another angle, i mean, it can be seen in a positive light. that is the valuation can be priced at a more reasonable and fair value. and that would be positive to investors. >> lewis, hi. it's louisa in london. i'm wondering about volumes at the moment on the chinese markets. i was speaking to somebody u.s. based recently who is indicating that when you look at the volumes it's starting to look a little lostier and we've got the same type of volumes that you saw in nasdaq heading into the tech bubble. would you agree with this scenario or are there other factors at play at the moment? >> okay. we do notice that there are more

new securities trading account opened recently. but this is in couple with the rebound in the asian market whereby the shanghai composite index has risen nearly a fault from 1600 to about 3,000 points. but the recent market turnover has actually shrunken a bit because of more cautious sentiment ahead of the october 1st, the national day holiday and also concern about the huge chunk of shares, nontradeble shares that are going to be tradeable in october, which includes heavyweight stocks such as icbc and sinopec.

>> lewis, julia boorstin here in the united states. looking at the performance of this ipo, what is there to say about the world that china is going to say in leading the world out of this recession? do you think china is going to lead the world or is it going to be >> actually, a lot of discussion has been going on here. the general believe is it's very difficult for china to be a growth driver because it is an exporter, not an importer. but in terms of market sentiment, china does play the role of stimulating role.

and it lends to commodity prices, energy prices, and it also helps to control fund flows into this part of the world. >> lewis, this is christine here again. this particular market of hong kong fell more than 2% today. interest rate sensitive stocks and interest rates getting hit. what is the picture looking like for hong kong in the fourth quarter. >> okay. i do expect some sort of consolidation and correction in october, which used to be an ominous month for the stock markets. and investors who have been more cautious in october, i'm afraid. but the overall up trend is still intact because the global economy, especially the u.s. economy, is recovering steadily. so i am still positive about the fourth quarter outlook and my

year-end target remains 23,000. >> okay. and in terms of sectors, do you like the energy sectors because the u.s. dollar is weak? >> yeah. and the believe that global economic growth may grow momentum towards the end of this year and starting from the beginning of next year. and if global economic recovery picks up, we may see a revising demand for crude oil. and since the energy secretary erps have been elected compared to other sectors, such as financials and tax, with i do believe that there are some -- there are still some upsides for energy stocks. >> lewis, we'll have to leave it there. thank you very much for your insight there. >> yes. if you are just joining us, let's show you what our markets are doing today.

we took a bit of a breather yesterday, the fed statement initially causing quite a bit of buying in the u.s. on the background of them updating or upgrading their assessment of the u.s. economy. but it came also towards the end of trade because people started to worry about what does it mean that they're slowing down their purchases of mortgage debt to extend the life of this program. they're doing that until march now. the currency markets look like this at the moment. a bit of dollar weakness still continuing to creep in there. we're joined by ian standard. ian, glad that you're with us this morning. the dollar story continues to be at the front and foremost of things these days by the looks of things. when looking at g-20 and some of the indications that we're getting out of g-20, is there anything coming out of g-20 that potentially could move the markets, the meeting taking place today and tomorrow, thursday, friday? >> i think what we're getting

from markets this morning generally is that they're supportive of continuing the quantitative easing programs. the g-20 looks to be very much now looking at a re -- global rebalancing program. again, i think this is going to be very market friendly and supportive. so we would be looking for the recent trends, which have been developing in currency markets to continue. this means that many of the procyclical and commodity currencies will remain very well supported in this environment. i'll be looking for the australian dollar in particular to continue to move quite strongly higher. even the euro/dollar now looks set to break higher from the recent trading range. i'll be looking for a move up through the 150 area over the course of the coming weeks. probably the currency, though, which is going to stand out as being an underperformer in this environment is still likely to be sterling. now, sterling is continuing to the benefit from any of these

positives and i think that will continue to be the case. policy in the uk is going to continue to be quite negative for sterling and the comments we heard from governor king this morning with regards to sterling against just that the bank of england is not too worried about the weaker sterling at this point. so sterling would clearly be the underperformer. >> yeah. it's a bit curious, mervyn king saying sterling is helping us to recover in the uk. we're not quite hearing that same type of rhetoric out of the u.s. should they be upping that rhetoric in the u.s. and let it be known if the dollar is a bit weaker? >> in the u.s., i think there will be the need to be a little more careful given the dollar reserve status, given the extent of their issuance program and the need to attract foreign investment in-flows into the u.s. so with regard to the dollar, there needs to be far more careful with regards to those kind of comments while the weaker dollar is probably not doing them too much harm, as

long as it remains in a very controlled downtrend. you also need to avoid any suggestions that the dollar is going to suddenly accelerate that decline. so the u.s. needs to be far more careful. so i wouldn't expect the u.s. to make the same comment that we're now hearing from the uk. >> this is christine here. we're seeing how high yielding currencies are get ago boost today. increasingly, could the dollar be used as a funding currency? >> that's right. there has been a very significant shift in the funding currencies which are used for the more speculative carry trades. the dollar is now the funding currency of choice. and we've seen the yen actually benefit on the back of this. the yen, which has traditionally been the funding currency is now actually gaining support when we see asset markets rebound, we see the dollar coming under pressure and, in fact, in this current environment, i think we're likely to see dollar/yen,

the breaking quite sharply lower. i'm looking for a move below the 90 area fairly quickly, which should lead to a move down towards the 88, maybe even towards the 85 area over the medium term. >> ian, it's julia here in the united states. looking at the way the dollar slumped on the fed's release yesterday and then turned positive against the euro, also what you just mentioned about the dollar becoming a funding currency, what is your longer term outlook for the dollar, looking forward over the next year? >> over the next year, i think we are likely to see the dollar remaining under pressure during the end -- for the end of this year moving into the first half of next year. i think as we see the current policies remain in place and asset markets maintain their recovery, that should maintain these current trends. but i think in the next half of next year, we are likely to see quite a significant change taking place. i think at that point we're likely to see some of these

asset market recoveries running out of steam fairly quickly. earth because we're seeing the supportive programs being removed or we see the recovery process actually failing and both cases i think will likely lead to a reversal of some of these trends that we saw recently. that will provide the dollar with some renewed support. so in the second half of next year, i'm looking for the dollar to rebound. ian, briefly, a viewer writes in and says, my question is regarding the euro/yen at the moment. i recently saw the euro/yen increasing when the dollar was up versus the euro. so far the yen and the dollar have been moving in the same direction to the euro. are there any trends to these pairs? i've been contemplating selling euro/yen. >> yes, there is a bit of a change taking place, particularly with regard to the yen. some of the more traditional

relationships to the yen have been breaking down and we've seen that happening pretty much as a functional disrotation of the funding currency. so the yen has changed its behavior quite significantly and in its current environment, the yen is gaining some support. so even if we see euro/dollar pushing higher, i still believe there is scope for euro/yen to move lower as the yen will be the outperformer amongst the major currencies. >> great. well, ian, thank you so much for joining us, ian stanner, bnp paribas. >> thank you. the u.s. recovery is under way. that's the latest view from the federal reserve which vowed to leave rates on record lows for a prolonged period yesterday. joining us now is peter dixon senior economist from commerzbank securities. peter, what is your reaction to the fed comments yesterday? what does that say about where the economy is right now? >> i think it was a statement of cautious optimism. the fed is basically telling us

what i think we already know, that there are signs of a turn around certainly in the gdp growth cycle, but i think it's quite clear that central banks around the world and the fed is no exception are concerned about just how durable this recovery will likely prove to be. subsequently, they're not hanging any flags out just yet. they're going to take it easy, wait and see just how durable the recovery is before they start thinking about tightening monetary policy. >> now, peter, you say that w-shaped recoveries are talked about a lot, but seldom seen. what kind of shape are you expecting to see? i mean, we're still hovering below this 10,000 mark for the dow. >> yeah. i think it will be a fairly nonstandard recovery. i mean, it won't be a v. it's likely to be a w, it's likely to be sort of an inverse of square root sign in the sense that we get a sharp rebound in activity growth in the second half of this year. and once the impetus fades away, my guess is that growth will settle down at a much lower trend rate in 2010, 2011 than we

had seen prior to the credit crunch. >> hey, peter, this is christine here. the fed upgraded its assessment of the economy, the boj last week upgraded its assessment of the japanese economy. be the data, does that somehow cast doubts about the pace of recovery in japan? >> i don't know about casting doubts. it is one month of data, after all. but i think it's fair to say that the japanese economy isn't going to be able to rely on ex ports to drive growth to any meaningful degree over the course of the next six months. after all, the recovery that we are seeing in much of the industrialized world remains a technical one in the sense that it's a rebound in inventories, which is causing it. okay. that might benefit japanese car manufacturers in particular, but my guess is that it will not be the kind of recovery which gives ex ports a great lift. subsequently, the rebound in japan will likely be a fairly modest one as it were indeed in

other parts of the world. >> peter, hi, it's louisa. i'd be curious as to your thoughts on g-20. there are a lot of distractions this time around. it is the third such meeting taking place after the lehman brother collapse. but you've got angela merkel standing up for election on sunday. you've got the headache of the health care reforms that are trying to be pushed through in the u.s. is there simply too much other stuff going on that's taking the leaders' minds off the agenda? >> i think the g-20 will provide the ideal opportunity for the international leaders to focus on what matters with regard to the international financial system. obviously, the one issue which has been plaguing the policy agenda for the last 12 months has been what happens to global finance. this will be the ideal opportunity to sit down and thrash out a few idea peps i don't expect anything concrete to come out of it. but i think it's fair to say that over the course of the next two, ten or maybe five years

will global financial industry will remain a thorn in the side of policymakers and for that reason, i think this will be the ideal opportunity to think about what kind of regulatory changes might be proposed in order to look after the financial system on a longer term basis. >> great. well, peter dixon, thank you so much for joining us, senior economist, commerzbank securities. coming up in the next hour of "worldwide exchange," the federal reserve looks to mutual funds to aid its exit strategy. will reverse repo trades help to stave off inflation? stay tuned for analysis. um bill--

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i'm christine tan. in asia, the ceo of japan airlines says he has asked for a public fund injection as he struggles to restructure the airline. >> hello, everyone. i'm louisa bojesen the ifo sentiment numbers dis appoiappo economists despite rising to 12-month highs. and i'm julia boorstin in the united states. if you're just joining us in the united states, welcome to the start of your global day with "worldwide exchange" broadcast live from the u.s., asia and europe. in the u.s., let's see how the

markets are trading ahead of the open. looks like they're -- futures have turned around. the dow is about 15 points ahead of -- i'm sorry, about 6 points ahead of fair value. the nasdaq is pretty much trading flat. the s&p looks like we're headed towards a flat open. it was pointing down more today and it looks like it's moderating now. let's look at the bund yield. it's down 0.08 to 3. 3%. that's for the ten-year bund. and for the ten-year treasury note, that's 3.41%, down 0.008. louisa, how is it looking in europe? >> we are looking a little bit light on our toes today, julia, with a little selling taking place on our european indexes. the broad based story is a very political one this week. we have the fed, we have g-20 kicking off in full today. thursday and friday, g-20. and we've seen quite a bit of

movement on the currency markets with the governor mervyn king, governor of the bank of england indicating that a weaker pound is helping the uk economy to recover and that causes a big fall in sterling, no surprise there. down by 0.77 against the dollar. the euro investors this morning must be pleased. someone else is pleased. christine. >> hello, louisa. >> it's thursday and we're alive, right? >> i know. it's a thursday. one more day before it's friday. here in asia, more markets tracking losses on wall street, so it kind of moved lower, as well. investors are taking the fed statement to men it's slowly trimming support for the economy. so a bit of caution setting in here. the nikkei 225, however, bucking the overall trend, moving higher 1.7% simply because it came back from a three-day holiday beak. so playing catchup there. the kospi is down 1%. the hang seng getting hammered

down the most, 275% down. interest rate sectors were badly hit. we're talking about banks, properties and the aussie market is down 0.7%. this is how the nymex picture is looking for oil. trimming the losses. $71.55 a barrel. and brent is moving lower the last time we checked, pulling back just a little bit, with $67.38 a barrel. louisa. >> well, christine, just picking up on some of these things that we have to go with today, paul is joining us for the next hour. and that means you can e-mail through with your questions. get them in now and we will pose them to andy. worldwide@cnbc.com. how the devil are you, andy? i'm very well, very well, indeed, just back from monaco, seeing how the world lives and you can be forgiven for thinking

that there was still life in the economies. >> that's interesting. when you look at wealth management, i know wealth managers were having a difficult time either because clients were switching, because we've had pain, we're goggles where, or simply because they anticipate that when you put on a new strategy, something needs to happen, we don't want to miss out. >> i think that's right. i think what's clear from the meetings that i've just been having is a group of clients take a very long-term view and taking a sensible, pragmatic view about the realities of traditional expect ages for growth. i mean, the traditional asset classes, traditional relationship to growth looks to be a broken model. and the reality of that is beginning to dawn i think on fj markets more generally. you see it today, some of the headline stuff, as well been but some of the more uncanny investors outside the uk and elsewhere are looking to physical assets to the

long-term, looking to global themes rather than conventional themes. i think that's where they see the opportunities. behind that, money begins to flow, albeit on higher margins with higher spreads. nonetheless, it's beginning to flow, which is great news for spending for infrastructure, etcetera, etcetera. it leaves question marks over conventional asset classes, particularly in the west. >> andy, julia boorstin here in the united states. what is your reaction to what the fed said about their strategy they laid out for quantitative easing? how will that affect the markets? >> well, i think in the ends, they're stating the blinding obvious. there will be no rush to remove any of the spurt mechanisms anywhere in the western economy. they always used to say, there are only two things that are alternative, death and taxes in the world. we now have a variant on that theme. the only thing that's certain in

the western economies is debt and taxes, taxes needing to rise over time to bring down the debt mountain. when g-20 is sitting in pittsburgh trying to address the problem of $9 trillion in debt, when you try to address problems of getting that debt down, what are consumers left looking at? consumers are left looking at the expectation in the end for some kind of claw back through the tax system, in the end, the moderately higher interest rates. no one is going to make the move very quickly, but there's no end in sight to the support program. maybe not an extension of it. no more money going in, perhaps, but no sudden reversal of it. >> andy, this is christine. if the fed is in no hurry to exit qe, as you said, what are the chances of it stocking inflation? >> that's what everyone is worrying about. money supply growth clearly is higher than it was back end of last year and certainly higher than in march. but we've been down this path

before. we've had high money supply growth and it hasn't fed through into cpi, let alone broader measure hes of retail inflation, which is the sort of thing that policymakers are focused on. i see more danger over the coming year particularly of disinflation continuing disinflationary themes if not outright deflation. after all, if you're in a low growth environment, and that is what everybody is talking about, insipid growth means low numbers. what is the response of retailers? cut prices. it's very simple. >> andy, julia here again in the u.s. you mentioned the g-20 earlier. what do you expect to see coming out of the g-20? do you think we'll really see any new regulation for bankers, any commentary on currencies? >> well, i think most importantly it's going to be the focus is going to be on regulation. as i said, you know, the only two certainties is debt and taxes at the moment, but the third one riding outside that one very closely is on

regulation. there is no doubt that as you look ahead, the financial world will be a much more regulated market than it was before. if as most people conclude so far, the problems that hit the financial markets over the last 18 months arose because of light touch regulation, hands off regulation, clearly there's only one way to go for regulation and that's tighter, that's what g-20 is going to talk about and to produce statements on. >> great. well, andy, you're sticking around for the rest of the hour. andy hartwill, market strategist from quasar. coming up, leaders from around the world are gathering in pittsburgh for the g-20 meeting. !e!e!e!e!e!e!e!e!e!e!e!e

welcome back. president obama picked pittsburgh for the g-20 summit in part because of how to survive this recession. the city's unemployment rate, for instance, is 2% below the

national average. cnbc sharon epperson returned there this week to tell the story of the city's transformation from steel mill to skyscrapers. >> the leaders will see a much different pittsburgh than the steel city i grew up in. >> it's kind of brain center now than a brawn center. >> the steel mill res postally gone. more than 100,000 jbs were gone when that industry collapsed in the '80s. but now robotics, life sciences contributes $14 billion to the region's economy. what strikes me most about pittsburgh is its transformation over the past few years into a global leader in education and health care. that's where the jobs are. upmc, the university of pittsburgh medical center, the largest tenant in the city's iconic u.s. steel building and the region's largest employer.

carnegie and the university of pittsburgh are working to further the economy. >> we're spinning off new companies from university based research. those companies are rooting here and beginning to grow here. >> now small businesses like this dry-cleaners, in my family for three generations, maybe the key to pittsburgh's growth. the new owner's son is scouring forgotten neighborhoods for new business opportunities. >> it's about using what's already here and using it in a new way that it gets us the best bottom line. >> that has been pittsburgh's promise over the past 30 years and may be the key to its continued progress. sharon epperson, cnbc business news, pittsburgh, pennsylvania. >> still, what will be in focus at pittsburgh's g-20 summit? high on the group of 20's agenda will be regulation.

european leaders will be fighting for strict rules for banking regulation. but it looks increase glingly like europeans will have to act alone. >> but what everyone is asking is how much can g-20 leaders receive? not all of it has been delivered. that's been an area of concern for the british prime minister, gordon proun, but despite being recently hailed in the u.s. as global statesman of the year, the prime minister was unable to get a formal one-on-one meeting with the u.s. president. barack obama reportedly turned down five separate requests to meet with brown ahead of the summit, opting, instead, for an informal walk and chat on his way out of the u.n. headquarters. >> so where might the g-20 reach agreement? well, a u.s. backed plan to correct global imbalance has won the qualified support of china. a plan would reduce exporting

countries to china while savings would be boosted heavily to indebted nations, including the united states and britain. the value of the u.s. dollar and the chinese yuan will be discussed likely. >> still with us to chat about today's g-20 meeting is andy hartwi hartwill, market strategy at quasar. andy, what are you going to pay most attention to at this meeting? >> i think perhaps particularly the statement on regulatory reform because that's the one that the financial markets are most closely focused on. i don't think anybody has too much time for the g-20 about currencies. we've heard it all before.. the markets are live, the trading in realtime and g-20 fundamentally and this is a problem for regulation. g-20 fundamentally has no agreement in and of itself to mandate individual states. so individual countries have to

go back and start implementing, start winning votes in parliament and start getting through their electoral cycle. really, whatever they have to say on the currencies i think is beside the point. what they have to say on regulation is likely to find much more resonance with their local electric torts, with their parliamentary and local processes and likely to come into some real force over the course of the next 12 months or so. >> andy, can we switch gears a little bit? over on this side of my neck of the woods, we're watching the chinese market, the ipo market there, our previous guest was saying, you know what? maybe things are starting to cool down a little bit. an appetite might start to wane. what is your feel on the matter? >> it's a wonderful thing having a growth recession while the rest of the world has gone to hell in a hand cart. the chinese economy is on a long-term growth trend, which i think will see it achieve economic super power status beyond its existing one over the

coming several years. all the tensions ta go with that, the dollar cross rate will continue, of course. as for the ipo markets, stock markets generally in china, a pullback after the sort of runs that he would seen despite what happened over the summer months is hardly a surprise. don't forget that the chinese economy got its lending targets for the infrastructure spending for the fiscal boost. its lending targets for the whole year were met by the first half, by the end of june. clearly, there was going the be some kind of slowdown. >> andy, quite a couple of viewer questions on debt this morning. eric writes in and he says to follow through on your view of the global debt problem, how far are we to the point of no return? another comment is have you heard that the level of debt in the system is far greater than most leaders have admitted? i guess debt is truly relative now.

they're in the trillions. >> the numbers are mind boggling. it reminds me when i had my first job as a kid, seeing a till for the cash, how much money was that? incredible. the amount of money that is now in the system, being owed one to another, it doesn't go away in a hurry. there's no point in pretending. clearly the politicians have an electoral audience to play to at home, some of them more imminently than others. the rest of the world sits back and says, you know what? i'm not going to take on any more debt. why? the savings rate is climbing back up to 4, 5, 6. the last time we got near those numbers, the market went flat. >> andy, you're staying with us. i cannot remember this e-mail address for the life of me. in fact, it's on screen, worldwide@cnbc.com. use it and we'll pose your questions to andy. so don't forget, whichever you

are in the worl, follow all of our coverage on the pittsburgh summit at cnbc.com. louisa, the fed wants to ensure its exit from -- the fed wants to use money market funds on mortgage backed securities and treasuries it bought during the financial crisis. the fed would use so-called reverse repos, it would drain liquidity by borrowing mutual funds using assets as collateral. the fed believes the banks would be willing to lend mouse because they're under pressure from investors to stick to less risky assets. a vaccine for hiv is modestly effective and safe according to sanofi. the drugs were tested on 16,000 volunteers in thailand. it says the trials showed a sth reduction in the risk of hiv

infection in those given the vaccine. however, that news didn't boost the company's share price this morning. christine. >> louisa, one ipo to tell you about, mu metallurgical corp. o china dived as much as 15% below its ipo price of 6 hong kong dollars and 35 cents. the tranche ended 5% lower on monday, with you remains above the after price of 5.42 yuan. it's the world's second biggest ipo this year. analysts said investors were concerned about mcc's high price as well as growth prospects. still to come on the show, the u.s. recovery under way also says the federal reserve. we'll find out what our strategy panel has to say about that. ahead on the program. before we get their opinions,

what is yours? is the recovery a done deal or are we headed for a double dip? meal us. welcome to progressive. how may i help you? i'm looking for a deal on car insurance. i think i might have a coupon in here. there's an easier way. we've got the "name your price" option. you do? follow me. you tell us how much you want to pay, and we'll build you a policy that fits your budget. and i still get great coverage? uh-huh. go ahead. you're the boss. i'm the boss of savings. more like the c.e.o. oh, oh. no glass ceiling. the freedom to name your price. now, that's progressive. call or click today. he's saying "toodel-loo"s and switching to sprint rcle. - with any mobile, anytime. - hi, john. now, on the sprint network, he can call any mobile phone, on any network, anytime he wants. without worrying about the meter running. so he's decided to call every mobile phone in the country. he'll finish... just after his 93rd birthday. welcome to the now network.

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hello. welcome back. this is "worldwide exchange." we need to get on with it and show you our global markets, what they're doing. rebecca is in london.

stephane is in london, as well. we're talking about paris. and adam joins us out of singapore. becky, let's starts with you. >> louisa, thanks very much. i love tv. let's talk about what's going on on the uk markets. the ftse 100 is lower by 0.4%. about 18 points or so. that represents a bit of a recovery from what we saw the first thing this morning. but still in negative territory. let's look at some of the decliners on the market today. british airways is the biggest decliner so far this morning. we've had a couple of analyst calls on this stock. citi cutting their rating to a neutral. also, we had ubs initiating the coverage of the airline sector starting british airways neutral, as well. as a result, would he have seen british airways moving a little lower. 3i group is pretty low today, as well. 3% on this company which is based here in london. they came out with a statement this morning in which they told us they believe the economic recovery is very fragile.

also saying that they've been working pretty hard on their credit position. they have renewed and extend pd their credit line. so the shares on the back of that really cautious outlook is falling fairly hard. let's take a look at some of the other stocks that have been declining, as well. lse, london stock exchange is another company suffering this morning, down by about 2.6%. they had a cautious outlook in their statement today, too, and telling us furthermore they are cutting 12% of their staff, as well. air france klm is declining today. ubs has decided to stop the coverage of the airline with a negative rating sell on the company with a price target of 12 euro per share which is below the current price for the company, down more than 3% right now. in the airline sector, we've got comments from the general director of airbus. he believes that the company will benefit from the large

national loan that the french government wants to launch early 2010. the companies in the sector would need an extra 800 million to 1 billion euro investment over the next couple of years in order to make sure that they'll be able to launch the next generation of civilian aircraft on time and also we've got still others outperforming the market sanofi had positive tests on its recent tests promising to outperform the french market. let's have a look at the asian market with adam in singapore. >> thank you very much, ste tan. the japanese equity market was a star performer today in what had been generally a weak session in the asian markets. but, of course, they were shut for the three previous trading days. we saw the nikkei 225 rise handsomely, up about 1.7% in the context of weak factors of the

u.s. weak markets down overnight. we had weaker export data in the month of august and the japanese yen which continues to go higher versus the u.s. dollar which generally is negative for the exporter stocks. but we didn't see that permeate through the technology today. in japan, at least, we had sony, one of the leaders after it saw a 300% rise in the ps beside 3 console. so both of those stocks did manage to slows higher. one of the weaker stocks was japan airlines, this on talks that it's going hat in hand for the government on more funding and more reports that they may be splitting to much along the lines of gm restructuring in terms of the good bank and the bad bank, the profit airline and nonprofitable airline. that stock did drop heavily today. on that note, back to julia in the u.s. >> thanks so much, adam. investors are due to get a pair of economic reports today. weakly jobless claims are out at 8:30 a.r.m. new york time, forecast to rise by 5,000 to a

total of 550,000. at 10:00 a.m., existing home sales will be released, expecting to jump to an annual rate of 5.39 million homes. then at 4:30 p.m., the fed puts out its weekly report on its balance sheet. the senate banking committee will hold a hearing on the t.a.r.p. at 9:30 a.m. new york time. he says the t.a.r.p. has played a major role in stabilizing the financial system. while several recipients have repaid the government, it's unlikely the u.s. taxpayer will ever see a full return on their investment. still to come here on "worldwide exchange," we'll continue our coverage of the pittsburgh g-20. send us your questions and your thoughts. these days every penny counts with everything you buy.

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dow futures are about 15 above fair value and it looks like the nasdaq, the s&p, they're pretty much flat, but slightly up. so a bit of a reversal yesterday. and down 80 points, so we'll see if maybe we have a more positive day today. let's look at the treasury yields, treasury is planning to auction $29 billion in seven-year notes today. and now the yield on the ten-year note is down 0.002 to 3

much 41%. louisa, how is it looking in europe? >> we're still a little lower this morning. it seems that the banks are taking most of the index, when you look at deutsche bank, lower by around 2.5%. there were comments out, banks, the chief executive stating that -- these are comments from the swiss stanley newspaper -- i'm not pronouncing that right, but i tried. he's saying heavy regulation would result in lower profits for banks. these are coming ahead of the g-20 meeting where they'll be talking about banking regulations, things like that. sterling has taken a hit today after the bank of england govern mervyn king was indicating that there were weak counts in helping to rebalance the uk economy. christine in asia. >> hello, louisa.

investors taking the fed statement to mean that, you know what? the fed statement is going to trim support for the economy and that low interest rates will gaully come to an end. however, one market bucking the overall trend is the japanese market coming back to play catchup from a three-day holiday. moving higher 1.7%. the shanghai xoty recouping earlier losses there. the hang seng down 2.5%. the interest rate sectors like banks and in terms of nymex light sweet crude, it is falling back to the $68 level, concerns about the demand picture, up a huge buildup in crew stocks, 62 cents lower, $68.36 a barrel. and brent pulling back, as well, at 57 cents, $67.42 a barrel. julia. >> thanks so much, christine. joining us now for market strategy is the director of research at h ae versford

investments and still with us is andy hartwill. jason, we've been talking about the fed and what to makes office though comments yesterday. what's your reaction and what do you think is the impact of their strategy for quantitative easing moving forward? >> i think our perspective on this is the fed is basically going to have to be following a lag in first out sort of policy where there are dpraully removing different pieces from the equation in order to start inching towards an eventual exit. these steps that have been coming out are the first steps in that direction of basically saying -- basically moving away from a dramatic quantitative easing that they were at before and taking some of the early steps in the opposite direction, while still supporting the overall market.

this fed wants to be supportive. bernanke knows the risk of cutting off early. it's a mistake that was made in the '30s and he doesn't want to repeat it. >> jason, we're looking towards the g-20 today. what are you expecting to come from the g-20? do you think there will be any progress on regulatory of the banks, do you think that will impact the markets at all? >> i think what we have to realize is that at this point in time, we probably hit a regulation low during the '90s and perhaps the early 2000, both in the u.s. and probably internationally as far as regulation is concerned for the overall corporate economy. from this point forward, we're going to see more financial regulation to contain some of

the ways that business practices are internationally and domestically. and just kind of an assumption going forward, we think that the outcome of the g-20 is probably going to be the first initial step in that direction and there's a lot of work to be done after that. >> i want to get back to some of the viewer questions on this end. rick writes in and says how much risk would the u.s. banks taking on if they were to lend to the federal reserve? if the fed assets are so safe, it seems they ought to sell them into the marketplace to liquidity. >> i think the fed in and of itself is perfectly safe. why not do that? sooner or later that liquidity is going to get drained. that is what china did very early on in its response to this crisis. >> and i guess that goes hand in hand with who is buying treasuries and whether or not that funding is going to continue. >> yes, absolutely. >> okay.

>> jason, hi. this is christine here. and following on that note, will the chinese continue buying u.s. treasuries or will they diversify in other assets? >> we think this is a natural extension of what's been going on. if you look to earlier this year, treasuries were at certain levels, you know, down at the yields. they were just not sustainable at that point in time. now that yields have crept back up closer to more normal territory, they're still not where we probably prefer to see them. but that's allowed more fires to come into the marketplace. that's happened domestically. you've seen large operations such as pimco starting to release the treasury holding. and i think that's going on for international investors, as well. the chinese purchases treasuries. treasuries are considered one of your safe haven options. it may not be quite as much of a safe haven as it used to be

given the level of debt that's outstanding at this point in time, but it's still considered to be win of those spots. and those purchases are likely going to continue as long as rates kind of hang in there and don't fall to, you know, the absurd level that we saw earlier in the year. >> jason, as for questions that was e-mailed in and andy answered about the mutual funds and the feds that are teaming up with them to be careful about how quantitative easing happens and to avoid inflation, what do you think about that strategy? do you think that's going to work? >> you know, they need to take a strategy that does, you know, try to contain inflation and moves in a gradual manner in order to get the market back to a reasonable point, allow the economy room to move back to a reasonable point. this is just one piece of many pieces of the overall strategy. i think as we look back at it 6,

12 months from now, it will be hard to discern whether this one item is that much of a needle mover in the overall strategy. i think this is a -- just a fraction of a much larger strategy to keep stimulus in place, but to move it toward more of a market operation from a all-out federal reserve operation at this point. >> jason, it's andy back here in london. i just wanted to pick up on something. is there anything that you can see likely coming out of g-20 or anywhere else that's going to prompt a dramatic turn around in the contraction in bank lending that we're seeing now in the united states and elsewhere approaching record lows? >> i don't know that anything from the g-20 can actually resolve the bank lending situation. having said that, there are expectations at this point in

time is that the current economy is going to be surprising to the up side over the next couple of quarters and perhaps into next year. as that occurs and as we get a return to more normal levels of inflation, that being somewhere in the 2% range as opposed to the deflation we've been seeing recently, that debt payment is going to become easier for a lot of people that do have debt outstanding. as a result, a lot of banks are going to start looking at their outstanding loan balances and realize that they're not quite as risky as they were before and they're going to enter into a position where they're actually more willing to hand over in the terms of loans capital that they've received from the government or received in debt payment from their other loan holders. that should loosen up the system gradually as we move into a better economic environment. and we think that will help everyone across the board. >> thank you very much for being with us today. we appreciate it, jason pride,

director of research at haverford investment. andy, briefly, pj writes in from seattle and says, you bet things are making money here, they've raised credit card interesting, charging an arm and a leg for overdraft protection. at the same time, though, if the fed is going to be keeping rates lower, as they've indicated, it's going on be awfully heart for the banks to make money. you have the consumer on one hand, but on the other hand -- >> the heart of the problem, he's absolutely right. interest rates are low, but banks make money on differentials. so whether or not you're a 100 basis points for a prime rate, they can make a margin of 100 basis points, that's fantastic money for them. it's just the same as when they're lending out. they really don't mind. they make it on the turn. and that's what's happening now. the banks have been able to, over the last several months, to widen out that spread. it's proven banking.

go back to the 1980s. that's what you did. we're going back there now. banks are improving their margins, they're going off their balance sheet. what we're not seeing yet is any direct side of it coming out into the marketplace to fund the kind of real world program that you and i want. never mind paying that credit card debt. what about looking to the future, investing in the future, as well, for corporate and real individuals. >> thank you for joining us, andy. andy hasn't been with us for the full hour from quasar. >> let's cross live to tokyo and check in on the trading day there with ken moriyasu from the nikkei. moriyasu-san. >> hi, christine. coming back from a five-day holiday, tokyo stocks marked the highest in a month. shares in the chip sector showed strength after an upbeat economic assessment by the u.s. federal reserve. on the down side, consumer

credit company ifo lost 24% after announcing they expect a net loss of $300 billion yen for the current physical year. aiful says it will cut its workforce by half. losing 16%, japan airlines announced a reduction in inter national flights. after the bell, jal officially told the government that it is considering applying for a public fund injection. and it's been a year since mitsubishi ufc rescued morgan stanley. northan stanley stock has recovered from $6 to nearly $30. the partnership has opened doors for mufg abroad. but for mufg, the key goal of integrating the two brokerage units in japan has yet to bear

fruit. that was the nikkei business report for today. >> thank you very much for that, ken moriyasu at the nikkei. >> still to come on "worldwide exchange," what would you do with extra $50 million? that's what about 300 directors and executives at credit suisse are asking themselves this morning. we'll bring you the detail of why, right after the break. tdd#: 1-800-345-2550 if i'm breathing, i'm thinking about trading. tdd#: 1-800-345-2550 i always have my eye out for a stock on the move. tdd#: 1-800-345-2550 doesn't matter if a company sells computer chips tdd#: 1-800-345-2550 or, i don't know, fish and chips. tdd#: 1-800-345-2550 i'll look at all kinds of stocks before i settle on one. tdd#: 1-800-345-2550 if i think i'm onto something i'll check it out, tdd#: 1-800-345-2550 you know, see what other traders are up to.

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welcome back to cbs news welcome back to cnbc's "worldwide exchange." citigroup is planning to scale back its retail banking presence in the united states. the wall street journal says citi will concentrate on six metro areas, new york, los angeles, san francisco, miami and washington, d.c. citi may reduce consumer lending to mainly credit cards and consumer mortgages. the company is determining whether it should pull out of areas such as boston and philadelphia. in frankfurt, citi is trading down 2.83% to $3.09. meanwhile, a former moody's analyst who went public this week with credit agencies are

still raising takes his story to capitol hill today. eric wolchinsky will testify and plans to tell lawmakers still favor revenue over credit quality and will dismiss employees who disagree with them. he says he was suspended by moody's after warning the firm's compliance group after what he believes to be a securities violation. microsoft says it has no plans to be electronic arts. shares of ea jumped 7% on wednesday on rumors of a takeover. analysts have generally dismissed the takeover of a acquisition noting the company would have little need for ea. madden, nfl football and tiger woods golf as well as the rock band video game. >> thank you, julia. the widely watched ifo survey of the german business environment came in at worse than expected during the month of september. while the survey rose to a

12-month high, the figure came in lower than what people have been hoping for. this news sent the euro quite a bit lower -- actually, it's not lower, it's higher by 0.2%. that makes more sense. on top of that, continued dollar weakness being very persistent. a group of credit suisse bankers appear set for a payout bonus. 300 executives and managing directors could get, on average, more than $6 million worth of stock as part of a performance incentive plan. that doesn't sound bad, christine, 6 million? >> louisa, one ipo to tell you about, metallurgical corp. of china, or mcc, has won the aword of the word market debut this year. it david as much as 15% below its ipo price. now, the shanghai tranche which lifted on monday ended 5% lower today but remains above the

offer price of 542 yuan. the combined listings rates $5.1 billion makesing it the world's second biggest ipo this year. analysts said investors were concerned about mcc's high price as well as growth prospects. >> so this program is almost over. it's hard to bear, 10 more minutes, but after this, u.s. "squawk box" follows "worldwide exchange" for viewers in asia, europe and the united states. carl quintanilla joins us live today, in the dark, even. >> louisa, you remember what a big deal this was for london, the g-20 in april. we are live in pittsburgh here where we're talking about the g-20. we'll talk about the agenda, trade, executive comp, financial regulation and what that could mean for the markets, of course, and for the dollar. we'll talk to commerce secretary gary locke.

and former white house staffer tony fratta will talk about what this means for a white house situation. also, what this means for financial services for pittsburgh and for the u.s. as we play host to the world today, a busy split edition of squawk begins at the top of the hour, louisa. >> sounds good, carl. we look forward to it. see you in a bit. julia. >> thanks, louisa. up next, we'll take a look at today's u.s. jobless claims. will they support the fed's latest assessment of a pick up in the economy? we'll say. stay with us.

still with us for a look ahead to the u.s. trading day is jason pride of heverford investment. jason, looking towards the trading day here in the u.s., do you think stocks are going to take direction from the jobless claims numbers at 8:30 a.m. and where will they head? they may take some direction from it. what we would like to see from the jobless claims is a continuation of basically a

gradual improvement in the employment market. while we don't expect that unemployment is going to top out immediately, it should be doing so somewhere within the next two quarters in order to confirm what we're seeing in other economic indicators. what we need to remember, though, is that jobless claims in any of the employment stats are very much a lagging indicator and they tend to follow on a two to three-quarter lag versus many of the other stats out there. the weekly number is very volatile, so the market may partially ignore it or they may take into account. it's hard to say how the market is going to interact any one individual data point on something that's so volatile. we do believe, though, on the whole, things are xrofing. we are probably going to be seeing in the third and fourth quarter of this year economic situations start to improve and come in ahead of expectations. given that, we think that the bias in the market, even at this

point following a 50% run, is still to the upside. we're only about halfway through the overall rebound in the market at this point. back to normal levels. we still have a long way to go. >> well, jason, we have to leave it there. thank you so much for joining us, jason pride, director of research at haverford investments. let's take a quick look at where futures are heading for the day. futures have turned around and we're now looking like the dow futures are pointing up by about 40 over fair value. nasdaq and s&p pointing to a higher open. that's it for today's show. i'm julia boorstin in the united states. >> good-bye, everybody. i'm lb in europe. >> and here in asia, i'm christine tan. thanks for your company here on "worldwide exchange."

good morning. investors do a little profit taking, european shares falling for the first time in three sessions following cautious economic comments from the fed here. ex fed chief paul volcker urging limits for banks. plus, carl reporting live from pittsburgh. >> yes, joe, world leaders descending on this city. protectionism, executive compensation and financial regulation are key items as "squawk box" begins right now. good morning, everybody.

welcome to "squawk box" right here on cnbc. i'm becky quick along with joe kernen and carl quintanilla. who is reporting live from pittsburgh today. carl, obviously, the g-20 coming to pittsburgh is a big deal for america, very big deal for pittsburgh, but we have seen some clashes in the past at these g-20 events at some of the other huge events. why don't you set the scene for us and tell us what we can expect today. >> we have already. we're on our first at the alcoa corporate center. you can see the allegheny river behind me here. the president and other world leaders as you mentioned will be arriving here throughout the day. a lot of them are, of course, coming from the u.n. general assembly in new york. the global economy is at the top of their agenda. member countries represent about 90% of global gross national product, 80% of world trade, 67% of the world's population. as is often the case with global summits, the leaders will be met with protesters. the green peace activists yet

repelled off of pittsburgh's iconic west end bridge. the demonstrators could be seen dangling from a huge banner that said danger, climate destruction ahead. release co2 now. downtown is sealed off in various restricted zones. the mayor here estimates the cost of all this extra security could hit almost $20 million. the feds are going to provide about $10 million. pennsylvania pitching in about $4 million. the city is going to have to make up the on the map is worth the extra cost. state police, 1,200 troopers in the area. the pennsylvania national guard overseeing 2,500 troops and department of defense personnel for crowd control and other duties. a lot of businesses are closed. schools are closed. government offices, a lot of other operations closed for the day. the river behind us is closed and you