"worldwide exchange." better news out today. return to growth for the first time in 16 months, the september figure. slightly better rate than first expected. this is the final print of the euro zone, up to 50.9. it was 49.9 in august, the highest since april 2008. the employment index, though, was revised down. so still job recovery. the september come poz sit up to 51.1. a little bit better than thought on the services side. helped by a leak from french services into clear growth territory 54.8, germany held above the 50-point, although the index retreated from the august level in terms of the -- some of that data there.

euro dollar 146.20, of course. let's get to a little bit of reaction. joining us is head of investment strategy at credit suisse. i suppose everybody wants to take a view on the sustainability of this. what's your take? >> well, actually, it's a bit surprising. actually think the economic recovery is set to enter the second stage, which is probably not as strong, but a bit more sustainable especially after this stock. and now it appears we have to allow a little bit more on consumption. and the data out of today confirms the view. it is a lagging indicator and we will have to watch it closely. >> is it going to be more of a jobless recovery? what we're saying is the pick-up in activity and a bit down in the employment index. >> yeah. i wouldn't go that far. of course there's always talk in the beginning, how many jobs

will be lost before they are going to be recreated again. what we are seeing so far mainly in the u.s. has been a very front-loaded entry in unemployment quarter and we would expect demand is going to reach a more sustainable level of the first increases in the job seekers again. actually the work is behind and we are basically optimistic. >> okay. stick around, come back to you. meanwhile global equity markets started off a bit flat today. china's been closed, it is closed until we get back to work on friday. the nikkei ended flat. has this data helped us back over the line that separates a down performance from an up one? so the european stock markets one hour into the trading education session, just over one hour into the trading session. ticked higher for the german market. no doubt that the pmis have helped us. on the currency markets, we're

plenty focussed on the aussie against the dollar. the australian central bank will raise rates tomorrow. dollar/yen, still below the 90 mark, the euro/dollar up to 1.4629, and euro/sterling at .9173. a mostly weaker picture here over in asia. not surprising given the selloff on wall street last friday. take a look at the final scores there. the knick chi off about .6%, although the market did see some support coming from the retailer. certainly the underperformer today, down 2.3%, the the market there playing catch-up after coming back online after the korean thanksgiving this past friday. the hang seng very choppy trade, but actually did manage to close higher by .3%. we have the big blue chip names

such as ascp. talking about a w-shaped economicry coverry. the taiwan market up .3%. shanghai composite only comes back online this friday after the golden week. crude trading below that $70 handle currently of 21 cents, as far as brent is concerned, the if you bring up the board. brent currently trading at, there you go, off 26 cents at 67.81. and good morning to brian shactman, welcome back. >> thank you very much. here in the states, we're coming off a week where basically the dow and the s&p lost about 1.8%, close to 2% in the nasdaq. so it was a rare down week for the u.s. markets. we start off this monday positive by about 76 points in the dow and positive across the board. we have ism services today, almost $80 billion in bond

options this week. and we start off earnings a little later in the week with, of course, the symbolic launch with alcoa. the yield right now, it is ticking in at -- see if we have that board for you. of course i mentioned those bond options, starts with 7 billion tips where 3.3% with the bund. we'll see how that's staring, 3.21%, and take a gander at gold and see where it is in relationship to that 1,000 mark, $5 up above it up $3.55. an international monetary found in the world bank are gathering with global leaders innist tin ist t istanbul. as the world moves out of recession. the director of the wto told

cnbc that the nymex should not become the central bank. he puts that to the stability board which he hopes to increase regulation. >> well, generally speaking i'm in favor of strong international regulatory frameworks. we all know that domestic operators don't always like this and this is the reason why we had no solid financial regulation, which by the way led to this crisis. >> right. guy is in istanbul. this is turning into a turf war while everybody should be working out their responsibilities in the future? >> reporter: that's a distinct possibility at the moment, ross. probably accurately describes what potentially could happen over the next few months at various international institutions vying for authority. of course, the canadian finance minister has a prime seat at the table, manages interested to ge take on where this goes.

the canadian finance ministry, where does it sit on the debate of whether the ims should be the new central bank of the world? >> well, we're involved with the multi-lateral banks too and innovative investments were committed to the world bank, the imf, canada's been a major donor. we think there needs to be integration and coordination. >> reporter: does the civility board have a more central role to play? it does seem as if maybe a lot of people are beginning to side and say it should have a more prominent position. >> it has a major role to play. but there are different initiatives. lots of different funds set up, our concern is to make sure they're coordinated and take time to assess how this is going to work so we don't make mistakes going forward. >> what is interesting is who contributes what and what say they have. there is definitely a move from the advancing countries that

they should have a greater say, that they should play a greater role and that's beginning to be reflected in institutions like the g-20. is that a viable discussion for now? do you think it is a legitimate question? do you think that the eu, canada, the united states are going to be willing to seat some of their authority? >> yes, in fact we have in imf reform we did a few years ago in singapore. we've agreed to move forward on that again. this is a reality of the emerging economies. the emerging performance as the premiere discussion place for economic policy in the g-20. we just went through another summit in pittsburgh where we agreed on that with the leaders with the finance ministers. i think we're all on the same page there. >> she said she felt that the euro zone should not have to shoulder the full burden of currency revaluations that seem to be taking place at the moment. a lot of people surprised that maybe the dollar didn't get a little bit more discussion at your meeting at the g-7. >> well, we had some discussion

as we usually do. i've been going to these meetings for four years and it's a perennial topic of discussion. i discussed it with my chinese colleague, as well. because that's part of the need to see more elasticity in that dollar. the canadian dollar, the australian dollar, we've all suffered at the hand of the weakened u.s. dollar. it's a factor in all of our economies. >> reporter: how big of a problem is it? we're talking now at fairly high levels or low levels. if those become more extreme, will that generate more firm action? stronger words do you think? >> i think the most difficult part of it for business and i care about business and job creation in canada is volatility. when we see sudden fluctuations in the value of our currency or sudden devaluations of the u.s. dollar, that's a big thing. if we see it gradually over time, that gives business a chance to adopt.

>> reporter: thanks for your time. the canadian finance minister. back to you guys, ross? >> we'll check in, of course, for more from istanbul. you can get all of our coverage of the imf world bank meeting on our website www.cnbc.com. and joining us now is ania harper. let me start with you. we had a weak picture out here in asia on the first day of trade this week. a lot of concerns over the resilience of the global economy, the strength of this economy, also comments of hsbc citing a w-shaped recovery. you're saying we should go back to business as usual approach? >> absolutely. i think we need to separate out and know what your push to investing is. the message we want to get out is we're not going out there and

investing in a bau, business as usual approach because it's smarting from the crisis. and they're losing out on the up side. we don't see a large risk of w-shaped. yes, it's possible next year. but at this point in time, looking outlook, we think the right decision is to be invested. >> more up side for the asian equity markets. what do you think? >> reporter: absolutely. twofold picture. i would agree that from a strategic point of view, the imf has brought up the forecast, on the tactical side, however, quite a bit off already the positive economic. i wouldn't expect too much from that side, also developed countries have actually caught up pmi wise in the meantime. so, you know, we actually basically we are bullish, but of course we do see the technical indicators have lost momentum

and have kind of flattened out a bit. >> brian shactman here in the u.s., we had greenspan chime in over the weekend. both of you listen to this quick sound bite. >> the silver lining is that at some point we're going to start to see an improvement in employment. but unless there is a monthly increase of more than 100,000 a month, you still get the unemployment rate -- >> now, i know asia's your focus, but as you look forward with your approach, how do you factor in the role of the u.s. and the degree of the recovery here in the u.s.? >> well, the degree of the recovery in the u.s. is i guess the most important to all of us. even in asia without the strong u.s. recovery, we're going to be in a little bit of trouble. but right now, in fact, we prefer developed market

equities, u.s. small caps over equities on a relative basis at this point in time. on the labor market, yes, and agree with the sound bite, you do need the numbers to begin looking up. let's not forget that's a lagging indicator. and it's one of the indicators you'd expect to see to recover last. and from an investment point of view, you need to invest before that. you wait for those numbers to pick up as an investor it's a little too late. >> in taking just the fact that jobs are a lagging indicator, anja, what is it on your strategy? >> well, actually, what we have seen some of the victors seem to have on the equity side we would certainly expect a small rotation back into more defensive side of things. from a pure economic point of view, we would expect some positive -- slight positive

surprise for the third quarter and potentially for the fourth quarter also based on the private consumption, something which hasn't been really looked at most recently, but see consumer confidence actually heading north. we also in our view have seen financial coming back to the private side. so for us actually that means basically just strategic direction for market is up. we might see some minor and not too broad based weakness. but generally, we actually like the u.s. equity market. >> what do you make of fixed income investments at the moment anja? >> at the moment, strategically we would feel that we have to underweight. but we feel that markets are well anchored at the moment, especially at the shore end. strong belief in the community that there won't be any premature interest rate hikes. we don't have to go too short

duration. and certainly, you know, they're going into the fixed income segment all three indicators. and you should have fixed income. your portfolio shouldn't go too short duration, and there will be a time we have to do that. >> yeah manpreet, what's your fixed income view? >> our fixed income view, sir, is similar. we scaled back to neutral, but we think the approach should change. up until it's been a spread narrowing story and we think that story's run its course. we think looking ahead there are two opportunities. one is in a place like australia, we select the u.s. markets, but we don't expect to see those rate hikes coming until the second half of next year and think there's an investment opportunity there. but like wise, we think the stories to place more on the slope of the yield curve and

rising long-term rates more than spreads narrowing on the credit side, which we think a story that's run out of steam. >> manpreet, thanks for that. anja, thanks, as well. now, still to come on the program. well, they say about the state of the british recovery. we'll find out. hsbc ceo says we're in for a w-shaped recovery. and we'll take a look with our guest host and the imf has been making its case for becoming the world's central bank. the latest case from turkey. 

how you could start saving. okay. what's happening in the global equity markets? there's our team of reporters. we start off with becky in london. >> managing to hang on to some gains at the moment. we've been higher, we have been lower at various points throughout the morning. but we managed to hang on to 13 points at this stage. as well on the up side, the basic resource stocks helping us. the gain of 3.8% higher.

antofagasta helping us out there. rbs also putting in a strong performance today. it is certainly helping us to push ahead. downside, though, stocks are tempering those gains do include some of the real estate stocks in the uk. the likes of land securities, british lands, also segro, hammerson pulling us off the highs we've seen. they'll complete the ipo of their dutch unit in november. the proceeds of that action will help them to restructure the balance sheet and pursue growth. sylvia, how does it look in germany? >> similar story after the consolidation last week, today we try to push the market up a bit, but there wasn't an awful lot of dynamics in there and still isn't. for its early days yet, if our friends in the usa don't help us

in the afternoon, we probably slump back to profit-taking. but be that as it may, not an awful lot to write home about. we've seen a lot hanko getting faster with their saving synergy, the integration of the u.s. company that took over, sh they want to save $150 million or they expect to save 150 million are in 2010. they had expected that only a year later up to 20% sales slump once the cash for clunkers scheme fizzles out in germany. that means in 2010. they were the only german car maker that really benefitted from the cash for clunkers as it was called here. so they're the ones that are suffering most. but their share's up this morning. other than the other automakers that didn't benefit from it. and their shares are down not dramatically so, but be that as it may. solar world benefitting from the fact they want to push up production in the north american

market. what does it look like in paris? >> it's a similar picture in paris after a negative start the french market is now gaining a few points. we've got one of the top gainers after the cu told the financial times that the market should recover next year. anticipating a rise in 2010. also forecasting a dumpy ride, that's what it states for the steel industry, the stock is up 2.2% almost. we've got trading higher as the trial of the company starts today in new york. the class action case will focus on the former ceo who has been accused. the challenge is big for the company according to some lawyers. they could pay up to $1 billion in compensation. a spokesman for the company says the figures without foundation. and bouncing back from the decline we had on friday, the stock lost more than 3% on

friday. it's now up nearly 1%. some pilots of the airline today will present a report on the crash of the air france 447 flight that killed 328 people in june. blaming the air speed props for being responsible for the crash and it's also blaming the french authority for underestimating the problems with the speed props. it was manufactured by a french company. since then it has been replaced. once again, bouncing back edf also trading higher. the stock is up 0.9%. that's the story in paris. now let's have a look at the asian markets in singapore. hi, stephane. you saw hong kong recover, shares bouncing back about 1% to

help rebound stocks. blue chips, most of them higher, hsbc stayed in negative territory for most of the day. and you can see it closing down 1%. of course its chief executive warning about growing too fast and saying a second economic downturn could force the bank to take more write-downs. there is a financial times report that u.s.-led consortium may have entered the race to buy the unit from ford. the parent was in the running for that. as for japan, the nikkei closing at an 11-week low, down 0.6%. very heavy selling in the exporters there on the back of the strength in the yen. and one i want to focus is mazda motor. something 5.6%. and after the market closed it announced they're raising $1.1 billion by issuing new shares but also selling treasury stock.

on the positive side, they did narrow their loss forecast. so in terms of the operating loss for the fiscal '09 and '10 year, now looking at a loss of $13 billion yen, the previous forecast was 50 billion yen. south korea's kospi down 3.6%. it was playing catch-up to losses. saw heavy selling in the chip stocks like samsung as well as hynic. we talked about hanna financial tanking after it is considering a rights issue. media reports saying it could be worth $1.7 billion. as for singapore, i want to mention this one, as well, still trading right now. interesting that the monitory authority of singapore saying that capital-raising for the banks there could be on the cards, as well, to strengthen the banking system. we got a bit of a mixed picture as you can see dbs and ocbc

trading lower. back to brian in the u.s. >> good to see you here on a monday. here are the states. much lighter week for economic data. u.s. investors may take their cues from earnings. alcoa's reporting season kicking off on wednesday. one report, the ism services index, analysts looking for a reading of 50, up from 48.4 in the month of august. 6:30 p.m. new york time fed president dudley will speak about how to foster the soundness of the economic and financial system at fordham university. the u.s. supreme court begins its fall term today, as well. a few items on the docket. the justices will consider one case questioning the constitutionality of a regulatory board that was actually created in the wake of the enron scandal. and there's another one about what role courts should play in setting compensation for much

fund advisers. they could also decide today whether to hear appeals from two corporate criminals. former enron ceo. and we do have breaking data. i'm going to send it over to ross for that. >> thank you very much. it's risen to 55.3 in september, 54.1, it's a high since september 2001. we thought it'd get up to 54.5. much better than expected number. the service sector in the uk expanding at the fastest pace in two years in september. so this data suggests that it has returned to modest growth in the third quarter of the year. the spare capacity in the sector and weaker performance in manufacturing. recovery might be a little weaker, as well. sterling bouncing back after that. going back to 1.60 against the

green back. sarah, good number here, does that mean you think britain has exited recession in the third quarter? >> reporter: yes, some of the recent numbers we've had on the uk economy has been a bit worrisome. but this is a very good result and it certainly suggests that we've returned to positive growth in in the third quarter. the recession came to an end in the second quarter. the services sector an important part of the uk economy. and to see a big bounce in this monthly report is very significant. >> yeah, how do you contrast it with the manufacturing construction surveys which sort of suggested that the recovery could easily run out of steam? >> well, i think that these numbers have disappointed on the manufacturing side sort of oscillating around the 50 level. it is a bit of a surprise because we're expecting to see restocking after the severe destocking that took place in the fourth quarter of last year,

first quarter of this year. so we would expect to see a bit more of a lift of manufacturing. we would expect weaker sterling to help manufacturing, as well. so those numbers certainly have been a disappointment. but i think it's clearly important to focus on the services side and that this overall suggests return to growth in the third quarter. >> okay. just to give you aly bit more detail. hotels, restaurants, reported particularly strong growth, activity and transport storage, communication, personal services. stick around. we'll get more from you. we'll look at the ism coming up a little bit later as well. chloe? well, coming up on "worldwide exchange," told cnbc this morning that everybody wants to see a strong dollar. we're going to take a look at the latest on courtesy markets in just a bit. stick around.

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hello, i'm chloe cho. here in asia, mazda narrows the forecast and says it'll raise over $1 billion by selling new and existing shares. and here in europe, markets get a boost from better than expected day from the euro zone and the uk. and i'm brian shactman in the u.s., investors may turn to third quarter earnings this week

to e see if markets will return once again to their winning ways. you're washing cnbc's "worldwide exchange," the global trend's been a little bit flat this morning as we go to european trade, but it bounced back up after an uptick in the revised pmi for the euro zone and a revised number out of the uk, as well. nevertheless, still up .2%, up .33% higher. on the currency markets, the pound got a bit of a lift off the lows against the dollar, up to 1.5971. the dollar/yen is flat, 89.79. >> ralph, you know that strong yen hammering a lot of the exporter plays over on the nikkei today, lower by .6%. but the big loser today here in asia was the kospi.

down 2.3% playing catch-up given the losses we've seen in the earlier sessions last week. and hong kong managing to rebound by .3%. taiwan market, as well, the greater china market the shanghai closed until thursday and will only be back online friday. but going for a lot of bank meetings. and today the bank of indonesia, kept interest rates unchanged. tomorrow, all eyes on the rba given a lot of market participants are already betting on a 25-basis point rate hike. the bok meets later this week, as well. and over to brian in the u.s. thank you, chloe. here in the states, coming off a week where we lost 1.3% off the board. if you're just joining us, futures have strengthened. that plus 40 was plus 29 in our half hour. we're about 47 points to the up side and the dow by about 11 plus to the up side and the nasdaq and s&p 500 if we opened

right now we'd be up by more than six points. right now we're in positive territory. not a lot to deal with. we have ism services we'll talk about with sarah hewitt in a second. earnings start in the middle of the week. we have a whole lot of bond options to look at and think about this week. 3.21% three-year note at present is where we stand. let's bring back in sarah to talk about the global economy and issues here in the state to start. sarah, good to see you again. let's talk about ism services. some of these sort of second-tier data points have moved markets lately. what do you expect? will it have an impact? >> well, we think we'll see a move back into positive territory. expansi expansionary territory. this will be the first time we've seen such a move since september 2008. i think it would be significant. and we're looking for the economy to recover in growth in the third quarter, but a lot of

that to be based on a turn around in the inventory cycle. so i think market is really looking to see if there is sort of more solid growth taking place, the service sector obviously is very significant and return to expansion would be an important result. >> one side of the argument says, listen, you have this artificial prop with stimulus and you get the bounce from inventory replenishment. so based on what you saw in all of the data we saw last week, i mean, how fearful are you of the double dip thesis? >> well, we are quite concerned. we could well see quite a strong rebound in the second half of this year as a result of the fact as you mentioned the inventory cycle, the fiscal stimulus. but the data that we had on friday, on payrolls was disappointing. in particular, the workweek, the weakness in earnings, all of these together suggest that the consumer is going to really

struggle going forward. and we're not going to see that broad-based economic recovery that we need to avoid a dip weaker in the first part of next year. >> good morning, sarah. here in asia, central bank meeting very much in focus. a lot of market participants suggesting that the rba may actually bump up the interest rates by 25 basis points. is this something that you think will happen tomorrow? >> we're looking for rba to keep rates on hold tomorrow. there have been some stronger data recently, but we don't think that they really signify that the economy is -- has bottomed, that there's a very strong recovery in place. if we look at the retail sales, job advertisements, stronger sales, but retail sales on the back of a couple of months of disappointing data. and it'll be interesting to see what the rba says about the future intentions. certainly we're looking for australia to be one of the first major economies to see higher

interest rates. but in our view that's not likely to happen until next year. >> and as you can see, investors certainly piling into the aussie currency today. but it's not the aussie. a lot of asian currency showing quite a bit of strength against the green back, is this something that's going to crimp growth for asia given that a lot of analysts were pricing -- a lot of market participants were pricing it as v-shaped economic recovery? >> i think at the margins potentially is a risk to asian export recovery. of course exports have been rather sluggish throughout this whole process. the currencies, we don't see them being especially undervalued. certainly overvalued, sorry. if we look at the comparison with the euro, with the yen, then on an effective terms, these exchange rates are not moving into dangerous territory. >> we'll have to leave it there, thank you so much for your time

today sarah hewinn. and moving on now, in north korea and his visit coincides with the 60th anniversary of formal ties between the two sides. and during the visit the two sides are expected to discuss the nuclear arms program. will china be able to persuade the communist neighbor to return to six-party talks. northeast asian political analyst joining us today. obviously a lot of rosy comments coming from both sides. north korea rolling out the red carpet, chinese premier happy with what he's received. it has impacted their relationship over the past couple of years. do you think beijing will have some conditions attached? >> well, first of all, the visit

is very importantly timed when the prc's 60th anniversary, the 60th anniversary of relations between the dprk, north korea, and china. and attention on north korea from the rest of the world. i don't see necessarily china upping the ante, putting pressure on north korea. but rather really trying to gain the assurances of the north korean government that they will at some point return to these six-party talks. i don't think the trip would've happened without some assurance in advance that north korea would show some direction towards those six party talks. and so i see it as a very important and timely trip in many dimensions. >> important and timely. now, speaking of six-party talks. we're looking at a slightly different dynamic now, china being north korea's main patron but at the same time, u.s. may not have the same kind of leverage given that china is

holding as much as $900 billion in treasury bonds. >> i don't see too much of a link between these two. the united states has enormous leverage so to speak in the global political scene. but really needs to step up to the plate in a statesman-like way, not permits tensions with north korea getting ratcheted up and rather look at the long-term. the mechanisms by which the tensions on the korean peninsula, the nuclear armed north korea at least it has tested some devices. those issues need to be seen in a much bigger picture of the divided korean peninsula. the absence of a peace treaty, the opportunity for diplomatic relations, and really get things moving in terms of rebuilding the north korean economy. possibly through external assistance, the asia development

bank, you name it. and so really stepping back and looking at what would solve tensions on the peninsula as a whole. >> is a prolong stalemate the best possible scenario for this nuclear crisis which has been on and off on and off all over again? >> i don't think a prolonged stalemate is the best. but if you imagine the alternatives. is ratcheting up and the possibility of an accidental outbreak of conflict would not be in the best interest. rather looking as i said in a way that really addresses the north korean regime's basic concerns. why would a regime like that develop nuclear weapons? the only nuclear weapons on the korean peninsula from 1957 to 1990 or '91 were american nuclear weapons. the absence of the soviet union with the end of the cold war certainly triggered something in the north korean regime feeling the need for some kind of

deterrence. i'm not speaking on their behalf. but if we step back far enough to understand the concerns, the absence of the peace treaty, diplomatic relations, the continued presence in at least the asia pacific region of other nuclear weapons targeted at north korea. so if we step back from the brink and look at these things in a more long-term and statesman like fashion, we might be able to move from a stalemate to an actual -- a better situation on the peninsula as a whole. >> we've run out of time. thank you so much for your thoughts today. executive director for japan and northeast asian political analyst there. and we're going to move over from tokyo to mum buy to the india business reporter. >> thanks very much for that, chloe. just about a day of consolidation. while it is holding 5,000, it is a negative day for the indices. a whole lot of negative qs to

react to. your biggest loser. just appeared domestically. so we did get a rating downgrade coming from clsa which indeed had conviction buyer in part now it has downgraded to an outperformer. the stock is trading down by almost 9%. news coming in and this is what we're picking up from the financial times that he actually was looking at investment up side. almost $20 billion in the indian state, and he has been quoted as saying if they indeed face any road blocks in terms of land acquisition, he will be pulling out looking at some other states. not just that, we did get important news from the cement sector over the weekend. looking at demargining -- currently down in trade.

the entire telecom space actually is a bit down because of the movement we've seen. back to you. >> thank you. great to see you again in mumbai. and ross? voters have overwhelmingly endorsed the european unions lisbon reform treaty. no more than 2/3 backed the charter which gives the eu a long-term president and stronger foreign policy chief. the pressure now grows on the only two countries that have yet to ratify the treaty, poland and czech republic. the polish president is expected to sign the document within days, but the czech president says a ratification is not on the cards. for more, we're joined out of warsaw. so yan, look, what is the position right now for poland? >> well, hello, yes, that's correct. we are still waiting for the

official comment from the polish president who announced he would sign the treaty after the irish yet. the pressure, the spotlight now turns to poland and czech republic as leaders in both countries haven't signed the document yet. the president of france sarkozy urged both of them to ratify it as quickly as possible. there were no official comment from the polish president after the positive result of referendum in ireland. so far only one of his officials one of the ministers in his office claims that mr. kachinski would keep his word. the prime minister asked him to do it as quickly as soon as possible. the situation is probably even more unclear in czech republic where the allies of the

president treating it as probably the last result to delay of block the whole process of implementation of the treaty asking the judges whether that documents were in line with the czech's law, whether it didn't breech the constitution that judging may take several weeks. so still some questions, there is some opportunity and obstacles concerning the lisbon treaty here in central europe. that's all from marcel, back to you. >> thanks indeed. tvn, cnbc business. well, mazda will dilute the shares by 22%. the japanese automaker will use proceeds for research and development of low emissions vehicles.

m mazda has revised the forecast down from the original forecast of $556 million loss. mazda shares fell 5.6% today before news of the fund-raising in japan. the international monetary fund in the world bank are gathering in istanbul this weekend along with g-7 finance ministers and other global leaders. hoping that currency discussions would've played a larger role, but the french finance minister told cnbc the reasoning behind the limited discussion was that the group was pretty much in agreement. >> we all want a strong dollar. timothy geithner has indicated that we all endorse the same statement, we all welcome this strong dollar. >> the credibility of the u.s. government's $700 billion financial bailout program being called into question. in a new report t.a.r.p. inspector general says former

treasury secretary hank paulson and others created the public impression that the nine banks receiving the first round of loans last december were sound, but privately worried about the health of those firms and paulson thought one unnamed bank would fail. broski thought banks needed more help. he will be on cnbc at 9:00 a.m. you can get more news, videos, and blogs on today's market-moving stories at cnbc.com. coming up today on "worldwide exchange." already again it's earnings season. we'll take a look at the earnings week ahead later in the show. >> comes around pretty quickly, doesn't it? we'll also turn our attention to the currency mark.

dollar/yen pretty steady 89.86. euro and the pound, up better than expected.

how you could start saving. all right. on the currency market, the dollar's been a move overnight during the asian session on the

expectations the rbi will hike elsewhere. euro and the pound firmer against the dollar, up 89.87, moving away from the lows of 88.23. a short while ago we had stronger than expected services, pmi numbers out of the uk. will that turn around the fortunes of the pound? >> well, it should help. the services sector is a bigger portion of the uk economy. we're well into expansion territory now for that particular measure. i think it's a good sign. i think in fairness the numbers in the uk have been okay, not spectacular. and the starting program has been the bank of england. that seems to have stopped now. we'll see what happens thursday. but something like cyclical numbers, pmi. >> we had better than expected services out of the euro, what's the forecast from major euro? >> well, i think on euro sterling, we seem to be stuck around this 91.50 level.

it started pushing higher this morning, but we had the uk numbers. really i think that's a little bit sticky. in general i think people are looking towards euro/dollar for the most action. >> it's brian shactman in the states, on friday we started off stronger on the dollar and we weakened throughout the day. is it a situation that the only times we get a little strength is when the risk aversion comes into play? where do you see the dollar post jobs report? >> generally, that's been the case. it felt like the mood was changing a little bit on the dollar. we had a monday where the equity markets bounced really quite large and didn't get much of a sell-off in the dollar, but the end of the week we were in familiar territories. it's trading on risk once again. this week will be a key test. you talked about the earnings season starting in the u.s. i think that will color how the dollar performs. but i think early signs of a

move swing on the dollar, dollar bullishness creeping in, that seemed to fade at the tail end of last week. >> and chloe in asia, what do you think of the aussie dollar? is it factoring in 25-basis point rate hike tomorrow? >> well, we're a long way on the interest rate futures. it strikes me as remarkable and we're fully prized for a november move. there's a lot already built into the interest rate futures and i can only assume judging how strong into the currency market, as well. maybe a little bit of risk around tomorrow's announcement to the downside for the aussie. but even if they don't move tomorrow, they're going to be hulkish and short-term sell but they're enjoying to hike in november. that would be the market perspective and i think they'll buy in on any dips. >> good to see you, have a good weekend. deputy head of global sx and strategy. coming up on the program in the next hour, turkey in the spotlight.

we go live to istanbul to get the latest on the imf meeting. stay with us.

hello there, i'm chloe cho. here in asia, mazda says it'll raise over $1 billion by selling new and existing shares. in europe, stocks get a boost from better than expected

services data in both the uk and euro zone. and i'm brian shactman here in the u.s. investors may turn to third quarter earnings reports this week to save the day and return the markets to their winning ways. welcome to "worldwide exchange" this monday. our viewers just joining us 5:00 a.m. on the nose new york time. let's take a look at the futures here. we had a week where the s&p and the dow lost about 1.8%, the nasdaq close to 2%. so see where we pick up. we're up about 40 points against fair value. if you are joining us, we are off the highs of the pre-market session, but not by much, the nasdaq up by about 11, s&p 500 close to six points to the up side. ism services today, 70 billion in bond options this week starting with ten-year tips, $7 billion worth today and the alcoa starts off official

earnings season a little later in the week. take a quick look at your treasury market, as well. your bund yield right now at 3.13%, about eight basis points behind in the u.s. ten-year note. take a look at that, at 3.21 at our last check, up one basis point, 3.20. we'll see how the yield goes this week with all of that issuance coming out into the marketplace. as always, very good to see you, sir. >> yeah, good to have you back in the saddle here on the program, as well. a another little bit, sales down 2% on the month, down 2.6% on the year. the monthly drop is better than the forecast 4.5%. so the volume of retail sales today has fallen for the 15th consecutive month in annual terms. weaker sales of non-food products according to the euro statistics office. that data, of course, on the

back of earlier pmis better than expected. and quite a bit better than expected for the uk, as well. so that is just supporting stocks right now. 2% higher for the xetra dax at the moment. resources chemical, telecom, construction, travel and leisure. on the currency market, dollar moved away from the eight month lows on the yen. just below the 90 level for the yen. 1.4618, sterling trying to get back to 1.60, pretty steady. the strength in some of the euro currencies the yen not helping the equity markets there. the kospi down 2.3% as the market played catch-up after taking friday off. take a look at the nikkei, as well, down .6%.

the hong kong market did manage to stage a late-session comeback, higher by .3%. news coming from china the markets there are closed until thursday and coming back online on friday. tomorrow is the rba, a lot of market participants betting on a 25-basis point rate hike there. the australia market closed down .6% there. the market inching higher by .4%. moving on to the energy complex, we've got nymex crude contract edging lower by 36 cents, 69.59. and a quick check on brent, it is also -- actually managed to narrow a lot of the losses higher by 3.38, 67.69. ross? joining us for the rest of the show, phillip manduka. thanks for coming in. good to see you. i want to talk about speed bumps

here. for those who want to take on risks and as well evidenced by buying commodities or buying stock markets, obviously the jobs report on friday is a speed bump. how much of a speed bump is the earnings season going to be when our curve kicks off? is this going to return as the head of hsbc is saying? going to return that we've got a pretty sticky recovery? >> he's a banker and needs to be cautious. he came into this like all bankers did, wide open and it would pay to be cautious, you would think going forward. that speed bump in employment is one in a rearview mirror. it's a lagging indicator, not ahead of us. actually what's ahead of us is stronger than expected growth. we're going to get through this september-october seasonal celestial elliot wave phenomena and start pushing up again. and i tell you the risk to all right now and you might record that i'm not typically a hysterical bull about equity markets. but the risk to all is the markets are going to end up far

stronger with an economy far stronger than is currentliest mated by pretty much all. >> why? >> you've got a lagged effect of demand, consumer demand. and a lot of people are now looking to stay in a job because they thought they were going to lose that job. secondly, i don't think property prices have got much farther to fall. the equity markets i expect to continue and that's going to result in more spending. and if you get more spending and i believe you will, you have a terrific lag in inventory build because inventories have been run down to barely zero right now. in fact, you can't buy anything out of the shops. they're window shopping inside the shops. >> are you saying this earnings season we're going to show -- we're going to get enough reassurance in this earnings season to prove to be stocks weaker it's going to be a buying opportunity? >> i'm not one of these equity analysts peddling stuff we sell in our shop? we don't deal in individual equities as you know. i'm talking in terms of motion,

the movement, and it's going to be higher. i'll give you one anecdotal indicator because lots of people think everybody's in the market already. one of the top investment banks last week had a conference in their wealth management operation. it was the same conference they had in march this year. at that time, they were -- everyone in the audience was asked to vote who was fully invested in equities in march and one hand went up. that same question was asked this time last week. and only one hand went up again. so wealth management, high net worth -- >> the institutions are in, not the private money? >> i think the institutions are somewhat in. >> mimperrill lynch says they'r fully in. >> they're somewhat in. there's money moving up the curve that hasn't moved across to equities. and i believe before this is all over, it will come. >> philip, the concern here is that the government's filling in the gap for consumer demand and that a lot of people don't think it'll come back or snap back as

much as you think and that maybe we shouldn't even want it to because we'll go back to living on leverage and on a scale we can't really sustain. >> well, we're not going to go back to leverage, brian, that's not going to happen. what is going to happen is the government's going back to leverage and you're going to see a situation where i think government analysts were terrified at what they saw last week with hawkish stuff and removal accommodation. i don't think they're going to do that again in a hurry and i do believe for the foreseeable future governments and central banks are going to be too square in the center of the economy. for a lot longer than they currently think. the private sector is not going to come back and generate the kind of demand that's going to get politicians and bankers for which politicians too that central bank is off the hook because unemployment is going to remain very strong in my opinion, lots of people are going to stay unemployed for quite some time to come. this is a secular thing in unemployment and unemployment

leads directly to politics for our votes and as a consequence, governments and central banks are going to have to stay in the economy and keep it pumped up giving the deleveraging process a chance. >> just quickly then. if you say that, then where does that huge consumer demand come from that makes you so bullish about earnings? >> well, i think the consumer demand is going to be stronger than currently expected. i don't think it's necessarily going to be hugely strong. but it's all going to be stronger than currently expected. and the fears for this -- first half 2010 phenomenon, a lot of fears this is going to fall flat on its face and all kinds of alphabetic soup is being talked about. i think the first half will be stronger than currently expected. do not read it's going to be strong, read it's going to be a lot stronger than expected. and that alone, that reflation story will put wealth into consumers' pockets that will

create stronger consumer demand and expenditure than currentliest mated. >> and philip, where does gold fit into investment strategy? it's been flirting around $1,000 for sometime now. >> hasn't it been doing well, chloe? it stayed up here even though we tried to get a dollar rally going last week. gold hung to that $1,000 level. didn't show volatility through 990, 980, 965. i've got people cueing up, that tells me that gold is imminently going to launch itself through the highs and on to the next stage. and i think by the end of the year will be north of those highs. and you know my long-term forecast for the end of next year we'll be almost double where we are today. >> okay. phillip, you're sticking around. we've got more coming from you. also still to come, global leaders in turkey. we'll hear from nurial rabini.

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okay. plenty of central bankers, the imf bank all meeting in

istanbul. guy johnson is there following the coverage, guy. and a lot of sense here is that we're trying to create a new world order but we don't know what that means. >> reporter: i don't think we do know quite what that means, ross. and a number of large institutions are vying to be the center of that new world order. certainly the imf sees a bigger role for itself. that really is the debate here. you don't have to scratch the surface, though, very much to get down to the issue that i think is really troubling the markets at the moment and that is the issue of the dollar. the potential weakness of the dollar, does the dollar weaken further from here? and at what kind of levels do we see a long-term run rate. the finance ministers gathered here in istanbul here, as well didn't spend much time talking about it. but when i spoke to the french finance minister a few minutes ago, she said they are all of one mind on this subject. they all want a strong dhar.

>> we all want a stronger dollar. timothy geithner has indicated we all welcome this strong dollar. >> reporter: what was interesting was that christine indicated this may gain a little more traction at meetings held in the future. particularly we continue to see weakness of the green back moving forward from here. certainly, this could be something that is a big problem for europe, the export story is obviously very significant for france, germany, italy, that export story is hurt by a stronger dollar and i suspect the europeans will be likely to attack this with fer rosty. and the other issue is the issue of employment, the employment report friday providing a little bit of a shock for the markets. and i caught up and talked to mr. rabini. we talked to him over the weekend about his take on employment. and i have to say it wasn't a particularly positive one.

>> i see unemployment rates rising through most of 2010 in the united states also peaking close to 10% for many other companies. and not just going above 10%, but stay at that high level and return to normal more gradually and that's going to be one of the important sources of weakness for an economic recovery. >> we talk about rebalancing the recovery. you're talking about it there. is rebalancing really realistic? the g-20 spent a lot of time speaking about it. but i struggle to see how surplus countries like germany, like china are going to drive domestic demand strongly enough to produce the kind of results that some of these policy makers are looking for. is this a realistic prospect? is it ever really going to happen? >> that's a significant risk because as you correctly point out, the overspending is like the u.s. and others spending more than their income and

currency, now they have to spend less on a domestic demand as a way of deleveraging and saving more. but then the oversaving country must increase their own domestic private demand as a way to compensate for the fall of demand of the overspenders globally with a lot of capacity and recovery is going to be weaker than otherwise and that's one of the reasons why i believe the global economic recovery is going to be weaker than a v-shaped recovery. that's one of the issues we're facing. the oversavers, china, germany, japans of the world and emerging markets are not doing their own enough share of stimulating. >> reporter: as soon as i finished speaking to him there, he was hot to trot to the airport to get on the plane back to new york. and he'll be joining the "squawk box" team later on this afternoon or this morning from your perspective. so more words of wisdom from dr.

doom on "squawk." >> and philip, what news do you have on the strong dollar? >> everybody knows they're not going to get a strong dollar. and the question everybody should be asking, if that's what you want, how are you going to get it? they don't seem to be prepared to do. i think you're looking for sort of guarded language here. what they're really calling for is a strong chinese currency rather than what a strong dollar currency because they're not going to get the strong dollar currency. it's going to continue to weaken. they're not going to get the strong dollar, so they want a breaking of that linkage and that lies at the heart of this. unfortunately there are them, there's no magic bullet cure here in china. this is a ten-year program to try to generate domestic demand and an inconsistency in generating domestic demand in china. you lose the slave labor wages that, of course, is very cost advantage, not just the rest of

asia, but all around the world. big problem for chinese to come, major problems at some point. it's not going to be a straight line for china, but pretty much a straight line for the dollar down. >> guy? >> reporter: the interesting thing, though, philip is europe seems to be getting caught in the middle and europe that ultimately ends up shouldering the burden for that adjustment. christine lagard hinted that to me. she's clearly worried about this. how big of a problem is this going to be for a european recovery? everybody wants to export their way out of this recession. and you've got a high currency, it ain't going to be you. >> well, she's not going to get a lot of sleep going forward they're not going to get out of this problem until they start creating more reflation policies. they're going to get what they want and deserve which is a deflationary story with significant unemployment problems that's going to force them to shake up policy or take the pain.

but one or the other's going to happen in these next 12 months and the first thing that's going to happen is unemployment is going up in europe and growth is going to be extremely flat to low with deflation rising in the core european countries. >> philip, guy, leaving it there for a moment. plenty more to come from the ism meeting. you can catch it at cnbc.com. saudi prince is urging the u.s. government to sell its 34% stake in citigroup as soon as this year to boost investor confidence. one of citi's biggest shareholders and told the magazine the earlier the government exits its investment the better as long as it doesn't done in a way that hurts prices of bank stocks. also bank of america could reportedly name an emergency ceo this week if legal issues force ken lewis to leave before the end of the year. a committee led by b of a chairman plans to submit a

choice for approval by the board and then, of course, u.s. regulators take a look at how both are trading in frankfort, mixed picture, but really not a whole lot of movement here, less than .25% to the up side. well, brian, there was a whole lot of movement for the shares of south korea's financial plunging by more than 14% as you can see on the kospi. this after south korea's fourth largest lender says it may raise capital. earlier today the business daily reported they were seeking to raise between $150 million and $1 billion. the sale was aimed at financing acquisitions. and so much more to come. the service sector is at the fastest pace in two years. we'll get the effect on the market right after the break. and we'd love to hear from you. drop us a line if you have a

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okay. we start off a new week. trying to be a little bit firmer. the latest now starting off with

our team of reporters and becky in london. >> it isn't very much of anything to be honest. ross, almost entirely unchanged. lower and higher so far this morning. we're up by one point. amongst the move is basic resources stocks looking pretty strong today. eurasian natural resources. real estate stocks pulling lower on the uk markets, as well. tesco lower 1.25%. aviva, the biggest decline so far today. the the company announcing today will complete the ipo in november. once it's done that, the proceeds to restructure the balance sheet and also to pursue growth opportunities so they put it. how does it look in germany? >> well, we started with a little bit of positive vibes, but that is evaporating as we speak. there wasn't much drive in the market but we tried to take it a

notch up. if the u.s. market helps us this afternoon, there might be something in it. but at the moment basically flat lining. on the one hand, positive vibe for the auto industry, on the other hand, they say they're going to drop in sales up to 20% when the cash for clunkers scheme runs out next year. deutsche bank confident they can keep their equity target of 20%. the market seems to believe that because the share is up, but there was some skepticism because last quarter didn't look so well. and henkel saving more money than originally thought. all together positive. what's up in paris? we're flat on the french markets, much better than the opening. but still the french market is not bouncing back after the 2.4% decline last week. in terms of individual stocks, we've got trading higher on the back of the positive comments made by the ceo through the "financial times." he says the steel demand should go up next year. hopes for 10% increase for the

steel market in 2010 but still forecasting a bumpy ride for the steel industry in 2010. also trading higher is indeed the trial of the company in new york, the class action case will focus on the former ceo. in 2002 when the company was close to bankruptcy up 0.5% right now. let's have look now at the asian markets in singapore. hey, stephane, a bit of a mixed picture here in asia. the hang seng index closing up 0.3%, resources bouncing back and most of the blue chips higher. the exception heavy weight hsbc after the chief executive said raising concerns. stock closing down about 1%. as for japan, the nikkei down 0.6%, continued selling in the exporters on the back of the

strength of the yen. mazda down 0.6%. but it did say it's planning on raising $1.1 billion through new shares and treasury stock. on the positive side, it did narrow the loss forecast now looking at an operating loss for this year of about 13 billion yen. that stock will certainly be in focus when trading resumes tomorrow. now back to brian in the u.s. >> thank you, we'll see you tomorrow. much lighter week for economic data here in the u.s. investors may take their cues from earnings. alcoa officially kicking off a third quarter reporting season on wednesday. one report of date today, september ism services index out at 10:00 a.m. new york time. analysts looking for a read of 50 up from 48.4 in august, at 6:30 p.m. new york time new york fed president will speak about how to foster the soundness of the economic and financial system that'll be at fordham university in manhattan. also the u.s. supreme court begins the fall term with a few

business-related items on the docket. the justices will consider one case questioning the constitutionality of a regulatory board that was actually created in the wake of the enron scandal and another one about what role courts should play in setting compensation for mutual fund advisers. they could also decide today whether to hear appeals by two corporate criminals. jeff skilling and joe nakio. much more to come here on "worldwide exchange." a good earnings season may spark a japanese stock market bounce. the very latest from tokyo. plus hsbc ceo says we're in for a w-shaped recovery. we'll have the latest.

it is 30 minutes past the hour. here are the top business stories from all around the world. we'll start here in the u.s. where investors, especially the ones looking to get markets back into rally mode may now turn their attention to third quarter

earnings and they start coming out this week. some markets have got a bit of a boost from better than expected. both the euro zone and britain service sector. here in asia, mazda narrows the loss forecast and says it'll raise over $1 billion by selling new and existing shares. welcome to "worldwide exchange" on this monday. let's take a look at stock futures, especially if you're joining us here in the u.s. in positive territory by about 40 points. we got as high as 40, now it's 34, and the nasdaq hasn't budged up about 11, s&p 500 if we were to open would be above 5 points to the up side. a lot of bond issuance, about $78 billion in the marketplace and alcoa earnings kick off the season officially on wednesday. between now and then what's going to move markets we'll have see. and we'll talk about that with

richard sutemyer. one basis point lighter on the yield and i'll yield the rest of my time to mr. westgate in europe. >> at the beginning of the week, we are a little bit firmer for european stocks. we've got flat lined. we are flat. we got a boost earlier on out of the euro zone being reprized up. and the uk, strongest service sector performance for two years. on the currency markets, sterling a little bit further against the dollar up to 1.5980. and dollar/yen trying to edge up slightly, but of course, we are below the lows which were hit last week. euro/sterling up pretty steady around the .9150 mark. new comments from hatoyama that he doesn't think the

economy has turned around and that labor market conditions will worsen into the year end. of course, we did have some job figures out on friday with japan's unemployment rate ticking lower from a record high. but job availability hitting a record low of only 4 for every 10 job seekers. the nikkei down .6%. hammering down, the kospi down 2.3%, especially news of a share offer for hana financial pressurizing that, tanking by more than 14. the hang seng managed to reverse gears and trade up .3%, we did have comments from hsbc's chief executive fighting a possible w-shaped recovery. the big focus on australia is the decision. a lot of market participants betting on a 25-basis point rate hike. crude currently off 38 cents of

59.67. and a quick check on brent also lower. unchanged from our earlier check, up 38 cents. and brian? can't imagine what would happen in the marketplace if we had a rate hike in the states. let's talk market strategy with the chief market strategist and of course still with us philip manduca with us in london. richard, good to see you. we started off earnings on wednesday and really don't have a lot between now and then. what's going to move us? and in what direction? >> well, i think the market has gone from this bear market rally we've had since march is coming to an end. we had a key reversal day in the stock market on september 23rd, and i believe by the time we get to october 16th, that's when it'll show up in the weekly charts, and we will confirm the return to the multi-year bear market that began two years ago, brian.

>> you know, richard, we've been talking to you for a long time, what's going to change that outlook? what would change your thesis? what would get you to say we're actually in a bull market? >> well, fundamentally we have to start to see stocks cheap again and they're not. they were ultra-cheap back on march 6th. right now, there's five out of nine sectors that are extremely overvalued. and that's not good fundamentally for stocks. on the technical side, we are over bought. and we have to alleviate that overbought condition. now what would be the thing that would change my mind would probably be job creation. and certainly the employment report we saw on friday tells us that job creation is a ways away. and that's going to be the key is getting that hours up from 33 per week, you know, let's lose the 33 handle, get to 34, and that's going to take some time. >> okay.

well, i think, you know, there's some areas in that analysis you'd expect me to say what i said earlier. the question you ask people who are trying to pick this top, were they trying to pick it at 950. this market's been climbing this worry for a long time. and to pick it on an outside key reversal is very tenuous as your catalyst as to why this momentum should change. valuation is out the window. what is cheap, what is expensive. it depends on mood and appetite. the opportunity cost of holding money, which is zero at this point in time. what else are you going to do with your cash? so the question really comes down to, you know, what is the catalyst that's going to reverse this? i can't see one right now. and the biggest thing i've got behind this market is the fact that the governments and the central banks have the biggest proposition ever long of these markets. and there's no way they're going to let them go down in the short-term. they just can't afford to do that. so they will find whatever

measures they have to. they'll change the rules, do whatever they need to do to keep reflating these markets through property and equities. >> rich? respond to that. >> well, we have bank failure friday. we had three more banks fail last friday, that brings the total to the year to 98, 123 since the recession began. we're going to have 500 to 800 banks fail by the end of 2011 into 2012. every time a community bank fails, a small business, all the small business clients of those banks have to find new banking relationships, credit is tight. so small business are supposed to be the job creator. they can't create jobs unless they're able to fund their business. so the problems on main street are still very real in the united states and are probably getting worse not better with the unemployment rate, if you count people out of work and looking for work and those who

left the labor markets probably 17% in the states. so we have a big problem. sure, we've cleared up some of the problems on wall street, but that's not filtering down to main street where jobs need to be created. >> richard, if the banks were being allowed to go bust, you'd be inciting the japanese models where they weren't allowed and sag nation and depression would be here for quite some time. watch that japanese model and it's good that the banks are going bust. we'll get new restructuring, new businesses will be allowed to be formed. the point you do make, however, about bank borrowing as in the uk remains an issue and i accept that and agree with that but i do think it's going to be somewhat mitigated by very cheap money to quote the fed an extended period of time. and things do heal. things do get better, and it's in nobody's interest right now -- certainly not the government's and the central banks to have all of the dice to allow this to go down. and you must try to disconnect

surely between economic strength and stock market performance. because there's plenty of times i can cite that they're very loosely linked and one of those times is right now. >> rich? >> well, we may have one good quarter of gdp growth, the third quarter i'm seeing maybe 3% or 4% growth. but that does not end the recession. it's the labor market that's going to end the recession. and that's not going to happen any time soon. with regards to banks, all that's happening on the balance sheets because of the rate differentials and making money on new business, if they're willing to lend the money. but the more toxic loans are building on the balance sheet. if we go back to mark to market accounting, which i suspect we will do in 2010, you're going to have to have stress tests all over again to take into account a 10% unemployment rate and the stress in the banking system through 2011 because the current stress tests were only done to measure the pressure through 2010. there are more problems coming.

particularly with 205 trillion derivative contracts and growing here in the united states and probably 750 trillion globally. >> okay, rich, you're going to stick around. more to come from you. philip, we're going to get a final thought from you. what we haven't touched on here is what you think happens to gold which we haven't talked about and fixed income markets. >> well, i think the gold market is what rich is saying. you can talk about all the things you've been talking about but we've moved from 650 to 1,050 throughout all of those problems. and no one's saying we have a clean bill of health or things are going to be wonderful in the future. you've got to say if you're a bear, hold on, he can't justify that. i think the music goes on for longer. where it all ends up, this may be a major asset bubble they're creating. i don't know. but what it does do is it's good for gold. you're going to see continued

debasement of paper currency per force because central banks are going to continue to have to for far longer than they think and governments issuing far more paper for far longer than they think in the future. which means for credit markets, i think we're probably bottoming on rates it's a big call i know. but i would say to you for all of those deflationary bears out that think yields can drive down and you can get a ten-year note and a two-year down to a half, we're probably basing right here right now and i would be a buyer of yield, in other words i think yields are going to be moving up from here, which has implications for currencies and particularly for dollar/yen of which i'd be buying dollar/yen below 90. >> philip, thank you. well, now crossing over to tokyo and check in on the trading day there. good evening.

>> good evening, chloe. the nikkei fell for a third straight down down 0.6%. investors were cautious after the yen staying strong. major exporters continue to lose ground with precision machinery, automakers, and electronics leading the decline. bucking the decline. priced its shares today. some market watchers say it could reinsure investors. announced a $30 billion yen equity financing. retailing soared nearly 15% after the company said late friday that september same-store sales at the domestic uniqlo store chain jumped with the previous year. investors also pinned hopes on shares related to brazil after rio de janeiro was selected for the 2016 olympics.

rail makers rose nearly 5% and kinki sharyo gained 5%. that's all from business nikkei business reports, back to you. retailers and trade makers doing pretty well. thank you very much for that report. and it's over to brian. still to come on "worldwide exchange," endorsing the lisbon reform treaty in a u-turn from last year's result. more about that after the break. plus before that, i'll give you a little insight into the futures. 40 in the dow, 11 in the nasdaq, and six points in the s&p 500. we'll be right bag.

welcome back to "worldwide exchange" on a monday. let's take a look at the top stories from around the world. cit could owe goldman sachs $1 billion if they file for bankruptcy. the financial times says that the payment is part of the $3 billion rescue loan goldman gave to cit back in june of last year. cit received $2.3 billion from the t.a.r.p. back in december. they would likely let cit delay payment on some of this loan amount, but would also be due money from a credit insurance policy it holds on cit.

shares of cit, on friday jumped to about 10%, but basically a penny stock. also a u.s.-led investment group has jumped into the race to buy volvo from ford challenging china's geely automotive. the crown consortium is head by bingham. the u.s. private equity firms, but the ff says they're seeking additional backing to keep volvo in that country. take a look at how ford is trading in frankfort right now, down about 1%. voters have overwhelmingly endorsed the lisbon reform treaty. in a reversal of last year's no-vote, more than 2/3 backed the charter which gives the eu a long-term president and stronger foreign policy chief. o observers say one of the reasons they swung to yes was fears about being isolated at times when the economy is

deteriorating, although that's not way that leaders were interpreting it. >> i see the vote as a sign of confidence by the irish people and european union as a sign of their desire to be whole hearted members as the heart of the european union. as a sign that they recognize the road that europe has played. mazda will raise up to $1.1 billion by issuing shares and selling treasury stock. it will dilute the outstanding shares by 22%. the japanese automaker will use most of the proceeds for research and development of low emissions vehicles. mazda has also revised the full-year operating loss forecast down to $145 million from the original forecast of a $556 million loss. take a look at mazda shares fell 5.6% before the fund raising there on the nikkei. 11 minutes away from "squawk

box." let's find out what's coming up in the program. here's carl. hey, carl. morning to you, ross. the economy, real estate, investment ideas, politics and the shopping mall. we have it all on today's show. our guest host bill reuden chief of one of the largest real estate owners, steve ross, the chairman of ornedo real estate trust. governor paterson will join us, running for governor, which has presented new obstacles. with us onset at 8:00 a.m. eastern time. and professor nuriel roubini find out if his outlook has changed. plus ideas from a five-star fund manager. ross, you guys have been hearing from roubini with the g-7 meeting. but whatever he says lately, people do tend to listen. we'll see if he's right about the longer term weakness. see you at the top of the hour.

>> look forward to it. meanwhile, coming up, we'll take a closer look on wall street. all eyes on the upcoming earnings season with alcoa kicking things off on wednesday. we'll look at that and what to expect in today's market in just a minute.

well, let's bring in richard suttmeier with value engine.com. what's your sense of the number? and will it move the market? >> well the ism will be, you know, 50 give or take a point or two. but the components starting to look troubling is that we're not getting the job creation in these ism numbers and we're starting to see prices paid start to move up a little bit. i have a feeling we will not react too much to this unless it's an outright decline like we missed on the ism was a lot lower than we expected.

alcoa's earnings i'm looking at what is the demand for aluminum? that's going to be key. looking at the dollar, i question how long the dollar's going to stay weak because you can't get copper or crude oil above the 200 week simple moving averages, 75 is that level on crude oil. and we've been trying to get through that since the middle of june and a weak dollar hasn't helped. with regard to key technical levels, look at 94.50 on the dow if we end the week below that. that's a warning. under 10.20 on the s&p 500 would be another warning. >> richard, good morning. chloe here in asia. aside from alcoa, give us your thoughts about the overall third quarter earnings season. is it going to be a debt cap bounce? >> i think it's going to be -- if we get any bounces, it rallies to sell, i think the bear market confirmation, the return of the multi-year

confirming it is probably a couple of weeks away. it happened two years ago right in the middle of october and i see the same kind of risk of it occurring again. just in the middle as the financial start to report and they're going to have a rough earnings season in my judgment. >> so no christmas rally, rich? why not? >> well, i think we had the christmas rally that's ending now. you can throw 40% or 50% out of this market from the march 6th lows. i look for 40% to 50%, we got more than that. so i've been fighting it a little bit. i must admit, over the last month or two. but i think over the longer term that you've got to sell into this strength not be a buyer anticipating it moving higher, ross. >> what if people have some money they want to put to work, richard? what should they do? >> look for stocks to go short if they have the stomach to short the market.

you know, it's very hard to find buy rated stocks that have significant upside. there's only three strong rated stocks in the dow that are worth owning and that's merck, pfizer, and verizon. and they're safety stocks, defensive names. so you've got to stay -- if you want to put money in the market, look at dow components such as those. >> all right, richard, thank you very much. chief market strategist with valueengine.com. quick look at futures here before we hand it off. we've been positive throughout the entire morning in the u.s., but in the tight range up about 47 in the dow, up about 12 in the nasdaq and little more than 5 1/2 points in the s&p 500. that's it for today's show. i'm brian shactman in the united states. i'm chloe cho here in asia. have a great monday. thanks for watching "worldwide exchange."

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good morning. stocks off to a sluggish start, u.s. equities trying to break a losing streak today after finishing lower now for two straight weeks. and are you ready for this? i'm not. well, i guess i am. earnings season officially opens for play. economic data flying fast and furious. the markets at this hour, a mixed picture of red and green arrows overseas, but u.s. equity futures are trading above fair value. a "squawk box" begins right now. ♪

good morning, everybody, and welcome to "squawk box" right here on cnbc, it's monday, october 5th. we have a huge week ahead on wall street. this is an earnings season officially opens officially opens later this week. alcoa kicking off the opening bell. but the real flood of reports begins next week. earnings for the s&p 500 companies are expected to drop by about 25%. but in the second quarter, 73% of the s&p components saw upside surprises. so the question is going to be, will we see some of those upside surprises? what are we going to see for guidance? and are we going to see some top line growth, as well? or is it going to be about slashing expenses to improve your bottom line? >> right. over the weekend written about how long it takes top line to recover after recession versus earnings. >> especially in a situation where you're looking at 10% of the country unemployed by consumers that don't have the purchasing power. >> unemployed and under water on their mortgages.