first quarter profits plummeted and the new ceo meg whitman says there is no quick fix for the company problems. in australia the prime minister calls a leadership vote on monday pitting her against the vifal for the top job. and we have an exclusive interview. david miles tells me why he voted for more quantitative easing. >> where monetary policy needs to be now is to try to boost demand as quickly as possible. right. we have the latest snapshot of business sentiment in germany. fell 109.6, better than the forecast of 108.8 in january. it has risen. the euro rose after that number. up for the high since the beginning of february, above 1.33 as you can see. the euro was moving higher just

before the number came out. maybe somebody wants to investigate that. current conditions have come in at 117.5 as well on this particular number. and we were looking for current conditions so slightly higher. i think the main thing is expectations, 102.3, again, slightly better than the president clintons so after pmi yesterday, numbers are somewhat more reassuring. patricia has more reaction in frankfu frankfurt. >> reporter: yes, absolutely. stellar numbers when it comes to the sentiment index with four consecutive months in a row to the upside, already with the january numbers. the analyst quoted a game changer despite the fact current conditions in january were a little bit softer, definitely outstripping current conditions 117.5. 116.4. we did expect the rise to beat expectationses, above

expectations 102.3 and also the overall index much better than expected. now the data yesterdays was very interesting. if you look at the details at the end of the day it was the highest rise in the index since june you last year. the new orders impact if the pmi data was the eighth consecutive month to the down side. at the moment, though, the business sentiment index is fueling ahead, continuing to see a definitely better outlook for 2 2012 the first half and especially the second half. today what we're hearing today is the ministry of finance gave out their bull at this poietin revenue. down 0.4%. it is a freak and it continues uptrend in germany, however, the minister of finance straight away said it is our soft patch. we will get over our labor situation in germany will continue to be better, i.e., brighter outlook for the overall

economy for 2012 after contracting 0.2% in the fourth quarter of 2011. let's have a look whether we see some relevant issues here, says the german economy and exports still contributing positively for the overall feeling and trading at an internet session high. >> thanks for that, patricia. euro dollar at a high above 1.3224. somewhere around that particular level. as i say, that cleared 1.33 just before that number came out from the ifo. somebody was being very quick, chloe. a huge gain for the euro. let's talk more with our guest host for the full hour. from hsbc private bank, head of investment strategy. ifo 0 number what a relief and certainly markets reacting when

most of asia was gripped by what the high energy prices and potentially recession in europe might do. recession, that's not going to happen in europe at least a little bit -- >> that's the whole point. it seems the tale of two europes going on and germany being an excellent export powerhouse. they export as much as china does. $1.3 trillion. we saw last week the index of expectations was bullish on the german economy so it's not a surprise. i think from a global perspective it's what the markets demand that's coming in. >> a stronger germany may be a hindrance for the rest of the peripheral. we've already seen spain who want to argue they have the higher deficits. mario monti is desperate to get some growth plans going at a

european level. if they are doing better, they are more less likely to want to play ball. >> i mean, i'm not a political analyst, but you could call this both ways. hopefully they'll be more generous in terms of the conditions they impose on their neighbors, et cetera. so it's difficult, really, to plot this one out. i think at the end of the day the whole situation has to do with wages. german wages over the last decade have been pretty static in real terms. in the other countries they've been rising rapidly and it's that adjustment really i think is a resolution. so it's going to be painful one way or another. >> okay. thank you very much indeed for that. plenty more to come from you. the chief economist at ifo saying higher oil prices may pose a risk as well as the auto sector. the ought tauto sector is one h

talking about. on the dow jones s ittoxx 600 w are now up for the session high, post that ifo 0 number. after losses in the last two sessions the ftse 100 is up half a percent. it was down 0.2%. trying to have those losses after being down half a percent. the euro has been the main beneficiary, out to that two and a half month high on euro/dollar. the euro/yen up at a three-month high and more at the moment. dollar/yen after climbing to the highs we haven't seen since around july last year now 80.15. we hit highs yesterday up to 80.14. sterling yesterday, david miles will be here after those minutes explaining why he wants more quantitative easing.

sterling/dlarlg 1.5494. gilt has a boost. down 2.12. u.s. treasuries just over the 2% mark. ten-year btp earlier in the week down to 5.35%. we're now back up over 5.5%. ten-year bunds 1.9% is where we stand. we keep our eye on the oil prices. brent currently trading higher, 123.51 is where we stand. nymex above 106, chloe. thank you so much for that, ross. well, over here in asia, pretty much a mixed picture across the board as you can see. you notice how this political brickmanship that we see playing 0 out in australia certainly started to impact the markets. snapped a four-session winning streak and that is taking wind out of the australian dollar.

the shanghai composite did manage to close up about a quarter of a percent. it is, in fact, at the a new three-month high. gold related companies were higher. i think what's really happening in china is ultimately policy driven market. i think a lot of speculators are starting to bet there will be some policy or growth, pro growth policies, announced at the npc, one of the biggest political events in china. national people's congress. that happens in march. i think they're already starting to realign themselves for pro growth strategies as well and pmi numbers yesterday, remember, pretty much the kind of curve that we've been seeing in europe as well. japan also interesting. you notice how dollar/wren is pretty much sticking above the $80 handle. a lot of foreign selling so quite a bit of caution but some of the markets did manage to pull ahead.

overall, concerns for today about recession fears, how that's going to, in fact, impact asia and also what energy prices will mean for growth here in asia as well. rbs is the main focus after posting a bigger than expected loss this morning. the stock is rallying up. credit agricole came out and said what a hit it's taking. swiss re up 3.8%. in an interview with c th bc the ceo of credit agricole explains how they plan to safeguard itself in greece. >> translator: part of greece is a delicate situation. we're there, taking part, spent provisions last year and are dealing with the situation. we are looking to improve

operating profits, handle the collection seriously and shorten and reduce exposure and agricole is doing by reducing credits and deposits. >> patricia has more on what's been going on at commerzbank. >> reporter: very interesting to see the way that the market is reacting to the numbers today. on the net front below expectations. 638 million. however, if you look at some of the details, we could pick up some nice things. if you look at the analyst comments so far, reiterating the trade aspect earlier on. debt swap they are announcing could actually be potentially positive for the shares. they opened down and started to recover, down about 3.7 ers and just making comments saying the cost provisions are to remain

flat for 2012. remember that here the costs have been reduced and lower loss provisions were lower than what the markets did expect. we should have been more on a positive spin as well. if you look it at the analyst rating in general, they are rating that stock still have a buy rating, one overweight. back to the numbers right now. now the numbers in terms of the forecast are seeing a solid performance. a solid profit for 2012 and the long lost provisions for the entire year should come below 1.7 billion euros. what they are looking at a little bit is, "a," the rally and, "b," the details, what is going to happen with that. we heard already a lot but one thing for sure they seem to be on track to close that capital gap, ross, which the eba did identify and they're down substantially saying they will meet the target by june 2012. >> patricia, thank you very much

indeed for that. swiss re stock is up. carolin has the details. >> reporter: ross, it really was an excellent set of numbers. yes, there were a couple of one-offs like a tax gain but if you look at the underlying result as well, that was very, very promising. full-year net profit tripled to $2.6 billion, much better than expected. again, partly because of the tax and also much better than expected investment results. another bright spot in those numbers is the fact swiss re has had a very good start to the year, a premium volume in january, one of the most important months for renewals was up 20% and prices also rose by 4%. i wondered or i asked the cfo of swiss re earlier on whether that trend would continue. >> pricing certainly has some positive momentum currently. we've seen a fairly broad, fairly moderate market so this

is not a very sharp rise in process but we've seen more demand for clients. we expect to see that dynamic continue. we're fairly confident on both price and volume for the whole 2012. >> reporter: and, ross, a number of positive surprises the fact that swiss re hiked its dividend to three francs a share. it may pay a special dividend so overall the capital position looks very, very strong and, remember, it's been an absolutely terrible year for the industry. swiss re alone racked up $3.5 billion in claims from natural catastrophes. the japanese disaster, of course, only being one of them. >> thanks for that, carolin. plenty more to come on corporate news. the bank of england monetary policy member david maliles say he remains concerned about the economy. >> there hasn't been much of a recovery from what was one of the deepest recessions in the history of this country.

sterling's relatively steady after the latest bank of england revealed david miles is one of two members who wanted 25 billion pounds more qe than the

50 billion the sevcentral bank announced. i caught up with david miles at the bank of england and asked him why he voted that way. >> stand back and see where the uk economy is. it's still in a precarious situation. we had a very sharp recession in 2009, a bit of a recovery in 2010. really a slow down to the back end of last year. there hasn't been much of a recovery from what was one of the deepest recessions in the history of this country and i think where monetary policy needs to be right now is to maintain an expansion and try to boost demand as quickly as possible and that was really the thinking behind expanding asset purchases and everything on the monetary policy voted to do that, make monetary policy more expansion. >> it doesn't matter whether it's 50 or 75. what extra does 25 billion make particularly when you can't really quantify the impact it's having? >> you're right.

you certainly can't be sure about the exact extra demand you get from another 5 billion, 10 billion, 25 billion. 25 billion obviously is a big number so i wouldn't want to suggest there's no difference in increasing. my view was that given the outlook it made sense to buy assets at the same pace the monetary committee had in october. >> so if two key components, growth and wages, are still at these subdued levels that we have at the moment, are you going to be arguing for more quantitative easing? >> we'll see where we are in may. it's a situation that changes significantly from month to month. we'll see where we are down the road. i think it is likely that we remain pretty subdued and that's one of the reasons why it seems to be pretty likely that

inflation will continue on the downward trajectory of the last few months and it's good it that looks like it's playing out in a way that we thought would happen 6 to 12 months ago. >> this idea of deleveraging as well, the financial system and housing stocks, is it your base forecast that it continues because credit and lending is still going to be pretty much constrained despite plans such as credit easing the government is looking at for small business. >> i think it would be foolish to expect the availability and cost of credit, to go back to the relative easy conditions in the years leading up to 2006-2007. that seems to me to be pretty unlikely. i think one thing that will have a material impact on household and household finances is that fair

fairly soon, probably within the course of this year, we'll be in a situation where for most households the squeeze on their disposable income is going to come to an end. for most people if you've been lucky enough to keep your job, the wage increase that you've had has been lower than the rate of inflation. i suspect that very unusual situation which has lasted a few years will end relatively soon and that will change the dynamics of consumer spending. >> is it just a final point on that, if the consumer does feel better because those restraints are lifted from inflation pressures, would that mean, also, perhaps the argue for great greater qe disappears? >> well, it's certainly the case that the decisions that we make on qe and on 0 bank rate will depend very much on how the economy plays out and consumer spending is a crucial component. >> all right. bank of england's david miles speaking to me exclusively. the last point here is key. we're seeing this continued

upward move in prices. petrol has hit an all-time high because of the price of sterling. how much higher does oil have to go before it throws off economic plans before there is no relief particularly on real wages in the west? >> well, i would imagine that it's really what's happening in the united states, that the u.s. consumer, which is driving how the global economy will respond to this pressure on oil prices. it's been estimated that for every cent that the price of gasoline rises in the u.s. that we are now heading towards $4 a gallon of gasoline. for every cent you are basically losing about $1.4 billion of u.s. spending and i guess a proportional impact as well. so we are pretty close to the tipping point and this, i guess,

is the big risk that we foresee. having sthat i think on the supply side in terms of crude oil supply, sufficient capacity this places like saudi arabia and other parts of the middle east to counter any blockage in terms of supplies from iran, et cetera, and to that extent the supply side of the equation is really manageable but it's demand from the emerging markets that's going to be the issue and given the problems with nuclear energy that we saw in japan, emerging markets are depending even more on these for electricity supplies, et cetera, and that's really what's causing this. >> yeah. they're up 15% in the last six months. nymex up only 2%. on the back sterling did see quite a big fall trading around 1.28 and then we came down to below 1.56, just ticking higher

1.57. dollar has been weakening across the board. chloe? yeah, take a look at this time line. certainly the political vendetta continues and that australian prime minister julian guillard in another showdown between the two. >> there's been speculation about a leadership challenge for weeks. now prime minister julian gillard is taking a stand. >> i have decided that at 10:00 a.m. monday morning ballot for the labor leadership will be conducted following kevin rudd's resignation yesterday i have formed this view that we need a leadership ballot in order to settle this question once and for all. >> reporter: kevin rudd shocked the country announcing he would quit as foreign minister saying he could no long 0er work with julia gillard. he would mount a challenge for

the leadership which he lost to gillard in 2010. speaking in washington, d.c., kevin rudd made his pitch for the leadership but has not yet said whether he'll throw his hat in the ring. >> can i say the australian people, the australian business community, need to have confidence that the government is in strong and stable hands. >> reporter: the prime minister hopes the leadership challenge will finally end the ongoing speculation that's been dogging the government. >> if against my expectation i do not receive the support of my colleagues, then i will go to the back bench, and i will renounce any further ambition for the labor leadership. >> reporter: there have been on going leadership tensions since gillard ousted rudd in 2010. the next few days will see both sides of the gillard and rudd camps work the phones as they try to drum up enough support to

win monday's ballot. matthew taylor, cnbc, australia. and take a look at the australian dollar. certainly took some wind out of the aud after the announcement but as you can see it is and has pretty much recovered from those levels and currently getting very close to 1.07. let's talk more. no shortage of drama from australia. does it really matter who wins and what is this really going to mean for the investment appetite into australia, the aud, the markets there? >> interesting question. i mean, australia, i think, will continue to do well because it's joined at the hip with the chinese economy and the chinese economy is just coming out of that inflation fighting mode and hopefully once they replate the economy that will be good for australian imports despite the strong australian dollar which, for instance, has hit. but the point is julia gillard,

her term as prime minister, has coincided with a drop in the popularity of the leadership party and this election is all about that. the labor party back benches are desperate it shall. >> who is the real winner there? i'm wondering, regardless whether julia fwil ard or kevin rudd wins, maybe the real winner is abbott who may come out from behind, be able to clinch an early election since the public is just completely disenfranchised with this tit for tat move. >> even on monday, they're not really sure who is going to win. the point is when you look at it from a broader perspective, australia has been really at the mercy of the international market so when rudd was prime minister he benefited from a cheap australian dollar and the fact that china was growing very strongly after the 2008 crisis that helped his inkcumbency.

when gillard came in, it slowed the economy somewhat and there were some policy moves, the tax on energy consumption that didn't go down too well. the labor party is fighting against that perception that they haven't gotten the leadership in laplace to save tt momentum that they enjoyed in the early years of the are rudd administration. >> what will happen to the carbon tax, the mining tax, what will happen to ultimately the opposition. so many questions and how close the vote is on monday. so plenty of forced trading that will happen probably even from this moment as we speak. we'll take a quick pause right here. and coming up in today's program on "worldwide exchange," we'll be talking about banks, european banks, with a guest who says deleveraging at french and german banks will be higher and more painful than anticipated. and apple holding its annual shareholder meeting as the stock

hovers around record levels. will the tech giant announce a difficuvidend? plus, the latest barometer for u.s. consumer confidence. find out why the tooth fairy index is tracking the markets. wñwñwñwñwñwñwñwñwñososososvycyíy

the euro shoots a high as business sentiment rises for the fourth month in a row. it's a bleak day for europe's banks. giants like kred commerzbank and credit agricole. >> julia gillard calls a leadership vote on a monday that pits her against rival kevin rudd for the skrob. bank of england npc member david miles tells us why he voted for more quantitative easing. >> where monetary policy needs to be now is to maintain an expansion to boost demand as soon as possible. if you've just joined us this morning, ifo came in better than expected, business sentiment survey so that helped boost the dollar to two and a

half month -- the euro to two and a half month highs. some downbeat figures out of european banks. rbs and credit agricole's profit eroded on 0 further greek debt. the best place to be invested in the moment and that deleveraging in french and german banks is likely to be higher. joining us is chris wheeler, banks analyst. thank you for joining us. this is the week before the ltro. the next batch of ltro here. it's undoubtedly saved us from a financial systemic collapse. i suppose the issue we're now wondering about is how do we, is this now the only funding for banks and how must we win them off at some point in the future? >> you're right. obviously a 38% rise in the bank sector since the ltro effectively and that shows how

important it was to shore up the liquidity with the banks. yeah, just been with clients this week asking the same question. it's three-year money. what happens in the meantime. it is a matter of trying to get themselves sorted out in terms of loppinger trm funding needs hopefully it has been busy and manage what is going to be clearly an uptick in funding longer term for banks as a whole. >> yeah, because obviously what some of them are doing, italian banks are using money to buy debt. people are viewing this as a leave it option on, i guess, sovereign risk. is that right to view it that way? >> well, i think that's part of what's going on. clearly some of the banks are using what we call investing in sovereign paper. the sovereign paper is stabilize ed because of the ltro. i sat with you before until we sort the sovereign out we won't sort out capital and funding. they've taken it the other way

around, sort out funding and that's stabilized the sovereign. >> chris, this little question of the ecb getting seniority in terms of the debtors, how does that affect the outcome for the banks going forward? would the demand for european bank debt be affected by this development? >> i don't think so. i think the ecb is having to protect itself in some respects because it's stepping up to the plate in terms of trying to stabilize the banks if you want. in fact, i think one of the good pieces of news in the ltro, in fact, is you will get to a situation where banks aren't seen now as desolate and they can be more selective, have more time to get into the market and actually start to create for bank debt again. you saw ebs issue these loan absorbing notes. 7.25%. a strong capital base.

and what you are going to hope is that in senior debt and also in other suborder na naer nate r subordinated debt. >> they would stand behind, wouldn't they, wouldn't that increase the perception of holding this bank? >> the question is, though, which would you rather have it at this point in time, i suppose, the ecb ahead of you in the pecking order or have what seems to be emerging at the moment a rather more stable funding market for the banks as a whole whereby that issue doesn't become a major sticking point in terms of ability. >> but, chris, if there was a huge tech take-up in next week's ltro, then what does this really say about the bank's capital structure? >> i think it says nothing about the bank's capital structure but

people want something for nothing and that's what the l it tro, you cort of look at it has been. when we first looked in january, we were talking amongst ourselves as a certificasearch saying the less take-up, the more positive it will be. people are talking about a billion dollar take-up more. i think the point is, it's there, it's cheap and why wouldn't banks come in? there's not a great deal of stigma for banks taking it. it does provide further buffer to getting their overall funding. >> it's interesting, you talk about there's a mood of denial, though, with respect to the cattle raising still needed a french and german banks, just outline how much more capital is needed and the process of deleveraging which we appeared then to have only just started and what that means for those banks as investments. >> one of the problems we've had is that banks have said that's wonderful deleveraging and in many cases in the fourth quarter of last year.

the problem is they seem to give us skinny numbers in terms of what that means in terms of lost revenues and what we would say is why slate in some assets you might like to keep, why give away revenues rather than just going to the market. if you have a strong equity market, deal with the capital issue and take a more leisureely view. we've seen elsewhere. >> interesting you favor the italian banks you would favor. even after the stock price ride that we've had because of ltro? >> well, i suppose, again, it's the fact they're not as aggressively having to deleverage their businesses. deutsch has to go quite aggressively. as i said, it needs probably 8 billion to 10 billion of additional capital. it seems not to want to do that. if they don't they have to push down risk weighted capital further. i think the italian banks have

gotten on with it. how a turn on equity moves from here. >> chris, thank you very much for that. chris wheeler joining us from mediobanca. >> do you agree with chris? do you think that having these ltro on bank balance sheets is a positive at a time like this? >> there is no alternative and qe, pure qe may have a better alternati alternative. but i think the european central bank is prevented from propping up individual bond markets so that seems to have shut the door on qe. this is the second best alternative. there isn't is any other way the european ecb could have really got to grips with this problem. to that extent it was unavoidable but good inside as we go along. i agree with chris to the extent this dose of liquidity does, i

think, improve if you like in the broader sense and banks will respond positively by lending more money than buying up you bonds and getting the whole credit to the government. one would hope it would rise in the periphery. >> we'll talk more. great to have you on the show. ross? i think the fear, of course, is bank lending won't rise because banks in the eurozone have only just started on deleveraging, therefore, you are not going to get any more credit. you get the opposite in terms of money supply numbers. here we are in terms of stocks and we are weighted to the upside right now, around about 5 to 3. more on that, advancers outpacing decliners. the ftse 100 up half a percent. xetra dax was down yesterday. the cac was down. the ftse mib up about a third at the moment. euro/dollar, post ifo number 1.3330 is where we stand pretty much on that two and a half

month high. euro/yen up on the high. dollar/yen pulling back from the seven-month highs we hit yesterday. above 80. sterling/dollar to recover the lost ground. just back over the 1.57. treasuries, those yields are just holding steady above the 2% mark on the treasury yields. ten-year gil it t where we st d stand. we were 2.19%. we have seen btp yields rise. we hit 5.35. currently 5.56 on the yield and ten-year bund yields at 1.92%. the real outlier will be what happens with these prices. brent and crude trading at 123.80. up, again, today and nymex well over 106. trading at nine-month highs, chloe. >> yeah, those high energy prices having plenty of

implications here in asia and it's too bad markets are not immediately able to respond to those ifo numbers as well. a couple can of red arrows that we see on the board here and the political fiasco that's unfield ing in australia. certainly sending that market lower for the first time in five sessions and the hang seng stepping back 0.8%. interesting picture in shanghai closing to the upside by a quarter of a percent. remember, there seems to be quite a positioning. people are pennsylvania willing in pro growth policies. the nikkei higher. the topix ditto as well. china's metals play certainly helped give the market a little bit of momentum, certainly seems to be more on easing hopes. let's find out more from tracey chang. chloe, we want to talk about metals companies today. some of the winning metals plays

today, respond to inkraesed expectation and that the central government will eventually put more easing policies forward. the markets responded to yesterday's pmi data as well, what showed a pickup in factory activity. analysts say there could be a pickup in demand next month when the traditional consumption season picks up when they approach. usually this happens at around march to may. that aside, there wasn't much love for shiwuan steel today. $2.65. back to you. >> the ipo not doing that well for xiwang. lots more supply to come in hong kong and china that could be part of it as well. our next guest believes the money in china's steel. let's talk more with our next guest sitting up in hong kong. head of metals and mining research for assiasia.

thank you for your time. why be bullish at a time there's still the issue of oversupply, warm winter, weak industrial demand? is it really about positioning or easing that's to happen anytime soon? >> yeah, and i think if you look year on year and the outlook easing will continue. i would say estimates have been below consensus. thus far the rally in the steel stocks has been because they're extreme extremely cheap and that's relatively something you can say. the next question going forward, how strong will the recovery be? and i'm saying i think credit easing will continue. we differ near term that there will be more negative data points. we think the official pmi will be down in february month on month and so there are some near-term concerns, the market may pull back a bit, but looking at it further, some more upside for steel, for thermal coal.

we did take some profit in copper plays we thought were expensive, though. >> from the end perspective, what would affect steel demand the most? would it be construction rising or would it be other industries like automotive sector demand for steel? what really drives the demand? >> sure. if you are looking at china specifically, 55% of the demand is construction. if you look at this year in particular, within that about a third of residential, commercial, and infrastructure, i think you are going to have to see as credit eases it will be infrastructure projects. there is still kuwait a bit of money that needs to go into the railway sector for freight, also electrical and then if you look at energy, a lot of money and activity in western china. so a lot of that is still relatively construction oriented and to the extent that there is

some recovery in social housing driven by the government we may get some appliance demand better but it is certainly my forecast is for only about a 1% increase in consumption year on year. that would be the slowest in many, many years. >> alex, quite a number of stocks have rallied substantially, i guess, since last autumn. what do you do with those stocks now? how do you reallocate your port foal yoe? >> yeah, what we've seen -- we have seen the dip last year. it was a little overdone. we had upgraded stocks, copper, and recommended just recently that investors reallocate some of that money to stocks with better growth outlooks, given the fact growth is growing globally, there's austerity and later this year we do have more supply. investors should begin to look at stocks that are trading below five on 2012.

reallocate money, say, from -- to companies who have more organic growth to, say, a flat growing company. that's a short-term trade out of that. longer term i like the energy plays in asia. we like thermal coal. i would wait until after the disappointing earnings results in march. the energy plays, thermal coal, an area we could take -- >> you say that your top pick raised prices but there seems is to be skepticism as to whether they can pass that on to their customers anytime soon. >> yeah, wilt structured for the next five years in china which is higher value steel, well funded, going through some mna. it's earning more money than the others. the march price increase is

aggressive at this point. others are coming in 1% to 2% for march. the way the demand is now we're down 13% year on year and i don't think there's much room given the weak consumption to to increase production and we'll have to get that full increase until later in the second quarter. >> just a quick disclosure baosteel, any personal or company holdings for you? >> no. no holdings. >> okay 0, well, thank you so much for that. appreciate it. alex latzer for asia excluding japan, taking us through his outlook for the chinese steel second is tore. reports are suggesting that japan is set to finalize on an agreement with washington to slash its imports of iranian crude. let's find out more from makiko utsuda. >> reporter: our sources tell us that japan may have plans to slash iranian crude imports by 20% as it attempts to win

waivers from u.s. sanctions. a waiver would protect the three big banks from being penalized. the huge cut could worsen japan's already cost ly fuel import 0 payments. currently japan buys about a tenth from iran but has been scaling back imports by 14% over the last five years. the chief government spokesman said today that he expects an agreement with the u.s. government to be reached before the end of the month. and that's all from the nikkei business report. back to you, chloe. >> thank you for that update, makiko utsuda, from the nikkei. iranian crude certainly had a different significance over in south korea. let's get out to rhie young limb are for the latest. >> reporter: south korea's finance minister said the country has been granted an exception to u.s. sanctions for nonpetroleum transactions for crude imports he said nothing has been decided yet. the two countries were still

working on a final agreement but assured that talks between the two parties were going, quote, smoothly. meanwhile, he down played the recent rise of oil prices. in fact, he says skyrocketing oil prices could pose a bigger threat on the economy than the eurozone debt crisis and if the trend continues it could be hard for the country to see an economic recovery by the second quarter as initially hoped. back to you. >> thank you so much for that, rhie. have a lovely evening there. ross? despite an oil embargo to take effect the 1st of july, they are benefiting from the recent rise in crude, brent up over 10% the past month. today up over nine-month highs. we had some crisis going through 124, so up over a dollar in the last 24 hours. we were touching on 0 the oil price a little bit earlier. because there is so much political risk premium, is there anything investors -- can you

get on this trade or not? >> well, definitely trade. i saw details, giving a 20% annual coupon on oil prices. it is good for traders. looking at the broader picture, i think the real issue is with all this money being created in europe and gentlemjapan and the states, qe, l it tro, whatever you call it, the pattern we've seen the last two years is in terms of greater demand for commodities and oil in particular in the emerging markets and across emerging markets, creates demand and where speculators are putting more bets. all that, i think, is converging on higher prices as we go along and at some point could be a tipping point which could affect

markets. so that's really what we have watched but it's also surprising that in a presidential election year the u.s., for instance, hasn't come out and made noises about the oil producing nations in particular increasing supply is and trying to stabilize prices. that, i think, is the big, missing factor now and that surprises me. >> we'll keep our eyes on that and oil prices as well. take a short break. still to come the latest ba rom it ter for consumer confidence. why the tooth fairy index is tracking the markets. something i'm particularly interested in with a 6-year-old.

all right. let's get some parting shots from our guest host. just a short time ago off line you've been saying how busy you've been lately because you're busy in the markets. how so after a stellar january? >> we did anticipate there would be a risk on the new year, usually the case in january. for a long time you have these january rallies and we didn't expect it, of course, to be as

pr pronounced as it was. so right through january and now in february with some of these dips that we're having, we are increasing exposure on the basis that the ltro has changed the rules of the game. china and india in the emerging markets are easing monetary policy. and that really changes the whole complexion of things from last year when the countries were grappling with high intlagintlag inflati inflation. there could be better consumption going forward and perhaps better profits. >> what's the best way to make money off of that trend? >> obviously buying the broad indices is something to look at because, say china, the chinese stock market and companies in hong kong have fallen about 20% to 25%. they have recovered about 10% of those losses but there's still more head room for those markets. china and hong kong in terms of valuations and where they were as oppose d to now.

singapore would benefit going forward. i think we've seen a lot of rerating the last month which has offset the losses we saw since september 2011 in our holding of stock. going forward i think you have to be much more picky. we've seen some adverse companies, disappoint iing in terms of performance. clearly it's not a broad based recovery and it's not going with this tide. they have been very selective. i think the technology will run some more chinese banks, hong kong property. these are some of the sectors like in coal, for energy. >> okay, well, thank you so much. great to have you on the program. head of hsbc private bank. good to have you. that's still a whole hour of programming to go. jackie joins us and, jackie, this is the tooth fairy costs

falling or are they rising? >> they're falling, ross. the average gift dropped to $2.10 last year down 17% from 2010 but she is still visiting about 90% of homes throughout the united states and you can see the index there. the tooth fairy index seems to track along with the dow jones which is certainly interesting. let me ask you this, how much do the tooth fairies pay in the uk? >> that's what i was thinking. in the uk inflation is still going up so about 2 pounds 0. you add in the exchange rate that's about $3. so the tooth fairy here is being generous. all the headlines from around the globe.

welcome to the program. the euro sheds a two and a half month high as business sentiment rises boosting oil prices. and in the u.s. hp's profits plummet. the new ceo meg whitman says there's no quick fix for the company's problems. a bleak day for europe's banks. posting better than expected quarterly losses because of further write-downs on greek holdings. >> and oil prices rise as japan gears up to cut imports by 20%.

we have a bunch of forecasts coming out for the eu, the euro area gdp has been advised down as the recovery has stalled. they now see the euro area contract i contracting 0.3% in this year. it was seen flat in 2012. they say inflation expectations have been revised up. economic risk remain tilted to the down side though there might be a gradual return to confidence in the second half of 2012. so this is an annual basis, 2012 gdp is forced to contract by 0.3%. the 17-member block will remain unchanged in the larger eu. the eurozone we will have a recession.

the key thing, of course, how that feeds into the fiscal compact that will now try to introduce in the euro area, particularly in the eurozone with regards to other countries and a bunch of deficits. spain is only a few weeks after signing that wants to have more room on the budget side. want to be able to run slightly larger deficit because of this continued contraction. we'll keim oep our eyes on that. euro/sterling on the back of those forecasts. we'll have a press conference as well detailing that. europe needs to build a better debt firewall, that's the advice from the u.s. treasuries undersecretary for international afails. she praised them on the debt situation but warned a convincing firewall was necessary to avoid the risk of contagion warning that the debt remains the most serious to the global growth today. joining us now to discuss it

more, our guest host, julia kirby, senior editor of the harvard business review. great to have you on the program, julia. what do you make of those statements when we talk about a debt firewall for europe, how could we put something like that in place? >> well, good luck to them, i guess, is what i can say. i have no great advice on how to construct a debt firewall but it's absolutely certain that is the major global threat right now. >> and when we're talking about europe and looking at the economy domestically here this the states, is there still a threat, still a concern about contagion from the banks in europe to the banks here in the united states? is that something that worries you. >> it does worry me. i have to say it seems to me sitting here in the states this is kind of an underappreciated concern. we're obviously in the political season here with the debate after debate after debate, but i'm not hearing a lot of politicians bring this up as an issue that the public should be

paying much attention to. >> when we think about greece, julia, we did have a debt deal but there are a lot of issues still to be worked out and the us austerity measures to be implemented. do you worry that athens might have some trouble implementing the usausterity and we might sea spillover effect there? >> austerity, when is it ever easy? i have never seen a situation in which austerity came easy to anyone whether we're talking at the household level or at the level of the entire economy. it seems to me, though, that maybe the people of greece, they have such a beautiful country that they never need to travel think where because they have no awareness how the rest of the world lives compared to them. >> we could flip that around to the other side, the other thing is whether we think the good news for investors might be that the u.s. has performed better

despite the contraction of growth we're going to get here in europe. >> it could be. it could be. to say more, what's your theory there? >> oh, no, no, everyone spends a lot of time focusing on the negative impact of europe. there could be the upside actually that the u.s. might outperform and, therefore, we can escape what's going on in europe to some degree. >> i see. it's like the old joke, you don't have to run faster than the bear. you only need to run fast er thn the other guy. >> exactly. >> well, it's a good point. >> and, julia -- sorry, jackie. i wanted to get a quick question out to julia. if the united states does manage to outpace the growth levels in europe, what will high energy prices mean for the improvements that we have seen so far? >> high energy prices, i mean,

they're hardly good news for anyone. where we'll see the long-term effects of that is as one of the guests on the program said earlier, it's the long-term effects of the emergence of the emerging economy and that incredible -- it's not just oil but all commodity, the price run-up in all commodities we've seen a little bit of a relaxation of because of the recession but we shouldn't take much comfort in that. >> and, julia, it is an election year here in the united states and so i think we have to look at what the politicians are doing, the obama administration, some of the policies like the tax program that they just announced. and take them perhaps with a grain of salt in the sense that we've seen several years we haven't been growing as much as we'd like to be growing. are these policies sort of future fueled for the growth

engine here in the united states or are they a short-term if fix to help win an election? >> well, of course everyone is using a term like cynical ploy because of the timing of it. i guess i'm not so worried about the cynicism of it. of course you expect that in a political election season, but i guess i'm heartened by what seems to be a shared sense that the u.s. corporate tax code needs to be more simple. it's a huge achilles heel right now. it's incredibly complex and, of course, lowering those rates is a good thing. >> we're going to have to leave it there for now. julia kirby will stay with us for the rest of the hour. ross, over to you. thanks. good to have you on, julia. still to come, we'll hear from bank of england member david miles who gives us his take on stimulus and growth. >> where monetary policy needs

to be right now is to maintain a very expansionist stance to try to boost demand as quickly as possible. are you still sleeping? just wanted to check and make sure that we were on schedule. the first technology of its kind...

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to get you up to speed on the global markets, jackie has

the futures. >> ross, let's see how we're set for trade on wall street. it does look like a slightly higher open this morning. of course after a down day yesterday and i do want to highlights the components on the dow dragging us down, chevron, hpq, but as of this morning we could see the dow open up by 31 points, the nasdaq up by ten. ross, over to you. >> thanks for that, jackie. also, the eu commission olli rehn holding a press conference. they may contract 3% this year. let's listen in for more. >> inflation for this year normally we do it only for the seven member states which cover about 85% of the european economy. but due to the rapidly changing economic circumstances we decided to extend the coverage

from the seven largest member states to all 27 member states. the following three, first, gdp, of course domestic product of the european union as a whole is expected to remain unchanged in 2012. why they have entered into a mild recession. compared to our november forecast the prospects have worsened and risks to the growth outlook do remain, but there are signs of stabilization at the same time especially in the more recent period.

inflation in 2012 has been slightly revised up due to high enterprises and increases in direct taxes. i will draw political interest the economic picture. let me start with external conditio conditions, the ever weakening which we expected in november is still going on. trade growth has weakened since spring last year as can be seen from this graph and it's expected to dwr gradually in the course of this year. also, the key index, the index

has slowed down last year although it indicates more expansion. however, there are substantial differences, the growth regions, the united states has recent isly shown signs of a moderate recovery as the labor market has improved and consumption rebounded. by contrast in japan the economy has ended last year on a weak note although moderate growth this year remains intact. many emerging economies better as we will know. overall, the global economy is expect

expected to grow by 4.3% this year, 2012. concerning markets, they remain still rather fragile but there are also signs of stabilization. several countries, although they remain at elevated levels with the exception of greece spreads have is come down since mid-november, determined measures taken by vulnerable countries and taken the european labor. auctions are further evidence of this development. also, the market reaction to down grades since december has

remained muted. current credit conditions for the private sector have been tightening over the period of the last couple of months. the picture on the right shows the next surveyed banks expect conditions to tighten. there are no signs of a credit crunch moreover the fate until december so it may not take fully into account the latest improvements. >> olli rehn quite interesting just to recap the european commissioner has come out with its forecast. now after posting a flat forecast in 2012 for the eurozone and that's how it's going to contract minus 0.3%. they slashed their gret for italy. they were forecasting they were going to grow in 2012 and now

talk about contraction of minus 1.3% and this weakening in consumer demand they talked about in the autumn they say it's going to continue. one thing they do say is inflation will be higher. the question is, with these forecasts whether countries like spain are going to actually be able to argue successfully, say you need to give us more breathing rooms in terms of deficit reduction plans and whether we can put growth into the fiscal compact. but, is it any surprise as we've seen oil, brent briefly touching 1.24 and downward forecasts in growth, european stocks fall back. xetra dax which got a boost earlier is now down a third. the ftse mib after that slashing italian forecast is now down over 8%. why are owe/dollar a two and a half month high 1.3340 earlier

today. now back down to 1.33. yen down multimonth lows anyway. that's a three-month, $5 yen at about 1800.40. we keep our eyes on what's happening with bond yields in particular with btp. those yields just climbing back higher 5.55%. treasury yields are steady. gilt yields are falling down. ten-year bund yields are flat. brent isn't going 0 to help out on the growth. we did hit 1.24. just below that at the moment. we're up at nine-month highs. we've been up nearly a cent, a dollar on the day. nymex just over 106.16 at the

moment. chloe? >> yeah, certainly high energy prices and what that's going to mean for growth inflation here in asia have quite a bit of implications plus recession fears gripping europe as well. quite a few red arrows and the political uncertainty ahead of that key vote on monday sending the asx lower by 0.2% there. certainly that market snapping a four-session winning streak. the taiex is down as well. the shanghai composite was an interesting one ending at a fresh three-month high. already the speculators in ma mainland china seem to be betting that pro growth strategies, policies, will be introep deuced at the npc, national people's congress in march. a huge political event. they seem to be believing recent data, pmi, will gear the mainland government to do so as well. you also talked about multimonth lows for dollar/yen especially above the 80 handle that had an

impact on the equity markets as well. continues to outperform its peers. topix higher by half a percent. the kospi down about a percent overall. quite a bit of foreign selling in that market. the sensex just off 0.4% and that is going to do it for me and the entire team here in asia. we'll be back with much more news moving markets around the region. thanks for that, chloe. have a great night. still to come on the program, apple is holding its annual shareholders meeting in california later. will the tech giant finally announce a dividend?

good morning and welcome back. you're watching "worldwide exchange." it's 5:23 here on the u.s. east coast. let's take a look at the futures and see is how the markets are likely to open this morning. it does look like a higher open. it would be up by 17. the fas dabbing up by 5 1/2 and the s&p 500 up by 1.8. this, of course, after a down day for the markets. to point out,s ro, still year to date doing well. the s&p up nearly 8% and the nasdaq better than 12% year to date so those numbers are encouraging. >> yeah, we'll keep our eyes on that. also we've seen sterling try to

claw back losses it posted after it was revealed david miles was one of two members of the monetary policy committee who wanted more quantitative easing than the 50 the bank announced a couple of weeks ago. after those minutes were released i caught up with david miles, member of the bank of england, and asked if the amount already done for qe whether there was room for a lot more and if there was a limit. >> where we are right now is a situation where the conventional outstanding stock the bank could buy, the stock that is actually larger than when we started asset purchases way back in march of 2009, so the creation of new gilts by the government has actual lly met more than mah by the bank of england since we started buying in the early part of 2009. we're certainly not in a situation where anything in the

very near future we have run out. >> is there a point it's too much after distortionary effect? >> i'm sure one could get to that point. my own judgment is that we are not to that point now. >> all right. and still with us now is our guest host for the next hour julia kirby, senior editor at the harvard business review. to pick up on the theme of qe, obviously not just an issue in europe at the moment. we're still considering it here in the united states and the fed has left it on the table. do you think qe-3 is something we'll see in the next few months or so and do you think that it's a good thing or a bad thing? at this point is it just holding the economy up and should we see what happens if there's no more qe-3? >> well, the tea leaves are hard to read on this. they don't seem to get much easier to read. quantitative easing is such a huge tool in the kit, such an

incredible lever. i guess one doesn't want to see it being reached for a little too readily. >> and it seems that the fed has been, as you mentioned in terms of that tool kit, pulling out all the stops trying to help the growth process and the health of the u.s. economy. at this point back to my second question, do you think it's time to pull back the reins and see what happens? >> my own perspective is we are at that point and there are a lot of encouraging signs. i don't know that we need to be hasty. and so i guess to answer your first question, will we see it? i'm doubtful that we will. >> all right. we'll leave it there for the moment. thank you so much, julia. you'll stay with us to provide us more insight. coming up on the program the u.s. markets have struggled to find the next catalyst to help stocks determine their next move. a leg up or down? so will hp be driving septembnt today? [ female announcer ] want to spend less and retire with more?

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welcome to the show. hp's first quarter profits plummet. a new ceo meg whitman says there's no quick fix for the company's problems. oil prices continue to rise as reports suggest that japan is

gearing up to cut iranian crude imports by 20%. economic prospects have worsened. they've downgraded forecast growth to flat. germany's bucking the trend. this as it has risen. they say they see no recession in germany. nice to have you here on "worldwide exchange" this morning. if you are just joining us, take a look at u.s. futures and see how the markets are likely to open. it will be a higher open at this point if the markets were to open, the dow would be higher by five and change. the nasdaq by three. and the s&p 500 just above the flat line after a down day yesterday. it will be interesting to see if hp or something else is driving this market today. >> we've been quite volatile.

it's been worth pointing out after an hour and a half ago after the ifo index came in, stocks were up. we had the xetra dax up and we have turned around. the a second recession in three years for the eurozone, flat eu output and growth in the likes of italy as well. the ibex is down. spain is trying to renegotiate and olli rehn says any decision on spanish deficit targets will be taken when all the economic data has been released. joining us now is george dowd, head of the chicago foreign exchange new edge. still with us our guest host julia kirby of the harvard business review. we'll talk a little strategy.

george, i want to talk about the markets and the kind of trading that we're seeing. feels like we're a little bit range bound. do you feel that's a pattern we're going to continue to be in and see this range bound trading or some are saying the dow could go to 15,000. 13,000 is where we're quite close at the moment. again, is it going to be range bound or are we going to broke out? >> i think we've broken out. the equity markets, the s&p has had a very strong move up. we're just off the highs to move up. range bound i'm not sure. the market seems pretty big. personally it will continue to stay big. we didn't see much of a pullback on hp and dell. looking ahead we have the apple shareholder meeting i think will be very important for the market but i think this market feels like it wants to go higher and on any up move we'll have periods of pullback, maybe we're

overdue for one of those. >> all right. what exactly would sort of be the driver to send it higher? is it really fundamental growth that we're seeing here in the united states, some of the earnings numbers that we've seen or do you feel it's just that the market wants to go higher and it feels fluffy right now? >> i think it's a couple of things. i think it feels topee and might be due for a pullback. if we start to get strong growth numbers out, i think that will help it to go higher. a lot of push up over the last coupf months is excess liquidity sloshing around. so you look globally at central bank policy, that money has to go somewhere. to a certain extent even if you had as expected numbers, i think you could still see earnings expect expected numbers come out. you could see the equity market trade higher on the liquidity in the market and i think to a certain extent you are seeing that through the commodity markets as well, like a crude, gold, all these markets are very

big partly due to fundamentals. a lot is excess liquidity in the system. >> george, because you brought up the apple news that will come out later today, what do you expect there and how do you think it will drive sentiment and behavior? >> you know, to be honest, i don't personally focus on individual equities so closely. i could say from traders i talk to who are looking at the shareholder meeting today, they want to look at all the cash, unless they announce a share buyback, unless they announce some kind of dividend or do nothing, those are the three key questions. what are they going to do with all the cash on hand? as far as specifics, look, the market seems topee. even though i like it higher it will take something to get new highs and the nasdaq, we saw the

way the nasdaq traded the last couple of days on the hp and dell numbers. it wasn't really a focus. though they were disappointing, you didn't really see the market trade down. i think they're waiting for apple and you may see a trade after that this morning. >> george, a quick view, we'll come back, just euro/dollar. we hit 1.3340. a good day to add the ifo but downgraded forecast on the eu. we've moved a long way from the january lows. are we done here with sort of euro moves particularly now that that has been a bailout and for stocks it was a sell, in fact. >> i think you're right. so if you had asked me do we have more upside? i probably would have said yes. we have the targets i was looking for. i thought we could could trade briefly above 1.3330. we saw that today. coming into europe this morning worries the ifo would be stronger, which it was. we went through a lot of

technical levels and now we've had these downgraded growth assessments for europe, and we're start to go see it trade off a little bit. my view on the euro has been that i think the euro needs to go lower. i think it helps europe for the euro to be lower, and i think this up from 1.2625, that's just a technical correction. i think it's probably run its course at this point. and it's not unusual. we had a 700-point move up lows. if you look back in october, we had an 1,100 move up. the trend is down. look, if this market will go lower, there are going to be periods on the way down where you see this kind of a rally and i don't think this push-up is anything more than that. >> all right, george, thank you so much for that. we'll have to leave it there for the moment. we'll come back to you for more insight. thank you to julia who will stay with us. we will discuss the importance of emerging markets in today's

global economy. countries from mexico to vietnam to south africa could play a huge role if driving gdp growth for decades to come. we'll ask can our guest host to weigh in there. are you still sleeping? just wanted to check and make sure that we were on schedule.

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good morning and welcome back to the show. last month the imf projected

global growth projects will expect gdp will be 3.75% down from previous forecasts of 4%. growth in emerging economies is expect ed to slow to 5.75%, dow half a percent from those previous forecasts as well. and that's due to external factors such as europe's debt crisis as well as the slowdown in domestic demand. joining us more to talk about the emerging market situation is julia kirby of the harvard with business review. when we speak to the markets, we focus on the bric countries but it's the next 11. tell me about that. >> and not only do we say, when i say we, i have a co-author and together we just published a book called "standing on the sun" and it's about how capitalism will evolve thanks to the emerging economies. so what we say is that the big story is that growth of the

emerging economies is really that they will be in a position to change the rules of capitalism for the rest of us. the rules that all global capitalists will play by. >> we talk about the bric countries but the next 11, mexico, vietnam, south africa, tell me how some of these k countries will play into the picture and drive growth. >> well, those are the -- you could say above the brics. that's where we're seeing an incredible amount of capitalist foment, experimentation, you see the incredible effects of the uptake of mobile technologies and the fact that that allows you to leapfrog a lot of the embedded infrastructure. certainly the major industrial economy but even to some extent the first in emerginging economies. >> okay. but these countries also are not immune to the global slowdown in

growth. we are expecting to see a little bit of contraction there as well. how will they weather the storms when we talk about the problems in europe, some that potentially we have here in the united states, some of the issues in asia. >> i think -- i don't think we need to worry about the emerging economies, they are going to continue to surge forward. certainly at some slower rate than they were, that was really kind of at some points overheated. so i guess i'm not terribly concerned for their purposes. >> all right. fantastic. emerging markets, of course, a great place to look for growth for some of the investors that are out there. we'll leave it for now and take a look at other stories we're following this morning. the s.e.c. is seeking to curb the influence of high frequency traders. "the wall street journal"s say they are considering speeding tickets or charging fees for the tons of buy and sell is orders that are later canceled.

mary shapiro says she is concerned about such activity. a large part of stock trading has to do with tiny practice moves than high-frequency traders are jumping on instead of the market fundamentals. the trading commission meets next week to consider new safeguards for companies of futures brokers in the way of the mf global collapse. customers could keep their cash at clearing houses instead of brokerage firms and others on keeping where money is and creating a fund to protect against losses in their accounts. and rick san ttorum came unr heavy fire from his presidential rivals at a debate last night. santorum surged in the national polls ahead of the primaries and ten more contests in two weeks. santorum and mitt romney traded jabs object spending earmarks, federal bailouts and health care. it was the 21st gop debate of receipt son and possibly the last before a nom thee is

chosen. and the big stock winner of the day could be vivus. they surged on wednesday. an fda panel has thrown support behind the weight loss drug qnexa clearing the way for the agency to approve the first prescription diet drug in the u.s. in more than a decade. the fda typically follows the advice of its expert panel. there were concerns about heart safety and possible risk of birth defects. and apple is holding its annual shareholders meeting today at 1:00 p.m. eastern time. with the stock just off an all-time high investors may be hoping the ceo tim cook will talk about what apple may do with the giant pile of cash. options include dividends or buybacks and trade battles in china and labor conditions in the supply chain including at its chinese manufacturer. apple closed on wednesday. you can see the chart there.

a nice climb for apple l. hewlett-packard's first quarter profits dropped and revenue fell 7% slightly below analyst forecast. hp was hurt by hard drive shortages due to the flooding in thailand. sales of just about everything, pc servers, network declined. hp is also forecasting weaker second quarter results but the ceo is urging patience. she says the first priority is to stem the revenue side and expects sales to flatten out this year. take a look at hp now, trading lower by 2% in frankfurt. david faber will have an exclusive interview with meg whitman on ""squawk" on the street." tune in for that. and let's get more on this from george dowd, head of chicago foreign exchange at news edge. george, when we look at hp and look at what we've seen in terms of tech and dell, what does this say about the broader technology market, and how do you compare

it to some of the standout companies like apple who have been doing so well? >> i think that hp and dell i consider the bellwether of tech, dell probably more so. so the focus is more today on apple. we didn't really see much of a move down on the back of the announcement. i think there's some sort of new technology companies being focused on more than h p and dell and apple is one of those. >> okay. and despite a down day are for the nasdaq, i do want to point out we are under the 3,000 mark, 2,933 and year to date we've seen the nasdaq up 12.6%. so do you see more upside in tech at this point? >> i think a lot of it depends on the economy. it if you start to see more strong growth numbers out of the u.s., tech is poised to benefit from that and i think we're going to have, as i mentioned previously, a little bit of wind behind the market if we keep

these credit conditions in the market as well. >> okay. what do you think the growth drivers will be in not only domestically here, we know it needs to improve to see growth in tech, but we were just talking about the emerging markets before. will we see a lot of tech growth and demand out of the emerging markets? >> i think so. i think your previous guest was exact exactly right. a lot of growth out of those markets. personally i'm not sure if it's going to be the big driver. i think a lot of -- if you look at the individual countries there's a lot of question as to things we don't have to consider here in the united states but how does the rule of law play out and what's the regulatory framework and things like that. each country individually is very different but i think that many of them could stand to contribute to global gdp growth and, you know, hopefully that will be the case. >> george, i just want to sort of talk about the dollar compared to other countries. we have qe in japan, qe in the uk. we have the ecb version of qe

but ltro. where does the dollar stand out against the rest of the currencies? is your sense the fed won't launch any more qe and what do they them do? >> yeah, so i think -- i think it's an open question whether the fed will do more qe and i think it depends on how the data comes out over the next few months. i certainly think that if they deem it necessary that they're not disinclined to do it so i don't really see a huge barrier to the fed doing more qe. now if you compare the status of the dollar to, let's say the swiss and the yen, it's interesting. in switzerland they're intervening in the currency markets or they have fairly recently. there were comments out yesterday that they would like to see euro/swiss up perhaps to where purchasing power would put it so 135 to 140 range. same thing in japan. anytime we trade in dollar versus the yen you see increased

rhetoric out of japan that they don't want to see dollar/yen down and they intervene as well. those are two currencies, especially the swiss, where you expect the swiss to 0 benefit interest safe haven flows like gold has. you don't want to fight the central bank if n that sort of scenario. i think the dollar benefits from that. this the euro problems of its own. you haven't seen anyone trying to weaken the euro but they're happy to see it go lower if it does. i think it helps the situation over there and desperately in need of help. there are rumors this morning of potential -- another downgrade of portugal. a lower euro alleviates the stresses in that region and i think they're not unhappy to see it go lower. the united states would still have the strong dollar policy. a weaker dollar will help as well but i think the dollar benefits because some of the other currencies are either, "a," in very bad shape

fundamentally or, "b," aggressively trying to keep their currencies weak. >> and that's a great point. thank you for that. george will stay with us. coming up next on the show. we'll look at the trading day ahead on wall street. among the companies reporting today, we have aig, target, sears and the gap. and coming up on "squawk box" we have stephen roach, richard fish er and timothy parker. make sure you stay with us.

good morning and welcome back to the program. let's take a look at the u.s. futures and see how we're shaping up today. it does look like the markets will will open higher, if the markets were to open now the dow would be higher by 17 is points. the nasdaq by about five and the s&p 500 up by just about two

points. of course this after a down day of trade yesterday with the dow down about 27 points, some of the losses there, walmart, chevron, kraft. year to date still up 6%. taking a look ahead on wall street as well there's one economic report out of the u.s. today and that's weekly jobless claims. forecast arrives by 7,000 to 355,000. hormel, the maker of the mystery meat spam, and some numbers from kohl's, sears holdings and target. after the close we hear from gap. a quick programming note, steve liesman has an exclusive interview with dow's fed president richard fisher at 8:30 a.m. eastern time so make sure you tune in for that. still with us, our guests george dowd and julia kirby. let's look to the weekly jobless numbers, george. we are expecting the nonforeign

payroll numbers. any indication that we could see potentially another down tick in the unemployment rate? >> yeah, i think there is potential. the jobless claims numbers have been fantastic. you mentioned looking 0 to 355 for that. i think if we get a better number today which i wouldn't rule out the market will be encouraged to see anything sub350. i think it's encouraging to see the jobs market and i think you start to price in better numbers for the employment numbers friday. could we see another down tick? it's possible. i think there's a long way to go up at the rates that we're at but the jobless claims numbers have looked fantastic so hopeful hopefully it continues today. >> we've been talk iing about th and retail earnings on the calendar today as well. what's your take on the health of the retail sector now and where we go from here? >> i really focus on the broad

market more than the sector. i don't think i have a great fell for retail. unfortunately. >> all right. fair enough, george. fair enough. and, julia, i want to get a final thought with you and get your take on the unemployment number we are expected to get next week. to do you think a down tick is possible and, again, do you think back to the administration and this being an election year that these numbers obviously are being crafted quite, quite carefully as we go into this election? >> well, number crafting is state craft in an age where we live on numbers. i mean, there could be nothing more important than seeing those jobs numbers go up on every front including the political one. i wouldn't be surprised if we saw it. i'm hoping, of course, the opposite. >> and, of course, it does depend on how you look at the unemployment numbers and the reason i say that is because, of course, the people who are out

of work not searching for jobs aren't really included in the unemployment rate and that really is why it is so low right now. ross? >> yeah, i was just going to pick up on that, julia. people on a business level, have is they really got the incentive to create enough jobs? >> have they got enough -- i'm sorry -- >> the incentives, policy incentives? do they need more policy incentives? >> of course. you know, it isn't so much that they need the policy incentives. they need the sales. so to the extent that you can goose those are some good policy, sure. that would, of course, drive job creation. >> all right. we're going to have to leave it there. thank you so much, julia kirby and george as well from chicago. and that wraps it up for "worldwide exchange" this morning. i'm jackie deangelis in the united states. >> i'm ross westgate here in europe. up next, of course, the markets state side with "squawk box." we hope you have a profitable

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good morning. hp's quarterly earnings beat the street but sales and weak guidance have investors taking a second look. earnings and the economy, weekly jobless claims and key reports from the nation's biggest retailers this morning, plus the gloves come off in arizona. romney and santorum squaring off on the latest gop debate. it is thursday, february 23rd, 2012. "squawk box" begins right now. good morning, everybody. welcome to