brought to you live from london, singapore, and around the world, this is "worldwide exchange." welcome to the program. the headlines today from around the globe, fresh evidence of pain in europe as pmi contracts in february even further. raising concerns the euro's third biggest and fourth biggest economies could be heading back into recession. and here in asia focusing, of course, on chinese/asian markets, they trim their growth market to below the 8% level for the first time since 2004.

and shares of bp rise after the company reaches a near $8 billion settlement with plaintiffs who sued over the gulf oil spill. plus russians are expected to take to the streets in moscow after vladimir putin won a historic third term in the presidential election. welcome to today's "worldwide exchange." with christine tan, i'm ross westgate. jackie deangelis will join us later. we've had pmi out. the composite down 49.3. weaker than the 49.7 flash. it was at 50.4 in january. the final concept pmi jobs index, the 49.5 was the flash. the final services pmi 48.8, weaker than the 48.4 flash. and what was dragging that down was a sharp downturn in italian and spanish businesses dragging

the private sector back into decline. to give you an example, spanish services pmi came in at 41.9 versus expectations of 45.9. we already know, of course, that spain in its budget at the end of last week has already pushed out its deficit targets which sort of put it at odds with brussels in the recent fiscal compa compact. cnn adviser of credit suisse joins us now. it seems clear italy and spain are in recession. the question is, whether it's getting worse rather than getting better. >> if you actually look at the decline in the pmis in italy and spain, obviously there was a very sharp decline really from last july on wards and the numbers out of spain clearly is a very negative number, what we are saying is that for italy and spain we are seeing a base being formed albeit at a low level. that means italy and spain stay

in recession and probably stay in recession for most of this year. and the only off set, positive factor, is that january all the data coming out of germany, remains very positive. the first half of this year -- >> germany is not the one that's currently got deep austerity drives and deep fiscal problems with their budget deficits. it's italy and spain. and this means they're less likely to hit their targets. what then happens with the fiscal pact? >> i think you made a clear distinction between italy and spain. spain has still got an ongoing structural issue with high unemployment of 23%. the ongoing restructuring of the savings banks, plus the unwinding of the bursting of the real estate bubble. high savings rate. we never had a consumer credit

bubble. we never had a real estate bubble. i think there is a high probability that despite the weaker economic data that the overall budget position in 2014 could be close to balanced and certainly one should forget the primary function has been in surplus for the last three years. >> we've seen because of the ltro as well, we've seen a sharp appreciation in the short end of the markets in italy and spain, a sharp fall in yields. can that go any further? >> italian yields coming in from last november at 7% plus to where we are now close to 5%, just under 5%, and it's interesting coming back to my earlier comments of making that distinction between italy and spain. actually the relative movement in italian bond yields have been much more positive than spain in the last few weeks. with the ltro, i think the

interesting question is to what extent the 500-plus billion we had on ltro 2 is going to feed into the real economy. and the answer to that is it's going to be very slow. >> christine? focusing, of course, on china. some mixed messages from china's services sector. the purchasing manager's index for the nonmanufacturers apparently eased in february to 48.4 from january's 52.9. investors hope that gives the pboc more reason to loosen policy. now the data was kind of conflicting with a separate private is yosurvey which shows nonmanufacturing pmi up at its fastest pace in four months but market which compiles the index says services firms are feeling less confident about their short-term outlook. also, we have china lowering its growth forecast, growth target.

that as kicks off its ten-day parliament meetings focused on the chinese economy. premier wen jiabao has said they are looking for 7.5% economic expansion this year through a combination of fiscal and monetary policies. the new target is lower than the s symbolic 8% mark beijing has kept since 2004. let's get the some reaction. 7.5%. now a lot of people are worried about slowing chinese economy but, to me, 7.5% is still pretty strong compared to global standards, isn't it? >> it's clear hadly a strong number relative to the rest of the world. and in 2012 china is going to be probably the fastest growing large economy. if we can trust that forecast of 7.5% with the recent figures from india where growth, i hope, will accelerate back from what

it was, a disappointing result at close to 6%. let's not forget that brazil, the economy stole in the fourth quarter of last year -- sorry, the third quarter of last year and recent data only shows, you know, a fairly moderate pickup. so you're quite right. 7.5% relative to the rest of the world is still a strong number. i would also say 7.5% is consistent, you know, with our scenario of a soft landing in china. this is not a hard landing and later this week we are going to get industrial production and retail sales numbers out of china and also export data and all three numbers are going to be strong and, if anything, are going to be consistent with a growth forecast higher than 7.5%. having said that, what's the policy implication?

the policy implication is twofold. one, a further easing of monetary policy. two, probably going slow on the rate of appreciation in the renminbi. >> all right. we have plenty more analysis coming up as well later in the show. find out why upcoming guests say not to expect any major policy loosening coming up at around 10:35 ct, just under half an hour from now. meanwhile, though, what about market reaction to the data that we've had out already today? ahead of the u.s. numbers later, christine? well, those premier wen jiabao comments we were talking about were pretty strong about growth forecast for 2012. 7.5%. still, investors are taking that as an excuse to take some profit from the table. the nikkei 225 is up 0.8%, drifting further below the 9,800 level. the topix up. institutional sellers are selling ahead of the closing in the japanese market.

elsewhere 0.6% lower is the china market. people are saying we're factored into the market but, you know, em are still taking money off the table because this particular market has risen quite a bit. so is the hang seng up with the property developers, the chinese financials moving lower as a result of slowing is growth concerns coming from china. the kospi is up. the australian market, those numbers really hitting down 0.2%, marginal losses. up 0.4%. the sensex over in india down . 1.7%. so for a monday not looking so good, ross? >> and we hit those pmi numbers out of europe. they foe can cucus on growth ann see advancers outpaced decliners by more than 9-1 on the dow jones stoxx 600 on the graph as well. we had losses for the ftse 100 but it's down 0.6% as you can

see despite solid games from bp. xetra dax up 0.8%. the cac down a percent. the ftse mib down. services pmi in italy down for nine months in a row contracting. the standard has been bp after coming to near an $8 billion agreement with a lot of visitors in the gulf oil spill. the stock up 2%. it was up over 3% it at the open but a sharp outperformer for the rest of the market around europe. bund futures have hit another fresh record low last week. the ten-year bund yield now sharply below 8%. growth helping to boost yields in germany. ten-year spanish bonds on the other hand just nudging up slightly in terms of yield. the yield below the 5% mark. italian btp nudged up to below

5%. ten-year gilt, a very important number for the uk in around 15-20 minutes' time. falling down 2.12. as far as euro is concerned. the sell-off against the dollar this morning over here, euro dollar 1.3171. euro/yen has weakened slightly. the yen getting a breather. dollar index just coming off a nine-month high first thing this morning. dollar/yen 81.29. we'll keep our eyes on the pound. now brent we saw tick back up after profit taking last week. around 1.24 first thing. just come off it as brent trades. we'll be talking a lot about oil as we go through today's session particularly post the iranian elections and with israel and the u.s. to discuss iran and nymex priced at 106.31. we'll take a short break. still to come, putin secured a historic third presidential term. beccy is in moscow.

>> reporter: plenty more to come after the break on the russian elections here.

vladimir putin is facing a fresh round of protests after declaring victory in the preside presidential election. the win will see a return to the kremlin for a historic third term but there are complaints of widespread corruption. beccy is in moscow with the latest. what's it been like? >> reporter: we got the results everybody had expected putin declaring victory. it looks like the number was about 64% or so. putin needed 50% plus a vote in order to avoid a second round of elections and it certainly looks like that's what he got. if you look at what some of the independent electoral watchdogs are saying, it is more like 50%. still, last night after polls closed here in russia we saw them turn out in force to show

support for the president-elect who has been president since 2000 for two terms. he was prime minister for the past four years but has claimed victory in this election. he is set to kick off another six-year term as president and potentially a second six-year term after that he could have potentially 12 years as putin president. last night he gave a rather tearful election spechl and when he -- a victory speech, i should say, the tears were due to the biting wind not the emotion. i have to say, as i was walking up, i was crying as well for the wind not because of the emotion. let's listen in to what he had to say last night. >> translator: thank you to all those who said yes to a great russia. i asked you recently will we

win? we won. we won an open and honest battle. >> reporter: but members of the opposition say that this vote was not a fair one partly because there were no credible candidates up against putin. that was tightly controlled by the powers that be. claims of vote rigging or where voters are shipped between polling stations and vote repeatedly, in this case pour putin. the indications that we have that here in moscow putin struggled to get that 50% level that take a while to get the final results but if he comes in below 50% and in moscow that would be difficult for him as well in terms of his political legitimacy but this is what a political activist had to say who is very critical of the putin administration. let's listen in.

>> many russians are not going to accept vladimir putin as president. and even if putin survives march and the next two months, he's badly wounded, maybe even deadly wounded as a political leader and i have no doubt that he will not survive the next six years. >> reporter: so the question is what will putin do with his next term as president. will he try to repress the opposition or will he try to push through with reform because it seems that the opposition does have a certain headway at the moment and we're expecting more opposition protests to o occur around the kremlin a little bit later today. it will be interesting how many people show up and how strong the feeling is around these issues. there have been lots of pledges for reform from the incumbent political parties here including putting in place the rule of law, pushing ahead with economic

reform as well trying to diversify the economy away from oil and gas. that will all cost money, though, and public spending here in russia accounts for 40% of d gdp. there will be a big impact we have a falling oil price and remember, too, huge capital outflow since the beginning of 2011. about $100 billion in capital outflow so investors appear to be worried about some of these aspects. ross? >> good stuff. we'll catch you later. i hope you manage to stay warm. thank you very much. bob, we saw the pmi still expanding but it dropped to 55.3 in february. what's your takeaway from this election, what this means for the russian markets and investors in russia? >> one point i would like to pick up that beccy said that has been a significant capital outflow from russia since the beginning of last year. in the last two months actually there's been a very interesting tu turnaround. if we look at this last six months of 2011, russian capital

was leaving russia at the rate of about $10 billion a month. in january and february of this year that capital account situation has actually turned around and they've experienced inflows and that's despite all the noise from the opposition about the credibility of the election result. now i think the reason for that is that the russian equity market is the cheapest equity market in the world. just to give you one example we have gas trading on a price earnings ratio of less than four. the market as a whole is trading on a price earnings ratio just above four. and i think that incredibly cheap valuation will pull capital back into russia in the months to come. we are long the russian market. i feel comfortable, dare i say it with the political situation, and that valuation is compelling.

>> all right. and stay with oil, christine. >> ross, well, iranian hard-liners opposed to president mahmoud ahmadinejad have won control of the parliament in tehran. supporters of the supreme leader a ayatollah khamenei have clinched seats as the iaea prepares to meet to discuss iran's nuclear program. now speak to go a pro-israeli group ahead of a meeting with benjamin netanyahu, barack obama warned the u.s. will do anything necessary to prevent iran from acquiring a nuclear weapon. >> i have said that when it comes to preventing iran from obtaining a nuclear weapon i will take no options off the table, and i mean what i say. that includes all elements of american power. a political effort aimed at isolating iran, a diplomatic effort to sustain our coalition

and ensure that iranian program is monitored. an economic effort that imposes crippling sanctions. and, yes, a military effort to be prepared for any contingency. yousef, what's it like on the ground? >> reporter: it's with been a fascinating speech and it's quite challenging to really dig through all of these different statements starting, of course, with u.s. president barack obama's speech. he did not rule any options out but, again, he also made it clear that diplomacy was still one of the hoped for solutions that basically with the help of sanctions and additional pressures eiran might turn a attorney in its contentious nuclear program really. the visit by prime minister benjamin netanyahu to washington to talk to the u.s. president will, of course, mark an important point in what has been a very long conversation, a tit

for tat series of measures between iran and the west. what are we watching out for he here? an art particular lags that two powers can agree on. israel has been pushing for a strike or has made it clear that time is running out. they're worried the iranians might be able to move some of their nuclear program to some bunkers which would make it more difficult to attack and ultimate ultimately destroy. a time line for military action if the sanctions and diplomacy does not work. again, a lot of factors to watch out for here. we'll keep a close eye on that. for now it's back to you, christine. >> yousef, thank you very much. ross? >> we'll take a short break. still to come, pmi data is due in a few minutes. we'll have instant analysis. plus, all the latest from the chinese parliamentary meeting today including the cut to this year's growth target.

this is "worldwide exchange." the headlines from around the globe, fresh evidence of pain in europe's sector, pmi is contracting in february raising concerns that the eurozone's third and fourth biggest economies are back in recession.

well, asian markets tumble after china trims its 2012 growth target to below the symbolic 8% level for the first time since 2004. shares of bp bucked the markets after a settlement. russians are expecting to take to the streets in moscow after vladimir putin wins a historic third term in the presidential election. we have uk services pmi coming out in about 30 seconds. euro/dollar down on the session low after the eurozone services pmi contracted in february versus expectations of a bit of an expansion due to the ninth month of contraction in italy and a much weaker spanish survey

than one might have expected. we also had, of course, chinese pmi back in on the official services as well. 1.3161. even oil has come back off slightly. let's bring you into this uk number. there's going to be quite a key one whether there's more qe or not. i can tell you that as far as pmi is concerned, 53.8 february services pmi, a little bit weaker than the 54.9. 56 in january. the services business expectation pmi in february the highest in a year. the latest survey suggested the economy grew modestly in the first quarter accord iing to th market. we did grow but less than expected in february. joining us for reaction, the senior director, bob parker still with us as well. bill, your view on this, uk escapes recession, is it? >> well, yes, and just.

it's still growth and that's the positive thing that distinguishes the uk from, i think, the earlier numbers we were seeing coming out of the weaker economies in europe. and that's, to me, a much bigger crisis than looking at maybe weaker growth in the uk. it's when we get a reversal of the rally of the last couple of months which is coming and that's going to come on the back of people realizing that the tightening and sovereign debt we've seen for spain and italy is unsustainable. numbers like we've seen interest out of there which circle to the session rather than the uk number which hints towards some kind of new low economy -- >> here is the point, if you get third and fourth biggest economies, presumably no one escapes that. they are major trading partners. not only within the eurozone but the eu. >> clearly the uk suffers on the back of poor european numbers. >> we've had this market rally, of course, and talking about

tightening, do you think the rally is over when you start looking at what's going on with the growth market? >> the equity market rally started in the beginning of october, so we now have five months actually of fairly good equity market and at the risk of being too precise, my view has been we would have a pause or a minor setback of 5% to 10% setback from march, april and may and then i think there's a good chance the rally may start again but, a combination of profit taking, disappointing data out of southern europe, politics is going to be difficult in france ahead of the presidential election. plus, of course, the elevated oil price and the political whis perfecting. there are a lot of reasons why equity markets probably at best

trade sideways, probably we have a minor reversal over the next two to three months. >> what about sterling? is that going to put more pressure on sterling is this. >> i think sterling is kind of in a meyer. it's not going to go particul particularly anywhere. i don't see any reason for sterling it particularly to move. i think it's more interesting to watch the pressure coming out in the euro are. that's where the key driver is going to be, and it's a question of do you hold euros because you expect things to get better or for the euro to become the new deutsch mark, or are you holding anything but euros? bearing in mind what the holdings of euros are outside europe, the fact that the -- >> more qe or not or do you

think it's too early? if we get weaker data from now on in, if the certificaservices first of a run of data that's weaker than people are forecasting. >> i think the jury is very much out again in qe. there is a lot of talk in the market whenever you see any apparent sign of weakness in the uk economy that qe is the way to do it but i think there's an increasing talk that what's its effectiveness, where does it go yet? the first time you do something there's a shock and awe effect. the second time it's lessened and now i think the questions are how do you achieve it? how else do you have growth in an economy? >> stay with us because we want to talk more about the ecb and the eurozone. it has got doubts whether greece will be able to meet its target this week without so-called collective action clauses. the central bank expects voluntary participation to be too low and that athens will have to force the remaining

private creditors to take part in the debt exchange. that happens the ratings agency would say greece is in selective default. at the same time the german government has denied rumors that it asked the troika to deny a report say that go greece would need a third bailout. they said again that greece would need additional funds of 15 billion euros. that it was deleted from the final assessment because of pressure received from germany. let's talk about psi. is it your expectation we won't avoid a collective action? >> i think a slightly smaller number that if we don't hit 66% you won't even get the collective action clause. >> they need 60% to have a collective action clause. >> i think it's pretty inevitable that we are going to see the collective action clauses triggered or try to trigger if we don't get 66%. if you're a holder of greece

bonds and you're a holder -- >> absolutely. absolutely. i think conclusion one is a high probability that the collective action clauses actually are in force. now the credit rating agencies actually last week put greece on what they call select ive defaut and one can get into a debate on what it means. i'd have thought if the cacs are activated and enforced, does that mean that they move from selective to outright default and does isda say have a write-do write-down? >> i think isda to claim that is a proper default when we see the cac executed. some in the market saying last week's decision not to execute on the basis of the subordination question, because no one had effectively lost any

money, that was probably the wrong question to be asking. as we go through the prospect uses on the bond issues in the psi, some of them are in default already. >> there was a secondary question that was about -- >> whether restructuring was under way. >> they were meeting on the basis it hadn't actually yet happened. as of last week no one had lost any money. >> the isda decision last week was justified because we're still going through the process of the bond swap. >> that then changes this week when they try and execute. now if we don't get to a level where they can even execute, that's when things can get quite interesting. >> that's the point. do we reach the level at which they are able to trigger the collective action clause, the 60% threshold? >> the outcome there, let's not forget most of the greek debt

under this bond swap currently is issued under greek law. now obviously part of the bond swap is the legal jurisdiction of those bonds will change to english law. as of today they're under greek law. the greeks turn around and say, look, we can't enforce the cac. you bondholders have not agreed to a bond swap in the final analysis then they can enforce a default on them. >> that would be similar to the situation we had with the irish banks last year in some ways. >> yes. >> i think the other thing to remember is the largest single constituency holding the ggb debt are the greek banks themselves. now it's very much in their interests to go into the exchange not only for the pressure they're no doubt getting but they need to be able to show the ecw that they have live bonds which they will then use to raise money to get themselves solvent. >> the issue is critical because

if greece goes into a disorderly default, then the greek banks, which, as far as i can make out, still own over $50 billion of greek government bonds. those bonds can't be used as collateral in the ecb and that is a real problem. >> the results of a technical default last week but if the greek banks cannot pledge their ggbs to raise cash, then you have a whole new problem in greece which is no cash. >> you have a liquidity problem in the banking system. >> thank you very much indeed for that. bob sticks around. you can never unravel the greek crisis. >> yeah, yeah. there's a lot of details, nitty-gritty that we need to get into. speaking of nitty-gritty, we mentioned before that beijing has broken from its long-standing 8% growth target cutting it to 7.5%. tracey has been looking at this

and tells us more. that's right. while the new target is actually a part of china's new five-year plan which means china expects to grow at a much slower, relatively stable rate the for the next few years and, of course, wen jiabao said today the cut will give them more time to solve domestic challenges and really carry out the social and welfare reforms ahead of the once in a decade leadership transition. >> translator: problems concerning land appropriation, housing demolition, work safety, food and drug safety and income distribution are still very serious. inflation reform the top are prior with the rate target of 4%. the pboc is like ly to to keep t prudent and that dashed fiscal loosening. official pmi in february which

came in at 48.4% and that's a sharp contraction from january's reading. everything china, the project director at fung global institute. good to have you with us. growth this year. official nonservices pmi contracting a little bit. inflation at 4%. combine this altogether and tell us about the output for china. hi, christine. >> i think china has started the year 2012 in pretty challenging circumstances. we are seeing some head winds on 0 the domestic front but also on the external front and so we see an economy that is not growing extremely fast. if you look at the trends that i think 2012 will become pretty solid year both on growth, i think think inflation is still on the agenda but has been trending down wards and we expect that trend to continue.

over2012 will be a year where we will see a start to the kind of china that we will see in the coming decade, one where we will not see 10% growth anymore but where we will continue to see very solid growth rates. >> we keep hearing structural reforms, economic reforms, are these reforms geared towards boosting domestic consumption, rebalancing the economy, is that what it's meant to do? >> very much so. one of the key objectives of the government at the moment is, indeed, that in the words of the government, the acceleration of the transformation of the growth pattern in normal day language is like to change the way that the chi is growing with stronger role and more importance for domestic consumption and that is something that beijing has been trying to do for quite a while now. so they are putting more emphasis on this.

do you see anything on the front that could impede the process? >> i think china's politics the way that leadership is being transitioned, the impact is there but i don't think there is an impact on that. economic policy in a mode and they want to see a stable transition. i don't think they will see a dramatic change in the approach coming from that transition by itself. >> this is bob parker there london. ed good change to you. to be more precise, how do you see monetary policy evolving in the coming months and do you take the view of the renminbi

giving the moderation, probably the renminbi stabilizes or if anything it only appreciates very slightly and the path of sharp appreciation the renminbi is unlikely in the near term. but what's your view? >> thanks, bob. on monetary policy in general i think that we are coming out of a phase of very high inflation. we're seeing some challenges on growth, the economy is holding up better than we thought a few months ago but still there are these growth challenges and inflation is almost under control but we still do have housing prices that the government is keenly looking at. monetary policy is going to be eased some what this year but not dramatically. moving to the renminbi exchange

rate, for the simple fact if we look at the key driver of exchange rate policy in recent years it has basically been the current account surplus, the external surplus. what we're seeing now is that the surplus came down until last year. they stabilize that pressure for the china, indeed, there isn't lots of additional appreciation installed for china. >> just as a follow-up question to what extent do you think we need to worry? i'm not worried but i'm interested in your view, how much should we be worrying about the increase in bad debt provisions amongst the local authorities in china and the bank exposure to the local authorities? that's where the problem is. >> yes, that's right.

this local government debt spiraled like in an extremely rapid stimulus program. we had a completely unsustainable pace of policies for a limited amount of time and i think that is crucial. we saw it being there for a limited amount of time. we are starting to tackle from from 18 months ago, they are having a pretty heavy handed approach and basically the bank regulators are in charge of this by now. they have halted the flow and it if you read the prime minister's speech of today then, again, there is all this language for the need to control that debt, don't let it out of control. if we see what needs to to happen to the stock of debt that has been built up so far, cle

clearly there has to be a restructuring maturities along the lines of proposals that came out a month ago, that that restructuring is inevitable and there will be some default in some localities. i don't think, though, and i agree with you, bob, i don't think the default that we will see is going to be of a systemic nature. i don't think this is going to challenge the macroeconomic situation. >> good to know. thank you very much for your insights today. project director at fung markets. this week, of course, marks the one-year anniversary of what's happening in the deadly twin disasters which struck japan restructuring efforts have remained slow. to tell us more makiko utsuda from the nikkei. >> reporter: hi, christine. a recent survey shows that about 60% of the quake hit towns and cities say recovery has been slow. next sunday marks a fuel year since the twin disasters that

claimed 23,000 lives and yet even today more than 30,000 people have been unable to return to their homes. among the 37 coast al communitis in the survey, nearly 40% said it was still hard to find places to live and work and over 75% accept a drop in local population. manufacturers such as electronics and automakers have now fully recovered but many small and mid-sized businesses are still struggling to get back on their feet. the same is said for farming and fishing, a major source for jobs in the area. they are also dissatisfied with the level of financial aid. in a fund-raising effort, the government started accepting applications for reconstruction bonds today. the yield for the first three years will be fixed at a limit low of 0.05% but in turn those who $120,000 in bonds will be given a gold coin worth about

$120. and that's all from japan one year on. that's it from me, thank you. makiko utsuda, thank you very much for that. our own report on how one japanese company has coped since the disaster. >> reporter: restoring renaissance was kraucrucial for auto industry. 80,000 workers from carmakers to competitors were sent in to help with recovery. and in three months the factory was back making the micro controller chips that dominate 60% of the market. a year later plant manager has put in countless new bolts to clamp down the machines and containers. the 22-year veteran says he should be able to restore output in a month, a model renaissance is trying to replicate at all its other factories. >> translator: by september 2013 we'll be able to recover in one month, two weeks for the

finishing process, which then we will have a multisystem where one pro detective can be made. >> reporter: holding more inventory is a solution but one he says some customers are reluctant to pay for. a plunge in prices and more competition from south korea, taiwan and the united states have forced consolidation over the years and more may be in store. renesas itself is of successive moisture struggling with a ring of small fact interest tries it inherited and are now inefficient. >> the company needs to cut away some of the unprofitable businesses that it currently still has. many about businesses. >> reporter: and they do not work out.

>> like many, the strong yen has hit profits hard. but it can be as big a player in the $24 billion global market as it is at home. analysts say might push into the black this year. >> and we'll have a range of reports one year on for the japanese aspect. "worldwide exchange," bp says that a large number of private claims related to the spill in federal litigation. uh oh.

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german banks took less than 10% of the 530 billion euro in the last ltro according to the german newspaper as commerzbank. >> reporter: well, they did it absolu absolutely, ross. market reaction is not good though it's well expected in terms of the process of restructuring the balance sheet. shares are down almost 3%. however, it's interesting to see

that they managed to increase capital by about 7% which is good but less than expected they were looking for about 10%. however, if you look at the actual transaction, it is positive and will have a positive effect on the profit until 2017 so all in all it looked something the markets should have expected. a couple of comments from analysts on the back of that release by commerzbank, they do not expect commerzbank to meet another capital hike after that, they they thick the issue should be resolved after that, increasing the buy stance. also making a comment after that, they are adding that stock to the all sector top picks in europe and germany. so all in all it is a part of restructuring the balance sheet. however, do not be mistaken, it's not their part of restructuring the capital identified by the eba. it will get them there quicker

to close but, however, it's not part of that actual strategy, ross. >> thanks for that. elsewhere eads is can considering kurng down the offer of state help from germany. stephane has more from paris. this is around, i understand, getting funds for the a-350 development. does this mean that they don't need it or what's the situation? >> reporter: well, it's part of the plan that was announced in february. the ceo of the company proposed to gather all the management positions that would be, of course, something for germany and paris because a part of the management as a reaction in germany there was a lot of criticism he especially about t production location facilities and as a result according to the frankfurt site they have decided to carry on 0 its future projects including the development of the a-350 without

the support of the german government. it has not been confirmed yet but they would do without the remaining $500 million euros from the government. that would be perhaps potenti potentially problematic for eads and why the share prices are lower today. we're down on eads. also mentioned -- we need to mention that the company will report earnings on thursday and we are expecting a profit close to 700 million euros. ross is this. >> thank you for that. we have over an hour of programming to go. jackie joins us, of course, for that. good morning, jacks. good morning, guys. happy monday to you. shares of bp are trading higher after the company reached a $7.8 billion settlement with a large number of the thousands of plaintiffs who sued over the gulf oil spill in 2010. now the settlement will be paid from bp's $20 billion compensation fund, more than $2

billion from the gulf's seafood industry. a federal judge delayed the civil trial which was to begin today in new orleans. bp faces lawsuits from transocean, halliburton, and the u.s. government as well. meantime, still with us is bob parker. i want to get a quick comment on the bp story from you, bob. how do you see this impacting the markets, the oil markets, and domestically here in the united states? it's a big boom for people who suffered from the crisis. >> that is clearly true and, therefore, it's a positive for the people in the area who suffered and it's not surprising that bp's share price is up today because we've got clarity on one part of the legal liability. the big issue is can one quantify, however, the full extent of other liabilities, and it particularly on core cases

with the u.s. government? and that is still an unknown and although we like the oil sector, we are long the oil sector. we still have this uncertainty hanging over bp's share prays and that's going to take some time to clear, i think. >> all right. fair enough. thank you so much for that, bob. bob will stay with us for more insight and coming up on the program as tensions in the middle east continue to support crude oil prices, has oil become the new greece in the eyes of investors? we'll discuss it next. keep your e-mails and tweets coming in. we'll put your questions to our guests.

good morning and welcome to the show. the head lines from around the globe this morning, shares of bp rise after the company reaches a nearly $8 billion settlement with plaintiffs who sued over the gulf oil spill. fresh evidence of pain in europe's services sector pmi in the euro zone contracts because of sharp declines in italy and spain. britain sees less growth than forecast. asian markets tumble after china trims its 2012 growth target to below the symbolic 8% level are pour the first time since 2004.

okay 0. we've had services pmi today which suggests the eurozone will contract very modestly in the first quarter. january retail sales better than we might have thought, though, for the area. up 0.3% on the month, flat on the year. forecast to be flat in the month, down 1.5%, better than expected. december sales revised down 5%. 0.3% on the year. euro dollar post the services pmi, back to 1.3188. bob parker is still with us. when you look at the eurozone economy, bob, we're not going to get any major consumer -- i mean germany, everybody is looking for the consumers to start

spending but they don't. that's not what they do, is it? >> if we look at the two track europe eve got very weak consumer confidence in economies like portugal, spain, italy, the stress economies because of very high unemployment or expectations of higher unemployment. the question is why do we have weak consumer confidence in germany when unemployment is actually at or near a historic low? and the reason for that is the german consumer is very concerned about the impact on the tax bill of eurozone bailout or further bailout. although consumer confidence in the eurozone is getting less bad and it's showing signs of forming a base, it's way premature. i think we'll bounce along the bottom. >> we'll check into futures.

stocks down near the session lows at the moment, certainly the data hasn't helped uk services pmi came in and were expanding weaker than expected. your expectation, bob, you started derisking two weeks ago. >> we trend risk two weeks ago and i come back to what i said earlier in the program which is i am assuming that are march, april, and probably may are going to be at best flat possibly down 5% to 10% in global equity markets. so we do face risk and that is going to encourage investors to take profits. >> okay 0, jackie? supporters of iranian supreme leader ayatollah khamenei clinched more than 75% of the seats. the iaea prepares to meet in vienna again to discuss iran's

nuclear program. speak to go a pro-israeli lobby group in washington ahead of a meeting with prime minister benjamin netanyahu, president obama warned the u.s. will do anything necessary to prevent iran from acquiring a nuclear weapon. >> i have said that when it comes to preventing iran from obtaining a nuclear weapon i will take no options off the table. and i mean what i say. that includes all elements of american power. a political effort aimed at isolating iran. a diplomatic effort to sustain our coalition and ensure that the iranian program is monitored. an economic effort that imposes crippling sanctions. and, yes, a military effort to be prepared for any contingency. >> as far as brent and nymex are concerned we started with brent back a little bit, 123.04 and

nymex at $105.78. according to an hsbc report, rising oil prices have become the new greece in the eyes of investors. joining us for more 0 the senior director of global commodities strat they from merrill lynch. bob is still with us as well. in terms of price at the moment, how much is political risk premium putting on the price? >> you'd be surprised. i think it's relatively small. i would say after the last $20 in the brent crude oil rise, i would attribute $5 to iran and $15 to liquidity and continued quantitative easing and just the fact the supply of money continues to rise dropping the value of money relative to the value of real access. liquidity is having a huge impact on oil prices. >> i studied the recent data. let me ask you, if we look at net long speculative position in

the futures markets, last april at the time of the libyan blowup, we saw a surge. going into december, early january, those speculative positions came off a lot. in the last few weeks, have they been up again? >> they've been up a little bit but not really to explain the rise in prices. >> it's a very important statement because that suggests that the down side today is actually quite low. and speculative behavior could drive the prices up. >> i think also from a long only perspective we are only just seeing the long only investors coming back to the market now after having witnessed outflows over the last six months we're now starting to see inflows as we see into other risky assets like high-yield bonds and emerging market equities. >> christine? sabine, this is christine. we had wen jiabao signaling slower growth for china this

year, 7.5%. still pretty strong. is that having any impact on markets? are people starting to factor lower demand coming from china or not? >> you know, it's really quite interesting. what we are seeing right now is a big disconnect between the rebound in the global economic activity and the demand data we see. in the u.s., of course, we have weekly data it's the most apparent. it is still contracting at a rate of 6%. it's shockingly low. europe it's the same. now interestingly we are also seeing a contraction in market demand growth. we still see positive growth but in emerging markets as a whole but in china very quickly actually in the fourth quarter we saw no growth in oil demand at all. >> and yet oil prices you just said are limited in their down side, the down side risk. if tensions are ratcheted up any

more, on the world economy, the western economy, those countries are facing a bit of an oil nightmare. >> absolutely. absolutely. also expressed in pounds, expressed in many emerging market currencies, we are at record highs. i think it's a huge, huge issue for the global economy. we know from past episodes of spiking oil prices that the world economy just doesn't digest high oil prices very well. on our estimates we're never oil or energy expenditures reach 90% of gdp, we see a very sharp global economic contraction afterwards and we are at about 8% now. the maximum sustained oil price this year in our view is $135 a barrel as an average. >> i think if you look at the nine times since the '70s when we saw an oil price spike or an

oil price slump, in every case it's been fairly short term. of those nine times since the oil embargo of 1973, major oil price movements typically it's just a six-month event so if we do spike up to $130, $135 on brent -- >> jackie wants to step in. >> yeah, my question, sabine and bob, about the global consumer and the european consumer. the higher oil and gas prices here have significantly impacted our consumers. are you seeing the same thing for the consumers in europe? is it making a dent in terms of their spending patterns and what you expect to see going forward? >> we do see very low oil demand in europe, no doubt. even in germany where we've seen still relatively better economic performance, oil demand, we see

it in gasoline, definitely high oil prices are not helping a recovery in the consumer. having said that, of course there is a big secular story going on for oil. ultimately the oil market depends more and more on emerging markets and if they are doing just fine this year, if china is able to eke out 8% to 8.5% growth, oil prices will hold up. >> 11 million barrels plus, the top capacity -- >> probably close to 12 million. >> just run us through the scenario on iran. u.s. and israel talking about what they may do with iran. if they decide to do a preemptive struggle, how big is the wild card, bob? >> i think it's a statement of the obvious that stress, political stress in the middle

east, number one, is extremely complex. two, that stress level is going to remain elevated for the foreseeable future and whether we have a political whispering in brent $5 or $15, i think it's a fair statement that a political risk premium is going to remain and if stress levels increase after this goes higher, now, of the world's oil supply, if i'm correct, sabine, close to 30% through the straits of hormuz. that is a 30% kilometer strait. and although i think that the risk of disruption in the straits of hormuz probably is an extreme event, we can't ignore it. and, therefore, you can't ignore it, you have to have a hedging position by being long the oil sector. >> very brief, if it happened,

extreme outside risk, if it happened oil could spike to what price? >> if we were to see iran's output completely fall away because of some event, some political event or whatever, if you look back to libya about a year ago, we saw in our estimates oil prices spike about $20 a barrel just on the back of the libyan shortfall. iran exports about double the amount that libya exports so if we were to lose iran we could easily see a spike of $40 a barrel. now if we were to lose the straits of hormuz we wouldn't just lose iran but we would lose parts of saudi. we would completely lose qatar, kuwait, the uae, so this could lead to a very significant spike to oil prices. >> a nightmare to global

economies to put it mildly. besides the price would barely get hold of it either. >> it's not just the price effect, it's the disruption to supply. >> exactly. thank you very much. sabine joining us from bank of america. bob, thank you as well. bob parker joins us this morning from credit suisse and the other question, of course, has oil become the new greece? you can head to our website, cnbc.com to get more views. we'll write up this discussion as well. i think that was well worth it, jackie. yeah, romney storms to victory in washington state. republican caucus but foe can cuss turns to the super tuesday vote with ten states up for grabs. we have more on that. back in a flash.

good morning and welcome back. it's time for the global markets report. let's take a look at the futures and see how we're poised for trade on wall street. it does look like a lower open. the dow would be lower by 58 points. the nasdaq by 10 1/2. the s&p 500 lower by 6 1/2. tensions in the middle east, ross, an issue as well, and concerns over the private creditors approving debt restructuring terms also an issue so we are looking at a down day.

how are things faring in europe? >> we're down after gains last week for european stocks, hohn done was a negative. bp is the one stock that's helping the ftse outperform the rest, down 28 points. bp, as you can see up 1.8%. the xetra dax is down. the cac is down as well as the ftse mib down 1.2%. services pmi weaker than expected in the eurozone dragged down by spain and italy. 45.1 in italy. they have come down for nine straight months. we have seen bond yields rising a little bit in those two countries. btp still under 5%. 4.75 yield. what we have seen is fresh record lows on weaker growth numbers in the euro zone. yielding 7.9%.

certifica services pmi weaker, expanding 53 but weaker than expected. ten-year gilt being supported everywhere else. euro dollar weaker this morning. sterling not much reaction to that pmi. euro/dollar 1.3195 so flat for the session. you have seen the yen try to pull back losses. dollar/yen falling back from nine-month highs. christine, what do you have? >> well, asian markets, ross, are lower as investors have the impact of slower growth coming from china so investors taking the opportunity to take some money off the table, profit taking. neat kay 225 is up. the topix is up. bear in mind this particular market we have, of course, book closing on the 31st of march. so investors taking some money off the table there. the shanghai market is up. the steal companies, of course, getting hurt as well. chinese financials lower as a result. the hong kong market more of an

impact from those comments, lower on profit taking as well. the kospi off 0.9%. australian market, those comments in this particular market seeing modest declines there. new zealand up 0.4%. one of of the few to require and on a monday it's red across the screen. that's it for me. i'll be back tomorrow with the market moves stories making headlines here in asia following, of course, interest rate setting meeting and we'll continue our special series on japan one year after the devastating quake and tsunami. >> reporter: so here in russia we have the beginnings of the results at least of the presidential election. putin claiming victory. they are saying that this vote was rigged. we'll find out what all this means for the economy after the break. choose control.

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vladimir putin is facing a fresh round of protests. he will see a return to the kremlin for a third term but opponents have complained of widespread fraud and are

planning to kick off protests at 7:00 p.m. local time. be beck beccy has been tracking reaction and joins us for more. what's it been like there the last 24 hours? >> reporter: well, last night we had the pro-putin camp turning out in force in moscow. then late this the evening when we began to get some initial indications as to the results, putin himself came out and made a tearful victory speech. now two points to note here, one is that he said the tears were because of the wind not because of the emotion of the event. the second is he needed 50% plus one vote to avoid a second round. now there has been some debate over whether or not the result is valid. the putin camp, the government, says this was a clean vote. they have won fair and square. they went to some lengths to

point out they had web cams, lots of monitors out looking at how the poll was conducted but then members of the opposition saying that the vote was rigged, there was a so-called carousel, that people are shipped around to various polling stations casting several ballots. word in the past few moments the esce have called an investigation into the vote because of some irregularities. nonetheless, putin does have support certainly outside of moscow from many people who believe he brings some stability after their turbulent transit n transitional years and yeltsin. here it's quite a different picture. just now we've been around the back of our camera position where we're expecting more protests tonight. this time from the anti-putin camp gearing up for the protests later in the day. it's about three months now since the anti-putin protests have been going on, ever since

december 4th we had the parliamentary elections where there were allegations of vote rigging there as well. we did get the victory speech last night from putin. let's listen in to what he had to say. ross, we'll send it back to you. >> no worries. for now thanks for that. joining us is the ceo of advanced with the investable side. some capital inflows are slim. pmi is holding up today. what does russia offer? bob parker said russia is one of the cheapest equity markets he could find. >> i would agree with that. it's actually our biggest call in our own emerging market strategy. it's 13% of the portfolio. that's twice the weight they think it should be.

and, yeah, i think it's all about how you want to look at things. it's a big world. and we look at quality evaluation, growth and change. and along those four lines, you compare apples to oranges globally then we think russia is the cheapest market. >> there are reasons for things getting cheap, aren't there? what is in the value today? >> we think a lot is in the price already. russia is the most hated market in a way. the valuation, the forward pe is anywhere between five to six times. now that is very cheap. yes, there's a lot of bad news in there but it's one thing for putin to change the mindset because the mindset has been so negative and it's cheaper than some frontier markets and we think the last ten years russia is where it is today is a huge change. a huge change. no one likes to see, you know, this kind of situation on the political side of things but, you know, on the other hand you

can look at this with more stability but putin will have to do something to change the mi mindset of the local investor base and also the international investor base. they need to stop the bleeding on the capital outflow and we've seen that happen in brazil over the years and if russia can go there and stop the bleeding, then the upside is phenomenal. >> jackie? >> and let's talk more about the economic policy. obviously liquidity iish huge issues here in the united states, also europe as well, where do you expect rates to go in russia and do you expect the government there to do anything to increase liquidity in the system? >> they could. they have half a trillion in reserves. they have a lot of firepower and ammunition which we don't have in the western world. again, this is not specific on russia but they have a lot of it and we contrast that. if you ask investors to talk about india, we'll have a lot of

comments on india. india is running twin deficits, we have inflation through the roof. they don't have the kind of level of quality that russia has and yet there's a huge contract. this is one of the most reality versus perception gaps that you have in russia and the military policy -- >> selling here, short india -- >> yes. and if anything we went long on the strategy so we are live on india and heavy on russia so, yes, a fair trade and i'll do that particularly year to date, the indian currency has appreciated, the indian market while the russian one is still at five or six times, the ruble is sideways so, yeah, i'll go long russia. >> jackie? >> another bull case scenario for russia is the inflation situation as well. global concerns about inflation but we're seeing it decreasing

in russia. so how is that going to help play into the investment scenario? >> look, inflation has been an issue in the emerging market world over the last few years and that's reflecting economies so the policies across the world have been tightening and that's why i said earlier they built some ammunition for rainy days and they could loosen the policy going forward and we believe russia is very well positioned to do some of that. m monetary policy could kick start the economy. growth is not fantastic. even though the domestic economy is doing quite well. the retail sector last year was up, i think, 6%, 7%. so the domestic middle class and the metro authorities have, i think, a lot to help putin if anything. reassure investors. we think there's a lot of fine-tuning that they could do at all levels which could change

the mindset and close this perception gap. >> all right. thank you so much for that, slim. chief executive officer advanced emerging capital. lots coming up on the show. it's been nearly three years since the bulls were let out of their pen to run down wall street and propel the markets to new heights. will they slow to a trot or be reined back in.

good morning and welcome back to the program. in the u.s. the big focus for investors could be the continued overhang of high oil prices, plus friday's key jobs report. fresh evidence of pain in europe services sector, pmi in the eurozone contracts because of sharp declines in italy and spain while britain sees less services growth than forecast. and shares of bp rise after the company reaches a nearly $8 billion settlement with plaintiffs who sued over the gulf oil spill. and international monitors call for a probe into alleged violations in russia's presidential elections. this after vladimir putin won a historic third term. nice to have you here on "worldwide exchange." let's take a look at u.s.

futures and see how we're setting up for trade on wall street this morning. it does look like a lower open if the markets were to open now the dow would be down by 40 points. the nasdaq down by 8.25 and the s&p 500 down by about 5 1/2 but we are seeing a little bit of a tu turnaround here, the declines, of course, looking steeper earlier this morning but some of the pressure coming from china's downward revision of its gdp forecast, tensions in the middle east over continued rise in oil price is a concern as well and also watching greece to see if the private creditors there will accept its debt restructuring terms so a lot of wild cards in the market, ross. they have the end of the week to decide on that. there is an expectation that seems to be brewing. there are not enough to get an agreement without so we'll be looking to see, yeah, there has been a default. european stocks not quite on the session lows that we hit the pmi numbers one hour into the trade. you can see we're down

nevertheless. we have some gains, the german and french markets. we've wiped those gains with the losses this morning, ftse up 1%. the ftse mib off 1%. the ftse has outperformed gdp. we'll talk about that. >> yeah, meantime this friday marks the three-year anniversary of the bear market low in the united states, march 9 of 2009. since then the s&p 500 is up more than 100% with about a quarter of that coming since the october lows of last year. joining us now is chris girsh. let's talk about the markets a little bit in terms of the runup that we've seen. a lot of s out there calling for some bullish forecasts, yet, at the same time, we're still trading in a range and it's interesting to where we closed on friday, below key technical levels, right?

dow below 13,000. and the nasdaq can't quite make it to 3,000 either. so can you make the case for a bull market to continue? >> i'm not making the case for a bull market here in chicago. we've seen s&p is last month up over 9% on the year. analysts all over the place, you know, i'm a technical trader and we trade via algorithms. everyone has made the case for a 9% increasr the entire year. so the money has been made, the easy money has been made and really what the s&p is continuing to do as well as the dow, all these stocks are really quantitative easing, too. dollar dumping. the fact that the dollar has got then really weak against the euro as of late and we've seen it in commodities here as well as we see inflation maybe kicking in a little bit and the s&p, you know, take some money off the table right now. a lot of traders down here are

expecting, jackie, as low as 1325 in the s&p by the end of the month. >> okay. and that's interesting. as you mentioned some of the money coming off the table, we've seen the volumes be extremely light as well with the retail investors getting out of the game and it looks like the institutional investors are taking a more cautious approach as well. in terms of strategy for others that are investing in the market, how do they play that? >> i think that you continue to play -- if i was an investor, the commodities, the weak dollar, i believe, is going to continue. i think that things such as oil and gold are going to be plays with which are actually safety zones right now. especially with the conflict in iran. you don't know what's going to happen with the greece issue but if there's any sort of resolutions, ross indicated earlier by friday, i would see the continued dollar strength not be there and so as far as what i would do, i would invest

in stocks with high yield, something like a comcast where people, in the u.s., will turn off their cable probably last. something that's yielding a good 5%, something like a comcast. as far as stocks. >> yeah, well, we don't know what will happen with greece, chris, because maybe we might get cds triggered and know more end of the week. we'll follow that. oil is sort of an uncorrelated trade at the moment. >> oil is an uncorrelated trade right now. if you really look at it, there's a lot of strength at the 103 bid. i have guys on my floor that are really looking for some sort of capitulation trade to the down side but they're not seeing it as the s&p traders are on our floor so i think that the range is a lot, actually tighter than a lot of people believe.

the risk in iran, you could see a $115 bid really quick if something were to occur here with the war in jerusalem. >> all right. fair enough. thank you so much for that, chris. chris will stay with us and give us more of his insight. several big u.s. banks are reportedly clashing with the fed over how much information should be released from the government's latest stress test. "the wall street journal" says those results could be published next week in january 19 banks submitted data on how they would perform in a severe economic down turn. the fed says it will release revenue and net income figures. the journal say that go a bank lobby group has warned that it could have negative consequences for the financial market. and mitt romney wins again taking the caucus on saturday ahead of tomorrow's super tuesday contest in at the point states. romney is in a dead heat with rick santorum in ohio. he picked up two endorsements

from eric cantor and senator tom coburn. romney still faces challenges in the latest nbc, wall street journal poll. 28 positively. the ability gap is wider. if romney is the gop nominee he would lose to president barack obama by six points. cnbc has all your super tuesday coverage anchored by maria bartiromo and john harwood so make sure you tune in for that. bp puts a major part of its legal troubles over the gulf 0 oil spill behind it reaching a nearly $8 billion settlement in the civil case. now nearly two years after that accident bp and its rivals are stepping up efforts to drill in the deep waters of the gulf trying to feed the world's voracious appetite for oil. ♪ [ male announcer ] how could switchgrass in argentina, change engineering in dubai,

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as european for reuters joins us now. the stock is up today. presumably people are saying it's less than we thought it was going to be, right? >> less than some people thought, yes. >> will it help them in terms of their negotiations now with the u.s. government? can you draw that straight line? >> it's a bit of a dotted line but you can certainly draw a line there. what's really interesting in the settlement over the weekend was very much looking at the area of, you know, how much extra has bp provisioned. it was made on the basis that there would be no gross negligence so gross negligence means two things. first of all, the chance you might have punitive damages levied against you but also then it plays into the government talks and it would allow the government maximum fine to go from $5 billion up to $20 billion. so the fact that there doesn't seem to be a large revision in the deal that was agreed late

friday night for any punitive damages suggests that the lawyers on that side maybe didn't think they could prove that. and if the plaintiffs for the individuals and businesses couldn't prove that bp was grossly negligent, the government may struggle to prove that. >> it doesn't mean they won't try, though. >> they will definitely try. the difference is having maybe $5 billion or $20 billion. and i think all the indication that we've had are from the doj and the government have been that the government will push for a level above what bp has been provisioning for. >> this settlement comes at a crucial time as we watch oil prices rise and geopolitical threats to supply, certainly we're going to be looking to drill more and look for other sources of oil. despite the news that we have on

bp today, have we learned enough from this, and if we do continue drilling, are we going to do it in the right way? >> this was the -- very much the debate around this disaster, would the oil industry learn from that. i think that was clear was that the oil industry had overpromised in terms of its abilities to tackle the risks around this. and we saw, of course, the congressional hearings for the chief executives of all the big oil companies were made to look foolish by the investigating panel for the promises they had made. since then, we have a certain hardening of the regulatory environment in the u.s. however, there was a big change really between the disaster and the hole being plugged and the time with which the government and the u.s. started to think about actually imposing tougher regimes. regulatory re jaem, and the difference was gasoline prices. gasoline prices have gone up

substantially and that has led to -- hasn't helped wet the appetite for any activity that might limit flows into the market going forward. >> and, tom, a big question as well with this is the impact on insurers. in terms of the insurers and where we go forward, how is the settlement going to impact on them and of course disasters like this going into the future? >> it's interesting, bp was largely uninsured for this or actually self-insured so they didn't get too bad about it. they had to fork out about a billion dollars for the deep wa water high eye done rig itself. the impact is not directly measurable. it's more that there's a realization now that the risks involved in oil and gas production are financially much bigger than people envisioned. a measure of this is that the oil pollution act is going to be a $95 million cap historically on the damages somebody would be expected to pay in the case of

an oil spill and we've seen $95 million to touch on the actual cost of these disasters so any insurance company which is looking at insuring any aspect of the process is now realizing this f this goes wrong, it could go dramatically wrong. >> we have oil prices below $123 and brent below $106. what's your own thought on the actual prices at the moment and, also, how quickly we could get production up to full capacity in the gulf to try and help offset that? >> yes. the gulf of mexico has been set back. we had that moratorium for the best part of six months. there was almost no activity apart from plugging the leak. and that set things back. u.s. production, the expected increase in u.s. production has been delayed. the oil markets at the moment, it is a very political story and where things go from there i think it would be hard to see

the -- any new flows from the gulf of mexico overcoming the worries about the iranian situation. on that front it will be the news we get out of the iea and others and how that plays out. >> good to see you as always. the inside story of bp. jackie? >> meantime, in other stories we're following, a major oil pipeline will be shut down until at least thursday because of a car accident. enbridge says the two cars crashed into each other early saturday morning and hit an aboveground section of its 1464 pipeline southwest of chicago. the line normally handles about 317,000 barrels of oil per day t. could put further strain between canada and the u.s. and the death toll from this weekend's violent storms in the midwest and south is now 39 with the major in kentucky and

indiana. one tornado that struck the town of henriville packed winds of 175 miles an hour. the insurance industry is facing significant costses less than a year after a string of tornadoes caused some of the worst losses. they say this year's storm season is already running 30% higher than the average typical year. still to come on the program, we'll look at the trading day ahead on wall street as investors await february serviceses and january factory orders.

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good morning and welcome back. you are watching "worldwide exchange." it's 5:52 on the u.s. east coast. take a look at the u.s. futures

and see how we're poised for trade on wall street a. lower open if the markets open now, the dow would be open by 40 1/2 points. the nasdaq lower by 9 1/2 and the s&p 500 lower by 6. a couple can of things pressuring the market, china's downward revision an issue, concerns about oil prices still on the docket as well and, of course, we are looking to greece to see if the private krcredito will approve the bailout deal and the restructuring that is on the table so we will be watching for that. much of the focus this week will be on friday's u.s. jobs report but there arfew other pieces on the data as well. the february ism services index at 10:00 a.m. eastern. looking for a reading in january, also at 10:00 january factory orders are out. drop about 1.6%. dow's fed president talks about the economy at 1:00 p.m. eastern time and an hour later charles evans is speaking in washington. joining us now to talk about the day ahead on wall street is the

director of portfolio management. let's talk about the unemployment figures first we are expecting out on friday. we've seen positive signs we could see more of a down tick here. how much is the market priced this in, and if we don't get that down tick, then what? >> well, jackie, i think you hit it on the head. the jobs number coming in may be at 8.2% or 8.3% unemployment. it's the only thing that can carry this over the s&p. a lot of individuals think the consumer confidence numbers will fall with this $4 a gallon oil that we're increasing here in chicago and with the pipeline who knows what will happen. as far as everyone is concerned, the only thing is jobs, jobs, jobs. if you have a lot of jobs and we get that unemployment closer to 8%, we can, you know, get that 15,000 dow that you were talking about. a lot of these traders don't think that's even in the ballpark. >> okay, and comments having an

impact on the market. we will have fed speakers about the economy again today, probably the markets will be looking for any further signs, more quantitative easing, more liquidity in the system. do you expect them to say anything that might indicate that? >> i think that mr. bernanke alluded to that quantitative easing, number three will be on the sideline for a long time. i think that's why you saw a bit of a pullback on friday was individuals are well aware that what we're seeing right now is a lot of dollar dumping and the weaker dollar boosting just the price of everything and inflation play right now in the stock markets, so i believe that quantitative easing being off the table is why you're seeing the short trade here in the futures pit in chicago and in the premarket. >> after that run, chris, you hinted at it earlier, what will be the next stimulus high? are people derisking for a few

weeks and what will be to do something different? >> ross, i think that you hit it on the head. i think the 8%, 9% uptick that we've seen in the two strongest months in the s&p since, you know, stars 2000 really concerns us traders that we haven't had a pullback. i think 1325 level not a huge move and i don't think that's a capitulation trade in one day. a little profit taking right now is what i think they're reasonable and has turned negative in the market. >> all right, chris, we have to leave it there. and that wraps it up for "worldwide exchange." i'm jackie deangelis in the united states. >> ross westgate here in europe. up next, "squawk box" as they count down to the opening of the markets state side. whatever happens, jackie and i hope you have a profitable day.

good morning. it's the global economy. china aims to keep growth and inflation under control. meantime, investors in the u.s. turned their focus to friday's jobs report. crude realities, there is fear of a supply krcrunch as less cre on tighter western sanctions, plus, your money, your vote. gop presidential hopefuls preparing for the big super tuesday tomorrow. it's monday, march 5, 20 12 and "squawk" begins right now.