manufacturing data last week. >> in asia, president obama meets with hu jintao. a missile launch dominates. in the u.s., after a high profile crash results, the leader of a bats stock exchange are at odds over what part to pursue next. >> latest business sentiment, 109.8 in march. this will be scenes as something of relief euro-dollar spiking up. patricia. >> better than expected. there was a big fear because of that weaker number as you were saying in the headlines of the pmi data across the board here in europe that we might see a

dampening up german businesses. but here the headline number better than expected. index slightly ahead of expectations, so we should see the euro reacting corredirectly it. we're flattening out, 132.56. remember, that is the fifth consecutive month to the up side. we had a accept month high of the number. so will should be the eight month high of the number. so will this is good. we're expecting economists to make comments on what businesses expect going forward, but all in all the component with regard to inflation hasn't dampened the

expectations going forward too much at all. which is i think something to be noteworthy. german employment seems to be stable enough for companies to go forward with a little bit of a smile on their faces. all if all seems perhaps they're starting to level out in terms of the pace of increases, but still not there yet and this is very good indeed because people are startingtart to fear a bit perhaps things even in germany have started to flatten out if not come to an end. and also in the light of the market losing about 2.3 ps last week alone. so quite a good mum from the ifo index. tomorrow consumer sentiment data and more towards the end of the week. >> ifo saying retail sentiment considerably brighter. a currency strategist with me in the studio. global head of research.

some relief of course following on from the pmis. what will take more weight over the next week for investors, ifo or pmi? >> pmis certainly have been huge, but there are will be a relief to see this number this morning. a lot more going on in terms of politics ands hispanic elections and those stories suggest there is a significant risk of contagion building up in the market and certainly within the politicians. so the euro could struggle to get to the 133 mum. >> we have traded in a tight range. is this anything that will change? >> i don't see that in the near term. yes, the market could see some relief that maybe we'll get the bigger firewall, but of course it would be better if it didn't immediate the firewall and perhaps germany is concede has gone it does in itself is

suggestive of some concern. so i don't really see the euro breaking up significantly to the up side. >> what's your view of the data in europe, patrick? >> certainly a relief. the pmi figure last week, we had roughly one point decline pmi figure in europe, but the biggest decline came from france and germany. i would be quite careful. we need also to when we reduce deficit by one point, we cut deficit by 5%. >> germany economy is losing some momentum. what happens to the the german economy? >> it's very clear i think all -- both countries are losing momentum. the good news is that pot deeper

recession but will have very mild in the next few months, next few quarters and enough to he restart the economy, and it will remain very careful with euro for the next few weeks and next few quarters. >> jane, what's the trade at the moment that you're most focused on? >> it's been quite interesting watching the aussie and new zealand dollars, too. and of course the yen is probably going to be the most interesting currency of the year because of course did nothing for so long and we have had the weakening trend. in a risk on environment, it's still untested as to whether or not the yen can continue to weaken about we do get another bout of risks off. so there are pull backs to come, but i think we will see the dollar-yen move higher.

>> does that mean we will see more pull back when it comes to investment into asia? >> it might be possible because what we're seeing is the global economy down across the board. we see europe and a very nice rally in the market. and we need a break for the short term. all this going to be digested from investors and we might get consideration in the next few weeks. >> and what else is coming up in the program, president obama has vowed to cut america's nuclear arms arsenal as the summit kicks out in seoul. oil prices are moving lower, so are geopolitical prices in too much? and hunger games scored big, but did it break the record some fi? find out later. and after the losses last week, we tried to move a little bit higher.

spanish stock market has been an underperformer this morning. and we hit 5.55% on ten year spanish dealt last week. those yields have come down slightly this morning. but the ibex was opening down 2% this morning. germany looking to stop its opposition to the bailout. fin land, which has also been resistant to increasing the firewall is suggesting it may be ready to compromise. says a deal could be reached at the friday ministers meeting in copenhagen mario monty hdati ha backed the idea of increase the firewall, but spain could still pose a threat to the stability. he says madrid is behind on getting its public finances this order. and mixed news for the secured

victory in recent elections, but failed to get an outright majority. result is something of a blow for the spanish premiere who had hoped a majority would give him a firm mandate for implementing austerity measures. let's look at spain. the good news in spain is that they've already borrowed about 40% of what they need for this year. but with yields backing up last week's at that ten-year 5.5%, what is the market concerned about? >> spain is in the forefront of the concerns. earlier it was portugal. but we had finger pointing from italy into spain, italy saying spain is trying to get out of achieving it deficit targets. and you can't blame spain because they are against this awful recessionary conditions. so there is concern about about deficit reduction and of course

over portugaportugal, too. it brings us back to the ltros. is it wearing thin. there were rumors on friday that the ecb was back in trying to subdue the yield spreads back in buying bonds. we don't know if that happened or whether or not it was a rumor, but the fact that there were rumors suggest the impact of the ltro was wearing thin. so there are still a fair amount of concerns about the eurozone heading in to the summer and i think that's the background that we have and the reason perhaps why we've got this building up of the firewall now. >> have investors seen the benefit of the ltro, is that all done now? >> a big question mark for europe is that on one side, the cost of that from 2% to 5% of

gdp, sometimes higher on one side. on the other side, we have growth at best of 1%. most german countries being down minus 1 ppts 7% our forecast. which means the only way on balance it, this is why the market will be far more in the doldrums and i would come back to to reality. >> okay. jane, we'll let you go. thanks for that. patrick will stick around for the rest of this hour. christine. >> here in asia, markets a little bit mixed picture, but mostly lackluster. we had worries about growth in the global economy and that's pulling sentiment lower. nikkei 225 pretty much flat. but managing to eek out gains

despite the fall on friday. rising mostly on the back of a softer yen. shanghai, banks were the biggest drive. this particular market managed to eek some gains despite concerns about growth. hang seng pretty much flat. we had china banks which were a big drag on concerns that maybe the banking regulator over in china reclassified government loans wrongly and that also pulled this market lower. but property developers helped to offset some of the losses. so pretty much flat. kospi off 0.4%. miners a little mixed, but some concerns about growth coming from china. this market lower 0.2. and sensex in india up 1.3%. so not a lot of trading volume. a little sensitive, a little thin, a lot of worries about the global economy. what does your heat map say? >> we're weighted to the up side. a bit of a boost from the ifo

number. so just about 6:4, something like that. and that translates into slim gains. mixed gains for the european indices. ftse 100 is the best performer up a third. we keep our eyes on spain over here. down 1.53%. and that means keeping our eyes as well on spanish debt yields. remember, we hit 5.55% ones spanish ten year debt last week. currently trading below that at 5.32%. that's the good news, about failing to get a majority in elections is denting again. italy key still just below 5%. ten year bunds back below 2% at 1.87 after nudging up the beginning of last week. as far as the euro is concerned, it popped up slightly. not enough to take it near to that 1.33 mark. trading in very tight ranges.

yen has been sold off overnight in asia and continues to weaken. euro-yen up to 10962. sterling against the dollar, slightly weaker or steady. 1.5841. >> ross, we have a quick break. coming up next, it's good it on have ross back, isn't it, the just has tough words for both iran and north korea. but does china's position carry more weight when it comes to diffusing tenses and what exactly is china and he position. analysis when we come back.

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investment banks will cut balance sheets by another $1 trillion over the next two years according to the financial times. a joint report by morgan stanley says regulatory pressure will force banks to cut risky assets and the market understilts just how much banks will have to change their activities. and the ceo of bats global

market is apologizing to a major computer glitch. they called it the most embarrassing day in the company's history. bats is in the electronic exchange. they say there are no plans to attempt another ipo in the near future. but dave cummings says bats should try for an ipo again in the second quarter. that is the bats exchange as opposed to british american tobac tobacco, which wes also refer to as bats. >> of course we're looking at live pictures from the global nuclear summit in seoul. they are welcoming delegates to the summit over in seoul. we're hearing comments coming out that u.s. president obama is vowing to pursue further nuclear cuts with russia and of course he is saying that he wants nuclear terrorism -- he says

nuclear terrorism is still a major threat and he wants to rally the support of china when it comes to reigning in the nuclear ambitions and offer to china to work together for nuclear securities. 's he also is met to meet putin in may. but these are some of the things coming out at the nuclear summit over in seoul. we are supposed to be showing you live shots of world leaders attending of course the summit. we know world leaders are meeting kicked off around half an hour ago. there's a working dinner tonight but the official session starts tomorrow. let's get the latest in seoul. what specifically can you tell us, what's being addressed today? >> the main agenda will over the next two days are things like minimizing enriching uranium and finding ways to prevent nuclear trafficking in terrorism. but it's no surprise the real issue so far is north korea,

many here in seoul believe the planned rocket launch next month is a pretest to a ballistic missile. today barack obama reiterated his harsh sanz. >> there will be no rewards for provocations. those days are over. this is the choice before you. >> and south korean president also stepped up his rhetorics. >> we have agreed to call off north korea planned launch immediately. >> in the meantime china's hu jintao has promised to dissway north korea from launching the rocket. here at the summit, he's met with u.s. president obama who told him that those countries have a shared interest in diffusing standoffs yet

pyongyang is still digging in its heels. the main body has been moved to the launch pad for preparations on sunday. so it looks like we'll be talking much about north korea especially among the six part i members. >> thank you very much for thati members. >> thank you very much for that members. >> thank you very much for that members. >> thank you very much for that. we'll talk more about that now, benjamin, good to have you with us. do you agree that south korea will be what's dominating discussions? >> i think considering the fact that so much of the rhetoric has been about what's happening in the korea peninsula that it's definitely a topic for the world leaders. >> president obama trying to rally the support of china. what role do you see china playing here? >> china plays an extremely important role. in fact it's probably key to

whether he's tensions can be diffused. but the question is to what extent china shares obama's expectations. if china views it as americans trying to encroach on its own national interests, then that will be problematic. however, about china shares the view that this is something that is beneficial and that it's part of promoting its national interests as part of the wider asian piece, then that's something that there will be progress moving forward. >> so far they've preferred a bilateral approach. >> i think for china, the bilateral approach is seen as something that coalesces with its way of engaging in politics. of course at some point, it would have to show its cuts to the rest of the world and to affirm what it says or what it chooses not to say. so we could see that happening, but for the short term period,

my suspicion is that china will most likely prefer a bilateral approach. >> we hear comments coming from president obama saying china needs to toughen its line towards pyongyang. do you think china is soft at the moment? >> i think china has its own interests at heart. so whatever it chooses to say for pyongyang will be based on what it purchase seefs as its own interests and he moment, i don't think we've reached the red line yet. so my suspicion is that china will continue to use its own bilateral means. at the same time, the question is to what extent then would china be prepared to witness some of these things, some of these tensions that are happening in the korean peninsula. >> and what can you tell us about north korean's nuclear

ambitions? >> well, its intentions is a guess, but my sus pish should not is that it could be very much part of will whole leadership transition and for north koreans, that the military constitutes an integral part of its entire approach to engaging the world. so that is nuclear weapons represents a way in which it is able to project its authority and its stance. so that is something i think the north korean leaders are prepared it to put on the paper. >> so prepared to show a military might, is that what you say, as a show of gesture that the new leader is in place to tell the world we have a new leader, our power base is still intact and that's just a show? >> i do hope it's purely

symbolic, but at some point to what extent it's symbolic and to what extent it's surreal, i think that's going to be very difficult because we have got very little information out from north korea. we do know the capacities, but some of this information is still pretty ambiguous. so trying to send guess their intentions will be even more difficult. >> what do you make of the nuclear summit? we are going towards nuclear disarmament, a world where nuclear is something that will be less of a threat. what sort of progress to you see world reade lea leaders making front? >> i'm not optimistic something can be decided in the summit. it's an important forum in which leaders can communicate some of their concerns and expectations, but to expect that the world decide to disarm i think that's

something that would not happen just peerly at a summit. >> benjamin, thank you very much for your thoughts. between to ha good to have you on the show. >> how are investors to gauge political risk? >> i'm not so sure investors are really so worried at this stage. we need to think with the u.s. election being in november, it's unlikely that u.s. will go into any action. point number two, in terms of oil price, you need to be careful because a high concentration has been declining. and as far as asia is concerned, it might come back. >> we'll take a pause. still on come, an interview with the ceo of quantus as the group

announces plans to set up reegin air prps

some good news from the german economy. the march ifo index rises

unexpectedly for the fifth straight month. the spanish stock market has been down nearly 2% after the prime minister failed to get decisive support for austerity plans. >> in asia, president obama meets with hu jintao in seoul. concerns of a north korea scheduled missile launch dominate. after a high profile failure of its ipo, the leader of the bats stock exchange are at odds over what part to pursue next. an hour and half into the european trading day. stocks mod restly higher. just weighted to the up side but not much.

ftse 100. just remind you the ifo keenum after last week's disappointing pmis coming in at 109.8. also better on both the expectations and the current conditions components than was the consensus number. keeping our eyes on spain. the key thing is bond yields today have moved away from the highs that we hit last friday. still above 5%. ten year portugal yields higher, as well. spanish curve, 3.99 on the five

year. bund yields 1.87 is where we stand at the moment. italy still yielding just below 5%. we did get a spike higher from the ifo number, but not near 1.33. starting it weaken again. so after the initial reaction, didn't get an awful lot. yen has been weaker across the board. euro-yen up to 109.57. dollar up against the yen. sterling-dollar pretty steady. christine. >> that softer yen you mentioned really helping out the japanese market because everywhere else, lackluster trade. but japan managing to inch higher six points. export tore exporters getting a lift. lots of concerns about impact of global growth.

so that's weighing on sentiment. in the shanghai market inching ever so higher, but some concerns about the domestic chinese economy. a little bit of tug and war going on between the banks. so far hang seng pretty much flat. very flat as you can see. taiwan weighted index technologies lower pulling the market down 1.4%. the kospi over in south korea off 0.4%. a little mixed over in australia, we had concerns about china, shall concerns about a global economy pulling this market lower. sensex up 1.5%. the freshly haeelected chief in china, tracy has the details.

>> we'll be talking about that in a minute will, but i think you have more information. >> i'm sure that there will be a lot that i can learn from colleagues in verse parts of government including all political parties regarding the work of the government. and i'm sure with the help of the chief secretary and his team, i'll be able to roll out my policy based on my election manifes manifesto platforms. >> he will begin the post on july 1st. he managed to secure 689 votes from a 1200 seat committee of business leaders and other elites. most of them loyal to beijing. beijing has promised universal sovereign for 2017 when his five year term ends. but no map laid out yet.

>> okay. thanks for that. that's the latest from china. shell has declined a report. they owe around $1 billion. it suggests sanctions on tehran are making the processing of payments almost impossible. >> christine lagarde warned last week over in india that oil prices may spike by up to 30% about if iranian supplies are disrupted. martin caught up with first deputy managing director at the imf about this an exclusive interview. and asked him about the probability of this happening. >> i wish i knew. so what i'll say is that it makes sense to be prepared for what might come and so we have -- what we have seen already is that even the

perceptions of what might happen have pushed oil up somewhat this year. so the brent oil is in the neighborhood of $124 or so. that's higher than we had anticipated. so we want to help countries react to that and think through what are the appropriate responses on that situation. you may have seen just last week that the saudi oil minister has made a pledge in essence to do just that. so i don't think the world should jump to the conclusion that there's going to be an oil shock beyond what we've seen. but i think it does make sense for us to warn of the risk and consequences, have the discussion right now. >> let me push you harder on this. you're an economist. you have a lot of smart guys at the fund. you've krufrnled tcrunched the . so strait of hormuz closes, 150, $160. two, israeli strike on nuclear

facilities, 200 oil. three,hezbollah laurnlging rockets, 300 oil. >> if there's a substantial interruption, prices will go up sharply. but i don't see much reason to expect a closure of the straits of hormuz for any sustained period of time. the military presence of the west there i think can probably assure that. but that said, i think we do -- you alluded to economic analysis. if the prices were to go up substantially, there would be an effect on global demand and gdp with differential effects. we have exactly that, a scenario that if the oil prices go up

substantially, it charts out what will happen, who will be vulnerable. and not surprisingly, you see that the countries that are particularly dependent on oil, including asia and especially japan, will bear some risk that the real impacts of such a shock would hit them. that's why we put that scenario forward so people can have an appreciation of what might happen and can begin to think about their response. >> patrick, he's sort of echoing what you said. yes, there are risks, but we don't perceive them to go to anywhere near the worst possible case. and you say investors are beyond that. so are we at risk of something if it does get worse? >> there are two things. on one side, not too much worry

forren investors. on the other side, we railroaded had an oil shock. every time oil goes up $10, barrel guess up $10, it has a real impact of minus 0.2% on europe gdp. which means that when we move from 100 to 120, it cut europe gdp by 0.4. which is quite massive. if we had to go further, it would be a dampener on the european economy. >> it's the impact on the u.s. economy that we're most concerned because the rally is predicated on a self sustaining this year the growth recovery will be self sustaining. so will it or not? >> u.s. is most sensitive to oil prices in it europe because they have less taxes. we have more taxes in europe, obviously the impact is less

important. u.s. would be quite exposed to this. and the question mark with a your previous guest was saying that if israel was fighting against iran, the main question mark will that what will depend on saudi arabia, will we have terrorism on the side or not will be a big question mark because iran is one issue, but saudi arabia is the main producer and massive risk. >> okay. patrick, we'll pause there. christine. australia and he beg's quat joining with eastern to form a new line. it gives access to the growing chinese market. we caught up with alan joyce in hong kong. >> we think it's a great opportunity for us because china eastern is our partner.

we always try to team up with a very good partner that knows the market, knows the operations that we want to operate. and we bring our expertise of low cost models that we've brought to a lot of markets around the world. to us is this no different from what we're doing in japan or in australia where some of the most expensive airports in the world in australia. we have the most expensive airport in the world where we're starting a low cost carrier this july. we believe that we can still get a 50% lower cost base than the incumbent carriers. that will allow us to have airfares 50% proceed whbelow wh there today and great for hong kong consumers because they desperately need low airfares in this market. >> just about every lcc already operates in hong kong. what will you offer to the market. segment that's not already

present? >> a comprehensive network as we do in australia, singapore, japan. because what that does is allow people to take a one stop shop to go to you will of a these destinations. we already fly to singapore from hong kong, but you'll have a range of destinations. with 18 aircraft which this airline will have by 2015, we'll have a massive amount of destinations in china, in southeast asia and north asia covered by this venture. >> i can understand a market like japan can support the proliferation, but hong kong give or take 7 million people, can you depending on the mainland visitor to transit through hong kong? >> the math works because you take singapore, it has 3 million people and it has two low cost carriers and jet there is in hong kong has 20 aircraft and

we're talking about a smaller fleet with 7 million people. so the potential for tuesday to have that growth is huge. and you think if us a in austra 20 aircraft. ryan air has expanded massively into the european market. so there's huge opportunities and 7 million people and with the propensity to travel that will exist here is a great opportunity for us to grow. >> and that was bernie low speaking with alan joyce. let's check quickly shares of quantus, up 2.1% over in australia. china eastern down 1.8%. over in japan, the tokyo stock exchange is set to dissolve apparently market for professional investors that is jointly set up with the london stock exchange. let's go to the nikkei live from

tokyo. >> the tokyo aim short for alternative investment market was launched in june 2009, with you only one stock list listed so far with another scheduled next month. so not surprising the too bourses are in final talks. the aim to give high growth companies easier access to capital through more flexible listing and disclosure requirements. but under the system, participating security firms are responsible for screening listings. and securities firms have been reluctant to take on such risks especially since potential deals are expected to be small in size with low fees. now the tse plans to replace the market with a body of either own and is seek to overhaul operating rules to bolster market activity. that's all from nikkei business report. back to you. >> thank you very much for that. ross. back here in europe, the latest ecb policy maker suggests

that bank start withdrawing liquidity. thinking the bank is now moving away from crisis management towards an exit strategy following recent refinancing operations. at the same time, we have a couple of government debt auctions to keep an eye on. we'll get the results of the german bund auction before and france is tendering 8 billion worth of various bills. bill blaine and patrick are both with us. we've only just had the refinancing operation. what do they mean we're now roo? >> i think it's more the expression of the hope that we're looking for exits. >> we're clearly not near nor mal i. >> what is normality? at some stage we will get back to a stage where we have normal policy.

b but do we end up with a constant stream of regular low term repo operations or maybe in a slightly different form, does the ecb information malize the old government bond buying program again. because you can see both of these getting kicked back about if the next series develop into real crisis. >> spain has raised 40% of its borrowing each year. so how concerned are we about yields spiking higher? will it impact their ability to raise funds? >> there will be secondary effects. it's not just about raising funds. it will cause uncertainty in the market, could close off the market again for the rest of the 60% they still have to raise and cause great problems about the spanish banks. they'll need recapitalization.

so even though perhaps a lot of financing has been taken care of, that didn't stop the problem. >> and we need to take into account that confidence is very low. it's mainly in the financial system, but doesn't go yet in the economy. so means at the risk ecb putting out this money at this stage is far too early. >> are we still going to see another bailout for portugal, will we see ireland requesting a bailout and potentially a third bailout for greece? will it happen and about it happens, how do investors react? >> it's very interesting. every day we say is portugal going to manage through. portugal has made enormous strides. they've actually got a better consensus domestically with the unions joining politicians to

create some of the requirements to free up labor that got clear political consensus about adopting austerity. they don't have some of the social tensions that we're seeing in spain and elsewhere. but the economics are dead against them. >> i think the main question mark for portugal is private debt and debt to gdp. if we take private debt, it's far more than 200% which is a lot. we need to take into account that 30% of total gdp would generate minus 1.5 gdp every year. there is clearly a question mark. assumptions are not realistic on growth and privatization.

greece at some point will need to come again it the table at financing. >> christine has a question. >> bill, this is christine. as we and you can about ttalk a the bailout, do we get to a point where we start to say maybe this eurozone is not going to be intact? >> that's a very interesting question you ask because i don't think the markets are looking that much at the news that comes out in will terms of how big the bailout fund is going to be. i don't think they're that concerned with how the stability packs work. i think what the markets are looking at is purely whether the consensus exists to continue assuming it and at the moment, it very much does. we're going to see some kind of agreement this week in copenhagen. i'm sure we will get some kind of compromise from angela merkel

on the size of the bailout funds. so to use this horrible expression that the can keeps getting kicked down the road and i think that will go on for a long time. the time to panic for markets is when you start seeing domestic politicians cooling support about and the guys will be watching what happens with the french election particularly, finland and perhaps germany. >> the market will shift into will we have initiated in europe to booth growth, yes or no. and one idea member to use europe for investment. we need to keep in mind 35% where historically debt to quit at the was more 38%.

so appetite to invest feels -- >> we'll leave it there, patrick. bill, thank you. coming up on the program, the tiger has roared. tiger woods is back. he's won his first tournament in 2 1/2 years since his personal life life disintegrated.

china wants to raise close to $1.5 billion by selling new shares to boost capital. the news triggered falls in the hong kong financial stocks on fears of a liquidity crunch if other banks were to follow suit. shares are suspended ahead of the fund-raising. china state run securities says publicly traded banks will raise an estimated $16 billion in in share offerings this year as they attempt to bolster hair balance sheets. ross. >> and investment banks at the same time reportedly cut their

balance sheets by another $1 trillion over the next two years, according to a report in the financial times from morgan stanley resultants which say that regulatory pressures will force banks to cut risky assets and underestimates just how much they'll have to change their activities. this process of deleveraging is really only just begun. do we know what the full impact will be? >> it will be quite massive. the deleveraging is roughly 20% of total european gdp, which is quite massive. corporations will need to find other sources of funding. and large balances will remain intact like business flows,

advisories, and we should not woert impa worry the impact of this, but, yes, there will be an impact. p. >> patrick, thanks for being on today. still a whole hour of programming to come. and that's time to bring in jackie today. and look, big sports news state side last night. >> absolutely. ross, it's great to see you, although we did enjoy having you here. but talking about that news, pure joy. that's how tiger woods is describing his first victory on the pga tour in a long time. woods won the arnold palmer invitational on sunday. his seventh title at this event. the world's former number one player shot a two under par. his 72nd pga victory and just two week before the masters. it's critical in a couple of senses because we're wondering is tiger woods really back. and also that tell-all book coming out by his former coach.

so the timing kind of interesting. >> the key thing about this is that the sponsors will be over the moon because i imagine everybody was looking to see that. and with the masters coming up in two weeks, you have rory mcilroy and the current number one going up against tiger. that tournament will attract so much commercial interest, as well. and i suppose the thing that tiger does is he attracts the nongolfing community, right? >> yes, he does. because i think he has asian roots as you might call it. but i'm more interested about his achilles' heel. i hope he gets better. he had to fight that throughout the whole tournament. >> yeah, but it was just a strain. because he did it in the previous tournament and he pulled out. it was just a strain. but the question now is whether he's got 14 majors, he's trying to target jack nicholas' 18.

so will he start taking steps back toward jack's record. >> it will be interesting to see and we'll certainly all be watching. the fallout of course from the bats global markets blunder also continues to be in the news as the company ceo apologizes for the failed ipo and major computer glitch. we'll discuss the impact of that next. and keep your e-mails and tweets coming in. we'll put your questions to our great lineups of guests. [ male announcer ] this is the network --

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headlines from around the globe this morning, here in the u.s., after a high profile crash results in a failure of its ipo, the leaders of the bats stock exchange are at odds over what path to pursue next. >> good news from germany. the march ifo business sentiment rises for a fifth straight month. >> and in asia, president obama meets with chinese counterpart hu jintao at the start of a nuclear summit in seoul. concerns of a north korea scheduled missile launch dominate.

>> you're watching "worldwide exchange." great to have you with us this morning. let's go ahead and it take a look at the u.s. futures. looks like we'll open higher. dow up by as much as nearly 25 points. nasdaq by 10 and change and the s&p 500 by a little bit more than two points. this after stocks closed modestly higher on friday, but the dow and s&p posting their worst weekly loss, veers concerns about a slow down in china and weak economic news out of the eurozone still dominating those head lines. but interesting to point that the nasdaq logged its sticksth straig sixth straight winning week. >> we have a mixed start after a week of losses last week. ftse 100 the only sector up by not by much. spanish prime minister not

getting the complete majority he needed necessarily for a firm mandate for the austerity reforms. so a cautious start. and the ceo of bats global markets is apologizing after having to pull the company's ipo on friday to to a major computer glitch. they've called it the most embarrassing day in the company's history. tony fraf fchlfra pchlfratto is. what did you think about the bats failure some good about as tough a start as you can imagine

for anyone. >> how damaging? >> extremely damaging. a question of confidence for an exchange. we have seen exchanges have to deal with some technical bumps along the way. it's a huge hit to the confidence of investors. >> and do you think actually the founder is right, that the only way you can restore confidence is prove that you can do it. so they should do i do an ipo a soon as possible and make sure it works. >> is th that's exactly right. >> when we're looking at a story like what happened on friday with bats, is it time to turn up the heat and really look at this issue? >> i think regulators are really

concerned about all of the exchanges. we know that from the big crash in new york stock exchange a year and a half ago or so that the flash crash, there are people who are really worried about what's happening with high frequency trading, with the speed of the exchanges and are they technically competent. so this just adds to that. i think regulators are concerned, want to make sure both sides of the trades are protect and can be confident that the trades are will go through and clear the way we expect them too and quickly and efficiently. contributes to the efficient movement of capital it in markets. >> and speaking of protecting both sides of the trade there, the decision to cancel the ipo being looked at a limit on liability by shareholders, do

you think that was a smart decision by the company to make? >> yeah, at this point. i don't think they should set a time table. they need to show that they have the confidence to go forward with it and they need to reassure a whole lot of stakeholders from regulators to investors to customers clients. so until they do that, then they need to accomplish that and then set a new ipo date. >> friday we had softer u.s. home sales. has it changed your outlook about the recovery we're seeing in the housing sector in the u.s.? >> we could line up a whole lot of people who have called the bottom in housing for a long

time. there's still a way to go in housing. we need to see another wave of foreclosures to go through that were still held up because of the robo signing crisis. so i think we're probably near the bottom. maybe we're bouncing on the bottom. but the to call it a recovery is -- >> it's about hitting the bottom. and the recovery is a very long slow process. but when buffett repeated his call of buying occupied single homes -- >> he's taking a long term view. essentially it will come back. it will come back trailing employment, trailing household income. when we see those recover, then we'll see credit recover and then we'll see people go back about into buying single family homes. and then we'll have to see what happens in the secondary market, do we see residential mortgage

backed securities recover and then you can see the turn in housing good. >> good to have you here today. i know jackie is missing you, but nice for he me once made while to get to see tony face to face. >> of course. and great to see him in my end no matter where in the world he is. meantime, if it you're curious about what happened on friday in the flash crash, go to cnbc.com for the details on the apple flash crash that resulted it from the bats glitch. and if you've just woken up, business climate index improved unexpectedly in march. now up the fifth straight month boosted by better than expected retail sentiment. patricia has been looking at the impact in frankfurt. we had a short jump up in the ire r euro. didn't last long. but how much of a counter balance is this? >> of course this is very good especially for the expectation part of the index is better than

expected telling us what companies think whether happen over the next six months. from that point of view, i think the numbers are good. germany can say i'm still standing. however, we're starting to plateau out. so while we're heading to the fifth month of an increase in a row, we are starting to increase at a slower pace. by the way, february was revised to the up side, that's good, as well. the reason why i think why we just had a short term positive impact on the and you are row u.s. dollar and also on the market is simply because the market is looking at spain, the market is looking at kind of very short term environment and data, however, comes are telling the real stories. they're in better shape than they were in 2008 and a lot of the ceos said a couple of things. oil, yes, we're watching it, it's not an issue yet. by the way the chief economist said exactly the same thing. they also think that they're this better shape. so whatever happens on a mac row economic level, they're it

actually quite good to weather it for now. but you really have to see how it will map out. also it seems that the retail environment in germany is starting to look perky. look at the wage in-nation, look at the way the labor market is continuing to improve. and people sooner or later will start feeling confident enough to have the domestic demand, domestic spending really continuing to power ahead with the german economy. talking about 2012 forecasts, what can we take from that in terms of where the german economy is going. remember the government is saying up 0.7%. last week we had a couple of the smuts revising their gdp forecasts to the up side up to 1.3%. so that's almost twice as much as the exercise man government expects the german economy to grow. so yes, the companies are still feeling good.

companies starting to make sounds that investments may go down in the immediate term. but for now, enjoy the party as long as it lasts. >> an i abofo economist saying manufacturing is deteriorating about so that we'll keep our eyes on that. thanks, patricia. still to come, the race for the republican nomination could drag on all the way to this summer's convention in florida. as rick santorum continues to be a thorn in mitt romney's side. who will be the last man standing and can they pose a strnk ch strong challenge to obama? hey, heard any updates on the game? i think it's final seconds, ohh, down by two, shoots a three, game over. so two seconds ago... hey mr. and mrs. harris, where's kevin? say hi kevin. hi. mom, put me down. put...the phone...down.

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let's start in the united states. it ta take a look at the u.s. futures. dow could be higher by as much as 19. nasdaq by nearly 9. and s&p 500 up by 2 points at this point if we're looking at how we're setting up. of course stocks closed modestly higher on friday. the dow and s&p had a little bit of a rough week, but in term of the nasdaq, we saw its sixth straight winning week. seeing a lot of strength in technology across the board. in terms of the sectors that led on friday, we saw the materials

and energy sector see a little bit of a pick up and hold the markets up. >> advancers and decliners equally paced. so a pretty mixed european indices performance. xetra dax down nine. no major reaction to the fact that the index is up five months in a row. we're still getting deteriorating business conditions in manufacturing and it's manufacturing in the orders on the pmis that was most disappointed. eyes will be on on spain. today the stocks down 1.7 about%. spanish prime minister not quite getting the full majority he needed for backing for austerity measures. yields on the other side, while they have just moved away, they

hit 5.3%. so that is the good news. ten year it at that timian yields just below 5% at the moment. remember, we saw yields heading back up towards 2%. firmly below that. euro-dollar spiked a little bit. lost many of those gains. steady now at 132.04. yen has been weaker across the board. dollar firm against 82.75 and the pound against the dollar 1.5813. pretty steady at the moment. christine, what kind of day have you had there will? >> really a mixed session. that soft every yen you were talking about giving a lift to japanese market. so stabilizing a little bit in this particular market. the topics on the negative side.

greater china markets, up side are pretty much flat. we had concerns there in china about of course the banks. we had a banking regulator which came up to say they reclassified incorrectly outstanding government loans 20% of government loans. is that seems to be fueling expectations that maybe local government could be higher than expected. but we had the rise of local property developers and it helped to offset losses in the chinese financial sector. hang seng pretty much flat. elsewhere the taiwan weighted down. kospi off 0.4%. miners mixed. some concerns about the global economy, about china, australian market off 0.2% and the sensex in india down 1.6%. that's your global market report and that's it for me. i'll be back tomorrow with news making headlines here in asia. thanks, christine.

it was two years ago that president obama signed health care reforms in to law. today the supreme court begins three days of hearings. the law aims to extend health insurance to more than 30 million americans. but many republicans oppose it and it's being challenged by 26 states. a decision by the high court is expected by late june. meantime rick santorum says he's confident that he can win key swing states and ultimately beat president obama in the general election. santorum took the louisiana republican primary on saturday beating front runner mitt romney with 49% of the vote. but his victory doesn't really dent romney's overall delegate lead. campaign trail moves authority with the contests in wisconsin, maryland and washington on april 3rd. and still with us to talk more about it is tony fratto. tony, still great to have you with us. when we're talking about the political picture here in the united states, a lot of issues on the table today. obviously focusing in on health

care and on this strive between is an tore run and romney. so let's just start this for the moment. how much longer is santorum going to be a thorn in romney's side? >> the financing for a presidential campaign these days is so much easier than it was maybe in any other presidential election even 2008, you can raise money over the internet, you could use the internet and social media so much easier. so a challenger like rick santorum who appeals to a core base really could stay in for a long time. it's tough for mitt romney who all but is right on the path to getting this nomination. i think everyone who has watched understands that mitt romney will get the nomination and get big delegate halls once we get to new york and california. rick santorum will likely win pennsylvania, but he would have to win five pennsylvanias to

surpass the delegate count of mitt romney. but he could stay in the race well into may or june if he likes. >> let's focus on the health care legislation it could be a big blow to president obama if the law is struck down. what's your thought on that in. >> it's huge. everything is on 9 line for president obama here. the stream couupreme court, if at a lot of the criticisms of the law up until now, it looks like if you were betting on the outcome they will likely uphold obama care. so republicans who are thinking about this from a campaign issue where the majority of the people oppose the president's health care law, you know, they still

have it out there as an issue if the supreme court upholds the law. then the pressure goes to congress and elected members of congress to change the law in a new congress next year. but for the presidential campaign, the stakes couldn't be higher for president obama, for his marquee piece of legislation. forget about dodd frank which most americans don't really understand, to get about the stimulus bill which most americans think was not helpful to the economy. it's really the health care bill that's his marquee piece of legislation. for him to go if to his presidential rae election campaign without that law confirmed by the highest court in the land would be real damaging. of course we won't find that out until much later in the process. they're listening to the debate this week and we'll see what they come back with. >> certainly something to watch. still to come on the program,

we'll get some stock tips for for you your portfolio including why you should sell bbva and why there may be further down side corrections in the european banking sector. [ male announcer ] how can power consumption in china, impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing.

president obama and hu jintao have been speaking this morning and have agreed to coordinate closely in responding to any potential provocation of planned north korean, according to the white house, the president felt it was important to use its influence with north korea and send a message of concern to pyongyang. he's taking the north korean issue very seriously and registering concern. so finding some areas of agreement over north korea. >> congressional investigators have released e-mails in which jon corzine asked an executive in the chicago office to transfer $200 million to cover an overdraft with jpmorgan. the e-mail says corzine authorized the transfer from a customer account. corzine spokesman says while he

did ask to correct the overdraft, he never directed o'brien to use customer funds. o'brien has been called to testify wednesday but she's expected to invoke her fifth amendment rights. and investment banks will cut their balance sheets by another trillion dollars over the next two years according to a joint report issued by morgan stanley. an analyst says the market underestimates just how much banks this have to change their activity. so what does that mean in terms of owning financial stocks? lawyerly in europe post the lrto. joining us is senior sales trader at silver wind sesecuties. tony is still with us, as well. darren, let's concentrate on european financials. obviously a big ride up. you think it's time to take

profits and to sell? >> we want to be stock specific, but baesk lsically the sector'sa very good run. we think the sector has turned around. with yegreece supposedly fixed, the attention has turned to iberia. >> we've seen spanish yields rising. >> it's something of a proxy, but since we broke the stock down, they've fallen from about six euros, we think there's a very good chance that they could come back to something like five years.

>> the way i think about with the banks, i think about what the plaque crow outlook will be. they're withdrawing that much from their books, what's the macro outlook going to be for the european economy and for their balance sheets going forward also. >> very poor for those in spain. hardly now make a return on equity as a european bank at the moment. if you're a spanish bank, you have double trouble. >> switching gears to the u.s., we've seen a run up in technology, technology performing very well, specifically in 2012 since the beginning of the year. you are a bull on western digital. tell me why. >> occupies a sweet spot. one of the world's largest makers of hard drives.

purchasely a third of the world's hard drives are made in thailand. >> so this perception out there is that everything is moving to the cloud. what do we need hard drives for. >> if you take a step back, the cloud is as well as, not instead. two thing wills running parallel. if you want 24/7 access, you can't guarantee even the most modern communication networks. so you want something that's portable potentially and i don't think many people really rust all of their memories to an off line server. >> pioneer natural resources. is this predicated on the weak

natural gas price? >> 100%. it's ironic really that in a world with rising oil prices, you have a building supply in the u.s., but also abundancely cheap supplier of energy, natural gas, which doesn't appear to be taken over in the states. the whole sector has fallen back and we look at pioneer to break $100. >> the natural gas story in the states, bad for the coal companies, but for the u.s. as a whole and the economy, and this is a big, big story, isn't. >> our colleagues at cnbc new york talking about it. and it is a huge economic story. regionally, but also for the overall economy. the view is, look, we can become the saudi arabia of natural gas. actually exports energy. but we need to make the transformation domestically

using the natural gas. >> when people start seeing the price of natural gas -- >> it's like water. literally cheaper than water. you have to imagine private sector will find a way to use it. >> how much rollout of a did distribution gas grid to you need to get it into homes and -- >> i think five to seven year, we'll see very different market. you'll see it happen in the homes and even the rolling stock of cars coming out of detroit. >> okay. good for that. darren, thank you for your stock ideas. and president obama has just been speaking at the conference in korea with hu jintao. coming up on the show, the dauf has the rally run out of team or is this just a pause for breath? more next.

welcome back to "worldwide exchange." just want to take a look at our headlines.

in the u.s., results in failures of the ipo, leaders on the odds over what path to pursue next. >> and the prime minister fails to get decisive support for austerity plans in a regional election. >> in asia, president obama meets hu jintao at a summit and the two agree to according fate closely if north korea goes ahead with the scheduled rocket launch. nice to have you on "worldwide exchange." let's take a look at futures. looks like dow could open 25 pointer higher, nasdaq by just about three points. >> only the ftse really making any gains and not by much.

xetra dax pretty flat. focus very much on spain. you can see the market down 1.71% although yields actually holding lower than where we hit last week, 5.55% on the ten year. germany not having any problems raising money at the moment. >> yeah, germany is okay, but of course everyone will be watching spain. the dow and s&p turninged in their worst weekly performance of the year last week, but the losses were relatively small following a stellar rise for stocks over the last few months. joining us now to talk more about it is ben liechtenstein and still with us of course tony fratto. ben, let's talk about a little bit of the pause that we've seen here in the united states.

do you think this is the start of a broader correction or just that, a pause? >> i think for the most part at this point it's just a pause until we start to take out some of the value areas that have been established on the way up. i really think it's just a breather which is very healthy for the market. some of the rate of that acceleration that we've seen, while it has been accepted and that's one thing that i focus on mostly in terms of new probing price activity, whether you get that acceptance or rejection, you have to look at the acceptance that we've seen at these levels. it's been a controlled slow grind to the up side, so, no, i don't think there's any real indicator of some sort of a v top by any means. i think we're balancing out at the upper extreme slelevels, buo indication of any rejection of these levels. more just an indication of some of the other major markets starting to play out. you look at gold, and

continuation of price trading levels up above 105. so that will slow the stock market down a bit. but i don't really think that it for the most part this is any indicator of any v top if you will, many possibly a bit of a balance forming up here, but not any team of rejection or v type activity. >> so then in terms what you're watching right now as we move forward, the slow grind you mentioned, do you expect that to continue or are there any catalysts on the table that you expect to create a big bounce? >> i think the real catalyst, if you will, that would either create some sort of -- well, for the most part i think the fear or the concern -- the risk is to the down side at this point, after seeing that slow sustained grind for the up side. i think that the risk and exposure again is to the down side and that really comes from

the unforeseen catalyst, some news out of the middle east or something like that in terms of pipeline issues or some sort of heightened conflict of some sort. i think that would certainly bring enormous amount of concern and a slowdown to the euphoric type activity that we've been seeing. you look at ali stock look appl at $600. what will it take for the today the list to pull that energy out of the energy kemarket, i'm not. but it is something that we've put the concerns of europe behind us and we're really just moving forward. again, status quo, higher highs, higher lows for the most part. again, a little bit of a slowdown, but in my opinion, 1369 would be a major left to test and bounce off of and that would exhibit enormous amount of

strength about we could do that. again, two accepts forward, one step back is very healthy in terms of a market in a growth phase as we are right now. so that's what i would look for and we haven't seen that most recent step back, if you will. >> something i wanted to check in with you on. where the top is and where it bounces around, some of the big day it take that we have coming up in the next few weeks, we'll see more housing -- i'm sorry, more employment data out of the united states and maybe start getting some better sense of where final demand is going to come to support the summer sector. are you looking at that in terms of trying to get conviction here, whether a slow grind up or whether we've will it some real trouble? >> i actually think that the slow grind up is more a product and a result of the interest rate policy that we're in right now. so i think that that again is status quo. i don't think -- in-the fed's

made it pretty clear that the activity they're sxinting right now and the initiative in terms of trying to keep the interest rates low right now is actually what we're seeing or a continuation of that is what we will see. i think that the market right now is actually more focused on instead of some of the internal numbers, the housing data, some of the unemployment data, consumer confidence type data, i think that the market right now is focused more on the shift that's kind of this disconnect from the dollar over the last couple weeks. i think it's focused more on the oil price and the activity that we've been seeing in the 30 year. so i think it's more technically focused which again brings me back to some of the levels i was talking about before. you have at the upper extreme psychological level of the s&ps at 1400 and down below it's very narrow range which is nice, about 1370, 1365, a very comfortable level that we saw before this most recent run up. but i think again take the focus is more shifted towards what's

going to be the stocks correlation it to the dollar in the coming months more so than how are stocks going to react to some internal type numbers. >> ben, we'll come back to the dollar stocks and bond correlation in a few moments. take a coffee, we'll come back to you in ten or so minutes. meanwhile barack obama has met with hu jintao at the nuclear summit in saeoul. obama accused beijing on sunday of turning a blind eye on pyongyang's planned missile launch. >> meantime oil prices trading slightly lower as geopolitical tensions have been overly built into the prices. tone any, do you agree with that, do you think that geopolitical tensions will stay sort of where they are with

nothing nanlg happening for example, israel attacking iran and that these oil prices are a little too in-flaflated at the moment sha moment? >> it really has led to the run up that we've seen in recent months as a huge issue right now for the overall macroeconomic picture. i think we are in a period right now given where the white house is and where europeans are where they'll let the sanctions work on iran and at that time edge off of any thoughts about military action. i think you're seeing a lot of those messages come out of the white house and some of the allies to try to take that tension off. but at the same time, keep an overall economic pressure on iran to try to change their ways. if oil goes higher from here and we see gasoline prices in the united states in this political environment go up and we see gasoline approach $5 a gallon in the united states,le have huge

political implications, as well. >> i spent a week in the states last week -- >> you didn't drive yourself. >> no, andrew ross sorkin wlent me jeeves for a little bit. but four bucks, that's all -- >> we're all paying $4. >> that must be a squeeze bearing in mind it's still much weaker than they have been. >> and we haven't seen wages bump up, we haven't seen a big move in employment. so if you're going to take disposable income away, psych lodge he cgically it's big and affects other spending decisions. we dealt with it back when i was the assistant secretary to the treasury, at the white house. a president is going to get

blamed for high gasoline prices. that's never going to change. i think we would see that again, so it would be a huge hit to president obama's re-election prospects in what will be a close election. >> pain at the pump of course, guys, a big issue. but still to come, facebook and twitter have come a long way from being just the next passing fad. but is there potential being fully tapped by the corporate world? we'll get an inside view coming up next.

facebook set to go public this spring and twitter recently celebrated its sixth anniversary. both sites have managed to flex their muscles for movements like the arab spring and also made instant millionaires out of partners like zynga. james andrews is joining us. let's talk about some of the social media outlets. you have brands tapping into these outlets and getting in some sense free advertising, freeways of driving their message that we've never seen before. what's the impact of this? >> huge.

brands are leveraging moments in time, leveraging opportunities like south by southwest, huge event experiences. doers hub had a strong thinksing and launched doughers hub to capture twitter conversations. nik nike built a fuel hub that was incredible. >> and it's not just about the companies. we mentioned the arab spring. i watched social media fuel a movement. what is the power of that? >> the power is now media. things are happening right now as we speak and from the underbelly, from the bottom up, conversations are being driven. trayvon martin case is a great example. could it wouldn't be as big if it wasn't for social media. >> and we talk about some of the smaller companies that we're looking at like some of the partners that we just mentioned.

p what is the potential for these companies to tap in to the biggers partners like facebook and twitter to be able to expand and bloom some there is some worry that the smaller companies, the revenue models might not be as stable, might not be as sustainable going into the future. do you worry about that? >> a bit. there's a lot of talk about the valuation coming up. what we're seeing is the new trend. the people who are the late comers to social media. your mom, my mom, who are no jumping on to these platforms. >> i'm just trying to get my mom to text. >>. >> you've been on pintrest.

i don't understand what the interest is. by biggest problem is 245 it doesn't work on a mobile platform. you have to sit at a desktop and search it for pictures. >> surely if tony doesn't like this, it's definitely not worth $2 billion. >> yeah, i struggle a bit with the lack of mobility. it's a simple platform. woman dominated it in the beginning. guys like you and i are just not getting on pinterest. i struggle with the thought that it's the nest facebook. >> can it really succeed if it's not mobile? i was talking to guys the other day who were talking about 3d television. they said 3d division witelevis never take off because we can't look at our back buries and

tweet while we're watching 3d television. you really have to be mobile today. >> absolutely. i think they'll figure that part out. i have hope and faith that pinterest it will grab the right people. they also will get a mobile strategy. there's bufrng of good tbunch o talent. they'll be a player, but not a facebook. >> and to see about if there's anlg a little bit of a slowdown. i certainly go on facebook and twitters but certainly not like i did a while ago. >> i think that's things that play with the ecosystem. things like path which yi which plays with twitter and facebook. so i don't think they're going anywhere. >> as long as there is new innovation that will keep interest. >> absolutely. >> thank you very much for joining us. still to come, we'll look at the trading day ahead on wall street as investors a wait key home sales data.

we'll have we'll have reports on home prices, couplinger confidence, durable goods, personal income and spending and the feenl estimate of fourth quarter gdp. today february pending home sales. ben bernanke gives a few from the fed at 8:00 a.m. and ben hilicechtenstein is sel with us. a lot of balls up in the air. but when we look at the housing

market, some saying it's too soon to be able to call a pot and s bottom. and do you think this year we'll be able to say, yes, we've hit rock bottom and it's time to pick up? >> it's too early to tell for the most part. i think anything in terms of forecasting any type of bond right now is really just a guess. you look back for the last two years, you have ben bernanke and many others saying that we've already reached a bottom and then on the other hand, you have s&p case shiller and other price reporting services that are again telling us that we're continuing to see declines. so i think for the most part, housing data has been somewhat mixed as we're starting to see unemployment come off and a trend develop to the down side there. and again, there's argument in terms of why that number is coming off, is it that fewer people are eligible. but i think housing data will be

in the same situation that it is right now until we see that real growth phase in the unemployment market or in jobs data to the up side. and as you mentioned, we do have jobless data coming out this week on thursday, but again looking forward a little bit more towards the unemployment data as usual is the case that being the bigger mark for the month. but, no, for the most part, i think again there have been a lot of officials that have been predicting a pbottom and we haven't seen the bounce yet. >> thank you so much, ben. and of course to tony fratto. and that's it for today's show. i'm jackie deangelis in the united states. >> ross westgate in europe. coming up next, "squawk box" and the count done to the opening of the markets. we hope you have a profitable day.

final trades of the final trades of the quarter. the bulls have five more days to finish out a strong start to the year. yeah, my 30% number has been hit if you go back to october. battle brewing at yahoo!. squaring off with an activist investor. and the chairman speaks. ben bernanke offering his outlook on the fed today. it's monday, march 26th, 2012. "squawk box" begins right now. welcome to "squawk box." we're finally together