welcome to a special edition of "worldwide exchange" on cnbc. here are the headlines. china's inflation in march climbs unexpectedly, but may not be enough to hit the brakes on monetary easing. tokyo socks drop for the fifth straight session as the yen rises to a fresh one month high against the greenback after friday's disappointing u.s. jobs report. and the nikkei daily says sony will slash its global workforce by 10,000 as early as year end. hello. s it is 4:00 p.m. in singapore, 4:00 a.m. in northern and 9:00

in the morning in london. plenty coming up on today's program. we're going to it a look at asia's reaction to north korea's plans to launch its rockets sometime this week and in india, the prime minister says he is penciling an official visit to pakistan soon as he met with the pack is an any leader delhi over the weekend. the so plenty coming up on "worldwide exchange." let's take a look at how the asian session faired on this monday. remember, a couple of our big markets were out of action especially australia, hong kong out of action, a couple other southeast asian ones. to reduced trading volumes, but you can see quite a bit of negativity. not a single bit of green that

you see on the charts there. a couple factors. we have the sticky inflation situation in china. ppi and especially cpi was the big one and also asian markets were the first to react to the u.s. nonfarm payrolls which only came in just about half of what was expected out in the market. so how much of this is a soft spot and what is it going to mean and does it also imply u.s. treasury yields will back up faster than expected? so these are many of the issues facing us today. what's also interesting is that the u.s. dollar in fact retreated while the japanese yen rose, as well. closed down 1.5%. and getting back to the top story, china c about pi rising than a faster than expected clip. tracey chang has been looking in to this. >> thank you very much. well, the major inflation gauge climbed 3.6% last month above the median forecast of 3.3%,

although it largely dashed investors hopes for monetary easing, analysts say it is probably not must have to deter the pboc from bringing mild measures and help china's weakening economy. analysts say the crucial first quarter gdp data on friday will be key to determining how much stimulus the economy really needs. many market watchers also think the march c about pi reading while rising faster than expect, while hopes for easing are still alive, economists also say if the central bank does act, it is more likely to cut the rrr than warn any interest rate cuts are unlikely to happen anytime soon. >> thank you so much for that. we'll check in with you in a little bit. let's bring in our panel for this hour. joining us live in our studios is richard geram from bank of singapore and the head of asia market strategy at seb bank

singapore. you went on an expensi extensivn china. what are the key data points? >> i think the market is a little bit too bearish on the outlook on growth and inflation. the key take really is like friday we have q1 gdp coming out, we're expecting 8.9% and market looking at 8.4%. and in the second quarter of the year, we're expecting a rebound in gdp growth which means that the inflation dynamics are likely to turn a bit more aggressive toward the end of the second quarter. we expect one more reserve requirement cut of 50 basis points this quarter. and that will be the end. because i think what we're finding is that the liquidity conditions particularly towards the small to medium scale enterprises which are the

backbone of the chinese economy in terms of supply and distribution and important to the vertical supply chain -- >> a couple key points here. 50 basis point cut in rrr is much lower than the consensus view out there in the markets. many economists seem to be looking for 100 or even 150. and also this gdp for 2012, you're looking at something about 8.7% which is also slightly higher, as well. does it mean china is actually in a bit of a sweet spot and that we've been getting too nervous about a hard landing? >> i think market has been all along too nervous and i think for some of the right reasons for more the medium to long term outlook rather than the cyclical outlook. there's a difference. there's a whole host of problems we're all aware of. property sector issues, banking sector issues, these are structural problems. so don't confuse structural problems with the cyclical dynamics. the u.s. economy is on a

recovery path. not super firm, but it looks resilient. around at least 2.5% gdp. japan seems to be recovering and we're expecting a mild recession in europe. and the rest of asia, we expect a v-sha shape recovery by the sd quarter. and in our quantitative indicators, the three main components are essentially real broad money growth, shipment to inventory ratio, and essentially taiwan export orders, both of those are showing signs of rejuvenation. that's why although our number looks a bit maybe totally out of whack for the year, that's what we're finding both on quantitative as well as on the ground. where i have to admit on the ground, it's knots as conclusion suffer of what we're seeing from our quantitative indicators.

>> so you think they'll keep the pressure on the housing market? >> i think when we say about housing market like what we have in every country in the world, it's not a market as you know very well, it's very heterogenous. the tightening or basically the tight monetary conditions in terms of bank lending to the tier one and tier two city property sectors will remain, but i think in areas more in the tier three, tier four city which is are mainly located in central and western china where the growth is coming from anyway and that's why we're also positive on gdp, their measures will not be tight i think because there we're not seeing the speculative pressures that we saw in tier one and tier two cities. so it's two different markets.

>> ultimately if you think the conditions are not as tight as had been feared, what about the imbalances that we continue to see the numbers keep going their separate ones. big enter surprises are doing well and smaller ones are suffering from liquidity crunches. and we hear that just anecdotally a lot are going bust. >> that's what con founds us is that trade data, basically china trade data, doesn't seem to be matching the recovery. smes continue to fight tight

conditions and need more cuts along the way. and i think that will happen to get the banks to increase credit growth. so i don't know about the pmi index. it doesn't correlate for us in terms of forecasting gdp and given that the official china pmi is pretty short, we can't use it statistically. >> in terms of strategy, though, a lot of the key north aern markets have tacked on on double digit fwans. are investors getting it wrong and are we looking at a very undervalued index and should now be the time to pile in? >> i think the next several weeks there will be opportunities. because like i said, by the end

of the second quarter, the data in asia will indicate clearly that we're in a rebound phase. and as you mentioned, and i agree with you, the china siend second quarter, we're looking at 6.23, which is well below market expectations. but remember we have a very different macro view. >> and where is that supported by? >> trade is pot what's driving our number because that's been weak. that's clear. but what we're seeing is essentially when we look at real retail sales, real fixed asset investment, not the nominal

numbers, those are showing good signs of the recovery. and what's driving it, essentially much of the growth is driven by essentially the hin ter land. that's what's supporting the real sales growth. and we're starting to see the long program until 2020 that they have, those activities are starting to proliferate. that's why it's difficult to quantify exactly but that's what's driving our basically positive outlook. >> so you're saying it could be somewhere around 6.3 -- >> 6.0 and 6.23 by the end of the second quarter. >> and you think the best appreciation days are over and investors should get on the last band wagon if they can. what about you, do you think

that it will appreciate is. >> that seems aggressive to me. whenever the rate of inflation comes off and they get a bit more worried about the growth rate, then it slows down rate of appreciation. premie premiere wen the other day said it was a signal that they don't want to push it. >> one of the things that does go into our model is looking at the inflation outlook. so that's why we have a difference in view. if you believe that inflation continues to come down or is we also behaved, then of course dollar cny will probably behave according to market expectations. but if you believe in our view, basically that's where we get our forecasts. and mind you, exceptionally we think this is the last year that our cny will appreciate against the dollar much more than the market expectations because in a big report which we had out on

the second of march, looking at the manufacturing sector, sub sector by suck sector, at least 50% are facing stens competitive pressures from other emerging markets. and so that feeds in to our story. 2014, cny currency is not where you want it to be to place your bets. and the theme from 2002 on 2007, you put your money in any currency, that's no longer going to be the case. it will be more difficult in terms of investing in currency wars because the countries which would be basically affected by this china trade slowdown, the pace of currency appreciation will be far less like singapore home base will be one of them, malaysia, thailand are the countries that will be most affected, whereas indonesia, korea, are playing to a different rhythm and they will

outperform in terms of currency appreciation over the next couple of years. >> certainly doesn't seem like a trait line indeed. thank you so much for talking to us. richard will be sticking around until the end of the hour. and here is what you can expect in just a little bit. between u.s. growth concerns and new hopes for upcoming talks with iran, can we expect lower crude oil prices? analysis after this.

welcome back. let's take a quick look at energy prices. remember, we have quite a bit of negatives out there. chinese inflation came in a little sticky, but we were also running on the coattails of that sorter u.s. jobs data, as well. plus we have news that iran has agreed to sit down with a nuclear dialogue. those discussions set to take places in turkey beginning saturday.

also forecasts that maybe the summer season in the united states could not be that hot, so that could also temper expectations of further spike in demand, as well. but we are sitting at lofty levels. brent crude 121.86. let's talk more about the came mod cities base. so where do we go from here? tomorrow we get chinese trade numbers. that will add another layer. >> i think the prices will remain fairly steady. just because we have a lot of things that are coming up, i think the chinese gdp figures may be out later in the week and then we have the iran talks as you've mentioned. so i don't think we'll see a big

change in prices because things are still uncertain. >> i believe the average for the past couple if not several months in energy prices still above 100. do the conditions how warrant that when the u.s. growth picture seems a bit soft, china's inflation is sticky, and you've got the european debt crisis all of a sudden rearing its ugly he had again. >> i think the demand picture is hazy. but china's demand has been pretty strong. i think iran, while the threat of export shortage, but you've got to remember that a lot of iranian crude are cutting back on imports. a lot of it is because they're having problems doing the

payments and also getting interest for ships. so i think the latest that we've seen is that greece, south africa, japan has been cutting imports. so the assumption that they are buying the crude so that will keep the fundamentals quite supported. so that still justifies where prices are, that the demand picture is something that i think the market will watch at least in the next couple of weeks and month to see what happens. >> if you look at gas or coal coming down, a lot of commodity prices have been coming down, doesn't that tell you it's really a supply issue? >> i think it is a supply issue. if you take out the crude buyers cutting back, i mean, and they are buying the crude to replace,

so i think that that has just been a demand and supply combination of that. but, yes, i think that's a factor. >> you have the saudi oil minister saying there wasn't a supply problem, they were prepared to fill in any gap. >> i think it had an effect on prices, can cait came down. but saudi arabia has been producing 10 million barrels the last couple of months but price hasn't come down below 120. and you don't -- p part from the u.s., you you don't see inventories really rising a whole amount. so i think the market is balanced too tight. so i think it's a supply issue rather than -- >> does the dynamic change, let's say, let's say maybe a year or two from how. i'm wondering when the transition happens because we

have natural gas prices as a ten year low and falling, producers digging up shale gas. there is so much talk about alternative energy and i'm just wondering why none of these factors fill it ter into the price of oil. >> i think it will, but not immediately. >> what does not immediately mean? the price trajectory is to the up terms of replacement won't happen this year. you can't shift immediately. you look at japan for example, just because after the nuclear shut downs and they've had to shift a lot into gas, the amount has increased, but also quite a lot of crude and pul for burning

because they can't just switch. even though if gas is cheaper than crude oil or fuel oil. so it wouldn't be something that will happen like not in the next few months and unlikely in 2012 i think. and with u.s. shale gas i think it's still very domestic. >> the disconnect is shocking. natural gas at just over two bucks. some say it could go down as much as a dollar. thanks for that. appreciate talks to you. let's move on to talk about some day it take points that came out from south korea today. producer prices in march growing by their smallest rate in would years. ppi index up 2.8% in march, slowing down from a 3.5% gain a year earlier. it reflects softer growth row men item which could give more

flexibility this year, but the bok is still widely expected to hold rates steady for an extended period of time. like many of the central banks in fact this week, as well. perhaps a more immediate current would be final present indications by north korea to launch a long range missile pep all three stages of the rocket have been moved into position for a launch despite international scorn. today it was called a provocation saying the government should ready to act firmly against it in order to protect its citizens and rising tensions are putting china in difficult conditions. china's foreign minister has appealed for calm. >> translator: encourages everyone involved on all sides to remain calm and reasonable. these issues need to be worked out in a diplomatic and peaceful

manner. >> the foreign minister of china there. they have dispatched destroyers ahead of the launch and reports out of seoul say may also be planning an atomic weapons test in the near future, as well, near the underground side of past north korean bomb tests. and let's talk with richard. not the first time they're doing this. hair previous test didn't go all that well. doesn't really matter in terms of the way you view the markets regionally if this test does indeed go well? >> it all comes down to regional stability. nobody wants the prospect of a very unpredictable regime with some sort of deliberate

capability. i think it would be quite disturbing about it did a successful launch test. >> and how would you approach it in terms of a market per spec i have? the launch gets carried out between the 12th and 16th, so it wednesday to probably sunday or monday. what are the key indicators to look out for perhaps the launch goes well, bypasses japan, how should we read this? ultimately north korea becomes a bona fide nuclear power, a bona fide arms power with the capacity to destabilize the region? >> i think it's partly that, buts's as much of that as what do they want. do they want to reopen negotiations with america, do they want some sort of aid about return for maybe again

pre-tenting to dampen down the program as they did back in the 1990s. because it's never as simply as we want to have the technology. there's also an underlying bargain taking place and they proved remarkably good at playing off foreign powers and getting donations. >> and ultimately this move isn't really surprising given when kim jong-il was in power, he made a similar move after taking the baton from his father who died. we'll chat more on the other side. sony is cutting back big time and we'll talk about pa what that entails next. this at&t 4g network is fast.

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china's inflation in march climbs unexpectedly, but it may not be able to prompt officials to hit the brakes on monetary easing. tokyo stocks drop for the fifth straight session as the yen rises to a fresh one month high against the greenback on friday's did it is appointing u.s. jobs report. and sony will slash its global workforce by 10,000 as early as

the end of the year you're tuned into a special edition of "worldwide exchange." no london, but plenty of asia stories plus the united states will be joining us in the second hour, as well. let's take a look at how the asian markets rae acted to that disappointing nonfarm payrolls out of the united states. quite a few red arrows that we see even though do take note that a lot of the markets were shut. such as hong kong and australia, along with some of the southeast asian markets, as well. in terms of the key moves especially you notice in terms of how the yen has strengthened against the majors especially dollar-yen pulling back to levels of just around 81.27, quite contrary move given that a lot of economists, analysts had expected the yen to weaken further. once we flip the calendar to april. that certainly has not been the

case. euro-yen also back down to 106.30, as well. and in terms of some of the negatives out there, really it's the chinese inflation that scaled back any hopes that we could see some sort of ease rg from the chinese side, as well. so certainly giving united states markets negative handover. let's take a look at u.s. futures, as well, if we have the boards. it looks like we could be quite a bit to the down side. we're still a fair distance to go until the kickoff in the new york session, but as you can see, all three major indices called to open lower in the order of about a percent or so. so how much damage this could do, that remains to be seen. maybe another key handle for us will be thursday's jobs number, initial jobless claims, that also points to a softer pictur

let's also not forget, we have a whole slate of data out from china. tomorrow we'll be getting trade figures and on friday, we'll get a closer read at china's growth story or a slowdown story, if you will. gdp number will be the big one to look out for. our earliest guest said his house view is hooking for 8.7%. that's considerably higher than the street view. and on to japan where the country's current account balance is back in surplus territory, but data may weigh on growth. the world's third largest economy says earned $14.4 billion in international trade in february, a notable improvement from january. but much of the rebound by due to rise in income surplus which economists say hardly results in job creation. the data also shows a fifth

straight monthly shortfall in goods and services, the longest on record. and the nikkei daily reports that sony has plans to slash a total of 10,000 jobs worldwide, possibly by the end of this year. let's go live to tokyo. >> the job cuts amount to about 6% of its group employees. half of those cuts will be from the consolidation of the firm's chemical business plus small and mid size lcd operations. the planned job cuts come on the back of declining earnings. season any suffered its fourth straight net loss in the year ended march largely due to the slump at its core tv business. six executive officers are expected to give up bonuses to take responsibility. sony's last restructuring program was announced in december 2008 amid the global recession triggered by the

lehman brothers collapse. back then, the company cut 16,000 jobs worldwide and closed five of its nine tv production bases. the difference this time around is take the job cuts will also cover the sales and administration departments. turning to other topics, today was the first day of the bank of japan's monthly two kay policy board meeting. in its monthly report for april, which comes out tomorrow, the central bank is expected to say the nation's economy is generally flat. the same assessment as in march. regarding monetary policy, board members are most likely discussing their expansion of a if you said to buy long term jgbs and other assets. but odds are that most members prefer to hold off on additional easing measures. the policy interest rate will likely be kept effectively at zero. back to you, chloe. >> so maybe no surprises there from the boj. thank you so much and take care.

let's also get perspective from managing director and chief economist at merrill lynch japan securities. thank you so much for coming into talk to us. so the boj meeting concludes tomorrow. do you think they will keep dry and main ascertain until they get data out in two weeks try and maybe do something in the april 27th meeting? >> yeah, actually, i agree with what you said. of course it's getting kind of a close call at the moment because of the weak unexpected job report. so it depends upon the reaction in the market to the data, but still i agree that more than 50% of people at bank of japan prefer to wait and see the impact of the february easing. and probably decide to expand its monetary policy easing on

27th of this will month. >> so keep their powder dry. what does the boj really need to do? because just when we thought that the weaker yen could help them achieve their 1% inflation arrest get, take a look at what's happened. we see dollar-yen strengthen again. is this temporary or do you think this is something that could weigh on the boj minds, as well? >> actually, of course it depends on what the boj will do from now on on. it is likely that u.s. monetary policy would be very accommodative for prolonged period. so it depends upon what boj would did to. and if boj decides to expand its balance sheet over the coming quarters, probably it would be possible to stabilize japanese yen against u.s. dollar up around 85 or 86. >> over the past ten year, we've had a lot of periods when the government has been beating up on the boj, a lot of criticism. and looks like we're heading in to that again at the moment. do you think it's materially

different this time around, is there a real threat to boj independence from the government? >> of course this is the kind of interruption between government and boj, and this time i agree that the boj is feeling more pressure from the government because of the difficulty to pass legislation to raise consumption tax rate and also as you know, last week refused to approve the nomination of the board member. so this is the kind of evidence that the political pressure has increased significantly on the boj. so to some extent, we can say boj is affected more by the political development. but it's understandable because we have been experiencing deflation for a very long i'm, so this is the kind of a process that the democratic system is beginning to ask for the more from the central bank.

>> but how much does the boj really need to do contrary to street expectations that the dollar-yen could be somewhere around 85 or some even calling 100? the latest survey suggested that companies remain quite bearish. they expect fy 2012 dollar-yen rates to be 78.14. >> so they are not confident that that trend in the foreign exchange market has changed completely, so probably boj needs on did more to do more. if we look will to the data, it is possible to change the trend because trade balance has already become almost zero or negative and we're seeing more capital outflow in the form of direct investment. so if boj create the kind of expectation for slightly higher inflation in the future, probably you'd see a gradual

reversal of the trend. in order to do that, i think boj needs to expand deposit program and needs to decide to purchase more the jgb with longer on the market. >> these are the same old tricks that they've pulled out in the past many years and how much will it do to it spur growth in the local markets because only that rebuilding efforts from the march earthquake, that's pretty much temporary. can't last beyond a year. >> if boj decides to purchase three year bond rather than two year bonds, that would mean that the boj is making much stronger commitment to could expanded for longer period.

so i don't know how much boj need on do, but in my expectation, probably boj do something on 27th of april and also one to two more actions were followed. >> so maybe boj might reverse that trend after all. thank you so much. we're taking another quick break right here. coming up on "worldwide exchange," there is no open and relations between india and pakistan after the weekend summit. but is there much of an economic impact? we'll talk about that next. ca refu

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let's get a check of what's happening in the indian markets. >> we're at 5254. down 75 points. volumes are low considering take a lot of the global markets are closed today, so just about done. oil and gas spags as well as the

commodities. we have india possibly getting affected by the slight lift in brent crude prices. remember that it's one of the key beneficiaries in terms of higher brent crude prices. a couple other commodity stocks down between 3 to 4%. on the the up side is defensive plays. possible approval of the determine to logical drug in may and a couple of the other stocks such as tcs doing well. a lot of events to watch out for, however it seems like the nifty and sensex are pretty much in line with the weakness that

we've seen across the global equity space. with that, it's back to you. >> thank you so much for that. on the political front, india's prime minister says he will make an official trip to pakistan soon to further boost ties between the two neighbors. >> relations should become normal. that's the common desire. >> we would like on have better relations with india. we've spoken on all topic has we could have spoken about and we're hoping to wait on pakistan very soon. >> the announcement comes after pakistan concluded the first visit to india in seven years. the two leaders held talks in new delhi and agreed to take a step by step strategy to resolve strained relations.

with more, let's talk to a visiting research professor at the institute of south asian studies. he joins us live from new delhi. professor, thanks so much for your time. it's interesting hat announcemeannounc that the announcement happens after a private trip. what is your read of the outcome and where do we go from here? >> outcome is very positive and agreed to visit pakistan, but he has not given any definite date. they would want some country to -- in in terms of countering

terrorism or the economic and other matters. >> in the end, do you think that the two leaders can get to the real crux of the issue, maybe even digging up the wounds from the 2008 mumbai bombings? >> the whole question hangs on when pakistan wants to show any con creed move. they would be very difficult for india to move forward. if there was to move very much forward on -- >> and how much progress -- yes,

go ahead. >> security measures as far as one can go because you remember they had almost come to a private agreement but it could not be signed. from the end of the year, they would lose all items on on the negative list and what they're expecting is for to lower some of the nonstatus barriers which are unusual in promoting the commodities. >> and how essential is bolstering these trade ties with india for pakistan given that the pakistani economy is in

shambles, it's overstretched,nd even bilateral trade ties with india is far skewed towards the indian position? >> pakistani would give a boost to the economy. strained relationship should be nominalized. and tremendous amounts of benefits in terms of job creation, in terms of making commoditi commodities -- no doubt that economically this would be a largely beneficial move, but the question is on political matters. they do month with an investment

to be normalized because -- >> it looks like he could be doing this maybe to set a legacy before he leaves. but do you think his move toward pack is an came a little too late? after all, his government has been besieged by policy flip-flops and corruption scandals. >> >>. >> there is no dekt any it terms of the problems including the coalition. >> thank you so much.

we appreciate your insights there. let's shift or focus to how the u.s. markets are getting ready to open up for this monday. it looks like it's widened itd losses from our earlier check. all three markets called to open lower by about a percent or so and maybe the losses could pile up even further as we get closer to the kick off. remember, chinese data inflation print was quite sticky running a bit higher scaling back expectations for any imminent easing from the chinese. and investors also on caution given that we get trade numbers out from china tomorrow as well as a whole loes of other data points, including gdp. first quarter gdp out of china,

that will really determine how much of a slowdown china is faced with the at this moment. so will be quite interesting. let's also not forget that federal reserve chairman ben bernanke is also going to speak. so whether he will head us in a little bit on whether there could be qe given that we did get that softer jobs number, that's also going to be interesting, as well. let's get final thoughts from our guest host. so looks leak aike we're gettin all of the excitement is gone. >> seems the market is a bit schizophrenic on china. one week you're worried about hard landing on growth and then the next week inflation. you can't have it both ways. i think in some ways that shows that the really big issues that we had six months ago about europe have faded and now

markets are a little bit struggling to find something to excitement them. >> so what do we do at this juncture? we've had a pretty decent rally. looks like a lot of the markets erasing earlier gains. is this the time to get in or get out? >> i think it's a bit early to get out. we think the growth outlook is okay for the u.s. we think it's just not bad for the asian region either. europe looks a bit dodgy. but markets are cheap. you get hog by holding cash, so you're forced to take some risk to get some returns. you can get reason able corporate debt that gives you single digit returns. but you think how much risk do i want to take. >> so defensive strategies. >> it's hard to see another stimulus coming from the central bank to give it another big leg up, but if it's cheap and nothing to go wrong, then you would expect to drift higher.

>> what do you think will happen to the u.s. treasury market once operation twist expires at the end of june? that's the big thing that everybody is wondering. do yields back up sharply? >> we've been starting to worry about this and we've downgraded treasuries at the start of the month because i think the market still hasn't fully realized there isn't going to be a qe three, but that's what the data is telling us. and they may try to have some watered down version of twist, but it won't be as strong. >> do you think the current patterns in the u.s. treasury market, the ten year notes, for instance, do you think that's not really telling us the full story? because after all, the fed is in there, too. >> it's interesting that it for six months, the yield barely moved up 2%.

>> so treasury yields back up a little bit -- back down a little bit, excuse me, after a softer jobs report certainly remains to be seen how the markets react given that asia certainly passing on a negative handover. certainly plenty of things to talk about as we pass on the baton to the second hour of "worldwide exchange." well, richard, thank you so much for giving us your pull time. always great to talk to you and hear your insightful ideas, as well. that will do it for this asian hour of wrld wide exchange. i'm chloe cho. and i'll leave you with picture of the easter sunday parade in new york. but keep it here. we've got meant more lent more fft

welcome to a special edition of "worldwide exchange" live from cnbc headquarters in the united states. >> europe is closed today for holiday, but asia is open, so we'll get a live report from sending po singapore. >> but first the top story, u.s. jobs report. today is the first time traders are able to actually react to the numbers. let's recap the numbers for you. nonfarm payrolls road s rose b0 being well below forecast of 203,000 and half of the 240,000 jobs added in the month of february. unemployment rate, though, ticked down from but that was

due to discouraged job seekers dropping out of the labor force. >> it's clear to every american that there will still be ups and downs along the way and that we got a lot more work to do. >> so let's take a look at how the markets are reacting this morning. taking a look at futures across the board, we're looking negative. asia not necessarilily helping the mood after the disappointment of a jobs report on friday. s&p futures look down by b. 17, dow rtriple digits. ten year at about 2.17%. first let's take a look at oil. crude down, brent down, all down

on risk off. there's the ten year note. it's really fallen off since the jobs report on friday. >> and take a look at how precious metals are trading. gold of course getting whacked after the federal reserve seemed to indicate that it wouldn't do more, because weak job report and speculation is back on. >> asian markets, at least some have had a chance to react to the u.s. jobs report. chloe cho at singapore stock exchange with a wrap of all of today's action. >> az i can't tell first to deal with the disappointment in the nonfarm payrolls. plus sticky inflation print coming out from china, as well.

3 bpt 3% was expected. ppi was unchanged. tomorrow we'll get all of the trade figures. that will tell us -- give us more signs as to how much china is actually consuming. on friday another dose of data which is the key one to look out for, gdp. whether we get around the consensus forecast of 8.5%, that is going to be critical in determining the slow down. take a look at the negative print across the board. shanghai composite down about 1% and plus the fact that some of the banks such as merchant bank of china got an approval for

rice issue. so overall a negative picture over here in asia. sorry to disappoint. so the futures pointing to a sha sharply lower open your way, as well. >> joining us thousand for our next hour, fred hopper, president and chairman from the u.s. export import bank. thank you for getting up to join us. >> the economy is still getting stronger. we've added 6 million jobs over the last 25 months. 4 million jobs. dues m excuse me. still on the uptick. slower than we would like it, but still a strong it first quarter. >> you think the previous three months are more the trend than just --

>> i do. i think it's hard to react to one number. what if that number was 160 or 70. >> i think right now one month does not make a trend, but you have to realize that within this a lot of this has come from government fiscal stimulus that went into effect last year. a lot of things that people aren't talking about is the strength in manufacturing has come from really an accelerated depreciation. >> is it true that a lot of that was that strength some because a lot of it expired at the end of last year. >> 100% expired, but how you can depreciate 50% and that doesn't exxir pe end of last year. you'll notice a lot of people because of procrastination sometimes buy toward the end of the year which has a lingering

effect. >> and you work with at love manufacturers. did you get the same impression? >> i see more of it has to do with -- exports are really strong. manufacturing we've had strong manufacturing growth. i think what we're seeing is the world still wants to buy a lot of what we make in the united states and that's been a steady increase. >> if bernanke says it's still on the table, people buy risky assets. if he doesn't, people sell them. a lot of people think manufacturing has been helped. so the question is do you think if it was taken away could the u.s. economy stand on its feet? >> thes from will has been clear it's a frnlg i will recovery.

we need to keep the cost of funds down, we need to keep the fed reacting. people still need confidence. it's why it was purchase to extend the payroll tax cut and things like that because this is not a strong economy. >> it's hard to get figure from the federal government at this point. so he with all know that. >> i think probably some of the export competitiveness fred's talking about comes from a weaker dollar. but right now, you have a situation where this is the worst form of government except for every else in the world. >> it's up 10%. >> and what you may find is they may be forced into qe-3 to maintain that relationship. >> what about the paradox here. you know if a lower dollar helps

manufacturing and u.s. exports, it doesn't to much if anything worsens the problems we're facing lying oil. >> but you have to realize that is not a definite effect and how it has a recessionary effect on the economy, but also stimulates protection. we've seen that with the natural gas and shale development in this country, also the additional drilling and also the governme development -- >> so you're in the worth it camp. >> i'm not making a judgment either way at this point, but i believe that is the position that 9 chairman of the fed basically has. he does not want a substantially weaker dollar. hfr-not a substantial stronger dollar nor tighter monetary policy. this is a fed chairman who would rather be responsible for 3% inflation than 20% -- >> than 1937. yeah. >> and the weaker dollar is helping the export side of

things is that -- >> i never comment on the dollar. i leave that to secretary geithner. exports are strong because still infrastructure is the major play that we see globally, that from infrastructu infrastructure, oil exploration, these are thing thises that the global economy is putting in to place whether it's asia, the mideast. and as a result, that's it actually helping a lot of u.s. companies. >> based on friday, market view is no different or it is different? are you buying on the dips here or are we moving forward thinking things will correct? >> i think right now you'll have a slight creation. the numbers are still strong. and at this point the fed has stepped in and although not developed qe-3, intimated qe-3

or become more dovish in its tone every time basically there's been a problem like this. he doesn't want to be forced, but he doesn't want people to go negative on the markets and create a problem. so he's almost saying don't fight me because when it comes down to it, i will sit there and ease. >> thanks, guys. coming up, we're at it again. earnings season about to begin. what does slow growth mean for corporate profits and your money? >> plus a deep dive on bonds with treasury yields at their lowest levels in three weeks. just how low can they go. ♪ [ male announcer ] how could switchgrass in argentina, change engineering in dubai, aluminum production in south africa,

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take a look at u.s. equity futures. red across the board. >> and we of course 10 points or so better in the last few minutes. earnings season starts tomorrow after the bell. alcoa reporting first. the outlook not quite as sunny. traders will assess whether slower growth is priced in to the stock market already or if the s&ps retreat from a four year high is the start of a rnlg

later mo larger move. >> i think expectations have been ratchet ee eed down probabo much but the actual results of those folks from the s&p come in is overwhelmingly better. they beat it by an average of about 8.5%. but of course the 8,000 pound gorilla is definitely apple. >> how important is apple as we head in to earnings season? >> since apple's had a bit of a parabolic rise compared to the s&p capitalization waiting mode

takes over even greater position. so apple is critically important. it's a sun any side of the street company. it's done so well over the years. and this is mr. cook's first real quarter in full control. i find it very hard to believe that apple will disappoint given the pafact that they've beaten an average of about 24%. so he'll probably do pretty well about. >> doug, you can say it's important but also almost irrelevant if you don't own it and it's so different than anything else because it's just a different animal. is it a bellwether? >> i think stan is right. you do have to look at apple as a bellwether simply because a lot of people are buying efts or indexes and at that point just because of the percentage that

apple is let's say of the mdx and of the s&p 500 on movements. >> if you exclude apple, it's it actually a negative. >> so what you're talking about this is the engine which is driving and most people are basically buying baskets of stocks. >> apple clearly isn't a company who is relying on easing money from the fed. >> i think what you're talking about really risk trade. there is no alternative. and you have lot of people out there who have been basically living on fixed income, they're now being forced if will on basically dividend paying sto s

stocks. these are things that wouldn't be happening if it wasn't for very dovish fed policy. and really the fed chairman has mentioned that that is his intention apple has benefited from that. superior company, but would it be trading wheres right now if, let's say, bonds were yielding 4% or 5% and short term -- that is short term. >> fred, what do you have from the market side? >> i'm not really a market player. >> do you work with apple? >> well, we can finance exports that leave the und. apple makes almost everything overse overseas. imports get here without any help from us. >> but we've seen imports would need the help because it's other nations that you have trouble accessing credit and the u.s. would seem to have plenty of the

private sector structure there. >> certainly it's focused on job creation. i think we're seeing a strength in australia, a lot of mining. we soo a lot of strength in the mideast in terms of power and investment. that's where i see exports going a and. >> some people don't necessarily look at it as a dow bellwether. give me one other big company that you will really look at and say this is what's going on with corporate profits.

>> i'd have to look at the technology sector. and we may not export physical products in terms of apple, but we certainly do a lot of intellectual exports. so the big growth model, it will be challenging because as these companies have become so large, if you look at miss directory it will be very difficult to sustain those growth rates. and once you start going into the teens, you get scary. people look for the next big thing. >> you look ahead and wonder if we're going to get growth. >> thank you very much, doug and of course stan, we appreciate the insight today. we'll get a few insights here from the treasury department. freezing pay for the second

straight year. they have yet to repair that i t.a.r.p. bailout monday. compensation for 69 other executives will be cut. >> and meek wallace who won his final emmy award at age 89 died saturday in the care facility where he had lived the last few years of his life. wallace helped make 60 minutes a top ten rated it tv show for 30 some odd years and he didn't just interview people, he interrogated them. his career began in 1949 and spending most of it at cbs. he was 93 years old. >> it was destination viewing. >> i don't think you see a lot of that style anymore. it would be nice if maybe his inspiration brings some of it

back. >> people don't realize how hard it is to ask good questions to intimidating people. coming up, we have our eye on oil. what will pressures from oversea asnd the u.s. economy mean for prices? >> plus the presidential campaign, of course gas prices, unemployment, stalled housing market. how will these factors shape voters decisions come election day. stay with us.

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futures off their lows, but still pointed weaker across the board after weakness both from the jobs report and concerns about what's going on in europe asia. at&t extending talks with a major union. communications workerses of america threatened to walk out. the union represents about 40,000 employees. at&t is seeking concessions on health care and pensions. take a look at our trade on thursday pre-market, down about one-half of a percent. talks had collapsed more than a year ago and prices under pressure and the weak jobs report as concerns mount over the u.s. recovery or lack thereof. you can take a look at the nymex down about $1.36.

brent down, as well. the spread still extremely high. so where do prices go from here some ceo from atlantic energy partners joins us. and phil wise. gentlemen, good morning. phil, first to you. >> it depends how the situation goes in iran. if things work out here, i think we have quite possibly, because fundamentally, oil prices are too high. relative to price, price is too high right now. >> i think there's a lot of noise and nonfundamental reasons that have push abouted prices high higher. >> i think you could see continued increased prices, but if things have calmed down with

regard to iran, then prices will continue to ease lower. >> if we're taking about will potentially rolling over, people say oil could be headed higher. prices go $5 a gallon. you don't see that happening? >> we've had a big push into this market from investor types. we saw this again in the late '90s from the goldman sachs commodity index. it's a similar they think that's come in to this market now. so it's there. those people already have their positions. not a lot of people waiting on the sidelines to place bets on iran blowing up. >> i want to bring our guest host in for this hour. because of the high oil prices, those services for a lot of americans abroad, what happens if oil prices peak here, is that the end of that boom? >> no, because clean tech is still a strong area, but still a lot of work and a lot of activity in oil exploration, oil

development, refining capacity. we have a surplus of refining capacity in the united states. the rest of the world has a deficit. they're building refineries in latin america, in africa, this asia. so i think we see a lot of activity for companies that are supplying equipment services, engineering, construction. both large companies and a lot of small companies, as well. >> just quickly, we've had stories on refineries shutting down in the northeast. what's going to get those back up to speed somewhat's going to get that side of the equation more profitable? >> i think the big issue that the northeast refineries pace is that there's not a way to get this cheaper oil that we have will. so we have the big widespread from brent and wti. and those refiners in the east are coming from europe, much more expensive crude. so we need to have pipelines that can get better to the east coast or changes in the that yous on shipping because shipping laws don't allow us to

get oil from the gulf coast easily to the east coast. >> you deal with stuff on the wholesale level. say we get down to 95 are or stay at 102, will we see further easing on pricing so? >> i think you can drift down levels that you're talking about now. but unless we have a real resolution with iran, you're probably not going to see much to the down side. we won't be looking at $80 anytime soon unless you have a real resolution to that situation. >> how big a premium? >> i think it's a solid $20. >> would you agree? >> i think that's about right. $20 or maybe more. >> and what about clean tech,

what happens in it this, just the -- everyone if tn if the pr down, consumers have to understand the prices are volatile. hopefully they will come down and stay down, but what's the play on clean tech and renewable energy with all this? >> i don't cover clean tech specifically, but the big issue for clean tech is in some ways they need prices to be a little higher because the economics of clean tech is such that it needs a higher price to be able to displace what we have now on the oil side. >> how do you play the entire move? >> one of the things that i like is offshore rig companies. even if prices for oil pull back, deep water exploration is still a profitable venture, still works economically. so companies like mobile corp is a good play there because the offshore prices. and i like the integrated because they pay nice dividends. so if oil prices go down, obviously the stocks can can pull back, but you're still paid a nice dividend and long term

those companies generate good cash flow. >> and although getting crushed a little bit on nat gas. phil, we appreciate it. ed, thank you very much. coming up next, the bottom line on the bond market. what the low yields could mean for investors. >> and we make the most of your money. ideas on where to put your cash right now.

welcome back to a special edition of "worldwide exchange." we'll have a lot of opinions on the bond market. kelly has a lot of questions on this about what's going on. will yields continue to go lower? >> and how will the jobs report and economy affect the presidential campaign. we have fred hopper here to discuss that plus the future of the xm bank. >> and if you have 10,000, although i want to make it 100,000 to invest this morning, what should you do? >> but first let's recap the major news stories this morning. u.s. futures and asian markets down across the board this morning after friday's disappointing jobs report. we saw a gain of only 120,000 jobs in march. that was well below forecasts. unemployment rate dipped to 8.2%, but partly because people

left the labor force. iran has reportedly stopped shipping oil to greece and may hold supplies as impact of sanctions increases. greece may be the most dependent on iranian oil. and yahoo!'s product chief is leaving after yahoo! bounced it would cut 2,000 jobs. scott thompson has called a meeting tuesday to brief employees on how yahoo! will be reorganized in to plea main businesses. core media and communications, platforms and data. >> quick check on the markets this morning. your stock futures right now against fair value about 120 points to the down side. if you're just joining us, we're about maybe 20 points off the lows since i woke up early this morni

morning, it was under $102 a barrel on wti, but it is right at $102. and of course kelly talked about that spread of $20 between brent. take a quick look at the dollar. weakening under 131. and a quick check on gold, you would think maybe slight to safety, if you will, getting a bit of a bid, but based on some of the selling last week, still off of the highest levels. >> and the tick up about in the gold price always tells you where the market is thinking with quantities at a time of it easing. saying more may be on the way. but now to overseas markets. chloe, good morning.

>> if you take a look at the charts right next to me, quite a bit of red. from india all the way to north asia and japan, as well. we get a ultimate position tomorrow from the boj but it looks like the street view is that maybe they'll keep their fire you powder dry and to something at the end of the month as they meet on april 27th. the big driver in the markets today was really the chinese inflation prints. a lot floor data tomorrow and friday. that will be critical aside from some of the headwinds from your way. and take a look at how the japanese markets was down for five sessions in a row. the strength in the japanese yen that you just talked about was another headwind, but it's the interesting to note how sony bucked the trend and closed up. nikkei business daily said season any osony may cut 10,000 jobs by the end of the year. if this does happen, it would

certainly represent the biggest restructuring drive since the gfc when they asked about 16,000 jobs and shut down a lot of factories worldwide. a lot, about half of the job cuts will probably come from already restructuring moves affecting the chemicals division. they may also have to forego hair bonuses for the fiscal year that just ended at the end of march. critical thing is how they're able to their rote gap with the likes of apple and samsung. >> chloe, thank you very much. treasury yields dropping to lowest levels in more than three weeks following disappointing march jobs report. checking on the major benchmarks, ten year about 2.06. 30 year at 3.2 2. all of them coming in, but the

two year note still yielding about a third of a percent. let's talk about it. let's go to the cme, and james camp at eagle asset management and fred hopper still with us. >> chris, whether people get burn burned in this little snap back i guess we had there friday to today? >> i don't think that people will get burned. you alludeded to it before in regards to talking about gold. you'll have a flight to safety here as the jobs report continues to disappoint. and we also have two outlying things can my desk had a position for lower yields in the 10 and 30 year. europe continues to have concerns. strength in the dollar. and more or less you've got speed and spain and greece moving their debt swaps up to

april 20th. a lot of people will be taken off the table. >> we had so much focus on whether this was the end of the bond run. we've turned right back around to 2% level. do you expect we'll be in the 1s again some. >> i think it's possible that we gets a high as 2%. if europe does begin to unravel the way we think it's going to, that flight to safety trade will be back on in earnest. and with the fmoc meeting, the minutes that were released, there seemed to be an about sea change in the markets that we're done with quantitative easing, we seem to be on a more steady path to growth. we happen to believe the opposite of that thesis and in fact the two things that chairman bernanke has alluded to over the last couple months, housing and labor, both to us are showing themselves to be in

worse condition than previously thought. >> and you had that view before friday or make you that change of mind since friday? >> i've had a bearish dance on housing for the last five years. i think the chairman knows the exposure to the banking system. the exposure to the gses. and it's extremely unlikely that whatever policy tools that they have will not be dae employed for as long as they can. >> you've heard what the guests had to say. how does that square with the future going forward, if we have renewed concerns about growth in the u.s.? >> if we look at slow dance in the united states and slower than we'd like to be, you won't see a the lo of investment here. consumers are a little more confident, but you have to look at -- i don't want to sound like a one note, but exports are one place that we can't keep growing.

>> and i want to ask chris because one of the interesting points in friday's report was an increase if earnings. if we're looking at average earnings up year on year, is there any risk here that that actually points towards ultimately more of a move back up in yields? >> i really think that with the three ripple witchings, your guest that alluded to it, quantitative easing number three as they call it down here on the floor is more probable with these bad jobs numbers. we've got europe concerns continuing to mount. we knew they were going to come back. and you also have a lot of profit taking in the s&p futures. i think all indications really point to lower yields and look your guest said, under 2%. >> if you watch and listen to cnbc as much as we do, we were

just talking about 2 about.5% and it wasn't worth it and all this money was going into the equity markets. and now everybody is back on 2% money was going into the equity markets. and now everybody is back on 2% money was going into the equity markets. and now everybody is back on 2%. so what do you need to see about we get next job report is good, we have to backtrack again? >> i think it's the housing numbers. >> that's the key for you? >> that's the key for us. and i think that europe -- greece has to make due on their payments. i think it's really a big idea for thaws in greece, spain and portugal continue to have higher yields on their bonds, things aren't getting worse. the stronger dollar will survive. >> and one of the things that we have too look at with the auctions, italy had a huge calendar, if we look at the yields that we had a week or so ago, we were all heartened by the fact that we got inside 5%, but what's really happening is the ltro facility is allows them

to pull that calendar forward. most of the refinancing has been done on the short end. this problem is continuing to tick. >> but if you think the u.s. ten year, you should it take a look at the german bund. james, chris, thank you so much for joining us. and coming up, it's the issue that could make or break a candidate. we'll take a look at how the economy is playing out on the campaign trail and the i thimpan the polls. >> and news that could impact eli lilly. ♪

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we're weak pen still. dow jones pointed down. weakness in the u.s. friday jobs report.en still. dow jones pointed down. weakness in the u.s. friday jobs report. >> fda giving the nod to eli lilly for a test to detect brain plaque for alzheimer's. the muconew news came out late friday. >> and it's been 20 years since the phrase it's the economy, stupid, was born on the clinton campaign trail, but it rings truer than ever. rising gas prices, high

unemployment. so let's talk to fred. let me guess, you're an obama man. >> i am. >> it is a good sign for the president for the incumbent that gas prices may have peaked, that the economy shall showing some signs of strength. but you take a report like friday and the administration has to be nervous. >> one month job numbers up or town do not make the economy. we've had a strong quarter. we've had 5 months of strong growth. we're not done. we're halfway there. so a lot of positive signs. >> why hasn't the president come out stronger on reauthorizing the export/import bank? >> he's been very strong. >> bachingsly you you need congress to extended the existence of your organization.

it was tied to another bill about that the senate shot down. and you're waiting and if it doesn't happen in the next month, export import bank will go away and you'll be an -- >> we're a sunset agency. manies sunset after -- periodically. we usual get reauthorized every four or five years. our authorization expired in september. extended three times. and now expires again may 31st. the president wants four years, $140 billion to make sure exporters can keep selling overseas and have the financial backing to do so. >> why do we need will this agency at a time when you represent something like 2% exporter? >> i'm glad you asked that question. we do 2% of u.s. exports, but in places like colombia, we financed a third of everything. >> is that just because they were buying a lot of planes? >> in the oil services. building refineries and --

>> do they need help from the xm? >> people don't want to lend money in colombia. so we work with the banks, guarantee a bank so that the banks will go in there and lend the money to build these capital projects. >> channeling mike wallace there. >> we're totally self funding. our customers pay all of our fee, pay all of our expenses. does not cost the taxpayer a dime. in fact we have delivered $1.9 billion back to the taxpayer. not even back. to the taxpayers for deficit reduction in the last five years. >> we'll see if congress can vote to keep fred's job here. >> thanks a lot. we appreciate it. coming up next, if you have $10,000 burning is hole in your pocket, how would you invest it? >> and bubba watson has a lot

more to invest than $10,000 after in-withing the masters. we'll show you how he did. this at&t 4g network is fast. 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. hey guys. did you hear... the choys had their baby? so 29 seconds ago. well we should get them a gift. [ choys ] thanks for the gift! [ amy and rob ] you're welcome! you're welcome! [ male announcer ] get it fast with at&t. the nation's largest 4g network. at&t. ♪

we're down triple digits. if we were to open right now, we would be down 134 in the dow. >> dramatic finish in the final round of the masters on sunday. 18 holes just wasn't enough to decide the winner between -- here's where i reveal i didn't actually watch the masters. watson hit this improbable shot on the second playoff hole. amazing precision right after the green. watson tapped into win his first major championship.

>> despite friday's numbers, confidence still rising. today a little tough on the markets, but rallying. so what do you do with that cash under the mattress? chip cobb is here to tell us where to invest $10,000. you have to go one chunk. where do you go? >> well, certainly despite the soft jobs market on friday and european woes, we're still all underweighted equities. so the first thing i would be looking at is consumer discretiona discretionary. it's an even weight for us and we like companies that are really into a strong brand loyalty. there's companies that have certainly a rich target market with the consumer that is the upper middle class.

we think vf corp is a terrific example of this. they have done a terrific job with their brand loyalty of the north face, they have tell better land, made jejestimajest companies that are going to be rounding out their portfolio. so we like vf corp in that space. >> and vpvf corp is up friday. you like google if financials. and you like mastercard. these are sectors that do well net early phase of rallies. fin. and you like mastercard. these are sectors that do well net early phase of rallies.n fi. and you like mastercard. these are sectors that do well net early phase of rallies. >> there is a bumpy road with some of the economic data, but consumers absolutely need to be focussing their attention on where they're spending and companies are actually going into those spaces where we see

the stronger demand. >> if people -- is it worth buying 15 shares of apple? >> i would actually look at google at this point. i think they're starting to diversify their portfolio a bit better, going into more of a mobility space and the tail end of their acquisition. and the cash on their balance sheet will continue to rise. >> and you mentioned emerging markets. anything you like will? >> emerging markets, we think the easiest way to participate is because there's been so much money that's come out of that space, we think the global recovery really starts with the emefr emerging markets. the debt there will be far gone. so i would add to that space and the he's crest weasiest way is allows you to buy the space

inexpensively. and you can do it with the less risk. >> spend it on somebody doing a lot xf port of exports because where the money is. >> chip, go ahead. >> no, i wouldn't put it there. the emerging markets actually is the spot i would do it in. >> thank you so much for joining us to both chip and fred. that's it for "worldwide exchange." >> markets looking at about a triple digit down side move after the friday jobs report. big show on "squawk box." john taylor, bob doll and stephen roach.

u.s. markets are reopening for business following the three day weekend. among the tasks, ulg see how the markets react to friday's jobs report. also get ready for tomorrow's start to earnings season. first, though, what an end to the masters. bubba watson is wearing the green jacket today after hooking a wedge 30 yards from the pine straw. and winning the second hole of a playoff over louie oosthuizen. it's monday, april 9th, 2012. "squawk box" begins right now.