welcome to today's "worldwide exchange." here are the head lines from around the globe. mario draghi says the central bank is ready to provide more liquidity if needed. but has once again put pressure on governments to act. >> we reached a contingency where political choices have become predominant over monetary instruments that we can use in the near feature. >> the bank of england sends sterling sharply lower.

but the bank of japan holds back on further action in case future eurozone troubles erupt. it's the final countdown in greece. people prepare to head to polls on sunday potentially deciding their fate in the eurozone. very good morning to you. welcome to the program. major central banks have begun outlining their positions after coordinated action to support markets citing g-20 sources. if the greek election result triggered a market rout, central banks would step in to prevent a credit squeeze. the bank of england will restart its emergency liquidity

facility or extended collateral term repo facility next week on the 20th of june. the bank of england says it will hold one august shun per month until further offering 5 billion pounds at each auguction. and mario draghi said he is ready to support europe's banks. he says the ecb will provide liquidity to solvent banks where needed. >> the ecb has the crucial role of providing liquidity in return for collateral. this is what we have done throughout the crisis, faithful to our mandate of maintaining price stability over the medium term. silvia is at the watcher's

conference in frankfurt. yesterday we had a startling outburst from a french minister saying the ecb, we need the ecb to do its job. what's the response been from draghi this morning? >> if you are going to ask the ecb to do its job then it should not provide so much liquidity at such a low rate. if it is to do their job by lowering bonds to zero, then they are not doing their job in price stability. of course mario draghi thinks they are doing their job. and i couldn't agree with him more. they did say that they broadly reached the objective, but we also had the quote there saying

it's a little bit too early to see how much it filters through to the real economy and where it filters through to the real economy. in terms of rate cuts, the monetary policy, it's clearly at a point where it can't leverage that much in the markets anymore. they know that. we heard similar remarks from ben bernanke. we are at the point where the global markets are in a confidence crisis, and this confidence has to be put back, not by the ecb. the ecb can keep pumping money into the market with less and less effect. the confidence has to come from the broad sweeping, difficult change, is that the eurozone has to make. there the ecb can buy only time it has to come from brussels, berlin and paris. >> just one thing on the ecb, they have a -- a broad money growth target for m-3, 4.5%. did they have a talk about that?

they seem to have abandoned that target completely. >> let's put it this way, when the euro started, they talked about it and they never met it because they always blew it on the upside. in the past few years they blew it on the down side. we had a few months of negative m-3 growth because money had dried up so much. they obviously the target, the two pillar system is kind of still in place, but they never quite met it to the mark. at the moment they have a tough enough time in keeping their price target, which mario draghi said there is no risk to eurozone inflation. he might be right in terms of there's no immediate risk, but we all know the cheap money in the market has to build up to some kind of inflation somewhere down the road, but clearly not the prime concern right now. >> i was just thinking, that would give them cover to give qe, to hit their mandate, if they're missing that part of their mandate, that provides

tell with cover to do it. >> well, it only would give them cover for qe if, first of all, by the same time they wouldn't blow the inflation target, which is doubtful. look, they pumped trillions into the money market, which is as much qe as you can get. they can pump maybe another trillion into the money market. would that give us real m-3 growth of 4%, 4.5%? with the m-3 target, it was never a target. it was a lid on m-3. it's a careful line you have to walk there. they never said we must have 4.5%. they all said we kind of don't want to go beyond 4 opinion 5%. in the first eight years or so they always blew it on the upside. >> silvia, we'll talk to you later. europe peep stocks are one hour into the trading day. so let's show you where we are with this global markets report.

just weighted to the upside. the cac flat rite now. the ibex has had a good rally this week. though bond yields in spain, as we saw breach the 7% level, the stock markets had a good week. up another one-third. it has been the banks craving it, but the whole market not doing badly. let's show you where we stand with bond markets. a reaction to the new liquidity scheme, so gilt down to 1.667%. sterling has been off because it was clear indication we might get more qe as well. spanish yields below the 7%, 6.79 is where we stand at the

moment. ten-year italian yields back down towards the 6% mark. german bund yields, 1.48%. around the 1.5ers. eu euro/dollar up to 12626. dollar index has been down to the three-week low today. dollar/yen, 78. 6. aussie dollar back over. sterling/dollar, down against the dollar, 1.55. an action will take place starting june 20th next year, and up to 80 billion financing for banks to make loans what about in asia?

>> thanks, ross. asi asia recouped some losses after news that central banks could step in to stem any potential backlash against the greek eleg sh elections. construction and engineering shares led the rally after reports that the government will invest to upgrade water filtration plants. equities in hong kong followed suit. investors were reassured saying his resignation was for personal reasons. the nikkei ended flat ahead of the greek vote.

central bank intervention hopes hoped the australian shares today gaining 0.4%. the overabanks rallied on the t expectation of a meeting of the rba on monday. >> and everyone just looking ahead to events in greece this weekend. voter gearsing up to head to the polls on sunday. the vote widely seen on a referendum of the euro zone. reports say secret polling numbers are circulating around markets and driving markets higher. joining us is julia in athens. where do these secret polls come from and what's been the implication? >> most of the polls now are seeing new democracy in the lead

ahead of syriza. in the past syriza was four percentage points ahead. yesterday markets ended up ten percentage points. people on the on the undersided numbers, which is around 20%. what we saw in the last election is undecided people did block to syriza. the key takeaway is this election is wide open. the obvious moderate or the benign outcome would be a new democracy, forming a coalition with the left party, but you have to question how stable that party will be with a strong syriza in opposition, and then what happens next. the ft is reporting that the eu commission may be willing to give ground to the winning greek

government, but it must come from a new democracy win at this election. they didn't rule out the possibility of negotiating with syriza. but a couple comments that sipras made yesterday. he accused his owe poangela mer being scared because she will face some objections, i understand it was a preelection speech but i don't see how saying that against germany will help them. >> all right. we'll catch up more with you later. dbrs, the rating agency, said it could cut spain's credit rate. central bank uses dbrs to rate collateral. yields on spanish debt currently trending lower from yesterday. joining us right now is

sattish buley. thank you very much for joining us. it's hard on a friday to talk about much else. and i was looking at -- you have a nice graph here. markets feel there is an outcome what is extremely wide what is your central forecast? >> that is done from morgan stanley. our central forecast is muddled through. we feel that in terms of the esf itself, europe has enough fire power to deal with the banking recapitalization costs, and if you compare with what was done in 2011, the fed bought some of

the debt, the ecb has done very little. the ecb wants european governments to deal with a lot of the bank capital issues, just as the u.s. government did with the u.s. t.a.r.p. all those years ago, 2008 now. >> it may be great for the esm/esf to recapitalize banks directly. the question is whether the germans are still adamant that they won't have anything that smells, looks or tastes like debt mutualization unless other countries are prepared to give up their own solver control. that may be our sticking point. >> i'm not sure at this stage we need a much deeper debt mutualization than is already inherent in the esf itself. it's about 700 billion euros. if it is utilized properly, which is as bank capital, then

it has much more bang for the buck. it has just as much bang for the buck as it would be if the esm were a bank itself. that's one of the solutions that is being put forward, which we don't like. we would rather see the esm money or the esf money being used to recapitalizing the banking system by 250 billion euros. >> if is comes with s subbordnation, does that make things worse? >> yes, but the combination of combining ecb introducing more, it shouldn't come to that point for any country other than greece. >> okay. stay with us. we'll get more from you in a second. let's remind you what moodies has said about dutch banks, it downgraded five citing difficult

conditions. ing, lease plan were cut by two notches, s & s bank has been downgraded by one notch. ing is also put on negative watch. if you have comments on this, you can e-mail us, or tweet us. isisttush,t at the moment, what is the rite strategy? >> play safe, play close to home, invest in the entities you are most comfortable with, because you are getting paid decently yields and spread-wise to take that kind of risk. that is true of the stronger

banks and stronger countries in europe as well as large u.s. banks. you are not getting paid quite as much to hold investment credit, but everybody loves it. it is not a bad place to be given the very high risk profile of the rest of the sector. >> mario draghi says we are quite happy to provide liquidity to solvent banks. the key there is solvent. how many banks are truly solvent at the moment. if we get the wrong vote in gree greece, we'll have a lot of insolvent banks. >> in terms of country wide, and wachovia, when they were facing this, and citywide to some extent, the u.s. government, the u.s. treasury invested $700 billion into the system, which made it look like the banks were

solve solvent. the today also guaranteed money market deposits. it's the job of the government is, and the central banks together to ensure that the solvency of the banking system. in this case, the ecb is insi insisting it is the government's job to ensure the solvency of the system. the governments have put the 700 billion euro information the esf, and very soon the esm to do just that. they have to find the political will and the mechanical route with which to get that money into the banking system. when they do, that's more than enough money to assure the ecb that the banking system is solvent. >> satish, thank you very much. coming up on the show, we will go out to tokyo. and also -- right.

i'll tell you what is coming up. we'll head out to tokyo to get reaction to the bank of japan b decision, and we will talk to an asset management who says to overweight gold and we'll talk to a tax expert to talk about cross-border transactions. plenty more to come on "worldwide exchange." so, how do you feel about cash back? i would not say i'm into it, but let's see where this goes. [ buzzer ] do you like to travel? i'm all about "free travel," babe. that's what i do. [ buzzer ] balance transfers -- you up for that? well... too soon?

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the bank of japan is the bank of japan is standing on its policy today saving fire power in case there's trouble in the eurozone. that means it's $880 billion a set purchase program will stay at current levels for now, but they are ready to call an me emergency meeting next week if necessary. joining us for more is martin short, senior economist with fujitsu research institute. thank you very much for joining

us. do t the domestic economy, how does that compare with export side? >> the domestic economy is doing comparatively well. the government programs on reconstruction are clearly having an effect here. however, this is for the first half. the second half we will see a little bit slower demand from that v that side. exports are the big exporters and they are terrified because the yen is strong, potentially getting much stronger and the world economy is slowing. so, bank of japan has a lot of pressure right now. >> what can they do? can they do anything realistically to ease the pressure on the yen? >> well, this is the dilemma of the bank of japan rite now.

the pressure is tre mmendous. the imf says you have to do something, but the bank of japan this year is buying more bonds than the government is issuing and the banks are becoming unwilling to sell anything of the shorter-term bonds to them because they are afraid of the global situation, so the bank of japan will have to buy more etetfs, corporate bonds, and th will take some consideration, so they didn't act this time. they will act in july, i think, again. >> you think they will buy corporate debts, etfs, reit? >> there's not much more in the market now, which is amazing because japan is the economy with the most adapttive government, but all the banks are concerned about the risks now. they are moving from longer term to shorter term. so they are unwilling to sell

anything with denominations of one-year, two-year, even three-year bond rates are tanking because nobody wants to sell them. they will have to expand the range of what they're doing, getting deeper into the markets. >> what are the hopes, maybe forelorn hopes, of getting additional growth measures from the government? >> well, the government is basically at the end of what they can do. they also are at the end of their wits. the government has very little ideas then hoping the bank of japan might print more money. also hoping that the ministry of finance will intervene into the market when the yen is getting stronger, and we can be sure about that. so, from the government side we cannot expect much. what will come is if the bank of japan is intervening more, the ministry of finance is intervening more. hopefully expectations will not shoot up so japan is the next

problem case in the world economiment. >> martin, good to see you. the eurozone crisis investor risk appetite is forcing a string of corporations to hold back on their expectations. hyundai is one of them. >> that's right. hyundai was was hoping to go public in june or july, a glommy market condition and falling stock prices worldwide were major reasons for scrapping the ipo plan. hyundai oilbank is the biggest buyer of iranian crude sourcing around 20% of its total imports. an official at the company said given the complex situation, it

will be difficult to get a proper price for shares. bankers say this decision could leave other offerings in the pipeline. so we may see more ipo pauses coming along here in asia. back over to you, ross. >> good stuff. thanks for that. still to come on the show, we'll be joined by bob parker, get his view on the latest move to support banksment. >> with signs of deterioration, the case for further monetary easing is growing.

the headlines from around the world. mario draghi says the central bank is ready to provide more liquidity if needed and willing to support eurozone banks. >> we have reached a contingency where political choice is predom than over monetary instruments that we can use in the near future. the bank of england unveils emergency procedures, that sent

the pound sharply lower. the bank of japan holds back on further action in case future eurozone troubles erupt. it's the final countdown in greece. people there are heading to the polls on sunday, potentially deciding their fate in the eu eurozo eurozone. okay. very good morning to you. if you are just joining us, we have a deal announced, hong kong exchange has become the victor in the battle for the london metals ebbs change it is buying it at 1.388 billion pounds. it says it will finance the acquisition with existing resources and a 1.1 billion pound facility. completion will take place in the fourth quarter of 2012.

so there we go. after a long, drawn-out battle. the cme pulled out a while ago saying it was too pricey. hong kong gets the lme. bob, just a quick reaction on that. the price is enormous. >> without looking at the detail it's tough to comment on the price. but intuitively it seems like a very high price. having said that the trend, whether it be commodity exchanges, whether it be equity exchanges, is one of global integration, exchanges taking over other exchanges. we've seen it in europe. we've seen it across transl transatlant transatlantic. this is part of that consolidation trend. will it improve market liquidity, logically, yes, it should. >> all right. you are with us for the next

hour the there's a whole load of stuff to talk about. we'll come back to you. the markets ri s right now, 10. billion pounds for the uk april adjusted global trade deficit. and the eu trade deficit deficit, 4. billion. sterling was already down this morning on the measures announced last night with george osborne and king. u.s./sterling is up to 0. 140. gilt yields are lower at 1.667. let's show you the rest of the markets, yields are lower in

both spain and italy. spain, 6.83%. we broached that 7% mark. 6 opini 6.05 for italy. european stocks up a bit. the ibex has been a sharp out-performer this week. it's bouncing off nine-year lows and it has been bank stocks that have driven that action. plenty to talk about. let's remind ourselves with what happened last night in the city of london. the bank of england and the british government are joining forces to boost growth. the chancellors told an annual gathering of financiers that now is the time to coordinate banks and i dundustry. >> in order to inject new

confidence in our financial system and support the flow of credit where it is needed in the real economy. we are not powerless in the face of the eurozone debt storm. >> meanwhile, the package includes funding for lending plan designed to cut bank funding costs in exchange for lending to the real economy. the bank of england said it will reactivate its short-term sterling liquidity scheme, and the bank still has measures to counter the black cloud of uncertainty created by the eurozone financial crisis. >> we can do both. >> bob, your reaction to this move. we have seen sterling weaker, as you might expect. there was a question about qe,

gilt yields lower as well. there's two sides to this, there's trying to get lending going for companies across the board and of course liquidity. >> if you look at monetary indicators in the uk over the last six months, 12 months, you have to ask or challenge whether monetary policy is helping. if we look at corporate liquidity, corporates are running very high levels of cash and not investing. in the uk, consumers are rebuilding savings, cutting borrowing and not spending. this easy monetary policy, yes, has been effective in preventing the economy going into a worse recession. but the effectiveness of monetary policy has been very challenging. if you look at the velocity of

money, you would argue monetary policy has not been working. so this action takes bank of england's balance sheet and tries to force the banks to lend to the real economy. to that extent, i think it will be. >> there was an easier way to do this. they could have eased back on the regulations, forced banks to hold more capital and reduce their liquidity. >> yes, in addition, they could have taken action on something that's been discussed for some time, which is set up special funds which actually lend directly to smes. or set up a bad bank, we'll see what happens. mario draghi says the ecb will continue to supply liquidity to solvent banks where needed, a.

>> the outcome of this work will get to be known pretty soon. a matter of days. but as i said, it's sort of -- it's more -- the idea of having 17 countries possibly more sharing a common path and objective, it's already to me a big achievement. at this time. it wouldn't have made a difference three, four areas ago, but at this time markets and people need to be reassured that we're still traveling together. >> that was mario draghi a bit earlier this morning. our next guest says there is still potential that upside on equities. wayne bowers is chief executive officer for northern trust global investments. thank you very much for joining us.

in any decision at the moment on equities, you have to decide what we've priced in, and where the risk still remains. so what's your base assumption for the politics of the eurozone at the moment? >> again, i think you hit the nail on the head. what we're doing is looking at it from a macro perspective, looking at the relative attractiveness of the u.s. economy versus the unattractiveness of the european markets. there's an increase in volatility we see not only today but in the future. >> here's the point, can you actually just look at this from a macro perspective? everything has been driven by politics. does it make sense to just look at stuff on a macro level? >> in the current conditions, it certainly has a significant bearing in terms of positioning. going forward, what we see from a smart investor's perspective is the ability to separate country risk to company risk.

we believe there are strong companies within europe, that are potentially being disadvantaged by the overall macro themes of anti-euro positioning at the moment. >> bob? >> i said on cnbc say super defensive, equity markets were going down, but i said we would start going back into markets the second half of june. at our investment committee last week, we decided to do exactly that. we are -- every time there is a little dip in markets, we come in now as buyers. apart from the fact that valuations are looking very cheap indeed, i would argue that we are in a current market environment where if you look at the politics, you look at the economics, you look at the macro data, markets today are less sensitive to bad news and highly sensitive to good news. so, one can get into a debate

about the extreme events one will have over the next two, three weeks, and particularly this weekend. but a lot of the potential bad news is priced in, the upside is not. >> the worst isn't priced in, which is a negative greek election. >> you're assuming that -- >> i think it probably is. on greece we have three scenarios, government led by new democracy, a government led by syri syriza, or a government led by nobody because the government cannot form a cohesive coaliti n coalition. the debate on greece has missed one point, everybody has talked about renegotiating the bailout terms. greece is way behind on the bailout package, if you look at tax collections, privatization, every aspect of the bailout program, greece is way behind.

it's not just a question of can greece loosen up the bail-out program. it's already done that. >> the swedish finance minister has come out saying we're in a serious situation, that's the best case after the greek election. and he says it may well be the effect of greece on europe's banks are limited, but the situation in spain and italy is decisive for the debt crisis. there will be a credible bank stop to the european progress. that's the latest comments out. so, let's come back to you, wayne. tactically you're also overweight gold? >> yes. we kept gold in the portfolio as a defensive die seversifdiversi. i would suggest and look at the

price of gold, hasn't been where we would have expected it to have been this year, based on the volatility in the market and the level of worry in the marketplace. but as a diversifier, it certainly adds value. in terms of going back to the overall u.s. versus europe scenario as well, it's important to understand, as we look a the macro views, those governments that are pro austerity, that have been recently formed and looking for a resolution to the eurozone crisis versus the current situation in greece, where we still don't know what type or form the coalition will take. >> i could talk to you more, but it's a busy day. come back soon. the swiss national bank chairman has maintained his robust view, and he has been speaking exclusively to carolyn. so that 120 line in the sand

ain't going anywhere, i take it? >> nope. not at all. when i spoke to him yesterday, he said over and over again, yes, this is our task. we will defend that 120 level no matter what happens. i put the question to him, given that we're going into this crucial greek election weekend, what happens if greece at some point is forced to exit the you're yoeurozone? >> this is our monetary policy. it does not depend on an exit or possible exit of gross. we will maintain the 120. >> defending the 10 level has been becoming more and more difficult and expensive for the snb. in the month of may, the snb's foreign currency reserves jump

28% 28%. and a couple months ago, it was the threat alone that worked quite effectively to keep that level at 10. and then also the political pressure to add to it. back in 2010, the snb wracked up 20 billion swiss francs in losses. so nobody wants to see that happening again. bob, your thoughts on swiss franc snb? >> clearly, as come mass jothom says they are determined to keep 120 as the ceiling. and they have the firepower to do that. if i'm right on the pattern, i think the pressure on the swiss franc will come off somewhat, because if we have a situation today where investors have a flight to safety trade on, so they're going into g4 government bonds, going into the swiss franc, if the european union

takes the action i suspect it will over the next few weeks, then you're going to see that cash mountain that investors have start to decrease, move back to investors, de facto that takes the pressure off the swiss franc. having said that, what happens over the next one to two years? switzerland has, if i'm correct, the largest current account surpluses percentage of gdp of any developed economy. in two years time we could be looking at parody. >> i can't wait to hear what you have to say about bund yields. >> they're going up. >> yeah. how fast? to where? still to come, global central banks may be standing ready to survive the storm, but our next

guest says luxury holidaymakers don't appear too worried..

now, also been thoughts on

whether the luxury sector has been able to withstand the growing financial crisis, and it seems the luxury travel market has seen little impact. this is a report from boss consulting group which shows luxury trips make up 55% of total luxury spending worldwide. and year on year it has grown 0% fast other than luxury goods. that suggests our next guest is in a fairly good spot. we saw this week about how tight the airline industry is in. why has that not impacteded you? >> you saw the news this morning, people want to take vacation. the situation is so tense and difficult, people want to relax. that's one, i would say.

sorry to be a little pitt ofbit joke. but clearly luxury vacations are on the rise. people want to travel, they want to discover a beautiful place. they want to do it in beautiful homes. and we see whether it's a ski resort or whether the new club just created, portico, that people book for the summer, people booked for the winter. we already see bookings for next spring and next summer. >> when we talk about luxury, such a wide definition. maybe we ought to define it tighter in terms of what you mean. how much typically are your clients paying? what are they doing? what sort of trips are you arranging? >> okay. if we talk about resorts, a club pore high net worth individuals and a resort is like a secondary

home or a tertiary home. you pay around $20,000 to join the club and then about $1,000 a night to access those beautiful homes, which are owned by the club, and provide full service. so obviously that is the high end of travel. >> sounds like your clients, bob. >> you talk about it being high net worth individuals, it strikes me ultra high net worth clie individuals are your clients. are people concerned about going to countries like egypt, the middle east where there have been obvious political issues? where are the most popular places that your clients want to

go to? >> well, we deal mostly in large proportion with american clientele, they travel to hawaii, the caribbean. we have places in london, paris, places in tuscany, in the french alps. we don't have that many places in -- in fact, we don't have any place in egypt or in countries which are more exposed. we are -- the only thing we do outside of our homes other than what we call once in a lifetime travel expenses and we offer private trips, customized trips to africa for safaris. so we are not really effected by what's happening in egypt,

tunisia, morocco and other countries. >> nice to talk to you. i would like to book one of though trips. >> soon. >> thank you very much. let's go back over to asia. governments are struggling with different types of labor challenges. we look at what's being done to lift the incomes of the working poor. >> reporter: while the refrain in the west is where are the jobs, asia faces a different struggle. the increase in wealth in the region led to greater disparity in incomes pushing policymakers in china to pursue more inclusive growth. that's resulted in a rise in the minute mull wages so far in hong kong, vietnam, thailand and malaysia. >> the bottom line is as we see asia growth continue over the past five, 10, 20 years, we did see inkcome inequality worsen. so there is justification for some degree of minimum wage but clearly the implementation, the

level set needs to be a compromise between the labor side and the employer side. >> reporter: in thailand, where prime minister yirose the minim wage -- >> increase of the minimum wage will be done after domestic consumption. plus i think people might say this might impact a company. this is an increase of the minimum wage. the costs are justified. >> reporter: victor swetz agrees and says history is a guide. >> eventually rising wages are good news.

rising wages force countries to go up the value chain. korea was an example this century. u.s. was an example in 1870s, 1880s, rising wages forced people up and countries get better. >> reporter: for some like lifung, high wages in china can be a good thing. >> typically we work on a margin on top of the cost of goods. so as prices go up, it's generally better for our business. of course if it goes up like last year in a ridiculous increase, because last year we saw an increase of 15%, 20% input costs, which is quite dramatic, that effected the overall market. but mild inflation, which we see going on, is good for our business. >> reporter: the lesson appears to be the private sector can

factor in a well telegraphed wage hike and it's up to policymakers to maintain the social balance. let's remind you what's coming up on the agenda in asia on monday. the reserve bank of india comes out with its mid quarter policy review. most expect a 25 basis point rate cut to boost flagging growth. that news will go hand in hand with may consumer data. and in singapore, may non-oil import figures. still to come up shg, plent the countdown to the greek elections.

. this is "worldwide exchange." here are the headlines from around the globe. ers cb president mario draghi says the they could support e o eurozone banks further. >> we have reached a contingency where political choice has become predominant over monetary instruments. >> the bank of england offers

banks 5 million pounds a month. the hong kong exchange announced a plan to buy the uk commodity market, boe, for 1.4 billion pounds. and it's the final countdown in greece. the country is heading to the polls on sunday potentially deciding their fate in the eurozone. so, very warm welcome to you. u.s. futures now are indicating a slightly more positive start. s&p 500 is some nearly 8 points above fair value. the nasdaq about 11 points over fair value. the dow is nearly 70 points above fair value. what about the ftse, we are at the highs for the session so far. european stocks this morning after a plat day yesterday, ftse

100 down 60 pois, the dax off, cac fairly flat, this morning up ftse up 0.85%. the dax up. cac up 1.10%. ibex up 1.39%. let's look at bond yields. spani spanish up a bit. same with italy, getting back towards the 6% market, which would be comforting for mario monty. and the guilt up to near 1.668%. $80 billion of lending plans to the economy through the banks. this auction every month of around 5 billion for banks of special liquidity that will be in place for the foreseeable

fought cho future. that caused trouble for sterling. it's down. u.s. dollar is at three-week lows. dollar/yen down. euro dollar, up to 126.34. we are off the low 1.2230 we hit at the beginning of june. that's where we stand in europe. what about the asian trading day? we got more from singapore. >> thanks. asia closed the week on mixed note after recouping ground on the note that central banks could intervene if faced with trouble from the greek elections. shares in the mainland closed about a half percent higher. for the week, shanghai shares garnered about 1%.

hong kong ended higher for the day while gaining about 4% for the week. esprit rebounded on damage control efforts of the kraut going ceo. the nikkei ended flat as investors preferred to stay on the sidelines of this weekend's greek vote. on a weekly basis they closed over 1% higher. the kospi bucked the trend to close lower today on a heavy exodus from foreign investors. but the week it managed to gain over 1%. those central bank intervention hopes helped australian shares today gaining 0.4%. the overall performance of asian e equities is helping indian equities nudge higher. banks rallied on a rate cut from the rbi which meets on monday. that's all from me in asia. back to you, ross. thanks for that.

we heard from a lot of central banks this morning. sweden's finance minister has warned there's good reason to think the greek program is off track. and says it is likely greece's deficit will blow through forecasts this year, adding that europe needs a credible fire wall for progress to continue. those comments add to a raft of other major central banks and governments who begun outlining their positions after a reuters reportsuggested they are planning a coordinated effort to prevent a credit squeeze. the bank of england announced its plan to get credit flowing. they will restart the emergency sterling liquidity facility, or as they call it the extended collateral term repo facility, that will begin the 20th of june, that's wednesday. the move is part of a package of

measures unveiled last night by the governor and the chancellor. the bank of england it's a it will hold up with auction per month offering 5 billion ponds at each auction. there's a plan to get 8 billion pounds flowing. mario draghi says the ecb will continue to provide solvency to banks. >> the ecb has the crucial role of providing liquidity in return for adequate collateral this is what we have done throughout the crisis, faithful to our mandate of maintaining price stability over the medium term.

>> silvia, mario draghi said this morning we think funding conditions are way better than they were in november. that's an interesting thought bearing in mind the bank of england had to introduce a liquidity scheme. >> the bank of england didn't push 2 trillion or 1 trillion into the market before that in the past few months as theers t- the ecb did. at last week's press conference, draghi was talking about a dysfunctional money market. we are not where we are supposed to be, but part of that is not something that the ecb can help. they are pushing money into the market where they can. he said they stand ready to push more money through the market.

but we have a confidence crisis. politicians have to start doing their job what can central banks do? what can politicians do? we are joined by one of the ecb watchers. we know him from the chief economy post at deutsche bank. professor, thanks for joining us today. a lot of speculation about what the ecb can do, should do. again from france we had the ecb has to live up to its job and do more. i kind of thought they did quite a lot. >> they did quite a lot in terms of liquidity, but with consumer prices down, the economy being weak, and indication that it's going to be weaker, not just europe but internationally, the european bank could consider

options. >> was it all a little bit keeping the powder dry until after the greek elections? >> potentially, but since we know the greek election mite not be conclusive, we might have to wait a little bit longer but not for long. >> terms of concerted intervention, maybe even concerted rate cuts, is there a bit of verbal intervention to come in the markets or is it a one, two, three thing? >> verbal intervention, not something hard in my view. >> in terms of where we headed with the eurozone and the crisis, a lot of terms about greece possibly leaving the euro. with the treaty has seems complicated. does a greek exit seem more likely than a half year ago or are we solving the crisis inside

the euro? >> it looks more likely than a half year ago, but not as probable as many investment bankers believe even after people looked into the complexities and the time consumed before anything would work and the very fact that to introduce a new currency needs a strong administration and government and that's not exactly available in greece. they would probably consider a solution with proin ingproactiva better one. >> and an easier one. and we could not leave greece out to dry even if they have another currency. >> if greek is to be cut off the ropes, greece will not disappear from the scene. >> european banking union, that's a wonderful buzz word that's been thrown into the rick. two questions beg themselves. one, if this is really something we need. why on earth didn't we start four, five years ago at least

with the lehman crisis? secondly, is this a likely scenario in the near-term? >> very good question. i fully agree. it's very obvious if you start with integrating the deposit insurance and ask german cu customers to pay for the european sins, that would not work. we have to start with regulatory form and we have a reality already of european markets, and we should come up with answers that in terms of supervision and regulatory surrounding s fit that. >> isn't another reality one we lived with for 20 years, maybe 30 years, that europe is heavily overbanked and the painful restructuring we've seen in the steel sector and car sector is looming over the banking sector and it doesn't yet want to buy it? >> it's interesting.

the germans got pressure from brussels but the london bank has moved in the right direction. i hope other countries understand they have to do a similar job. that's it for us from the time being. back to you. >> thanks for that. let's remind you of some of the headlines. mario draghi vowed to provide further liquidity to eurozone banks if needed. the hong kong exchange announced it is buying the lme for 1.4 billion pounds. those are the headlines today. let's get another comment from bob on the back of the ecb. this is an extraordinary comment. we still think -- this is basically a string of bad data, but they are still thinking conditions are -- economic conditions are okay and have not deteriorated that much. >> i think you have a very clear pattern of economic data in

europe. the german economy, which grew at an annualized rate of 2% in the first quarter, the second quarter and the third quarter growth will be positive but the annualized growth will be less than 1%. so, you know, we still have a positive economic trend in germany, but it's moderate froth. same comment on scandinavia, northern europe. for southern europe, yes, the positive is that budget deficits are improving, you're seeing a dramatic improvement in trade and in spain, portugal and italy, but that southern zone remains in very deep recession. we're not seeing a turnaround in the activity or the mandate. >> so the ecb, are they going to soon cut interest rates further? >> yes. >> are we going to get more liquidity action support for the banks?

>> i think in late june or early july there is a high problabiliy cuts to 50 basis points, and that is justified. i think they will stand there, prepared to do ltro 3. ltro 3 could easily be another 5 500 to 7 00 billion. >> this will be part of a bigger package coming? >> i think there will be a series of measures announced over the next three months. >> which will be one of the reasons why you are getting more positive on equities. after the break, we will be in athens where it's decision time for the parties vying to lead greece out of their problems. here are some views we've heard

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okay. it's really all about greece this weekend. voters heading to the polls on sunday for the latest round of elections. we have been hearing about these secret polls. what are they suggesting? >> well, the secret polls we've had over the last few days indicate that we are seeing new democracy pulling ahead of the syriza market. a flip from ones that had syriza

several points ahead. but it's still within the margin of sampling error, and also 10% to 20% of people are still undecided. that could be key. what we saw at the last election was a shift towards syriza from those people who voted. syriza had their final rally yesterday. we were waiting to see if we could get more talk about emergency plans if the negotiations fail. we didn't. we got them sticking to the hard line on the bailout deal and reiterating he wants to keep greece within the eurozone. >> translator: don't put your money on a greek exit from the eurozo eurozone. you'll be the losers, because come monday the memorandum is finished with. >> when i listened to that i thought he was saying keeping to the memorandum would lead to a eurozone greek exit, but later on he said those would not

happen, yet more conflicting signals. >> we will leave it there, but there's so much wind that it was blowing your mike away. we'll get a windshield for your mike when we come back and speak to you. she's on a beautiful location on top of the hill. we'll have plenty more on greece and the implications of any exit from the eurozone and what companies might have to deal with if athens does at some point abandon the euro. >

if if you just joined us. u.s. stocks are indicated to open up this morning. the s&p is set to open up nearly 8 points up, the dow up 69, and the nasdaq up 11. united technology cfo says the slowdown in europe is worse than the company expected. management is concerned about the risk of greece leaving the eurozone. the biggest maker of air conditioners and elevator s gets a small fraction of revenue from greece, united technology stock up a third of a percent in frankfurt. central banks, financial institutions and investors may be bracing for the ripple effect of this weekend's elections, but

they may want to consider the tax implications of any potential greek exit from the euro. joining us is the principal at gladtry. thanks for joining us. we don't know what will happen in greece. if it's in the next few weeks or sometime next year, why would the tax implications arise? >> this is an interesting situation. it's something we confronted 13 years ago when the euro was first initiate d. you know, the issue is that when the greeks potentially leave the euro and go on to a new currency, they may, by executive fiat, redenominate all of the obligations of greek players in the country so that, for example, debt instruments and

other contracts between parties in greece and outside of greece, those things may become payable in the new country. under general tax principles in the u.s., we would treat that e redenomination as a taxable event, even though no cash has been exchanged. this could produce taxable gain or taxable loss. the consequences are uncertain, and it all depends on your facts. >> how could you end up with a taxable gain? >> well, it is, in some cases, that may result because of the peculiarities of tax law and how it may be applied to a particular situation.

for example, if a u.s. investor has non-public debt, has extended a loan to a greek counterparty, under u.s. tax principles he would be treated as exchanging his old debt for new debt but the value of the new debt would be equal to the value of the old, and effectively he would be required to recognize the -- any built up exchange gains that have occurred up until the redenomination event. but he wouldn't get account built-in credit losses that you would expect from a deemed exchange. >> if you're going business in greece, if you want to avoid -- this applies to individuals as well, i suppose, if you want to avoid unwarranted tax gains, do

you dispose of contracts with greece right now? >> right now that would be a very good strategy, start considering entering into transactions to dispose of these greek denominated obligations. then you would actually be recognizi recognizing in most events a taxable loss, you would be able to control that situation, control the timing of that, right? always an important consideration. and you wouldn't be subject to some of the bizarre rules that apply when you have a hypothetical sale or exchange. >> ramon, thank you very much for that. ramon camacho joining us from washington, d.c. just a reminder on what's on the agenda today in the u.s., may industrial production out today. it's forecast to rise. 45 minutes later, the first look

at june consumer sentiment out. that looks to be down about a point from last month. still to come, the latest on all the central bank comments we've had out this morning and why my guest, been parker, is getting bullish on equities and what he thinks the european policymakers will come up with. .

this is "worldwide exchange." here are the headlines. markets in europe rallied as ecb president mario draghi says the central bank is ready to provide more liquidity if needed. we reached a contingency where political choice has become predominant over -- over monetary instruments that we can use in the near future. >> the bank of england unveils emergency measures offering banks 5 billion pounds every month for the foreseeable future. and the hong kong exchange won the battle for the lme. it will buy the uk mcommodity market for 1.4 billion pounds. and in greece, the country heads to the polls on sunday potentially deciding their fate in the eurozone.

so, very warm welcome to you. if you just tuned in, equities are pointing to a firmer start on the futures. s&p 500 trading nearly 10 points above fair value, about 12 points above fair value for the nasdaq. the dow is 70 points fair value as well. as far as the ftse, you can see we are pretty much near the session high at the moment. that's indicated as well by what's going on with european stock markets this morning. remember, pretty flat session yesterday the ftse down 16 points, the cac flat. right now, the ftse up, the dax up 0.90%. the crack 1.42% up. apart from today, yields are heading lower in spain. in italy we are back below the

6% level. in spain just below 6.8%. xwshgs gilt is lower on the back of the plan announced by the bank of england. also hint of more qe coming as well. already today on cnbc, plenty of comments about what investors should be doing ahead of the greek election this weekend. here's some of the thoughts. >> got this great talk about central banks saving the day. but you look at what's happening in greece, i think we're likely to be balanced towards the dollar. eu euro/dollar, if anything, we see some squeezes higher. the risk from april through

to the beginning of last week, now i think it's time to start building risk positions in portfolio portfoli portfolios until later this year. petroleum for instance, that's typical, and that was bg and gdf, big energy traders will be a profitable business xiusin for the next five years. with us is bob parker. you also think we should be building risk positions. what will happen or not happen? you can answer that question both ways, that makes you want to do that? >> number one, valuations are very cheap relative to where we were last march when markets started to reverse. secondly, investors are either very long cash or they are

hiding in g-4 government bonds, which, on any valuation measure, are looking very stretched indeed at the moment, or looking at the swiss franc which is overly stretched. the relationship between bond valuations and equity valuations is shouting bonds expensive, equity cheap. >> but there's a reason for that, people are worried by the eurozone implosion triggered by greece this weekend. >> people are worried about a blow-up in the eurozone. i think in the next few weeks, p probably going into the middle of july, you will see a number of monetary initiatives. ltro 3, ecb cuts, interest rates. on the political side, you could see an agreement by the eu to

delay the deficit targets by one year as the political agenda moves towards a more pro-froth agenda away from an austerity agenda. i think there will be a statement of intent, but they'll leave the implementation vague on strengthening the role of the ecb in bank supervision. i don't think we'll have eu issued euro bonds yet. that's probably on the agenda for next year. but you are going to have euro bonds issued by, increasingly, more issuance from eu investment bank. >> what happens with greece then come next week? >> part of this will be, irrespective if greece has new democracy, syriza or no

government, greece will be given breathing space. the situation is very clear, greece is not meeting the conditions of the bailout program. if we continue as we are now, the probability of dpregreece cg back to meet those conditions is probably zero. >> so whatever happens, there is no bust up in the nest few months? >> i think the probability of a eurozone, as you call it bust-up, of one country leaving or a run on some banks, i think that's much more of a risk than a greek exit. i'm assuming that monetary and fiscal and political action will prevent what you call a bust up. >> okay. for how long? >> a good six months. >> okay. but we might be back here again

in january. >> unfortunately you and i might be having this discussion again the first quarter of next year. >> good, in the meanwhile, long equities, short the dollar -- >> when you say short dollar, we are in this tug of war between the dollar and the euro. obviously if we get a mess in greece, that propels the dollar stronger. ltro 3 would push the dollar stronger. the counter weight is when you get qe3. >> bob, thanks for being on today. so we can relax now, just get worried in another six months is the message. talking about relaxing for now, eu president van rompuy is hosting a conference call with g-20 -- a video conference call with g-20 leaders to brief them on what their thoughts and plans are. the hong kong stock exchange has agreed to buy the lme for

1.4 billion pounds. the chinese market has been battling for ice for the deal, but the lme picked hong kong as the preferred bidder after a meeting yesterday. the shareholders have agreed to an all-cash offer for the deal to be finalized. a pricey deal, that. and a more than 8% stake in ypf has been bought by carlos slim. earlier this week, moody's downgraded ypf into junk status. it jumped after hours on thursday. and would you pay thousands of dollars for a computer that is 1,000 times slower than your iphone? someone just might. sutherbies is offering off the first apple computer today at

10:00 eastern. it was built by steve wozniak way back in 1976 with a circuit board, micro cassette interface. only of the apple 1 computers are still in existence and six, including this one, do work. it is expected to go for $180 thour and round one of the u.s. open golf tournament is in the books. and michael tohompson, is in th lead with 4 under par, but mr. woods is just four back. only six players out of the field of 156 were under par. one of them, nick watney turned in the shot of the day on the 17th hole.

knocked it in for the rarest of all birds. an albatross, or as you might call it in the united states a double eagle. it is only the third albatross in u.s. open history. you also remember there was one in the second hole in this year's masters in the final round as well. still love watching him. still to come, greek sit-ins are at the polls, but are secret polls influencing the vote in athens? optionsxpress, where you can trade your favorite products,

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good morning to you. we have direct investment data out of china. down 1.91% from a year ago, the may fdi was up slightly. weaker than the first five months of 2011. we'll check in for reaction for that. at the same time, in prank for frankfurt, mario draghi says the ecb will provide liquidity to

solvent banks. and a reform plan for a political union in europe will still come. >> the outcome of this work will be known in a matter of days. as i said, it's more -- the idea of having 17 countries possibly more sharing a common path and objective, it's already to me a big achievement. at this time. it wouldn't have made difference three, four years ago. but at this time, markets and people need to be reassured that we're still traveling together. >> silvia joins us for more. i'm interested by the phrase political union. angela merkel used this yesterday in her speech, mario draghi just talked about it today. what do we mean by this?

is there -- are we moved to a point where if you want things like banking union, greater economic integration, bank stops, euro bonds, you have to give up political control and political sovereignty for it? >> well, that's -- that's the road to political union. if you look at the history of the past six years of the eu, we have always given up bits of sovereignty. if you look at how legislation is ratified in brussels, not in berlin or london, or paris or anywhere else in the european community, we have already done that. if you look at the founding fathers, the conceptual fathers of the euro, this is where they wanted to go. one step further towards european integration. they said maybe we put the cart before the horse, have to pull harder, but this is where we have to head afterwards.

how determine the eurozone leaders and nations are rite gh now to put their money where their lip service is is a different matter. part of the matter is where we are with a common currency and no common budget control, that obviously doesn't work. they looked at it carefully, said step back, we can't return. we have to go into the other direction. so they're heading towards something that is a eurozone budget control. a european banking union. at the moment these are beautiful titles, they have to be filled with hard facts and hard legislation. >> absolutely. thank you very much. just a reminder of the headlines, mario draghi vowing to provide further liquidity to eurozone banks if needed. and the boe is providing

emergency number ifunding. and the hong kong exchange will buy the lme for 1.4 billion pounds. we also got german finance minister relaxing the terms of the greek bailout. that's fairly significant. julia is with us again in athens. the point is that the greeks are already behind on the terms of the current bailout. so, i mean, in a way the rules have been relaxed. >> absolutely. i think it's very clear from was we're seeing in terms of the growth numbers here shg, consumn numbers here, so heading into the election i don't think we're hearing anything different from the german finance minister. i wouldn't expect them to say anything else. they will go into negotiations after the election with the strongest hand, if they can and draw back from that in

negotiations. we have had signs of an olive branch. the eu may be willing to give concessions to the next government if they stick with the bailout deal. who knows what the negotiation will involve beyond that. i want to point out what tsipras said yesterday in the rally. he accused his opponents of having lowered the greek flag and handing it to angela merkel as a trophy. he said angela merkel is scared because there are objections to come. i don't think that will bode well for future negotiations. there is chatter about an ft deutschland article suggesting that greek voters should vote for new democracy, the pro bailout party. not sure that will go down with greek voters either, not wanting interference from germany on their voting process. an intense environment between the to countriy ies right now. back to you. coca-cola helenik has been

downgraded by mood y's. and angela merkel says considerations to mutualized debt is in the interest of some market participants but would move germany to mediocrity. they wanted the european court of justice to reject national budget proposals, others did not, namely france. angela merkel says the national banking supervision has not stood the test. the ecb could be an alternative and europe should start sticking to its promises. which goes back to the discussion, apg you have to giv sovereign control. we will be in the bond pits in chicago for the preview of the day ahead in the u.s. .

quite a bit on the u.s. agenda. may industrial production will come out at 9:15 eastern. it's forecast to rise 0.1%. and then the june consumer sentiment, that will be down about a point from last month. u.s. futures at this early hour are indicating a more positive start. currently caught up 70 points higher on the dow. the nasdaq is over 30 points higher over fair value. the s&p 500 is eight points pov fair value. ben joins us from chicago. besides all of that, we have quadruple witching. how will we trade through that? >> we probably won see a lot of

energy associated with that until later in the afternoon. for the most part it's usually a lot of volatility and price activity. there will be energy associated with it. heightened volume associated with it, but i don't tribute most of that with any price activity that we will see as far as activity associated with specific levels in the s&p's. we're breaking out of a nice balance forming this week. getting up above a key level, 1330 in the s&ps, trading up above it, seeing continuation of the strength we saw yesterday in the afternoon. we could like to see some follow-through. some conviction with this trade to the upside. >> we ahow much of that is base the secret polls coming out of

greece? >> a fair amount. traders are looking for a resolution to the uncertainty associated with greece. we are rumors going around yesterday afternoon. i think that's what traders are looking at now. the dollar is coming off a bit. earlier this week levels were around 83 even in the dollar. what i was thinking this morning on my way in, the fact that the euro currency with you unable to get below major levels, like 1.20. that was a key level. euro currency was coming off and it looked like the bottom was falling out. we were seeing that huge strength in the dollar the bonds were up around the 152 level and have come off since. but the fact that the euro currency was unable to get below those levels, sometimes it's important to see the levels rejected much more than the present levels. that level certainly was -- the attempt to get down there was basically rejected. as the dollar comes off now, we are seeing stocks strengthen.

we would like to see a continuation. >> such a big week, euro elections, the fed, bearing that in mind, will people be cautious about what they do today? >> sure. and again, as you mentioned, we're with the options expiration and the futures expiration right now. we probably won't see a high energy trade today. closing out the week with summer-type trade activity. we are at a critical level here. testing the upper extreme of the balance. if there is upside activity, energy could be associated with it. >> ben, good to see you as always. >> my pleasure. the german finance minister does not believe spain will require a broader bailout beyond the banks. who knows what is coming up and what is clear, "squawk box" is up next. whatever happens, we hope you

have a profitable day. good-bye for now.

good morning. the world watches, all eyes, and await the outcome of the greek election. central bank is ready to act if the greek drama turns into a tragedy. steve liesman is digging into the story. and you can buy the world a coke in every country but two. it's friday, june 15, 2012, "squawk box" begin s right now. d