hello. welcome to this week's "worldwide exchange." >> these are your headlines from around the world. >> the life of scandal with his job. the buck stops with him for the devastating blow to the bank's reputation. >> asian manufacturers stumble falling overseas. this led to fears about global growth. >> nearly $10 billion in deals this morning while germans lid snaps off florida-based care. >> german slumps to its lowest level in three years. output in the broader euro zone remains flat.

>> announcer: you're watching worldwide exchange bringing you business news from around the globe. >> okay. we're back. warm welcome to you. last night, spain did fairly well. not specifically on the data. >> although given how spain was the real winner last week they might have had a double whammy with the football win, too. >> we've got the latest copulation with the 45.1. it's slightly better than the flash which is 44.8. it has just taken the euro dollar back up. not quite on the friday high that we saw. and the final -- excuse me, the output pmi index, 44.7 against 44.4. and, therefore, the employment index for the pmi, also slightly high. we had these initial numbers out two weeks ago.

that would be when i was on the beach in rio. >> i think that was what you spent your time doing in rio. >> anyway, the point is they're not great. but they're a little bit better than the initial numbers that we got out. this fella pulls numbers out of china which we'll recap in a few moemts. rich, thanks very much, indeed, for being with us. look, we still got german manufacturers. despite the fact that we had some moves last week on the eu sum it, i don't suppose we'll be turning around the economics any time soon? >> no, but i think you've always got to be a bit careful when there's a lot of very negative headlines going around. sometimes they can get a little bit detached from the economy.

>> richard, we're also seeing some differences across the region. anything that jumps out to you that we didn't expect? >> i think probably the concern is germany. basically, the model is some of these peripheries are in real trouble. so i think german pmi down in the mid 40s is a bit of a concern. it could get quite nasty for the whole region. >> i think the thing is is whether that reflects the global slowdown, as well. >> yeah, well, maybe this reflects the fact that german manufacturers have become a little bit worried abpaying for everybody else's dinner. maybe the higher taxes or the damage from the euro zone

affecting their business. i think it was very positive, again, last week, that they managed to come up with a pitfall with the market edging towards back the union and a little bit of mutualization of debt, as well. >> we want to keep you up to date. crumbling orders from overseas factories hit asian manufacturing hard in june. pmi reports from the ree e region's major exporting company such as south korea and taiwan for the first time in five months. india proved resilient on there. still export orders was the weakest in 7 months. over china, hit a 7-month low. tracy chang has more. hi, tracy. >> hi there, kelly. the final pmi reading for june showed the factory activity

shrank for the 8th consecutive month. it shrank from may's 48.4. it's the low since march, 2009 as demand at home. the official pmi figures out over the weekend. pmi had 50.2 last month compared to 50.4. it's stronger than expected in the opinion above the 50 extension level a signal that factory growth was close to stalling. the two individuals get divergent readings with the big state-backed firms while hbc's firms are smaller readings. they had china activity needs to strengthen to compensate for frail demand, particularly from europe and the u.s. back to you, kelly. >> all right, tracey, thanks. appreciate that report this morning. >> coming up to speed, the trade

day here in europe, post those pmis in the euro zone and europe. remember, last week, european stocks finished at a 7-week high, close to summit on friday. it's not a bad week. a pretty poor quarter. 4100 up 1.1% last week. but on the quarter, down over some 3.4% last week on the quarter. the tax down 7.6% below. it was up 2.4% last week. that was certain hi goily goinga focus here. the quarter down 11.3 pnt. slightly lower today. the last quarter down 6% despite gains of last week again 2%. bond yields, we have seen literally after those pmis come down in spain. spanish bond yields down at 6.25

this morning, so still feeling the benefit after being up 7% in the last week. 10-year yields, u.k. manufacturing pmis coming out in just under half an hour's time. this is where we get great cuts and more qe from the bank of england when they suggest that banks should throw off or use some of the excess reserves. the best one-day gain results on friday. not quite there at the moment. 126.30. but still at the range. the yen, not much reaction today to use that one member in favor and being put off by if sales tax. not much reaction to that. hanging onto it. best chance, 7 months on friday. sterling steady at 156.56. and a quick look at commodities, just weak, 96.21.

this rallied some $6 on friday. a little bit weaker this morning, 83. not reacting yet to the fact that the eu embargo is now coming into effect. >> no, kbut that's certainly on to watch. barcley spez marcus aguus resigned after trying to manipulate wages. he was the ultimate guardian of the bank's reputation. let's get out to becky who has more on this live in the city of london. becky, good morning. heads are rolling. >> reporter: well, the next is what happened to bob dimon, clearly the out going chairman. trying to protect dimon, the ceo of his business by saying the buck stops with him and he is leaving. that won't necessarily take enough heat off of bob dimon.

h's pretty much the public face. he's the man with the treasure's select with a time of remorse and apology is over. and, yet, he finds himself apologizing again. the next phase is what happens to bob dimon and what about the other banks, as well. some of the banks have been implemented as the probe continues. they've already fired several traders at the end of last year of over the same issue. and as this probe wardens out, we'll see more of the city institutions drawing to this story. there are several elements to this. one is the fact that there could be criminal proceedings, as well. examining the files that have already been prepared. they'll be looking for any evidence which could result in criminal proceedings. watch out for that development. and then there's the political

angle toward all of this, as well. over the weekend, david cameron, the prime minister here in the u.k., ordered an independent review. so that will report back at the end of the summer. plus, many others are calling for full-scale public inquiry. so as well as the individual institutions, watch out for criminal charges, watch out for the possibility of more independent reviews and inquiries and, also, bob dimon will testify over the other treasuries on wednesday, too. >> becky, thanks. we'll have more on that story later in the program. first, we want to get back to our guest host, richard gerum. what do you make of the fixing scand scandal? >> well, i think the broad details have been known for kwiet a while. i think the shock of reading some of the e-mails that are banging around. you just see how incredibly

offhand and discreet people go to the financial heart of the systems. i don't think the headlines are particularly surprising. but i think obviously, the consequence, in terms of what it means for the regulation, the banks have been pushing back, it's going to be hard for them to do this when you have the jp morgan loss. you expect a squeeze. >> and how important is that in your kind of world view, richard? is it -- do banks have some justification to say that there's been too much on the regulatory front? or is that all a lot of waiting hands? >> no, i think that the financial sector is still extracting a lot of roeent from the rest of the economy. i think a tighter regulatory stance -- look at the state of the world four years after the financial crisis intensified. i think it's difficult to argue that you shouldn't be squeezing in regulation. to me, so far, surprisingly

little has happened when you consider the scale of the financial shock over the past three or four years. >> richard, we heard tracey talk about pmis in china. what's your own view on the extent of the slowdown and the kont continued tole policy response. >> the way you look at it in related to china bumping along around 50. so clearly broke the slow but it's not slow in quite a way that the response is kicking in. they're loosening up fiscal policy getting some of these infrastructure projects back on the road again. i think the other point is contrasted with europe, if europe pmis keep getting worse, what are they going to do? well, not very much. interest rates are already quite

close to zero. so the policy cover looks pretty bad compared to what you see in chooi fla. >> okay, richard. coming up after the break, we are going around the world on a program this morning. we'll be live from tokyo as the business survey there shows companies are more optimistic than forecast. >> we'll continue our manufacturing campaign to preview what to expect with the manufacturing figures. >> and we're going to be in london, of course, as we continue to keep an eye on the latest development out of barkleys. and if you want to join the confers here on "worldwide exchange," you know how. shoot us an e-mail or tweet us at cnbcweather conditions. . >> a low again today. they had a good manufacturing pmi. plus, we'll look at australia and say if it goes live, can it

work? #a#a#a#a'9#a+=#a#a#a#a#a +g#a

australia has one of the world's ambitious games to tackle climate change.

to promote the unpopular tax. at the same time, australia's controversial tax also come into effect. the watered down version will actually meet government forecast. matthew taylor has more. >> reporter: it's been one of the most devicive issues in australian politics in years. the government's mining tax that cost one prime minister his job. recently known as the profit tax, it was a 40% tax on all commodities. the unpopularity of the scheme forced the government and new prime minister to water it down. the mineral resources rate tax now has a nominal tax rate of

just 30% and kicks in when a company's profit is in excess of $75 million. >> this is not a deal breaker. this doesn't change the investment environment radically. it is a minor negative. >> reporter: the nnrt was designed by the government in consultation with extrada. and the government hopes to collect $13.4 billion in tax revenue over the first four years. but some question the effectiveness of the scheme given the volatility in commodity prices. >> the tax will raise on our sums between and a quarter and a half of what the government has expected. and, for example, not at all, if it's between the current price. it will raise a quarter of that amount. and if it is say today's spot price, it will raise 50% of that amount. >> the tax initially raised

concerns about doing business in australia with rio tinting a highlighted sovereign risk. still, ubs has lowered its profit expectations to be by 4% as a result of the tax's implementation. >> it's certainly a negative international investment. it's not a major negative. and australia's rule of law, it's civil cause its ability to deliver and its stable markets will remain an attractive destination for resource investors. >> bhp and rio tinto have come to accept the regime. it believes the tax discrimin e discriminates between states. like the carbon tax the opposition has vailed to scrap the nnrt if it wins power at the next election.

matthew taylor, australia. >> all right, guys. richard is still with us, as well. hayden, thanks for joining us. >> yeah, definitely we have. i think this was a tax that probably came two years too late. and for it to have the minors, you're talking about a sustained bull market that has come off substantially for us to see a real impakt of the nnrt. you're basically talking about a price that would lead to be $150 a ton or higher for an extended period of time. clsi has been fairly bearish for a long time. wunsz the price falls back below $ $110 a ton. >> you also say the state government royalties is unworkable in the long term. just explain that?

>> yeah, deaf niltly. i think the nmrt does start to evaporate. but these things are cyclical. if you like the pricing, you know, the state governments will have their own agenda and they can raise the state royalties to higher levels which basically takes away the bulk of the take from the nmrt. so if you saw the review, the nmrt will end uptaking more than what the nmrt would be allowed to under the kurnt construction. >> you talk about the law. if you hold that view, then, where do you go in the sector to invest? clearly not from those players. >> yes, it certainly rules out the likes of fortisqui.

probably from an aluminum perspective is behind that aside from what we think is a better portfolio of projects and a growth outlook. and in the new caps, despite the carbon tax, we think some of the coal mines are particularly atra attractive with those names which is potentially under takeover. >> is it all that relevant? is the opposition generally committed to reversing this tax, do you think? >> look, i think they are. the nmrt is, to us, by the time the opposition happens next year, in all reality, the nmrt is probably going to become a non-issue. there's a significant difference between the two. it raises the kst of operating in australia. it doesn't take a clip on profits which the nmrt does. mining is already suffering over

deflation. this is just another lid particularly for the coal miners. it's obviously joined us in the last few years. but we have' seen it cig fif cantly. so i think the carbon tax is for the government in particular and it does afefect everyone and every industry that operates here. >> we were just talking to richard there, as well earlier, about the extent of the chinese slow down. what is now baked in, general e lely, in commodity prices? >> yeah, i think it's a difficult one for -- commodity been hit harder than others. we looked to al min yum for that. if we do get that scenario, than

there probably is another late down in the commodity process, themselves. >> okay, heyden, thanks for that research at clsa. >> and before we let richard go, richard, we'd love to get a final word from you here. we've got a busy week coming up. do you expect it to make it to friday? >> well, it's going to be a pretty rough week. there's a lot of data and i think the focus is going to be on the u.s. job status. there will be tension shifting again. so i would think that you saw the immediate risk rally on friday. i think this is jugs going to be a choppy week. >> a six-month view, richard . >> six months, we're not all that positive. equities look cheap. we're still positive on the emerging market corporate debt. you can get a sensible,

high-digit yield. you go and engage risk and it's tough to be very aggressive. >> all right, chief economist at the bank of sing spore. coming up, we're going to take a look at banking scandals, phone hacking and big u-turns on the economy. don't go anywhere.

>> announcer: you're watching worldwide exchange. bringing you business news from around the globe. and german's manufacturing has shrunk the fastest since three years in june. >> chairman of barclays pays for the scandal with his job. he says the buck stops with him for the devastating reputation. >> nearly 10,000 deals done this morning. german snaps up. >> the best soccer team of all time, after winning their third major tournament in a row.

>> we have uch.k. manufacturing 48.6. better than the forecast of 46.5 and a take-up from the 45.9 in may. n new orders index. a very high level from may in 42. input prices falling. the fastest pace since may, 2009. so, yes, the manufacturers have been there for the second straight month. it's not as bad as people thought. it was just up at the highest level of the session. it was on 56.69. there will be some question, i suppose whether we get the full follow up from the barng on thursday. steven isaacs joins us now. steven, thanks for joining us. we fully expect more point of seize from the bank of england on thursday. another 250 billion.

they've already told banks to go out and use 150 or 200 billion reserves in terms of lending. >> the data has been very poor for quite some time. we're in a recession the first quarter let alone the second quarter. individual pieces are bouncing around. but i think the trend is still very poor. and that's really before the full force of the latest euros and cry sisz. so, yeah, ewe know, the banks being in the easing is camp, any opportunity in the last five years, anyway. so we should nt be surprised. they're going to do 50 billion this week. as you said, there's all sorts of other bells and whistles at it. 50 billion here, a hundred billion there. >> actually, maybe they need to do the focus on the other may jurors they've announced. you know, they're already well below 2%.

the concept of buying further gills and somehow that filtering into the real economy. i think it's symbols. so i mean, it is a large number, 50 billion. >> it's quite an expensive symbol. >> absolutely. there are many -- the merits of this policy, we've considered for a very, very long time. i think the symbol, is a big symbol, as you said. in times of actually delivering an impact into the economy, than lending directly to banks neelds to loosen some of the new requirements. there's a sort of a summit of the fsa, the fsc was out a couple of days ago saying they were going to loosen someover their requirements. >> here, we were looking at each other saying explain to us why it's a good time to legal cause them within the system or the slidty of your banks. >> this is a problem that the

u.k. government and the bank of england find themselves. on the one hand, they want less lending. they want to see more lending because you want the economy to work. what do you do? i think the latter part is winning. >> can i just ask how much of a threat there is to the u.k. in the way that negotiations are headed in the eu? the financial transaction tax and the banking, is there a real threat here? >> there is a real tlet, but i think the u.k. will draw a line in the sand. they've slightly come to center stage. and, again, same problem. all of these extra regulations which are designed to make the bank safer, in theory, do cut across the concept of keeping the wheels in the cart working.

so i think it's a bit of a lesser focus at the moment. >> the paradox of capital racing, i guess. but, in any case. yes, you should count it to send a gift of confidence, but not the detriment of grace, which is kw what we all need. france's top auditor is releasing its review after the 2011 bujts. i think the key thing is what he's saying is more substantial effort is necessary to respected the 2013 target. so we've got stocks a little bit further today ahead of the u.s. open. and we're up at the session high right now. surgeonly helped, as well. they're still contracting betteser than people had expected. >> take a look at what's happening akroocross the bonds . as you can see, spain there is six, if my eyes there are right. 6.19%. that compares, of course, with

over 7 pnt as recently as last week. meanwhile, those arrows are pointed down, but those rates are moving higher, certainly from the historic lows we saw during the real flight to panic. we threw up ireland there, as well. the ten your 6.33%. >> yeah, that's the low since the bail out, by the way, those irish yields. >> those yields, yeah, yeah. >> and the euro dollar, we had the best one-on-one-day jump on eight months on friday. we got around to 126.93. euro, 80.58, hant been up to stand any break. the euro big jump on friday, pretty steady today. what happens? >> ill think we could have two trends here.

one is a weaker euro and the other is stronger asset prices. >> the correlation is going to break. >> it has broken already. we oov been looking since last october. but even, i think, in the euro zone equities, adds well. what you're seeing is the election was the absolute key ish shaw. that end eed mercosi. that was a symbol of the german austerity to the euro zone's problems. he kachl along and tipped the balance. it's quite likely that the liberal party will be out of office and he'll get another politician there. so the balance is shifting to waerds a southern european vision of europe. when the euro was formed,

remember the concept of the frank 4? people were hoeping that the deutsche mark in germany would be the fiscal discipline and the anchor for all of the other european coup tris to congresswoman in behind. that doesn't seem to work anymore. >> germany itself is the mirs e first for the treaty. >> the hope that euro would be strong and led by german, i'm afraid is faiding. >> we're going to end up with high flesh. >> the bank has already sign signalled that it eegs prepared to tolerate that. so how many summits have we had? 15? 20? there's another 15, 20 to come. the if anyone can follow them, they're a better maker than me. i think it's the direction of the summit i'm trying to draw the dots together. i think the direction of policy, political policy in europe is towards a multitude of bail

outs. the detail is fascinating if you're an economist. but if you're looking in a strategy, where i see, is a common strategy. and that is the euro is going to be a southern your feen style state which means weakened currency. >> we can get into this in a second. steve enwill stay with us. but, first, apple will pay china $16 million. analysts say this paichs the way for the tech giant to sell more of its prukts. china is apple's biggest overseas market. contributing more than 11% to itsds global revenue last year. just two days after samsung had 10.1, another court has granted apple's request to block the sale of the smoort e smart phone in the country.

>> more on the story, reen. >> hey, there, kelly. sunset electronics is repealing the decision on sunday for a temporary stay on the preliminary ban on the nexus smart phone. apple cannot prove it's being damaged. apple says something has infrip jed on four of its powers. samsung has been fighting apple for more than a year. next, apple has sagt to buy as many as 25 smart phones. back over to you. >> okay, thanks very much for that. japan inc. has big tomorrows for the future. more on this live from tokyo.

>> thanks, kelly. the survey results for the quarter ending in june came in much better than expected. the survey seen as a key gauge show rising optimism compared to the previous march survey. this is due mostly to a pick up in conversation expanding and big manufacturers and nonmanufacturers say they plan to increase capital spending by 6% 2% in the current fiscal year. that's nearly double the 33.6% increase. meantime, things are not as rosy on the political front. the democratic party of japan is now irreparable. out with 49 other lawmakers has left the dpj. the departure rules the ruling party with slimmer majority in the lower house. the prime minister faszs possibilities of being thrown out of office.

this comes less than a week after nodo won key passage of a bill to phrase the sales tax. the followers plan to form a new party within the next couple of day ls. back to you, kelly. >> okay, thanks very much. the story just continues sto to fascinate. >> hi, dan, good to see you. the yen didn't really reflengt -- >> well, it didn't really react? why is that? >> well, basically, we've seen a lot of good news in ja parn. and i would disagree with the former speaker. we had growth figures, we've had the nuclear power reactors going back on again. i know that's not everybody's taste. pu that's going to be good for japan. and then the icing on the take, this trific tank survey which wildly out performed anything we're expecting.

so, really, a string of good news out of japan. i'm not surprised there hasn't been too hysterical e are aex. what i would say is this is completely predick nl. we know that noda has put his life on the line. he wants to push ahead with the consumption tax. i would say that this shows that it shows it's completely disz functional. it's actually moving towards quite a big breakthrough in terms of raising extra revenue for the treasury. >> yeah rksz but in you're notes, it's still dshl you're embarrassed on the consumption tax. you say it's the wrong solution to the problem? >> it's the right dshl there's two different as pekts here. this is the political aspect and the economic aspect. the point about the economic aspect, all the though the consumption tax is not ideal, it's pretty much the only thing

that can be done. so let's just say that the -- that what's possible should not be excluded because it's not the best solution. so this is not the best solution. i would say that. but i think tsz a part solution which hopefully, can be built on. >> dans, i wonder if we're sort of back in a 2003-2005 moment when people finally start to realize that the economy is tearing itself out of deflation and getting to a self-sustaining place. we've a big picture. how do you think things stand? >> well, as i say, we've had a lot of good news recently. is that going to carry on? that's a good question. everybody a always looblgs financially. and if yoi look at japan's exports, you're going to be

worried because china is japan's biggest traed e trading partner. exports go to the eu. if the eu slows down rksz it has a big immakt only china which has an effect on japanese export. but, i meean, by pure luck, a tn of domestic demand has come on line. government funds flow after the tsunami and that's finally happening. and now, as the survey shows, you've got the nonmanufacturing section which is the biggest opponent of the japanese economy moving in a positive direction. that is enough to pick up the slack of a slow down export. i would have to say that they've come back somewhat. so together with an increase in consumpti consumption, we're looking at the e a pretty rosy picture in japan. >> confidence? equality? is it coming back?

comforts, how do you see among the people? >> confidence, yeah, i would say i'm feeling a little bit more confident. i think a lot of people would share that. norm pli, a japanese prime minister does that and resigns. we might still get the same result. but that's a trade that he's done with the opposition. in return, we will very likely get the consumption tax, which at least -- as i say, it's not the optimal economic situation. it won't raise enough money. but it will arguably give people more confidence to go out and spend in order to ensure their pensions and their medical needs. the proceeds from that tax should keep their funds in their pocket.

>> is the new season even good enough to start worrying about about the bad news? the moemt at which japan's staggering debt load finally comes home to recently. >> of course, we've lost their careers on that trade. know, leave it alone. >> and, danl, to you, do you agree? >> absolutely. i mean, i was speaking to someone today. he said the worst-case scenario would be if before the bill passed the upper house, there was a conspiracy to unseat noda. so you'd lose noda and the consumption tax. i don't think that's going to happen. i think you're looking at a powerful coalition that's come together. and i think that's going to give hedge fund investors kmptble. >> okay, danl slate erslater, t for your thoughts. >> and spanish and italian today.

but it was spain that won last night. they beat italy 4-0e in the final. the only team in history to win three consecutive major quarters. italy sponlded braily with several chances. spain pretty ruthless carving up the italian defense. it's a fourth for the campaign spectacular and his star performance for spain. he planned to add to the work up victory in 2010. >> and they get to do it all over again at the olympics, right? >> no, the olympic teams are basically under 21 scores and e players.

>> i'm doing my best to follow along. >> it's okay. >> all right. still to come on the show, it's best-known as one of the world's biggest exporters. but could china become one of the largest importers, instead? we'll discuss the change of trade after the break. #a#a#a#a#a#a'9#a+=#a#a#a#a#a +g#a

welcome back to the program. global trade could be turned on its head with china being one of the world's biggest importers. i eets one of the global connections trade forecast. i spoke to hsbc and here's what he had to say. >> i think that as we, you know, see going forward in the next 5, 10, 15 years, there is a clear rebalancing which is going on. and it is produced on exports to grow will start rebalancing towards his port. and i think in that context, germany will, according to the report that we've got, start presuming more and start importing more and that's how it will move towards being one of the largest importers in world. and so will china.

so germany, china, india, brazil, all of these economies will be much faster than the support growth. and the traditional economies like u.s., u.k., france, spain with the exports of basic imports as we go forward. >> achnd all of this, i'm sorry including germany's import demand you see happening despite a pretty secure europeyoueurope crisis? >> well, in terms of the debt crisis, the crisis has been with us in one shape or form for the last four, five years. and everybody if you see the figures if r the first quarter this year, what have grown by over 5%. i'm here with 52 entrepreneurs and say we will keep investing as we go forward.

so i think that the way the businesses look at growth and future, if they have the risk that we see in the markets sometimes. >> and that would explain why you guys still see trade volumes or trade activity worldwide is that is growing by nearly 5% annually over the next decade. and, again, we're seeing some tensions, some strains in trade finance. and you say never the less, strong demand is going to over come this? >>y, i think what we are seeing is that, in fact, that the businesses are finding ways toe grow. so wup of the -- you know, key themes merging from my report is the reinforcement or what we call the sudden road. so india trading with china, china trading tw uae. brazil with india. so a lot more new connections are developing as we go forward.

so entrepreneurs and businesses and companies will find new sources of demand and make sure that they are servicing that demand. and that will travel on with the dwro growth of the world economy is what we expect. >> okay. i want to show you a quick picture of how the swiss franc has been trading. the level, of course, to watch there is 120. that's where it's held. our guests, though, our guest host for hour who has been with us, steven isaacs here, says never to bet that that will continue to work. a lot of pem have been able to stabd by this pig. you say not so much. >> the policy is now 6 months until the brand is forced out.

in the immediate aftermath, the s&b had no choice to go along with his po e policy. but i point out very much it was his policy. it was quite controversial even in the out set. >> so what happened is the swiss currency has strengthened. and the problem is, just as we've seen in japan rksz that's making the swiss exporters less come pettive. >> i'm not denying there wasn't real pain. but there were two big bounds of intervengsz. sfi first of all, in 2010, that's more of an ad hoc basis. and secondly, in 2011 when the cattle fall came in in 120. my point is there was never the political consensus that that consensus is now fraying at the edges: i mean rksz may alone, the s&b bought $65 billion worth

of currency. >> how much of what happens now depends on whether this is sisz bank appreciation. or rathder it would just be the euro. if they maintained against their levels would they be happy to see you? >> well, if you're tied to a weak currency and the euro has deprescribuated by 10%, well, obviously, your currency goes down with it. so my point is that the consensus wasn't there. the cost of the intervention is growing and it's very, very substantial. it's quite different to when you're trying to hol kbrour currency. for instance, the er oorks in '91, omvk of course the swiss cn

maintain a policy indefinitely. but there is a kbragreat cost t. in 1981, na's when they had their last huge round. we had been here before. and i think quality sometime over the summer will come in one day. i don't think we'll actually be doing a currency cry sils. it miegt even be done on a sort of balance. >> is there going to be a george sturros "s" figure who is going to be able to drive them up against the wall? >> if you look, they see different statistics and you'll see that the mart isn't actually that full of franks. it's full of port foel owe flows. where's all the money? that sort of thing. they seem to be the ones who are looking to day fers i have out to the concern for very good reasons about what's going on in europe. i think that trend will continue.

so the s&b, on friday, when we had that squeeze in the euro. it was up over two big figures at one stage. it came crashing down fairly quickly. we're not sitting here with a mark and being very, very short. >> thanks for that. steven isaacs, the japanese prime minister is going to have a press conference in 50 minutes. >> we'll follow that story and bring you more next hour. and, also, still to come on the show, the chairman of barclays is going to be live on the fixing scandal. will that be enough for the ceo to step down? we'll discuss next. re, every powerful collaboration is backed by an equally powerful and secure cloud. that cloud is in the network, so it can deliver all the power of the network itself. bringing people together to develop the best ideas -- and providing the apps and computing power to make new ideas real. it's the cloud from at&t.

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welcome to "worldwide exchange" this morning. i'm kelly evans. germany's manufacturing sector shrunk at the fastest pace in three years in june and asian manufacturers stumble drags activity to multimonth lows. the chairman of barclays pays for the libor scandal saying the buck stops with him for the devastating blow to the bank's reputation. nearly $10 billion in deals done this morning. bristol-myers agrees to buy amelin. plus the u.s. northeast is still recovering from powerful weekend storms that left millions without power, washington, d.c., west virginia, virginia and ohio declared

states of emergency, more storms could be on their way. welcome to today's "worldwide exchange." we had pretty good data today, the latest eurozone jobless rate, the total the highest since records began, 11.1% is what we got in may, that's pretty much what we forecast but it was 11% in april. we'll have more reaction on the markets which are generally on a firmer trend. the libor fixing scandal, chairman marcus agus agreed to resign after the bank settled charges of manipulating the interbank lending rate. in a statement agius said he was

the ultimate guardian of the bank's reputation. barclay shares rallied on the news, up 5% this morning after being sort of down heavily towards the end of last week. becky is in london with more. becky, there agius is gone. how much pressure on bob dimon, the ceo as he faces the parliamentary grilling? >> reporter: it is coming on wednesday, it is taking heat off bob dimon saying the buck stops with him. there is a great deal of pressure on the ceo because he's very much the public face of barclays, he's the man that said the payment of remorse and apology is over. now he finds himself apologizing all over again. so hope that's it for the responsibility for this business over at barclays is probably a little bit optimistic to be honest but we will hear more

from bob dimon and the way he's trying to paint this on wednesday when we get that addressed to the select committee. several other elements we should bear in mind, who else will be implicated, which other financial institutions will be implicated. we will have to watch as the probe widens who else is involved and also the possibility of criminal charges as well, they're going to be examining files and there could be possible criminal charges and the political fallout, too, over the weekend, david cameron said he's ordering an independent inquiry into libor and the opposition labor party are calling for a full scale public inquiry into banking culture. back to you. >> thank you. >> joining us from new york is george goncalves, head of rate strategies at nomura strategies

international. give us the context as to how important this benchmark rate really is. >> well, libor for your viewers, are familiar with the actual index rate is critical to the bond markets globally. for example mortgage rates are indexed off of it, a lot of the swap activity in the bond market is indexed off of libor so libor plays a key role in determining evaluations for a the love the bond contracts. >> it's incredibly important to the global financial system and a lot of traders say for years it's not reflected what's going on the term at which banks are lending to one another. given that, what do these settlements practically speaking mean for the way that the financial system evolves? >> well i think, look, going forward what we're going to see is libor, taken has for quite to be honest quite honestly since the financial crisis becoming less relevant in terms of active trading and moving towards other

indexations as another index called ois, overnight index swaps and i think even the market will evolve and that's just the nature of the beast, but you know, in the interim, libor, even though rates are low around the world and for u.s. libor rates you could see frictions introduced into the marketplace and that would raise libor slightly but rates are low. it will be hard to see that actually move. >> part of the scandal of course is that they were trying to lower the quoted libor rate after the financial crisis, george, in some ways. yes, they were manipulating it but if they were trying to manipulate it lower, that would have been to the benefit of everybody. >> well, look, those were very unique times back in 2007-2008, and i think that, you know, as we move forward, thinking about what libor means for the marketplace is probably more important because you're not going to retroactively get that money back, right, or try to

compensate for it by raising rates now. >> george, good to have you on today, plenty more to come from you, george goncalves with us. first a check of how u.s. markets are positioned on this monday morning after a strong day friday we're still seeing green behind us, the dow jones pointed higher by about 27 points, nasdaq about 5 points and same roughly speaking for the s&p 500, this comes after a ton of data out across the globe overnight and much more to come in the u.s. as so often happens on the first day of the month. cnbc ftse global 300 up 20, and we know the real figures, the unemployment rate being one of them, ross, continue to show wors worsening. >> we've seen yields continue to go lower on key peripheral data. we'll show you where we are and

the performance for the quarter. manufacturing pmi in the uk contracting but substantially better than we might have thought, that's given a bit of a boost. the last quarter the ftse down 3.4% although up 1% last week. xetra dax up a percent today. pmi this morning is 45.1, were forecast to be 44.8, that's what they were on the flash. although down but better than thought. xetra dax down 7% in the quarter. spain has been the real focus as we know over the last three months, down 11% in the last quarter, up about a third day, the cac down 6.6% in last quarter, it was up around 2.4% last month. can we get sustained move lower in the bund marks in the core peripheral he yields.

ten-year spanish yields are lower at 6.17, no surprise. bund yields fairly steady at 1.58%. foreign exchange markets year had its biggest one-day jump on friday for eight months, not quite the levels then, 1.2650 where we stand then. the yen pretty much unmoved by the fact a key member of the ruling party ichiro ozawa resigned in protest of the consumption tax. the aussie dollar friday up 7%, up its best move in seven months on friday, not weighed down too much by the chinese pmi data, sterling/dollar 1.5685. it's just enough to take oil off from the jump we had on friday,

brent was up some six bucks and we're just down a little bit on the chinese pmi data to 96, nymex up seven bucks friday down slightly to 83.63. more market reaction to all the data we've had ahead of the manufacturing ism, tracy has more out of singapore. >> hi there, ross. asian markets had a mixed trading day post the chinese data. the final pmi for june showed factory activities shrank for the eighth consecutive month, new export records dropped to lows unseen since march of 2009 as demand at home and overseas weakened. the data corresponds with official china pmi figures out over the weekend. the pmi hit 50.2 last month compared to 50.4. the data was stronger than expected and it did signal that

china's factory growth was close to stalling. the two indices usually give diverging readings as the official pmi surveys, while hsbc's pmi focuses on smaller firms. the twin readings will pressure beijing to ease policy further, they add china's domestic activity needs to strengthen to encompass foreign demand especially from europe and the u.s. >> tracey, thanks very much. we get back to george goncalves joining us there from new york. george, which, to you is pointing the direction forward here, the weaker data out of asia, the somewhat firmer tone out of europe or what happens in the u.s. with the pmi figures still to come? >> we actually have a short holiday week this week, the start of the new quarter and i think we have to look back to the last two quarters, the first quarter things come out, you know, quite nicely with all the liquidity coming into the system, markets rose, then we

had the complete night and day response in the second quarter when all the european fear set in, as we start the third quarter this week is critical, even though it's a short holiday week you have the ecb's decision, the boe, a lot of data, the pmis here as well which will dovetail all the pmis were discussing about china and europe, and i think that, along with friday's payroll number will set the tone for the quarter. >> george, just looking at the reaction central banks around the world, obviously china a couple of weeks ago cut rates. we expect a rate cut from the ecb this week, we expect more qe from the bank of england, also relaxing liquidity rules on banks as well. amidst all of that, is the fed overly silent? >> well, i think that all of these policy actions are incremental. and we're not really seeing that global coordinated policy. it's just coming, you know, unsequenced and unorganized way

around the world and i think the fed took a decision in june just to extend twist to see how things unfold. if things were to get worse you'd see a more bold policy action given that we already have twist in place, but i think collectively, even though it might not be coordinated, it does still carry a punch and i think if the boe were to ease further our forecasts with another round of qe and if the ecb were to cut rates to 50 basis points that would build upon the success that's already in place so this is a sequencing issue. they need to continue to improve upon the success they've put in place or come out with a very bold policy. the fact we're not going to get the bold policy means they have to continue working on easing and that's what the global policymakers are trying to do. >> george, more to come from you, stick around. >> in you want to join the conversation, get in touch with us. what do you think the u.s. pmi figures will come in later this morning? e-mail us at worldwide@cnbc.com

or tweet us @cnbcwex. speaking of twitter, it looks like it's set for a breakup with linkedin. more on that story when we come back. ♪ ♪ ♪ ♪ [ male announcer ] what's the point of an epa estimated 42 miles per gallon if the miles aren't interesting? the lexus ct hybrid. this is the pursuit of perfection. great! tyler here will show you everything. check out our new mobile app. now you can use your phone to scan your car's vin or take a picture of your license.

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welcome back to welcome back to the program this morning and let's check the headlines. germany's manufacturing sector shrunk at the fastest pace in three years in june. asian manufacturers is falling overseas demand drags activity to multimonth lows. the chairman of barclays pays for the scandal saying the buck stops with him for the devastating blow to the bank's reputation. nearly $10 billion in deals done this morning. pharma giant bristol-myers agrees to buy amelin. the northeast is recovering from powerful weekend storms that left millions without power, washington, d.c., west virginia, virginia and ohio have declared states of emergency. more storms could be on their way. i would argue that's not the northeast, it's more of the mid-atlantic that region but in any case let's look at the other

top stories. bristol-myers squibb agreed to buy amylin, in a deal valued about $7 billion. bristol miles is teaming up with astrazene astrazeneca, which will pay about $3.5 billion in cash and share in the profits from amylin's sales. they will pay 51% higher than its original bid in february, amylin shares up about 0.7% on friday. walmart is celebrating 50 years, sam wallton opened his first walmart july 2nd, 1962 in rogers, arkansas. in 1999 walmart became the largest private employer in the world with over 1 million associates. anti-walmart protests have been taking place across the u.s. amid calls for the firm to change its working practices and expansion plans. is there a storm brewing in the social media world, according to a linkedin blog post twitter is ending a two and

a half-year-old partnership that allows people to publish to the profiles, twitter has been gradually separating from partners. users will still be able to post updates on linkedin and twitter but content sharing will be a one-way road. and these two clouds aren't immune to the real clouds, 2 million people without power and also wiped out amazon's cloud service and the sites that rely on its web services. the storms took down netflix, popular social media site pinterest and instagram over the weekend. >> those look like the pictures they were sending, they said there were winds of 70, 80 miles per hour, my poor cat was found across the neighborhood in a gutter hiding out from the storm but he's a tough guy. the storms are much, much, much more severe than they were expect so long it really caught a lot of people by surprise

there. >> would it be too big of a dislocation to bring him to london? >> my parents or the cat in. >> the cat. >> he'd come on the set and enjoy it and we'd have fun with the google stories about the identity. asia appears to be a bright spot, we'll discuss m&a activity in the region after the break. with the spark cash card from capital one, sven's home security gets the most rewards of any small business credit card! how does this thing work? oh, i like it! [ garth ] sven's small business earns 2% cash back on every purchase, every day! woo-hoo!!! so that's ten security gators, right? put them on my spark card! why settle for less? testing hot tar... great businesses deserve the most rewards! [ male announcer ] the spark business card from capital one. choose unlimited rewards with 2% cash back or double miles on every purchase, every day! what's in your wallet?

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♪ welcome back welcome back to the program. let's check in on u.s. futures which were still trading in the green despite a sharp rally friday after some agreement in the eu leader summit of leaders. dow jones pointed higher by about 31 points, s&p 500 and nasdaq looking to open higher by about four or five points there as well. as we know there's less than a month to go, kelly is getting excited until london hosts the olympic games. we kick off the end of this month. euro star has been unveiled as an official transport partner for the games. joining us is nicholas petrovic of euro star. more reports today, are you painting the french euro star

departure in paris as the gateway to the london olympics? presumably the immigration trade has been easier? >> definitely we want to be the gateway to the london 2012 olympics in france and belgium and also in germany an holland. it's not london 2012 we say it's europe 2012. >> slightly cheeky. >> i know but you know how we are and i'm parisian and we still, we lost when was that 2005. >> paris lost out to london. you're just trying to get your own back. >> we want all the pa riparisia to come to london. it's more image just to show good to london, it's a great destination, there will be so many things to do and to go

there the best way is the eurostar so that's the way we sell it. >> do you have to add extra compass isn't it. >> we have a little bit of capacity around 40 trains, we've got jumbo trains, they're massive but it's really more about the image and bringing people so that's why for instance we've got a partnership with the dutch olympic team so that we take the eurostar, the french olympic team, belgian olympic teams. >> how long is the trip? >> the trip from paris is 2 1/4 hours, from brussels two hours and from amsterdam a bit more than four hours so pretty fast. >> it's the time it takes to clear customs, what is worrying because somebody stood in a heath row queue flying in from italy for two and a half years, i think it was the end of last week. you do it before you get on the train? >> it's a special system so you clear the customs and immigration before you take your train so that's why we work hard with the governments to have enough staff on departure, then

when you arrive just walk out. >> it's worth pointing out the eurostar is -- i don't know why i'm talking up your business, i don't know, i should be criticizing, but you then get on the javelin train and go straight back in fact or is eurostar going to stop at stratford? >> no, we are leaving the capacity to the javelin. and then you're in the middle of the olympic park. >> will you see a bit of the olympic park when you come on the eurostar. >> are bookings still available for the trips and how much would it cost your typical person to go from paris to london during that period of time? >> the bookings are very good but there are still some seats available and it's our usual pricing structure so the earlier you book the better the price and we start from 69 pounds return and then it goes up so it's like a local airline. >> you're going to get

competition in the future from deutsche bank so how important is this when you're trying to protect a competitive edge? >> it's very important of course to keep expanding our business. today we are the leaders on london, parris, london, brussels and we want to be leaders to amsterdam to the north of england, the rest of france province, switzerland, that's why the olympics are a great way to advertise the fact high speed trains you can go everywhere in europe. >> how has the future of high speed train and travel been impacted by the debt crisis? >> interestingly, we've kept growing. the crisis has been going on for five years but we kept growing our revenues and traffic during that period. >> what's your strongest place? >> i think because people switch a lot from airlines to high speed train because of the benefits of high speed train, as

you say it's easy, city center to city center, our prices are inclusive of everything so they like this idea and we've got more people switching to us so that's what we are trying to push. >> strong spots, weak spots? >> strong spots is the labor market from the uk, which really the weak spot is the business market. >> interesting, business market is quite weak. >> you should go to paris first and then go back. >> i'm just going to go for the heck of it. still to come worries about the global economy, asia appears to be one of the few bright spots getting into m&a. 

welcome to worldwide exchange. if you're just tuning in i'm kelly evans. >> i'm russ westgate. the chairman of barclays pays for the libor scandal with his job. nearly $10 billion in deals done this morning. bristol-myers buying diabetes drugmaker amylin. the u.s. mid-atlantic is still recovering from powerful weekend storms leaving millions without power, washington d.c., west virginia, ohio and virginia have declared states of emergency and more storms could be on their way. plus germany's manufacturing

sector shrinks at the fastest pace in three years in june. asian manufacturers also stumbling, falling overseas demand drags activity to multimonth lows. thanks for joining us on the program this morning, and good morning to our u.s. viewers who may just be tuning in, hopefully back with power those across the mid-atlantic including my parents now looking to get back on deck. let's look at what's happening across the market this morning. we're still seeing green behind me for futures although we're paring gains, the dow opened higher by 16 points compared to 20, 30 points earlier in the session. nasdaq, s&p 500 barely in the positive. part of this has to do with the tone coming across global markets. we're holding up well, up 0.14%

and we've pulled back in the last couple of minutes and looking at european boerses, ftse up 0.6%. xetra dax up almost 1%, resilient nevertheless, cac, paris, more than 1%, the ibex in spain flitting between negative and positive territory all morning as we digest both the news this morning we've gotten, ross, and also investors taking a closer look at the details or lack thereof that came out of the eu summit last week. >> here's a fly in the ointment on that, finland and the netherlands are saying they will block esm bond buying in the secondary markets so this is coming directly from the finnish government, there block secondary bond buying -- sorry, yes, bond buying in the secondary markets and also the other story following this morning the libor scandal,

barclays chairman stepping down, and mcdermott says barclays is not an isolated libor case. you'll hear more in due course. the regulator of the uk confirming that is indeed the case. more to come on both those two stories. other things we're following this morning, china's m&a is turning despite worries about the global economy, dipped down by 25% but deal volumes in asia are falling at a much slower pace with chinese firms the most active in the asian market. laura pinto is from nsba and george goncalves from nomura. laurie, where is tlorrie where bottom of the cycle? >> people look at china and say it's only going to grow at 7.5% this year, i think europe or

britain would be happy at that rate. we at nsbo think the trend for china going west and buying all things is only stoet continue, and that trend you could argue if you looked at every newspaper today there's a room on every sector in the world that the chinese group is looking to buy it and that trend we believe is going to continue pretty strongly. >> you had a high profile success rate with gia technologies? >> yes t is. >> this company was not a chinese state owned company, privately owned, yes, chinese company that came in, acquired a uk company and explain why this was so significant. >> thanks for that. i think the interesting thing about this and we believe this was the first of its kind is this was the first chinese non-government owned business that actually acquired a listed uk company, and the reason this is significant is that most of the, and all of the interests really that has come from china

over the last x, x, x years has been from government or government related state-owned enterprises going west. we at nsbo believe the new trend that is going to start to emerge is going to be non-government-owned businesses buying in the west. >> and in the uk they triggered and had to pass the major asset purchasing rule so basically there were hurdles that got this deal through one of its first of its kind you guys thoepd work on. do you expect this to trigger, to open the flood gates? >> yes, we strongly believe this will lead to a wave of acquisitions from china into different sectors in the west. >> i wonder, george, if we can bring george goncalves into the discussion. how are the asset flows do you think going to change the way that some of these currencies and rates products trade? >> for the last 15, 20 odd years where asia was accumulating all these assets, mostly in very safe assets like treasuries, one

of the things you'll notice and i agree with your guest that there's going to be a shift of capital more towards equity investments and long-term projects outside of china and infrastructure building even here in the u.s. probably will benefit from that. so i think that's still a long process, and on the margin we see that's going to take away support from very safe assets like treasuries. >> how much support, george? i suppose, how much support is in there from the asian buyer? >> well we've calculated in the last ten years that give or take depending on where you are in the cycle, the flow is coming out of asia was really qe0, they were the first central banks to buy in large size u.s. bonds and keeping rates depressed to the tune of 35 to as much as 100 basis points, almost 1% on the overall yield so any sort of

pullback and we've seen this for the last 18 months, no one's focused on the reduction in buying out of asia because europe and all the fight has been buying dollars and treasuries. any sort of stability in europe and if asia were to continue to shift its assets way from government bonds and up to capital structure, i think that that would, you know, over time push rates higher. >> and a finer point, there's a lot of negative stories about london's financial center but london may become one of the international trading centers, that's the big hope, what will that do? >> well, as a londoner, it's an olympic year, we sincerely hope that london does move forward in this area. the uk has been fantastic in the financial services area over the last 20, 30 years, we were the home of euro bonds, created a huge market in them, huge jobs,

huge tax revenues for the uk government, we created japanese warrants in the '90s, fantastic and in the 2000s the gdr market was created in the uk, the offshore rinne minuenminbi mark will become a massive job creator and earner for the uk economy, we have all the skills to pull it off, all the expertise, i believe the banks are very willing, i believe the government is working hard behind the scenes to make this a case here. >> does the libor fixing scandal make it harder? is that a dent or a blow to the city's reputation or prospects of bringing more activity here? >> i think makes no difference. in a few weeks' time, nobody will even be thinking about it. >> laurie pinto, ceo of nsbo telling us the chinese are coming, ross. >> yes, it's how they're coming is the details we're getting on. george sticks around. we've already had lots of experts talking this morning,

the u.s. a little higher, what you should be doing with investments. here's just a recap. >> brent is a low level, to me i don't think it should go as low as that, because obviously as oil prices ought to have come down, a significant amount of that marginal production is reduced, but i don't think that we have yet seen the bottom of brent. >> basically in spain actually six percentage of the spanish stocks in our data base are at 30-day highs, showing we're starting to see that improved sentiment. >> mid caps des mite the mrit coming in and carbon techs, we think some of the coal names are extremely attract iive, whitehan under potential takeover.

joining us for more strategy is the cio and head of investments at signia wealth. good morning. >> good morning. >> you're cautious. you say maybe to fade the rally that we've seen in the wake of europe, the european summit last week, so is now the time i guess to wait to step outside and wait for the next grand summit that may actually solve something? >> yes, and i think the summits are becoming more frequent as awe lewd. we've had a very good run, this run really could have been expected sort of from early may onwards, with this being this summit being the critical juncture where we get all the positive news out and that's pretty much out. >> were there significant steps, though, that were, was there significant progress made in this one at least? >> the significant progress would be mutualization of debt,

either through germany taking on the broader debt burden or the ecb stepping up and doing full-on qe. none of those two things have happened in this particular summit. >> do we get the full on qe later this week? >> very unlikely, and that i think is the point is that we've gotten to a point where european policymakers, the german electorate really sometimy what can be done in terms of further policy support from here. >> let's bring george in. we have the comment from the finnish government saying both they and the dutch government will block esm buying bonds in the secondary market. how significant is that? >> well, i mean, going back to what we were discussing earlier, we've had this incremental approach, the issue about sequencing. the biggest problem in europe and the news that just came out

clearly states is that actually implementing all these things is the hardest thing. you can talk all you want about the supported measures but if you can't get cohesion across the eurozone, it's all talk. that's been the biggest risk for europe is to come up with the great ideas and they're not even complete ideas as your guest is mentioning. we too rather see and finally do some sort of mutualization of the debt or do it through the back door through ecb but the problem with the incremental approaches looks like you're solving the problem taken further pushes away the real solution. >> here's the question for investors, we know where we stand right now the eurozone debt crisis. both of you just laid out the questions you need answering but the investors can now put that in the price, what is the thing we're unsure about? what is going to be the price changer then over the summer? >> well, i mean i think you need to see how severe the slowdown in germany and the north for europe really becomes, because

up until this point, people were looking towards northern europe to be the solution. now the problem is holding back from really giving the major leader in qe so i think just keeping an eye on how severe the slowdown becomes in europe and if it really starts to hurt and take away from the germans, that's really critical to me is just this denial factor they were going to be immune to the shrinking southern europe and now they're starting to slow down, they may come in because they need it themselves. >> it's also not just about bailing out banks, it's really about growth and the crisis has gotten so bad as we've seen in the data this morning it has affected growth. does europe need things to help turn around in the u.s.? >> europe definitely needs something of that order. the problem is i think with europe where we're probably going to have a recession this year and next. the actual broader issue is the emerging market and u.s. slowdown that we're also witnessing, so yes, you can

focus on the eurozone and the issues but the new information we're getting is that the move up we saw in economic data the start of the year has not followed through and that leads to a whole different other set of questions whereby we sort of ask that the eurozone issue -- >> if u.s. economy turned out better than you thought, would you be longer equities than you are? >> i think if china and the u.s. showed this economic data that was going to be better but let's not hold our hopes too high because issues such as the fiscal cliff the fact thatb bernanke has dissension on the board and how much more pushing can do you to generate growth and on the chinese front i think we see some stabilization in numbers but if you delve down and look at the new orders numbers as i'm sure you already know there's still a lot of weakness so i think, and actually on the emerging market side the currency weakness we're seeing together with agriculture prices going up over the summer

months may mean we do not get as much of a rate cut as expected. >> great point, gautam batra, thank you for your time. george goncalves with nomura with us there since the top of the hour, thank you very much to you as well. still to come on the program, marcus agius pays for the bank's involvement in the libor scandal with his job. is it enough to save ceo bob diamond? stick around. auto >

welcome back to worldwide exchange this morning. these are your headlines. germany's manufacturing sector shrinks at the fastest pace in three years in june. asian manufacturers stumbling, falling overseas demand drags on activity. the chairman of barclays pies pays for the libor scandal saying the buck stops with him for the devastating blow to the bank's reputation. nearly $10 billion in deals done this morning. bristol-myers agrees to buy drugmaker amylin. the libor fixing scandal claimed its first high profile scout, marcus agius resigned five days after the bank agreed to pay a record fine for

manipulating the interbank lending rate. there's plenty more to come. becky is out in london. we've had comments from the regulator the fsa. >> reporter: yes and the next question is whether this will be enough to save bob diamond, the fact that the chairman marcus agius has quit, on his way out. they're waiting for a successor so they can have a handover, but there has been a lot of pressure on bob diamond to go. barclays is the first high profile bank to admit to this libor manipulation and taken that fine as you mentioned. marcus agius saying the buck stops with him. lots of people are asking for more, they are already asking for more. prime minister cameron launched an independent review of libor and the processes around that. the opposition labor party in the uk want a full scale public inquiry into banking culture, this is only set to broaden out further and other financial

institutions that will be investigated next, we know that rbs, several traders in relation to the same kind of issues so we'll see how many institutions will be bound up in this and there's a possibility of criminal charges as well because they're also reviewing the case files to see if there's any breach of the fraud act which could bring criminal charges, just some way to go. i do note point to the diary wednesday, bob diamond will appear in front of the treasury select committee. back to you. >> becky, thanks. mcdermott saying this morning barclays is not an isolated libor case. will you hear more in due course. >> you can't fix a global rate by yourself. >> no. >> there are at least a dozen, two dozen participants in this market, barclays perhaps coming forward and giving them more information first is first out of the gate but there's going to be a lot more to come, easy target for politicians. i'll get off of my soap box. still to come after a dismal second quarter for stocks will

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if the miles aren't interesting? the lexus ct hybrid. this is the pursuit of perfection. gear up for the as we gear up for the top of the u.s. trading day, let's remind where we stand on futures, we saw more green across the board, paring the gains a bit, the dow up about 10 points and the nasdaq and s&p fighting to stay in the green. joining us is jack perugian out of chicago. what is your expectation as to how strong the risk on movement we saw on friday is and how long it will last? >> the kelly it was very significant. i think the action on thursday and friday late in the day on thursday and on friday was absolutely what i've been talking about. i said we were always one headline away from seeing the dow going up 400 points, 500

points, and all of that happening at the end of the last half of its fiscal year so we're breaking out as we enter the third quarter and let's see if it will have enough traction to pull in some of the buying. i have a feeling we might because of the shortened week, we might have to wait until the unemployment number on friday before we get a commitment of capital. what we saw happen in europe was significant. look as my partner in prague said it doesn't matter how fast the train is going as long as it stays on the tracks and that's exactly what we saw happen out of europe. >> jack, europe has confounded u.s. investors time and again with the way that it conducts policy and there's no guarantee as we get more headline this is morning about various nations that may try to block some of the moves we've heard that will be implemented so do you really think we're in here for a 400, 500 point move or is friday the exex of what we see? >> kelly, we already saw it, we were down 170 points on thursday and rallied back from that and

we saw the 270 on friday. all of that i equate to what was happening in europe, the european solution. what was happening with the finns and the dutch today basically exactly what the germans have been doing over the last couple of months, political posturing. more of a hey remember us. the other thing people aren't talking about are the 75 million people in eastern europe, you have countries there in the eu that can print their own currency. there are a lot of solutions in hand. it's a question of looking through the noise. one of the things we've been telling customers is failure is not an option so every time the market seems to break off of this news we look at it as a buying opportunity and valuation becomes very compelling and this last moving stocks with what was happening in europe tells you there is a floor based on valuation in equities. >> jack, it's ross. china, eurozone, uk, pmi is not great but on the whole better than the expectations. how does the ism manufacturing play in today? >> it doesn't. it plays very important.

we have to pay attention to it. we want to see some kind of a rounding bottom in some of these numbers especially with europe we'll see some improvement quickly because of the euro currency coming off against the dollar, look for the german numbers, look for the northern european numbers to come out a lot better. china is the big question mark. let's see if they can get back on track. remember 7.5% growth we might look at as wonderful. for them it's a slowdown. we want to see them get back on track. lot of that depends on how quickly orders from the eurozone start to flow back into the chinese books. >> jack borugianceo of bull and bear partners out of chicago. >> that's it for today's worldwide exchange. coming up next "squawk box." >> don't go anywhere and we'll be right back here tomorrow morning.

good morning. the buck stops with barclays chairman, or at least the pound does, marcus agius resigning in the wake of an interest rate price fixing scandal. watch out ben bernanke. china's economy showing more signs of slowing, a key measure of factory activity hits a seven-month low and wall street gears up for the nation's birthday but the real fireworks may come on friday with the jobs report, it's monday, july 2nd, 2012, and "squawk box" begins right noug. now. ♪ >> he's back, monday morning, good morning, welcome to "squawk box" here on cnbc. i'm michelle ka rue seeab