. welcome to "worldwide exchange" this morning. i'm kelly evans. >> i'm karen cho. these are your headlines around the world. glencore stuns the world. china securities general says nearly $116 billion worth of projects this week alone. mario draghi's bond buying plan. the spain and italy's prime

ministers say they'll refuse whether they'll request a full bailout. the reaction the ecb move has put the focus squarely on eurozone politicians and we'll be joined by the cos of eli lilly. and eni. in is the sentiment across the european markets. buying on the back end of monti's speech yesterday. you may notice some of these big names at top, many french names at the top of the chart but some of the italians like bnp, iconic lender which has been in trouble of late but getting a bump

today. if we move on to some of the individual markets, you can see the extent of the gains. the ftse looking tainted, so far up just a fraction. xetra dax adding 0.5%. the cac putting another 0.8% on the boards. it is some of these peripheries that really spiked after mario monti adetailed the buy back yesterday. let's take a look at bond markets. fair bit of yield, but let's start out with safe haven trade. german bund rising as we see the gap closing. the ten-year at 5.74%. yes, that's not a mistake. it is below that 6% handle. we're seeing a huge move lower

on that yield. on the italian, 5.08%. significant contraction. also at the ten-year u.s. treasury as we come up to key data points out of the u.s. later today. u.s. nonfarm payrolls number, very important for the market to see this number as we sit on the sidelines waiting to see if there will be qe3 this month. 1.7% so far. forex, euro/dollar is firm. don't forget we have just above 1.26 yesterday after monti's news. and the australian/dollar touched lows but is back on the mark now as we've seen the risk appetite back in the markets.

sterling/dollar getting a bounce. let's get to stories out of asia because of news of an infrastructu infrastructure. >> asian markets staged a resounding rally on ecb as bond buying program. shanghai led them higher by 3.7%. infrastructure stocks surgeri s. brokerages soared on reports regulators are planning to reform the current stock dividend tax scheme. strong gains in blue chips sent the hang seng higher by 3%. the nikkei marked best showing in about five months, helped by industrials and financials.

nomura rose 5.4% as investors reacted to the new $1 billion cost saving plan. seoul shares had the best day in six weeks. ship builders rallied 5%. samsung gained 4.5%. aussie market recovered from one-month lows led by gains in miners but those gains were cut by weakness in banks. lastly, sensex higher by 1.7% at the moment. joining us in studio is kathleen brooks, research director at forex.com. before we get her reaction, we want to get out to ross in lake como, italy. tell us what you're over there for.

>> we the amazeti forum, used to be italian industrials but mario monti is coming, we've had ecb politicians, last year mr. trichet, and business leaders and a big boost for the european economies and done in this most delightful setting on lake como. i'm upset my two favorite anchors are in london and i'm not but maybe we should get you guys to come here. >> i believe you that you're upset not to be here, ross. it looks beautiful behind you. >> it is a beautiful spot. there's been a lot of discussion about what's happened with the ecb as we look ahead to the jobs number as well. it's interesting first thing this morning i spoke to roubini

and people have talked about the conditionality the ecb is placing and he didn't think it was so bad. >> until now, spain was playing a game of chicken with the ecb saying, what are you offering? what ecb is offering is quite generous. >> and, of course, his view now what the ecb has done is put the ball squarely in the camp of the politicians to get on with it. this is what jacob frankel said about their task. >> although the actions and statements of the european central bank have been extremely important in alleviating the concern that if governments do their job, the ecb will make sure there's enough liquidity that those governments will do their job. what's important to understand is the ecb is not just going to pour money, it is all conditional on governments doing

their stuff. >> for what it's worth, there is a view now that spain will be -- will be in some program, according to nouriel roubini. what does that leavittly? editor of class cnbc, our wonderful affiliate in this country. look, what is the reaction of the italian government and the politicians to where they're at now? >> ross, monti couldn't hide his satisfaction after the ecb move. he said this is a key step forward for italy. actually, he's been campaigning for a big fire wall since the beginning of his office. he's been campaigning in europe, with merkel, with hollande, back to mario draghi moves. now the problem is the spread will probably be likely to slow down. we have a spread which is more importantly financial which is a

spread in productivity. there's a lot to do now and this is on his field now and his cabinet has a lot to do with that. >> we have an election coming up taken up by the middle of april, end of april? >> yeah, yeah, there's a discussion under way even on the date of the election. now, basically what the country is asking how long the technical government will go on and when politics will step back. the market has been questioning monti since beginning of his office. what's next after you, professor monti? what's going to happen when the politician, the old style politician will get back? this is what monti is concerned about. basically, also the center left and center right are in a complete mess. just a few months before the election. there's no clear leadership in the center left where the old guard is sieged by the new leaders. they're pushing to come over. the lack of berlusconi in the center right has left -- >> what will have been achieved -- by the time we get

there, all the talk of reforms, everybody came out and said when mario was on the road, italy has done wonderful thing with reform, what has this technocrat government achieved? >> terms of the consolidation of the fiscal balance, they did pretty good job in terms of the balance the budget, which is now a law in the constitution, and even considering the slowdown effect on the numbers. the government guaranteed in 2013 italy will hit the targets. some pieces of the reform they did, specifically the job market reform, is really biased. it's starting to show some effects but the business side is saying, this will take out more jobs than will create new jobs. >> are people -- they have to pay taxes, right? >> right. >> this is a political hot potato. are people willing to pay taxes whilst they see it as a

political system that is underperforming? >> for sure, no more taxes. tax level in italy is the highest -- >> it's tax collection, i'm talking about. >> right. no, no, no but if you look at revenues on the fiscal side, they're doing pretty good. even though the economy is slowing down on this side, the italian are paying a lot and a lot and a lot. you see the effect is the economy shrinking more and more rapidly. >> it is quite strange to be sitting here in this most beautiful spot and talk about a struggling italian economy. you know, you have to -- we're lucky to be here, i think. >> sure. >> when you look at the economic realities, kelly. >> speaking of economic realities let's bring kathleen brooks into this discussion. when we look at -- they're just talking about italy. if you look at, for example, italian bond markets, you have the ten-year trading practically just above 5%, we may go below that 5% in an extraordinary rally. do you expect this sharp risk-on move to continue?

>> i think it could for the medium turn. the markets wanted this big plan, just a plan from the ecb. they haven't done anything, they haven't triggered bond purchases. it's like, this is enough now. just to even have it in place without triggering it seem to be enough because we have italian bond yields fall and spanish bond yield fall. i think the risk is maybe investors will, later in the year, if it doesn't get triggered and bond yields keep going down. we know they have slipped throughout most of this year in the 2012 deficit targets are unlikely to be met. that's when there could be problems in the bond market. >> you see an inflexion point at some level. if you look at the month the yields have come off, it's been significant. there's no reason at this point for italy or spain to tap the facility that draghi has come up with yesterday. >> absolutely. this move is based on sentiment. it's not based on hard data. what we know is spain still has -- has a huge bond redemption next month.

still has an awful lot of debt to sell by the end of this year italy's gross is declining at a rapid pace and it's likely both countries will miss deficit targets. if they go back to concentrating on fundamentals maybe this rally is a little risk. not now. >> clearly not today. we'll see what happens in the weeks ahead. where do you think this leaves the you're sfloe. >> it's been more interesting. we've seen a big move in the bond markets than in the euro itself but i think it's quite constructive. i'm not saying we're going above 130 any time soon. i wouldn't look for that. but i think it clears us -- keeps us well away from the 120 or 2010 lows. i think that the sentiment is good, the credit risk has been removed right now. the fundamental data is still very, very weak. the ecb staff rejections has to come into it at some point as well. they are incredibly week for this week and next and higher

inflation. >> when you have the stronger currency, when you have the euro doing better on this resolution, yes, it's great for spain and italy with lower borrowing costs but a lower currency would help them. >> it's a challenge. >> exactly. look at what the ecb is doing, what the banks did yesterday. they're considering their currency. the ecb doesn't seem to be. >> the big stick, this is something mario draghi was key to point out, there's a second leg, the conditionality that exists with this program. at what point do you think we're going to see these economies -- we're talking about italy, ross on the ground, do you think italy, spain are going to stick to the conditionality around this program if they ask for a bailout? >> i think sometimes the targets seem to be plucked out of thin air. they aren't necessarily going to happen because if you've got contracting growth and tax revenues are going to be much lower, and you can't predict that with any degree of accuracy, as we've seen in places like spain, you know,

who's already missed deficit targets and already have had to adjust them. putting more ownerous putting conditions on them doesn't mean they'll work or they'll be met. >> we've had draghi and the august u.s. jobs report will be out at 8:30 eastern with hopes rising data will be better than expected. the optimism comes after the adp report shows 125,000. weekly jobless claims fell and the ism service index rose in august. the unemployment rate is expected to remain at 8.3%. unemployment has been above 8% for 42 months.

this data point, timely we get some -- what if the number today is stronger than expected? where does it leave those hoping for qe3? >> i think it's going to be quite important. payrolls is one thing but the fed and of course the government in the u.s. are concentrating on the unemployment rate. it is at that critical point, well above 8%. that's the key thing. even if we get one month of a 200k reading, i think it probably does reduce the risk of a -- of qe next week -- >> based on the fact that we're going to see some form of stimulus by a central bank, could what we see from the payrolls number destroy the bernanke spin? >> it could erode it. we need to see if the fmoc acts preechtively. they say they've seen signs of

the economy picking up but they say the economy isn't strong enough to withstand external threat. it's going to be a tough call. bernanke's credibility is on the line because he did point to more qe in the next couple of months. time is running out before the election. >> ross, did you want to get in here? >> i was just going to -- it's interesting. nouriel said earlier today that he thought if the data was okay today, the fed would stand pat. they may go towards the end of the year. how does the dollar trade through that? >> i mean, you know, it will probably be volatile. but we think gains will be capped because as long as they keep that kind of strong, you know, dovish rhetoric in play, then the markets don't fight the fed. that does cap the gains in the dollar, we believe, for the rest of the year but probably short-term volatility for sure.

>> kathleen brooks, research director at forex.com is going to stay with us snoop germany is dragging heels over proposed banking union. the chair of the parliament will be here after the break to get into the nitty gritty with us. bob... oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners.

welcome back to the program. mario draghi says the ecb is ready to buy sovereign debt only if governments apply for a full bailout or precautionary credit line from eu bailout fund. was raised on this very program. we were talking with esfs president thomas visor and barclays chief economist. >> if that's right there will be less skin in the game f you like, for the euro group and then the ecb would are to do all the heavy lifting in terms of the actual debt purchases. if you're the ecb in that situation, you'll be a bit more restrained about what you might want to do because you're not getting that equal commitment coming in from the euro group.

so, i thought that was quite interesting and lead me to the conclusion that, again, we shouldn't get too optimistic about the outcome of the developments. >> so, given julian callow's comments we brought him back on the program to comment on what the ecb did yesterday. first of all, he had local and thank you for coming back. on tuesday you seemed cautious about the implications of this type of scheme. we've seen the reaction in markets. are the details here more encouraging than, perhaps, thomas visor had indicated? >> yes, i think what encourages me, and perhaps what the markets were picking up on yesterday and today, is that there did seem to be a strong level of commitment being expressed by mr. draghi on behalf of the governing counsel. in a way it wasn't more than that and i think mr. draghi did really lay out a plan, which does sound like it would be very

powerful potentially. provided, of course, that the countries that would be getting the benefit would be part of that program, so-called precautionary program here, which would be involving the conditionality and would be involving the imf. so, i think we have a lot more clarity here. i think there were other points as well that were very useful, that emerged out of yesterday's press conference. in particular, the idea that ireland and portugal could actually be part of the ecb purchasing, and that would definitely assist their way of getting back to market access. that's an important issue for the financial markets. i think as well it was fairly clear that the governing counsel was not trying to get some form of seniority for this new purchase program. that, again, is very important because i think investors have been very concerned that ultimately the ecb might find it difficult to avoid being seen to

be in some form of senior status for the purchases it makes. so, i think the level of commitment, the general tone of the press conference, always very important. now, concerning the specific point about what the esfs and esm actually do, and what happens next, that is still uncertain, frankly. a lot really is going to hinge upon what spain is going to be asking for here. in the case of spain, it's actually a lot more complicated because the central government has to negotiate with regions that have a lot of autonomy. and a lot of issues are there with regional finances. it remains to be seen how commitmented spain is going to be. ultimately we might have to push back a little our expectation for when spain will be actually formally requesting the assistance -- >> certainly some dots to draw in the meantime but if we look at one explicit threats in the commentary yesterday, and this was the termination for noncompliance of the program, and this was an interesting

point, isn't it, that the hand that gives could take away just as swiftly. do you think the ecb would have that flexibility, that it could bail out bond markets or potentially sell some of those bonds to have the impact that it says it would? >> okay. there are two issues fif i may. the word was suspend not actually sell. i think that's very important. to us, that is very similar to really the nature of an imf program. if the program is deviating it will suspend lending but it won't call back the lending it's done and it could be analogous. that's not as bad as saying the ecb might start selling the debt. but the other point is really what you're talking about the moral hazard here which is i think is very critical. for me, this is why the imf

should be involved in the process. i think you need a very strong external objective arbitrator here to say, look, this isn't working. we have to do something different. i don't yet see that you quite have the conditions in place really that would be satisfying me if i was from germany on that particular score. i think the imf has a very important role to play in that. because if the program isn't working, which is essentially a european program, i.e., the euro group, esf, esm buying debt at the longer end, ecb buying debt at the shorter end, but the program goes off the track, the next step is you have to get the imf involved. that's a tricky call to make because they have seniority. >> of course. it's kathleen here. i'm just wondering what you think about this issue of conditionality and the fact you need to apply for either a sovereign bailout or this credit line. what are the differences between potential conditionality, then? and could it turn into a

diplomatic nightmare if you have spain going for the full bailout and harsh bailout and italy going for something a bit less? >> yes. these are the kind of technical issues that people are going to be still focusing on. i mean, one thing is, of course, the whole political sequencing i alluded to earlier. in terms of the technical issue, we were getting quite a lot of questions from investors yesterday. they were saying, well, what is this eccl? it was the first time we had heard that acronym. which is the enhanced conditions credit line, which is part of a precautionary program that the euro group would set up to be able to use. the esf and esm funds to be able to potentially buy the debt either in the primary or the secondary market. and, you know, all of that isn't really very well spelled out at the moment. it's not so clear, i think, to investors exactly how much would be put up there by the euro area governments. in other words, what i referred

to previously, the so-called, having skin in the game here, which i think is very important to make it work because otherwise the ecb is left with all the heavy lifting if there isn't a significant financial commitment. the esm does need to be very much involved. now, in terms of exactly how it's involved, is it going to buy the purchases or is it some form of credit line? also, what role does the imf have? the imf could be issuing a credit line under these circumstances. but we don't know about that. it would certainly help, i think, if that were available. so, there's a lot of detail that really the euro group does need to specify inspect. >> it did seem to be a fairly detailed statement but still a lot of question marks on what was announced. thank you very much. >> thank you. >> julian, thanks for coming back to finish that discussion. kathleen brooks here on set with us as well. we appreciate your thoughts. want to get out now to ross,

who's not here. he's at the ambersitti convention at lake como. what's coming up? >> we'll be joined by the co of eni and the ceo or eli lilly.

welcome back to the program. glencore taking the market by surprise delaying shareholder vote on xstrata merger saying there were developments overnight. reports of big infrastructure spending. china says nearly $160 billion of projects were green lighted this week alone. global markets getting a boost from mario draghi's bond buying program. spain and italy's prime ministers still refuse to say whether they'll request a full bailout. focus in the u.s. today turns from politics to the economy. the august jobs report is expected to show modest growth but employment has been holding 8% for the 42nd straight month.

there is nothing modest about britain's latest manufacturing report. manufacturing output rose 3.2% on the month in july here in the uk. that was the strongest monthly rise, get this, in ten years. now, it follows a revised june figure that was lower than originally -- i'm sorry, second quarter figure that was lower than originally expected broadly. industrial production overall weaker than just those july figures would indicate. the three-month output is running up 0.2. just to reiterate because we're seeing reaction in markets there. the july month-to-month rise in industrial output, 2.9%. manufacturing output, 3.2%. that was the strongest monthly gain in ten years. >> and the reference point here in terms of the monthly rise,

right back to february 1987 was the last time it saw this strength in that period alone. >> remarkable. so, again, in the broader context, not quite as exciting as you might otherwise think but i'm sure we'll get a little more color on that report as people continue to dig through the numbers. you can take a look at uk curve and take a look at european markets to see if they have moved on the back of this. of course, it's been a strong session for stocks overnight, starting in asia with the shanghai compositeupping. xetra dax up 0.8%. ftse in the red, barely down, just fractionally and we'll see if people shrug off the manufacturing figures or decide if there's more to make about them. let's move on the bond markets because after draghi's speech yesterday we saw a significant move on bond markets across the curve. the twos, fives, tens. there's been a lift in the

ten-year german bund. the gap has been closed with periphery. take a look at spanish, 5.78% on the ten-year so below that 6% handle. it was only a couple months we were up around the 7% mark. it's had a significant impact on markets. the ten-year italian 5.14%. and gilt 1.77%. the short end has seen a couple of basis points move. the two-year, for instance, down 15 basis points this morning. >> let's get straight back out to now ross westgate in lake como who has something special for us. hey, ross. >> yeah, look, the focus as we've talked about squarely going to be on political leadership. the ecb has done what it thinks it can. where does that leave political classes, not only in the eurozone but also in the united states. the global issue has been a subject john has been involved, the ceo of eli lilly.

nice to see you. let's see this issue of leadership. clerly the onus with central banks doing as much as they can in terms of turning around the global economy. the emphasis is very much on a political class in europe that is fighting its own corners, and in a clearly divided political class in the united states. can't we achieve this sort of leadership the world needs economically? >> we're in a tough situations that's been years in the making and i think it will be years to work our way out of it. there's an old saying as elected democracies we get the leaders we deserve. different views on our leaders reflect a certain divisiveness on leaders. some of the comment i made here yesterday of the position i would take, and i think we

should be looking toward from the perspective of anyone who runs a company is leadership that takes a long-term view when temptations are otherwise to deal only with the short term. and leadership insofar as possible in this time of turbulence can provide certainty, whether that certainty is around taxation, around regulation. the sorts of things that businesses look at as they make decisions to make investments. of course, businesses around the world are sitting on a lot of cash. >> they are. so what leadership can companies show, business leaders show, and start investing that cash or are those high cash balances, is that now just the new normal where companies will sit with high cash balances? >> i think it reflects a couple of things. i think many enterprises, whether they're banks or other kinds of commercial enterprises say having that cash reserve is

a good thing, if we see another cataclysmic event like 2008. there's a certain bit of defensiveness at play. and also a bit of hesitation, how is the world going to involve, where are global economies going. that uncertainty itself, i think, keeps many people in many cases from taking the risks that are always part of making these investments in the future. >> let's talk about the united states briefly. what result is best for eli lilly? >> i think, first of all, lilly and our industry have not tried to play partisan politics. we have a set of principles that are important for fostering medical innovation. we have articulated those principles clearly to people in both parties, even in the midst of divisive government. one might say in the u.s. in the last several years we've seen renewal of prescription drug user fee act, which is essential to interact with the fda.

patent with unanimous votes in the house and senate. we continue to push forward new medicines and new medical advances regardless of who's in the white house or who sits in congress. >> what's clear, governments around the world -- japan's a big case. do you a lot of business in japan. they are going to make it easier for challenges -- or making it easier for nonpatented drugs to get into the marketplace. so, where is that -- that provides a bigger challenge. for companies to generate drugs and make money out of them and get consumers to get drugs cheaply? >> we've had a patent system for hundreds of years and intellectual property protection is essential for our industry. no in fact,. >> there's an eagerness nor

governments to get more competition than before. >> yes. i think bio similars legislation part of the health care reform act that passed in 2009 is an example of this. it establishes in the u.s. a clear pathway for generics to enter with what are called follow-on biologics. more and more new medicines are biologics. part of the deal is the innovator companies that discover these in the first place get 12 years of protection. this is independent of the patent system. we think that's a good balance. it will encourage innovation but it will get consumers lower price generic biologic sooner and more predictablpredictably. >> is it harder for new pharma companies to get the drugs they need? you've decided not to push ahead with your alzheimer drug because it wasn't working out but is it harder for the industry to come up with drugs that will be

successful enough for the size of the companies you are? >> with our alzheimer's drug we've made no firm decision. we've said that's going be following disclosure of the data in october at two scientific meetings, including one here in europe, and discussions with regulators. while we missed our primary end points on those two studies we also saw interesting data in secondary analysis. the industry has suffered from productivity challenge. that's very clear today when we're losing in the next several years the industry $150 billion in sales from branded medicines that are becoming generic. we have a challenge to replace those with new medicines. there's been a bit of a lag in the last decade. as i said here in my speech yesterday, i'm actually very optimistic about the future because i believe we're catching up with the science. there's always a lag between, say, the decoding of the human

genome and when medicines finally arrive from that. and i see progress in our labs and i think across the industry bringing forward new medicines that are going to be more and more tailored, in other words, more personalized in terms of actually matching your specific genetics, in some cases, and will allow physicians to be much mortar getted in how they prescribe those medicines. very exciting. >> very nice to talk to you especially in a beautiful setting. karen and kelly, the kks, back to you. >> thank you for that. karen? >> well, glencore commodities has postponed shareholder meeting due to faltering $34 billion takeover bid of miner xstrata. let's get out to zurich where there's been very last minute revelations. talk us through this and whether the deal will see the light of day now.

>> well, very hard to say, but let me walk you through what happened this morning. around 9:00 glencore's chairman told shareholders gathered just outside of zurich there's not going to be any vote on that $34 billion merger today. that's because there are new developments overnight. that suggests that the deal had been back on. remember, this deal had been on the cards for the last four to five years. many say it's the reason glencore went public last year but it was in jeopardy because xstrata was in hold. glencore put out a statement asking for temporary hold of shares saying it's considering its options. it hints a 11th hour deal been struck. the sticking point was always --

under current terms glen core is offering 2.8 shares but qatara wanted it to be raised and as of last night glencore was against sweetening the deal but it seems there's been some form of agreement but for now it's just a waiting game. >> thank you for that. it was interesting, front page of "ft" talking about the major deals just falling over in the last decade. the rio tinto/billiton that didn't go through. a whole bunch of them. >> this is so important. if you look at european deal-making, this is significant and if it weren't for those successfully in the deal it would be even more crickets. it's an important deal not just for the commodity sector but for a lot of banks and other investors who have been playing this deal from the get go.

>> the type of investments is people buy them for the long term. there's so much vested interest to get the right price out of it if you are going to be selling into some sort of m&a structure. there's just a lot of, i guess, paint-up interest in these stocks which makes it so difficult when shareholder activism comes into play. dignitaries are arriving in russia for apex summit. so far president vladimir putin is making clear he wants to use the platform to sell his country as a potential far east investment country. >> we've spoken to a number of senior executives at leading russian companies. all of them are aeager to attract foreign capital but many say economic reform has to come in tandem if they are to attract more foreign capital. here's what the head of vtp bank

said. >> the not the quality of loan books. i think the main problem is the access to capital market because developing further and also you should take into account there's stricter regulation as a part of the central bank. russian banks will require new capital, if not now, in 12 months' time, and markets are still closed. there's no access to ipos or europe, asia or america. >> hundreds of ceos are here to kick off the ceo summit which takes place in tandem with the apec. there's a lot of headwinds. output among the 21 member nakz of apec constitutes more than 50% of global output. a lot of that hinges on the fate of china.

there has been some talk about the depth of the slowdown in economic activity in china. we talked to caterpillar and here's what he had to say about the recovery prospects for china's economy. >> i think everybody's waiting for maybe some direct action by the chinese government. in the fourth quarter of this year, i don't think we should be surprised maybe to see the chinese government take some direct steps to simulate investment in infrastructure. >> many heads of state have started to arrive here. hillary clinton will be heading the delegation in lieu of barack obama. i think a lot of the discussion and focus will be on some of the bilateral meetings, especially with the simmering tensions within the region about territorial issues and, of course, syria. we're gearing up for a big weekend here as apec summit kicks off here this weekend. back toy.

>> covering all of that. we're already seeing some commentary from putin. in fact, i think even the provisional statement coming out of that meeting. in any case, still to come on the program this morning, will china's reported $160 billion infrastructure spending spree help revif the mainland steel industry? bob... oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners.

it's the first friday of the month and you know what that means. the all-important u.s. payrolls report is due later today. that's 8:30 a.m. eastern. about 1:30 in the afternoon in london. the consensus is looking for a gain of 125,000 jobs added in august. we want to know what you think the number will be. some private economists are inching their own forecast up after stronger than expected payrolls data throughout the week. you can get involved by e-mailing us here at worldwide @cnbc.com or tweet us @cnbcwex. there's hope china's economy may see a boost in the fourth

quarter after beijing agreed to $160 billion infrastructure projects, or 2.1% of the economy. local media says china plans to use the money on new highways, airports and runways. china's economy surged. you can see some key ones on the boards, up 10%. china's key august data is due out this weekend and expected to show just how badly the mainland's economy needs a strong shot in the arm. on monday, trade figures are likely to show sharp drops in chinese import as coal or iron ore slows. they say china's steel industry is in trouble. joining us, susan smith, analytical manager of corporate ratings at standard & poor's. these projects out of china, particularly interesting because many people have not expected china to return to the 2008 stimulus where effectively

building bridges and roads, some people thought were going to nowhere, perhaps down the track in ten years time they might be populated but many white elephant projects. this time as you look at the pace of projects approved this week, do you have any concerns? >> if you're looking at the steel industry, any increases in the infrastructure would be a plus for steel industry. we issued a report this week discussing the difficulties we see the steel industry facing over the next year or so. we think those are pretty serious problems. i think the improvement in infrastructure, steel is used widely in infrastructure. so, it's one of the biggest uses of steel. so, if there's going to be an increase in infrastructure, that's good for the steel industry. your issue about whether it's good for overall investment and

if the investments are made wisely, that's really a different question. >> what does this mean for the cycle, though? because what's been of note for markets is an extraordinary drop we've seen in iron ore prices based on the story. do you think the projects announced this week will be strong enough to arrest that decline? >> i think market sentiment will be positive so there will probably be improvement in the price of iron ore and coal because those commodities have dropped so rapidly and they're probably at spot prices that don't necessarily reflect the fundamental supply and demand. so, any good news from the market probably will raise those prices. but over the medium term, i think those prices will reflect the reduced demand we expect to

see for steel in china. iron ore prices may come back, but may not come back to the highs that they were trading at last year or even earlier this year. >> is there any differentiation within the sector? are there companies who are more exposed, perhaps, to the positives of this announcement than others? >> well, the sector as a whole in china is really fragmented and not much product differentiation. but that being said, some of the larger companies, like bao steel would probably benefit a little more from this announcement. but infrastructure, you know, uses a lot of commodity steel products. it should benefit, you know, steel producers across the board if they're engaged in getting orders for any of these new projects. >> there has been an argument some of the smaller players in

china are in trouble because with the demand falling away and cost of production, there's a mismatch and he had can't compete with major players in china. do you also share that view? >> well, there is a cost curve in terms of, you know, the cost of production with certain producers being higher cost than others. i'm not sure size alone, you know, would represent whether they're producing at cash cost. certainly, the large blast furnaces are going to be the most efficient. and the newer ones would be more efficient. it also depends on how much operating -- how much leverage a company has and how much debt they have and, so it's not necessarily the case that the smaller companies are always in worse shape. but generally speaking, the larger companies will be more efficient from an operational point of view. >> thank you for joining us. analytical manager of corporate

ratings standard & poor's. you have flashes crossing from france. >> we're seeing comments from francois hollande saying he's expected to cut state spending and 10 billion euros will be cut from that 2013 budget. lots of movement on the political front there. but let's get out to italy, neighboring italy there with ross westgate. >> kelly, plenty more to come from the ambersetti. yesterday we got chunky upgrade from the ecb. when you look at that, the slowdown in china, it's interesting brent is still at $114 a barrel. when we come back, we'll be joined by the ceo ready to talk about the global market and plenty more.

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welcome back to wou w"world exchange." i'm kelly evans. >> i'm karen cho. the focus today in the u.s. turns from politics to the economy. the august jobs report is expected to show modest growth but unemployment is seen above 8% for the 42nd straight month. global markets get a boost from mario draghi's bond buying plan but spain and italy's prime ministers refuse to say whether they'll request a full bailout. glenncore delaying the vote on xstrata merger saying there

were developments overnight. from lake como in italy, plenty of reaction to the ecb's move. where does that leavittly? we'll get the views of the chairman of eni. before we get to all of that, let's check in on markets. u.s. markets in particular yesterday had quite a rally. we saw the dow, the s&p and the nasdaq all hitting multiyear highs. dow jones at its highest since 2007. the s&p 2008 and nasdaq at its highest since november 2000. today we're seeing green across the board as they look to add on to the gains. nasdaq looking to add three or four, the s&p 500, trying to stay in the green. following strong gains in asia session overnight.

you can take a look at cnbc ftse global 300. shanghai composite in particular. net-net up 0.4%. the tone across europe has been more muted. you can take a look at major vorcis. ftse has been the underperformer. high other morning, just a little by 0.02%. stronger, the xetra dax up 0.8. >> the tlucenthusiasm for dragh plan is taking place in the bond markets. the bund has been down and the ten-year spanish yield now below that 6% handle. the 7% level is what was irritating markets at the start of the year. you can see the enormous attraction draghi has had on markets. the yield in the italian still

above 5% but come back quite significantly, 5.16%. solid moves at the fives and twos. don't forget the ecb launched this framework to target the short end of the curve which is why we're seeing a turn back to there. the ten-year u.s. treasury yield as we get set up for u.s. nonfarm payroll, if that is low it might leave it on the sidelines for qe3. let's take a look at some trades out there on the forex market. euro/dollar has seen flux of money into it. this extends the immediate gains we saw on the back of draghi's comments yesterday when the handle was 1.26. dollar/yen, support for dollar. the australian/dollar getting a bounce as risk currency normally does in situations when we do see some appetite on the charts,

0.5%. and sterling rallying by 0.25%. let's see how asian markets have been tracking because they're getting a solid run. china newing helping out, latest infrastructure projects approved this week but setting up for key chinese data as well. >> asian markets clocking strong gains on europe optimism and chinese pro-growth moves. china reportedly approved as much as $160 billion worth of infrastructure projects during the past two days to stimulate the economy. we also saw broad-based gains among financials, miners and industrials. strong gains in mainland blue chips sent the hang seng higher. the nikkei marked its best

showing in five months helped by industrials and financials. nomura rose 4.5% as investors reacted to the new $1 billion cost saving plan. seoul shares had their best day in six week. europe sensitive ship builders rallied 5%. samsung rallied despite apple reported they will be cutting down on samsung chips in the new i phones. gains were more moderate, gains in miners were capped by weakness in banks. sensex now higher by almost 2%. back to you. >> thanks very much for that. following one of the major stories of the day, xstrata says the starting of the meeting has been delayed for five to ten minutes. not a huge delay all things considered. company shares up 5.5%, after glencore cited overnight developments and glencore shares down. the meeting of that shareholder

meeting, of course, has been temporarily suspended. this is the start of the xstrata court meeting by five or ten minutes. two different meetings. that's oil and metals. what about oil and gas? ross westgate is at lake como, extremely jealous but we hear you've brought us good things. >> yeah. you should be jealous. it's a beautiful spot. it would be nice if you were here as well. in fact, next year both of us doing the show from here. is that -- i'm looking at my producer. he's giving it the nod so i think we're on for that. plenty of focus and reaction, of course, to the ecb here at ambrosetti forum. ecb had chunky downgrades to economic forecast for the eurozone. now minus 0.6 to minus 0.2 according to them. when you look at that growth

figure, you look at chinese data, the pmis have been weaker and a u.s. economy chugging below 2%. i think it's amazing that brent is trading today with $114 a barrel mark. what's that all about? joining us now is the chairman of the global energy company eni. thank you for joining us. how much political premium is in the oil price, in the energy price? extraordinary levels when you bear in mind the level of economic activictivitactivity. >> trying to give an estimate of one price in the past, we've missed it, so it's very difficult to do. we know oil priceses comes out of a combination of factors. the problem is you never know which weights more against the other. so, today despite an economic prices the oil price is going back up because market is looking as restart of the economy or probably because they feel the political tension are

picking up again. definitely i would say that the hydrocarbons in general include oil and gas are under huge transformation. so, the big question for the indices, what gas will do in the next year. so we see a huge between west and east, and a factor of seven or more between u.s. and japan. so easy estimate that sooner or later they'll reach equity again, realigning to some average but nobody knows where it will be. >> on the oil equation, are we getting tightness of supply? i'm just worried if the global economy does rebound to the stronger part of regrowth, where the oil prices might go then, because u schsaudi is pumping a capacity, and i suppose most countries are.

>> the question around peek oil, are we reaching capacity of the world or not? i mean, the answer to this is that every some years there's a technological discovery which is increasing reserves of the world. now the technology brings us to deep exploration to 3,000 meters down and the arctic sea, drives us to shell gas. usually a question you can answer on a forecast longer than a quarter of a year. so, that's what we're seeing. it's kind of surprising to us as well. some weeks ago everybody would have thought the oil price was going down. >> let's talk about italy. amborsetti was started as an italian forum. mr. nouriel roubini said italy

may not have to go into oil resistance program but here we are with spain. technocrat government being formed but an election due by april, or some point they have to agree on an election date. where is italy right now? where does it leave this country with sort of the political uncertainty and trying to initiate what a quite dramatic reforms? >> you know, election is part of a worldwide issue. we had election in france. we had election in greece before. we're having election in u.s. italy will come next. you have germany and all the other countries that follow suit. so, this is a natural milestone which is mixed around the world. so every six months you have a crucial country going to electric. what italy is concerning -- about italy what it means would italy be able to continue on the path which has been designed by the current government.

what i think has happened with the action of the current government, they really showed a line. they showed a value into rigor, into austerity because italians took austerity, i would say in a good way, but without rejecting it too much. everybody knew the pension reform had to be done. everybody knew labor reform had to be done. everybody knows more general spending had to be done. doesn't matter -- >> we're having a little problem with the line. when you see ross in that setting and talk about oil prices is how you get to lake como is by sports car because you need a low to the ground car. i see ross had that tuff of hair so i'm thinking sports car, open top, taking the scenery to lake

como. >> ross has been doing traffic work out there. vladimir putin has warned economic problems still pose a threat to a global rebound. speaking ahead of the asia-pacific summit this weekend, putin says the crisis is still not behind us. the recovery is being held back by high debt and volatility and he says russia will consolidate and strengthen its banks. germany is draggings its heels over proposed eu banking union. we'll be here after the break. bob...

oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners.

welcome back to the program this morning. these are your headline. the focus in the u.s. today turns from politics to the economy. the august jobs report is seen showing modest growth. global markets get a boost from mario draghi's bond buying plan. glencore takes the market by surprise, delaying shareholder vote on xstrata merger. while the ecb's decision yesterday has pushed italian and

spanish bond yield down. one proposal to be announced next week by eu commission will outline a plan for a more integrated banking union. joining us, sharon bowles. thanks for stopping by. >> hello. >> first, your thoughts on what we heard from the ecb yesterday and how this plays into the future of the eurozone. >> well, i think we're in a better place if the ecb is viewed by the markets as equivalent to the federal reserve in the u.s. so that betting against it is a bad thing if that attitude could prevail in the markets i think we'd be in a much more comfortable place. >> and how does the banking union fit into that? do you think this is a necessary and required move to move towards further federalization? >> well, i think so, because if you're going to have an ecb that is playing the role of federal reserve, to coin a phrase, then you do need to have more

integration. and that is why people are still calling for greater fiscal union, the banking union was seen as another step on the way. and a way to try and sever some of the linkages between the weaker sovereigns and their banking system, which was not necessarily weak. there wasn't anything wrong with, say, the italian banking system. it's just that it's stashed up with italian debt that causes its problems. >> the way you conquer problems, and this is something you'll be talking about next week, whether the ecb should have mandate to supervise or banks across the eurozone, big banks as well as small banks. the german government wants this to be a smaller mandate. if we look at what the ecb has to do after yesterday, it's a big task. can the ecb feesably manage and supervise all banks across the board? >> i don't think the ecb will become hands-on supervisor. that's still going to be done by

supervisors on the ground in some kind of federation. the point is the ecb must call the shots and the ecb must call the shots for all banks in the eurozone. the way it is calling the shots has to be the same as the way they're going to be called in the uk. so, you know, our bank of england and ecb certainly need to talk to one another about supervisory methodology, for example. >> if you look at likes of bankia, it wasn't seen as important to spanish economy but it's had a major impact on what's playing out and forcing the government to go to the ecb for assistance. if it were up to the germans it wouldn't be included. >> that's right. they have obviously the state aid, but many people don't realize how interconnected the savings banks are with their mutual deposit guarantee scheme. of course the germans don't want

that to be going into some pool. they say it's last aid long time and why should they be subsi subsidizing everybody else. there are ways to deal with that because there are other national schemes that could be consumsub into a common system. that means across the eu 27. germany has to be shown to lead in this. they can't say one rule for everybody else and we're staying out. >> sharon bowles, thank you for joining us, chair of the european parliament economic and monetary affairs committee. we just had news crossing from xstrata after they postponed their meeting for five to ten minutes. the company says it will increase to the merger ratio to 3.05 glencore shares. so, we have -- this is big news. >> you can see the reactions there. >> take a look at the stock

price. increased offer now. so, the proposal that's come across suggests this is still in play now, that the offer that's come forward from glencore has been upped for the glassgo to be ceo of the group, glencore to structure the transaction as a takeover offer. kelly, weigh in here because this is the issue, isn't it, this morning as we were watching headlines about these meetings being postponed we knew there was overnight news but we weren't sure if a new deal was cut with qataris or norwegians. it seems they've been working hard to get this on line. >> the figure it's just over 3 is probably significant, indicates a lot of what might have been happening behind the scenes. let's get straight out to carolyn who's been following the story from zurich. >> yeah, kelly, these are big,

big news, xstrata just came out with. glencore may, you know, might actually agree to the deal. the resolution will be proposed at xstrat's court meeting. the terms look better than before. the initial offer was for an 2.8 of glencore shares for each xstrat shares. that has been upped to 3.05. that's a significant increase also. the ceo of the combined group would now be ivan glchlt lazenberg, not mick davis. that's a significant change. also it was repeatedly said this was going to be a merger of equals. now it seems like this could be structured as a takeover offer, in fact. the news just crossing the wires here. in fact, leberon capital came out with a note, qatari holding,

has been opposed to the terms for a long time, would return a profit if the share ratio is above 2.9. >> one other flash that's coming across is that glencore may structure the deal as a scheme of arrangement. this happened with existing proposal. one of the reason why we're in this dilemma today anyway. >> yes, definitely. under the current arrangement they need approval of around 75% of all shareholders outside of glencore. glencore has the biggest stake of xstrata. the blocking vote of qatari was only 16.5%. the news we get this morning, that's significant and it does point to the fact that this deal will likely go through. just remember yesterday, ubs said the chances of this deal

actually happening fell from 40% to only 20%. >> thanks very much. they're going to structure again as a scheme of arrangement they must be confident they have the qataris on board. you wouldn't go down that path otherwise. we have plenty more coming up after this. stay with us. [ male announcer ] how can power consumption in china, impact wool exports from new zealand, textile production in spain,

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welcome back to the program. there are 6 million mobile phone users worldwide. i would think the number would be higher. maybe 6 billion. the market for mobile voice and data is about to get a whole lot bigger thanks to new devices unveiled by nokia, motorola and next week by apple. what we want to know is if that's led to a decline in mobile manner, something intel hinted at. joining us with or that is anna post, author with emily post institute. thanks for being with us. >> good morning. thanks for having me. >> as the ymobile devices have d our world, how has it impacted manners, or the lack thereof? >> what i see coming through is

the top pet peeves. this study took a look at what was going on around the world. 80% of people said globally they were bothered by other people's manners. they wished they used better mobile etiquette out and about. >> what are the big no-nos? what should we not be doing? >> you know, some of the top pet peeves that came back worldwide, both teens and adults, included things like complaining too much, too much negativity, too much use of profanity. also too much personal information or inappropriate photos, which when you talk about online sharing with your mobile device, these are thing i think a lot of people are seeing happen. >> and, anna, the interesting thing for us is to then look at how these complaints may start to shape the way people make mobile devices. what do you expect or recommend

or think might happen with kind of the next generation or device, or when you look at all these new tablets out on the market, what features there might start to respond to some of these concerns? >> you know, i don't actually work for intel so i'm not sure exactly what the future holds but i can tell you in term of etiquette whether it's the old fashioned land line phone ringing at the table, the mobile phone right now, or whatever the future might bring, the key thing for people is to think about how their actions will affect the people around them. not just the person they're trying to connect with. so, when you're in line waiting at the grocery store, commuting in on the subway in the morning, what you do with that phone matter to the people around you. >> you're talking about it as if it's a singular, but the reality is many of us stand there now with two phone or at least a phone and a tablet. the world is sort of moving in a direction where we're attached to our devices. >> yes. this connectivity is something that we saw in -- excuse me, that intel saw in their global survey. one of the things that for me comes through very strongly in

this, you know, the survey -- the study showed very clearly that people are using these to connect and to express themselves. that's the really positive side of technology i love, too, and that isn't going anywhere. right now it's about striking that balance between the two, because you're right, it's not always just about one device anymore. >> thank you so much for joining us, anna post, spokesperson for emily post institute and co-author of "emily post: etiquette 18th edition". let's recap from big news from glencore and xstrata. the latest is that xstrata has received a fresh proposal from glencore to amend terms of that merger. this, of course, at the 11th hour as both companies were staging shareholder meetings to vote on this deal. the offer is, in fact, higher now. the merger is now 3.05 glencore shares for every xstrata up from

2.8. there's talk glencore may again structure this as a scheme of arrangement. the qataris, the holdout, the sovereign fund that had wanted more shares put on the table from glencore, and now supposedly in talks on this revised scheme, norwegians were also holdouts, too. >> and you can see the back and forth on this. they sweeten the offer but at the same time ivan glasenberg, according to this, would be the new ceo of the organization and may be structured as more of a takeover. >> this was a thorny deal, the salary compensation to be paid to mick davis to stay on. that was something shareholders objected to. this takes some heat out of that debate, doesn't it? >> it does. we'll have much more after the break.

welcome to "worldwide exchange." if you're just tuning in, i'm kelley esches. >> i'm karen cho. the focus in the u.s. today turns from politics to economy. the august jobs report is expected to show modest growth but above 8% for the 42nd straight month. spain and italy's prime ministers still refuse to say whether they will request a full bailout. extrxstrata gets revised sh

offer from glencore and ivan glasenberg proposed as the ceo of the new group. lots of news this morning. we're awaiting that jobs report. following the xstrata/glencore drama. the dow jones industrial average looking to add to those gains, pointed up 30 points. nasdaq and s&p are also pointed higher. just a reminder, those indexes stand at multiyear highs. nor the nasdaq its at its highest level since november 2000. also up about 20% this year. thanks, i'm going to guess, in part to a little company called apple. let's take a look at european markets now. that's partly what's driving the positive sentiment this morning. the ftse 100, underperformer and in the red last time we checked,

is adding 0.25%. the dax, cac and ibex all up. also china announcing a new investment program. let's recap on one of the big stories playing out. glencore has upped its offer for takeover of miner xstrata raising the ratio to 3.05 a share. we have seen the response in the share price this morning. take a look at how xstrata has been doing. a bounce of near on 10% first up, and now up 7.86%. >> that's right. glencore shares were trading down in the range of 3% to 4%. we're going to turn our attention now to the payrolls report. take a look at what expectations stand for this figure later today that we're expecting. a gain of 125,000 jobs.

that's the consensus. that follows 163,000 jobs in july. i might add that consensus figure is probably edged a bit higher over the last 24 hours. let's see what julia coronado thinks, chief economist for bnp paribas. good morning. do you think the whisper number is higher and how high? >> probably the whisper number is a bit higher after yesterday's data. both the adp, private employment report and the nonmanufacturing ism employment index pointed to stronger job gains in august and july. now, there's things pointing in the other direction. actually jobless claims are a bit higher on average in august than july. some of the sentiment indicators pointed lower. so there is a couple of special factors in july that we think may fade, but, yeah, i think you're right. the whisper number, if we got something in line with july, i don't think the market would

react very strongly because it reacted so strongly to the data yesterday. >> julia, it's interesting to be talking about a stronger jobs picture because it's only just a week ago that ben bernanke was talking about the fact that the employment pace was still very, very sluggish and we're just not going to get the traction in bringing down unemployment rate. do you think any of that has changed? >> actually, i don't think that that has changed. if we look at what the activity numbers that formed gdp are telling us, really it still is a very mixed picture. i think consumer spending is holding in okay but investment back drop has weakened quite a lot. government spending continues to contract. the construction numbers have leveled off a bit lately. if you add it all up we're probably not looking at that above-trend pace the chairman said he needs to see to be confident that these job gains are going to continue. now, remember the key phrase we got from the minutes of the august fmoc meeting was

substantial and sustainable improvement in the data. unless the activity numbers are telling us that we're heading to an above trend, more than 2.5% gdp growth, then the chairman won't be confident in a one month of good numbers. remember employment is a lagging indicator to gdp. it really is -- has to be a very broad-based improvement for the chairman to be convinced. i think he set the bar very, very high. >> we're going to come back to you in a bit. we want to get back to lake como where ross has been. you're talking about us being your two favorite anchors and as such do you think you could bring back a bottle for kelly and i? >> yeah, you know, have i to go find out what the local wine is here. i was probably trying it last night without actually knowing. a beautiful spot. i'll do what i can for you. the key thing is what's going on at amborsetti forum. this used to be the home of one

of the generals thnapoleon had before it became a hotel. plenty of discussions going on today. we've talked about the economic outlook, global leadership, the agenda for europe. a big discussion tomorrow with herman van rompuy and talk about u.s. leadership in light of the elections. that's a subject we'll continue on "worldwide exchange." we'll also hear as well from jakob frankel and his views. bob... oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race.

no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. save 50% on banners.

welcome back to the program. a reminder, these are your headlines. president obama making his pitch to the american people for a second term. the president accepted his party's nomination at the democratic national convention. he says voters face a starkly different path in choosing between him and republican rival mitt romney. meantime, u.s. jobs are seen rising as the focus turns from politics to the u.s. economy today. global markets getting a boost from mario draghi's bond-buying plan. and glencore taking the market by surprise, sweetening its bid for a merger with xstrata.

and as mentioned, president obama is making his pitch to the american people for a second term. the president accepted his party's nomination last night at a democratic national convention. he says voters face a starkly different path in choosing between him and republican rival mitt romney. the president did admit there's only been halting progress in fixing the u.s. economy over the last four years, but he urges people to be patient. >> now, i won't pretend the path i'm offering is quick or easy. i never have. you didn't elect me to tell you what you wanted to hear. you elected me to tell you the truth. and the truth is it will take us more than a few years to solve challenges that have built up over decades. it will take the bold, persistent experimentation

president roosevelt pursued. >> ross has been asking about politics out there in lake como. lo what's the view from the italian coast? >> well, as a challenge, isn't it? clearly a big challenge. it was something i brought up with jakob frankel, chairman of jpmorgan international earlier this morning. he laid it out squarely about what politicians need to do. >> the danger of having a strategy of kicking the can is a danger because it means you don't deal with the issue. there isn't the u.s. issue that says the can kicks back so you cannot think it will be solved. i think the key issue is the fiscal one. that's the main one. the lugs is nsolution is not at federal reserve. it's in congress. there is no way you can have a budgetary consolidation without dealing with and touching and cutting the entitlements.

>> so, saying it's politics more than economics. what happens after the election, as we all keep talking about, it's going to be fascinating, isn't it? >> it is. i know you're out there following it for us. also following this for us is john harwood. he's at the democratic convention, joining us from charlotte. john, your reaction to president obama's speech last night. was he able to follow up on the success or perceived success of the speeches that came before him? >> reporter: well, we'll find out from the polls in the next few days how effective it was. what the president was trying to do was come to terms with voters disappointed in the lack of pace of progress in this first four years of his administration. so, he appealed for patience, as you said a moment ago, talked about staying the course, defended a role for government, which is something that his republican opposition is going

right at. basically saying the problem with obama's policies is too much government, too much debt. obama saying, we need a balanced plan and a balanced plan includes two things. one, higher tax revenue from people at the top. two, a role for government in fostering economic progress through education, through science, through innovation. that's the choice that he was framing for the american people, trying to reach both undecided voters and also rekindle some of that enthusiasm among people who were so excited about him four years ago. >> we had a discussion a week or two ago about how politicians speaking that plain, i'm going to tell you the truth. i think you mentioned walter mondale at these conventions. it doesn't go over, so i was surprised to hear obama taking that line last night. was that risky? >> reporter: well, it's a little different because he said i'm going to tell you the truth but he didn't say i'm going to raise your taxes to middle class voters. that would have been

truth-telling that's risky and difficult. this was president obama to cast truth-telling in the context of democratic aspirations, democratic goals. no, it wasn't departing from the partisan script that he has been following, as he's run a campaign since the fall of 2011, really going hard after republicans, trying to leverage public opinion against them. wasn't a departure from that. there was some risk in the sober tone of trying to tell the american people it's going to take a long time to solve these problems. that's something politicians don't often do. >> yeah, that's for sure. john harwood from charlotte. thanks for getting up for us this morning. just want to get julia coronado's thoughts on this as well. is the shift here to economics as we look to the jobs report today still a problem for president obama? >> surely it's a problem for president obama. it's very unusual for an incumbent to do well when the job market is so weak. of course, these are

unprecedented times. he's making the argument that a lot of progress has been made. that's undoubtedly true. i guess the problem is that everybody's been disappointed in the pace of that progress. and we still have unemployment well above 8%. more than likely, that's not going to come down before the november election, given the pace of gdp growth we're seeing. it's a tough marketing job the president has ahead of him. >> julia, could it be that mario draghi has done more for barack obama's chances of re-election than anyone with his bond-buying plan that's created confidence back in markets and might actually be providing some stimulus to the world economy? >> well, both mario draghi and the ecb and what the federal reserve's been doing have certainly helped keep confidence in financial markets. of course, that is helpful because if on top of a disappointing economy you had a correction in financial markets that were hitting people's 401(k) plans, obviously that would be really, really difficult for the president to

overcome. so, yes, i don't think that's why central bankers are doing what they're doing. i think they're focused on their economies and doing the best job that they can. but that does probably help the president out a little bit. >> thank you so much for joining us today. julia kcoronado. stick around. after the break, indexes are at the highest level since obama took office.

we're witnessing another bounce on european markets in reaction to mario draghi's bond buying plan. take a look at key numbers, in particular the german market. comparable to the nasdaq.

the dax tracking up another 0.7% today. modest here in the uk but the cac in france up 1.1%. ibex in spain up 0.75% but the italian market bouncing about 2%, one of the outperformers. this is really helping the gains that we've been seeing across for the monthly numbers in europe. as for the u.s. market today, we're also looking to see this start on the front today with more gains across the futures market. >> that's right. you can see despite strong rally yesterday in the major index we're also looking to add to those gains this morning. the dow pointed higher by about 26 points. can it be sustained? joining us is michael gerka. michael, first out to you, as you look across the commodities complex, do you see a consistent risk-on theme and is this the end or closer to a move? >> clearly, i think closer to the beginning of a move. i've been noticing at least in

one material -- silver. i've been looking at weekly charts now going back three years and at a level of 3251 violated will continue this bullish assent. again, i use that for many reasons fundamentally as silver is starting to get a little more co compass but -- it seems as though the rules of engagement today remain anything above 120,000 is going to be positive for the market. right now at least i think that range is more in line to watching, if we get anywhere near last month's number in private payroll additions because that was up above 170,000 and i think the forecast is around 140,000. >> michael f we get a better tone from the data today, even if that supports stock.

>> it's probably going to be an abrupt move lower. i think it's a scenario where we'll see a lot more volatility intraday and then assent. the target remains around 1750. the question is, does it get there in a week's time or a month. you know, i think gold's slope has been very nice as far as the way it has consistently been bid. i would not be surprised if we did see a small selloff. profit taking has been limited in that measure. and i really wouldn't look at that as anything more than be a small pull back. >> let me play devil a -- devil's advocate. we've had so much good news in the last 24 hours. don't you think good news might be priced into major indice and we might get selling today in the states? >> it's not a bad reference point. again, if you really want to take a step back and look at good news priced into the equity markets, i mean, the way the equities markets have been starting to forecast what we're seeing, it's more in case of not

just today, but i think good news is priced in all the way down, in and through the fourth quarter. it's going to have to be something abrupt when you see this. a number in the low 70s or something dramatically off from what's forecast. again, i think it's just a continued measure here. some of the targets we've seen have been put in the s&p are more year-end targets, of course. at the same time, i would not be surprised if we start escalating ourselves. the s&p is not an overlay of the gold chart. these earnings and balance sheets are very pristine for a reason and i woulden be surprised if we continue to see good news make that better. >> thanks so much, michael gurka. >> want to mention, ross westgate has been sunning himself on the shores of lake como this morning. we say, it has to seem, you travel to the best locations for these field reports. there was the trip to monaco, rome, there was -- look at this. there is the jaunt on the beach

famously in rio de janeiro. throwing off the microphone and running into the ocean. what do you have to say for yourself? >> these events need anchors with sophistication, charm, good looks. just begs the question, why are you not here instead of me? but i guess, you know, in an investment world it's better to be lucky than good. maybe my luck's been in. plenty of discussion to come over the next three days here. don't forget, we have an exclusive interview coming up with mario monti over the weekend. that's going to be big. plenty other great stuff over the weekend. >> yeah, yeah. >> we'll talk about it, tweet it -- >> don't pretend you're working. we're not buying it. we're not buying it. >> by the way, i'm going to cut cameras. it's lunchtime over here and there's a lovely swimming pool. i think i better go and have a look at it. see ya. that's it.

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good morning. it's jobs friday. always a critical economic indicator. thanks, mac. but this time around, it could also be an election indicator. and speaking of the race for the white house, president obama officially accepting his party's nomination for re-election and making the case for a second term. >> now, i won't pretend the path i'm offering is quick or easy. i never have. you didn't elect me to tell me what you wanted to hear. you elected me to tell you the truth. and the truth is