a recap of the headlines. unlocking a new stage of japanese. getting more on the g-7 ministers meeting. we'll bring you an exclusive interview with jack lew right after talking with british osbourne. insurance giant recovering from losses last year with a better than expected first quarter net profit. the ceo told cnbc exclusively

where the strength is. >> the best is germany and i don't think this is a surprise to anybody in europe. and definitely we see the difficult economy in southern europe, france, italy, spain, really suffer. and the world's biggest steel maker issues a more optimistic outlook than competitors after beating expectationings from q1 core earnings. okay. industrial output out for italy. it was down minus 0.8% month on month. reuters forecast was minus 0.2. we also had better than expected uk industrial production out as

well. plan to focus as well as the euro/dollar the focus on the yen, euro/yen hit a 3 1/2 month high, and dollar/yen with a high. we've gone up to 101.20. we've had such a problem scaling through. so it is a new high. the next target we're talking about 101.45, a level we haven't seen since october 2008. the japanese currency slumping during trade after greenback strengthened on the back of upbeat jobless forecast. the yen has fallen 17% against the greenback this year. joining us is steve wang research director at reorient financial markets. welcome to you both.

is this n your mind, a decisive break above 100? can we hold? >> well, certainly i think it is. the break 100 to 101.20 in eastern time zone. the timing of the breakup as well was a little surprising because on thursday in asian trade we had a fairly soft dollar trading because of the risk seen in stock markets because of cuts out of korea, australia, that pushed stocks much higher. so the dollar was soft across the board so the overnight move of the dollar/yen breaking above 100, so i think having ticking above the 100 level, as you said 101, raises line for yen and markets are betting on the yen

resurfacing yet again. >> what's the target? some people with the resistance of 101.45, where do you think it can go? >> we've maintained target of 101.50 for year end, so i think with the fundamentals still propping dollar/yen intact which is basically qe and all efforts to reach 2% inflation target, we don't see why that 105 target can't get met. >> steve, you've heard the target. nikkei up as well today, so does that mean if the yen continues to weaken, does that mean nikkei the trade? >> we have basically broke beyond our mid-march target for the nikkei and we have actually been tracking the rally very,

very closely since actually as way back as early as july. we have seen that foreigners are buying massively into the japanese stock market, as much as 8.8 trillion yen since november to date. we think that will actually continue to go forward into the second half of this year. >> so, in terms of you just buy the nikkei or do you buy a selection of stocks? >> we are overweighting the overall index, i think, and there's a lot of exporters benefiting a lot from this rally. a lot of the exporters are still a little bit too conservative in terms of their profit forecast based on assumption of the yen. >> and we also had numbers out today from nissan as well. i mean, is this -- are the

automakers -- honda up 3%. toyota up 5%. are these the guys that are going to lead? >> yes, in a way. nissan is one that reported somewhat slower growth. in terms of the general outlook because part of the reason to nissan's weakness in this overseas market in china is certainly seeing signs of rebound. so, on that front we see nissan, toyota, honda all to lead much higher from now. >> and more comments out yesterday from kyle bass, long standing pessimist on japan, but his long term focus on growth is a ponzi scheme upon ponzi scheme. >> i think boj is the latest to come into this qe story. you know, the fed has been do g doing -- the ecb, the bank of

england, all central banks are firing all cylinders to spur growth. the boj is the latest to add onto that. reinforces the environment in which currency in which you want to fund against to take some risk. used to be the euro before, the dollar, and now the yen. so i think on that basis it certainly is -- you know, it opens the door to what -- i think eventually investors will pick a currency to fund against. given what the boj is doing and the one most aggressive at this stage, we don't see why the yen should not be the currency used most heavily as the funding kern currency. >> okay. thanks for that, senior currency strategist at bnp paribas.

also on today's show julie will join us from milan to give us the latest on the generali numbers and head out to rome to get a preview of earnings. alibaba with a new ceo. we'll hear from one analyst out of hong kong says they could value the company around $100 billion. we're hear from the ceo of tech city. she tells us why london will challenge silicon valley as a real run for its money and why the tech sector will lead the uk recovery. 11:20 cet we'll head out to new york to find out why apples and pastries have got the art world all aflutter. all of that and plenty more to come. meanwhile, just over an hour and nearly ten minutes into the global trading. this is where we stand.

stocks 8 to 2 advances outpacing decliners. yesterday the ftse was up just 9 points but still a 5 1/2 year high. a number of stocks reporting today. like iag. ftse up 0.55 and ftse up 1.35 despite negative close in u.s. yesterday. we have a t-bill auction. u.s. treasury just nudging up higher again to 1.87%. worth pointing out this time last week we were 1.62%. and on the currency markets, we already looked at dollar/yen just at 101.30. the aussie is weaker, down to 100. sterling/dollar 0.06. dollar is pretty much up across the board. and dollar up against the euro

as well at 130.32. that's where we stand in europe. we're joined out of singapore for the latest there. >> thank you, ross. speaking of currencies after a month of loitering, dollar/yen broke against the psychological handle. analysts say fund managers cannot afford to underweight japanese he can weties. automakers drove higher today. toyota, nissan gained. strong earnings boosted buying momentum. suzuki motor jumped thanks to a camera earning forecast. camera maker nikon skyrocketed after saying they will top expectations. sony made its first annual profit in five years and shares gained 2.5%. the rest of asia is just trying

to grapple with the yen's sharp move. it's a patchy picture across the region. the shanghai composite gained 0.6% with developers lending support on chief valuations. the hang seng in hong kong gained 0.5%. china resources power resumed trading today, shares tanked 10% after saying now a plant merger. in south korea the kospi gave back awe all of yesterday's gain after that rate cut ending down 1.7% today. exporters took the brunt of the selling due to yen's weakness. samsung electronics and hyundai motor both tanked over 2%. australia managed to eke modest gains by gaining 0.1%. >> shares of generali trading higher. rebounding from a loss at the end of 2012.

results easily beat analyst estimates. generali seeing benefits from turn-around plan. we've been speaking to an exclusive cnbc interview. what kind of mood was he? >> he was in a positive mood and certainly reflects the results of this quarter. this is the first quarter really since the turn around of the company, began stream lining the company, focusing on core insurance business. of course, patching up the balance sheet and strengthening that, too. as you said, operating profits beating the top line of analyst estimates, net profits, too, at the top end of estimates. the strength really came from their pnc, property and kausht business. that's where they saw the most growth. operating profits up 26%, in fact. this is an area where they really want to continue to build the business and make it a far greater proportion of the overall operating profits. and i asked him just how he's going to do that. this is what he had to say.

>> if the numbers are solid, good. pnc is moving rightly -- everywhere in benefit we're benefiting from low frequency, reduced severity and also taking good action to reform the portfolio and components of the pnc portfolios which were not producing high profits. >> now, the company's promised to raise 4 billion europe rows by 2015 by selling off noncore assets. this is something investors are very much focused on right now. we didn't get any news on disposals in the quarter, something i asked him, particularly given one analyst out there suggesting they're not going to get the value they're hoping for on these disposals. they don't have any assets that can achieve that. ultimately, the firm will need to raise 1 billion euros worth of equity this year. i asked the ceo of generali what he thinks about that. >> same analysts used to say we

needed to raise 5 billion, so now he's at the billion. he's converging to our position. where our position has always been, we don't need to raise capital. we will not raise capital. >> no equity raising this year. no debt to raise either. he said they're going to look to pay back debt again this year so that is really the focus of the business. so, putting to bed perhaps that speculation and from one analyst there, he also did talk about italy, which is a key market for generali and what's needed by the government here in order to support business and boost growth. that's coming up later on in the show. for now, rose, back to you. >> thank you for that. catch you later. in italy, after the braebea from milan to rome. ♪

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italian bank unicredit is to report first quarter. joining us from rome, thanks for that. goi not going to be a pretty picture

then, today. all revenues under pressure. why do you think there might be an opportunity of recovery coming? >> well, first of all, one needs to look at the results of competitors this morning, generali announcing results, and san palo has, too. you have to look at the devils in the detail is to try to figure out where their growth is coming from. they have definitely been slowing down their lending to corporates and to real estate tail. they have been successful in getting deposits and that will give oxygen to the banks because that is their funding need. i think with the fact that the european central bank has brought interest rates practical, to all intents and purposes, to zero, has certainly given a lot of oxygen to them. the expectation for earning is about six cents. i think it's really -- have you to put your finger on it to

figure out if that's right or wrong. there's a significant amount of intangibles that have to be taken care of. you have nonperforming loans, which have been really the [ speaking foreign language ] as they say in italian, the dark cadaver they have been trying to avoid, avoid, avoid. if they're able to clean up their balance sheets once and foreall, they can get ready for 2014, which i think is the year of recovery for the italian economy, dha has been predicated the italian equity market has been reacting positively since then. >> how much -- unicredit stock is up 54%. europe bank up 36%. how much are we tied into italian, you know, price of italian government bond debt? if italian sovereign debt does well, the bank will automatically do well? >> well, in the case of

unicredit not as long as its competitor, which is long up their gills in italian debt. they have a very significant and potentially explosively good franchise outside italy in eastern europe. now, if those results come out as forecast for 2014-15, they'll be a major, significant player in the european market. the real -- the black monkey right now is italian retail and italian lending to corporates, because that's just going absolutely nowhere. nowhere, nowhere, nowhere. and italian corporates are starved of funding. they're starved of oxygen. every day there's a newspaper in italy telling you how many companies are closing down. yesterday 49, the day before 46. that's not good of banking in

italy. if italian bonds keep tight. enning their spread, which we forecast they should, we think the spread should be about 150 basis points but more on that later, that will give it enormous shot in the arm of adrenaline into the italian banking system because it's going to make -- create huge amounts of liquidity. >> just finally, you talk about the corporate sector. what is going to happen with loan loss provisions. >> well, they've been taking loan losses but they haven't really taken as much as they really could have in the past. when unicredit bought competitors here in rome, that competitor had very, very significant problems. billions and billions and billions of euros in nonperforming loans, which were swept under the carpet. and unicredit has done a very good job trying to, first of

all, discover them because they were hidden, and they were very well hidden. now they're cleaning up their act and the loan loss is going to be the -- is the big problem in the italian market. italian corporates have really worked much too much, hand in hand with the italian banking system and have not availed themselves of a type of instrument which is much more prevalent in the united states, in england, which is corporate bonds. get the banks out and get investors, whether it's pension funds, insurance companies, hedge funds, to buy directly bonds issued by companies to lighten the leverage and the exposure italian banks have to corporates. >> good to talk to you today. thanks for that. have a good weekend, whenever that starts for. >> you thank you very much. nice to go to rome.

mattel shares are jumping after they reported $1.6 billion in the first quarter. they said they expect global steel consumption to rise 3% in 2013. stefan is in paris and has the latest for us. >> hi, ross. the company was unprofitable in the quarter but the core profit was much better, close to $1.6 billion and they maintained guidance for the full year despite challenging economic conditions. they believe they will increase ebidat. they also believe steel demand will pick up this year and will increase by approximately 3% worldwide. that, of course, is the global figures. some regions of the globe will

still face difficulty economic conditions like in europe where demand for steel products is likely to decrease by up to 1.5% this year. as expected, china will remain most dynamic part of the globe with growth estimated 3.5% to 4.5%. they assume steel prices, margins and raw material prices will remain stable this year. that seems to be really optimistic. that's something the market likes, the company reduced significantly debt level to $18 billion at the end of first quarter and will continue to decrease debt level to reach $17 billion at the end of the year. this is what the ceo of arcelormittal announced this morning. they will also reduce capital expenditure this year. all in all, that was a strong set of results. even if forecast seems

optimistic by analysts on the ground but for the time being they give them the advantage of the doubt and they are trading much higher in paris this morning. over to you. >> thanks for that. and we'll also be taking a closer look at arcelormittal results coming up later. offering english premier football league matches on on sky tv. they saw shares tumbling but have recovered ground. earlier we spoke to the ceo and asked him why people should make the switch over to bt sport. >> we announced a host of great content and great stars. it's going to be very, very high quality. you shouldn't be thinking of this as a battle between bt and

bskyb. only about 25% of uk population today pay for sport. not much more than half pay for tv at all. that's very low, for instance, by american standards. the reason is, it's expensive in the uk. telecom in the uk is cheap, cheap by all international standards. pay tv is expensive. we're injecting some competition. iag continues to drag on results and offset results of british airways. apparent company said high fuel costs and slower passenger growth are to explain for the weak performance. abb chief executive announced he's leaving the company. the departure is said to be for private reendz but in a statement he said it had been a difficult decision. he was appointed ceo of swiss firm in 2008 and expected to stay? the role until replacement is

named. g-7 finance ministers meet outside london tonight and tomorrow. speaking tomorrow at the global investment conference the british finance minister george osborn said officials will be discussing what else central banks can do to revive the economy. >> of course hear from the fed and from the bank of canada and from the bank of england. we'll also be talking about t the -- james is pointing out, of course, the governor of the bank of canada is soon-to-be governor of the bank of england, so we're both interested in what he has to say at that conference. >> and there will be -- this will be the first such gathering for the new finance ministers. our colleague steve liesman will be speaking exclusively with the u.s. treasury secretary jack lew on this show, yes, on this show in one hour's time, 11: 30 cet,

5:30 a.m. eastern. now, this was a story my producer particularly like the. attention first time parents, huggies brazil introduced the mobile phone app four. it traces humidity -- humidity? tweets you so you don't have to worry about the wetness of the nappy. all you need to do is, quote, strap the tweet pee onto your baby's diaper. slightly weird. i thought the whole point about nappies is they're super absorbent. you know when they need changing, right? there comes a natural point -- they're a lot heavier and the baby is upset? whatever. interesting development. don't think we need it. anyway, there is a question we're asking off the back of this, are mobile phone applications going just a little

too far? possibly. join the conversation on worldwide exchange, e-mail us, tweet me. still to come on the show, a change at the top of china's largest e-commerce site alibaba. we'll be in hong kong for analysis right after this.

unlocking a new stage of the rally. japanese equities. getting central backs to do more is on the agenda at g-7 finance ministers meeting this weekend. we'll bring you an exclusive interview with u.s. treasury jack lew right after remarks by george osborne. the ceo has told cnbc exclusively where the strength is for generali. >> the country which is doing best is germany. and i don't think this is a surprise to anybody in europe. and definitely we see the difficulty of the economies in

southern europe, france, italy, spain really suffer. >> arcelormittal beating expectations with q1 core earnings. we also have -- i did have the latest trade deficit. uk trade goods narrowed as forecast in march. so that's fairly good news. the goods balance 9.056 billion narrowing from 9.16. pretty much what the forecast was. shouldn't have the biggest impact on cable right now. dollar is stronger across the board. the real focus has been on yen weakness. it's worth pointing out been to 102.30 -- sorry, 101.30. we're currently at 101.33. that's pretty much the session the highest we've been on

dollar/yen since october 2008. we see gains for euro dlaish yen up to three-year highs as well. that's a significant break. we've been waiting for a long time to get through 100 and we now are through it. as far as bond markets are concerned, you see treasury yields a little higher. 1.86%. the yield in italy, 3.89%. we have a t-bill auction coming up, which we will recap. european stocks right now are firmer. up 0.50% for the ftse, ftse may have been helped by generali. dollar/yen trading at highest levels since october 2008. japanese currency down on four-year lows after crossing that 100 level. with more on the impact and what's expecting to the nikkei, we go to tokyo.

>> after loitering for the month the dollar/yen breached the 100 handle and pushed past the 101 level. the move was boosted by better than expected u.s. employment data and the fed's continued debate about scaling back asset purchases. the japanese data on domestic buyers paying 5.4 billion bonds accelerated the yen's drop showing the boj's aggressive easing is pushing investors to go overseas. yen weakened 16% against the dollar this year and over 20% since last fall. the weaker yen will definitely help japanese exporters earnings but also downsides. the country's account surplus for fiscal 2012 contracted 44% on the year. mainly due to higher energy import costs. but many analysts say yen downtrend and stock's upward momentum will continue. some predict the yen will drop further to 105 yen over the next

couple of months. back to you, ross. >> all right. thanks for that. let's remind you what's going on with alibaba, the new day ceo of alibi b alib alibibaba's ceo taking reins. boost competitors by beefing up product lineup. they say the lineup is announced on monday making alibaba the biggest shareholder in autonavi. they are declining to comment. this comes as jonathan lue taking rains. jack mar would stay on as chairman for strategy but spares

speculation they're preparing for ipo which analysts say could estimate it up to $100 billion. maggie wu was promoted from deputy chief financial officer. we'll keep our eyes on alibaba. could london ever produce something to rival the likes of silicon valley? is this the best direction for uk economy? we'll talk tech city when we come back. ♪

[ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room. [ static warbles ]

as canada and eu edge toward signing a trade deal could a rou overshadow the deal. canada's minister joe oliver told cnbc canada is willing to go to the wto if required. reason is, i think, on our side. after all, a policy which doesn't achieve its intended purpose but causes damage is

discriminatory and is costly is not something that most people would want to be associated with. and i think increasingly europeans understand that. we're trying to and i hope we will be able to make the changes in the directive so that it will be effective, it will be fair and won't hurt the european economy. and, you know, that's -- that's what we're hoping for. if that does not happen, if this arbitrary proposal is not -- is not changed, well, then we'll have to look at our alternatives, of which the wto is one. arcermittal beat reuters forecast. they confirmed higher guidings and expects global steel consumption to rise in 2013. arcelormittal stock up. joining us mining analyst at gs

oechgse capital. what is your take away? >> their numbers is better than their corporate position is concerned, as far as dollars and cents are concerned. not sure the overall growth for steel is going to be as good as they say. >> their output in 2012 was terrible, so why is it going to get better this year? >> that's the question, why is it going to get any better? certainly the chinese are more than capable of producing all this steel and all the indications are that that steel inventory is rising. they compete with the chinese and so forth, by the same token the economies in the west are not growing as fast as we anticipated back in 2011 and 2012. the question is, are they right or are the rest of the world analysts and steel companies -- >> how much capacity do we have to take out for recovery? how much extra capacity is there

in this global business? >> at least a good 10%, which is deliverable at the current time, which could otherwise come off, that is too expensive, that isn't making money. another 10% is so marginal that it makes good sense from the investor standpoint that that also comes out of the mix. so a good 20% of capacity is certainly at risk, i think. >> what can they do with -- it tried to shut some furnaces in europe. can it take out further capacity? what can it do? spin off operations? >> yes, all of those things which otherwise rationalize and optimize their activities, they can otherwise hold out for better contracts, raise prices on some of the more specialty items where they don't have the pricing pressure. they can remove surplus capacity, they can close plants a little earlier or use extended leaves such as longer than

anticipated maintenance and holiday stoppages. >> citi has come out with a note, you should just completely separate the european business out. is that -- would that make sensor not? >> well, that would be one of the more dramatic or drastic sort of moves but i don't think they're willing to go that route because -- part of the reason, because of the labor and political feedback or problems it might create for them. >> the note, they say the reason behind that because that would encourage all relevant party exposoue how dire situations ar in this country and it would make relevant parties, governments and others, steel operations, come together to find a solution. that would be the theory. >> that is a valid argument because you need the major players like arcermittal and chinese steel producers to set the appropriate examples saying this is a situation we can't otherwise sustain. that's the kind of thing that

gets everybody on the same side in order to come with a solution. so it has a valid point but unlikely to happen? >> that is my view, yes. >> so what happens to everybody else in this sector? >> everybody has to compete in that sort of environment. it is going to be a more competitive environment, individual regions, individual countries are going to have greater difficulties than others. and it's going to be a weeding out profit. >> thank you for joining us. china kicked off a probe on the dumping of steel pipes in the country by u.s., european and japanese firms. the products were mostly used in boilers and steam pipes. the latest investigation came from beijing.

and in the tech sector, cnbc learned carl icon carl ikan is offering $12 in shares for pc maker. they say they have also proposed replacing directors and management. dell stock up 5.5% in frankfurt. and british government says the country's tech sector is key to reviving economic growth. lavished attention and funding what it hopes will be at the heart of that revolution of london's tech city. can tech startups rival the likes of silicon valley? they start by asking what more

the government needs to do to boost innovation. >> in the uk, technology is leading in terms of recovery so we have 11% growth year-on-year in the technology sector and we're looking at that through 2016. it's a very exciting time for us. and i run an organization called tech city in the uk which is a cluster based in east london but really represents a movement of innovation across the country. and what's happening in 22 clusters like tech city all across the uk is really exciting and positive and really leading the economic recovery. >> how do you respond to critics that say london is never going to be a silicon valley and just money down the drain. london is a financial center and this is where we need to continue to make sure that our focus is. >> yeah. that's interesting because i come from silicon valley. i went to silicon valley way back in 1987, my first job as a product manager. so i've seen both silicon valley

grow and i spent the last 13 years here. what's unique about london, the technology innovation happening in the urban cluster is happening also in san francisco. but we have access to government here and support, so you have westminster just down the road. you have the financial center, which is really close by and then you also have access to the greatest creative talent with the advertising agents being centered here. so you almost have new york, washington, los angeles and san francisco all combined into one. which is a really powerful story. i just left facebook. in london we have 11 million facebook users speaking english. that's the largest english speaking market in the world. so if you're developing a product, london is the perfect multicultural mix but the strongest market to lead and to look forward to other markets from here is definitely the way to go. >> and where in technology do you feel the most excited at the moment? is there a particular area where you think this over the next

decade or two decades we'll see astounding growth? >> what we're seeing across the 22 clusters in the country is each cluster reflects the local talents and experience of that -- the universities and businesses that have been there traditionally. in east london we're seeing this big boom in 3d printing because east london is where the main newspapers used to publish. so digital printing -- original printing and then digital printing is a heritage of that part of the country. so we're starting to see, you know, 3d printing emerge from there in a strong way. lots of great companies building on that technology. >> final question. what would you like to see happen over the next couple of years in order to make sure that technology isn't left behind in the uk? >> well, what's really interesting is 6% of our companies are producing 54% of our jobs. those are high-growth companies. it's really important what we've done, the work we've done with the london stock exchange.

two weeks ago the chancellor anunsed the future 50, which is a way to work with the 50 most promising businesses from the uk, europe and beyond, who would like to live here and make their home here. we can help support them and get them through this process to ensure that they eventually list on our markets, which then contribute to the long-term growth of the economy in the uk. >> meanwhile new ceo of alibi b ali alibiaba jonathan lu takes over can as they might prepare for an ipo. joining us from hong kong, analyst. thanks for joining us. how significant is the fact that jack mar is stepping up to be chairman? he'll still be overseeing strategy. >> yeah, of course. i think jack mar stepping down

as ceo of the company but as founder he will still make every strategic decisions and still leading the company. so, he will still be there. are they going to pursue an ipo or not, do you think? >> i think so. even alibaba enjoys very good cash flows and net income increase at 100% year over year rate but still requires capital to broaden from e-commerce to something like logistics and also supply chain, also financing service. so, it needs a lot of capitals. that will make it the next ipo position probably in 2014. >> but how much is the business

model changing? >> i think it's -- i think shift from e-commerce to financing supply team management and low gistic service. it's not just about e-commerce anymore. >> but does that change -- does that change the value of the float? >> it definitely changes the value of the company because internet service in china about is 100 billion u.s. dollars industries in china but financing service is ten times larger as internet service. >> yeah. alibaba taking this stake in navi after they bought an 18%

stake in the chinese equivalent of twitter. is this giving us signs of where the company's going? >> the company is making a lot of acquisitions relating to mobile service and it needs to broaden its service to data and acquiring wibu can give alibaba huge access to social media sites. and it will be related to the -- to the map related service. >> yeah, so if they put all these together some talking about valuation as high as facebook's $100 billion. is that achievable? >> i think it's achievable becaus youhe

recent results it released, gross at 100% plus rate. net income of alibaba last quarter already passed largest blue chip tech company listed in hong kong with market cap of 60 billion u.s. dollars. we believe there is a big chance alibaba, with ipo can pass 100 billion u.s. dollars, which could be the next biggest thing after facebook landed capital market. >> all right. good to talk to you. thanks for that. a reminder of what's on the agenda in asia on monday. more gauges of china's growth recovery from retail sales, india's report april trade and cpi and the earnings continues in japan with pioneer and

phoenix out with full year numbers. free trade banking regulation and tax avoidance on the agenda when g-7 finance ministers meet outside london tonight and tomorrow. speaking at global investment conference, british chancellor george osborne said officials would like to discuss what central banks can do to revive the government. >> of course, hear from the fed and bank of canada and from the bank of england, and we'll also be talking about the -- pointing out that, of course, the governor of the bank of canada is soon to be the governor of the bank of england, so we'll both be interested in what he has to say at that conference. >> and the german finance was also at yesterday's conference. he told the audience a financial transfer tax is not a major concern for him at the moment but he said west germany was okay with relaxing eu deficit but he's worried about problems

created by central banks stimulus. >> of course, it's important that everyone stick to medium term obligation to deliver what we have to reduce, sovereign indebtedness, we have to reduce global liquidity. >> italy's economic minister said there will be no tax hikes meaning the house lefvy will no be introduced. the government is aiming to pull italy out of the 18-month long recession and aimed to focus on more growth-friendly policy. and attention first-time parents. huggies in brazil, not sure why, but they have, have introduced a mobile phone app called the tweet pee alert, which apparently traces humidity levels in diapers and then tweets you, or dampness levels, i think. so, it also seems rather

ridiculous. every parent knows when a nappy needs changing. we want to know, are mobile phone applications now going a bit too far? if you want to join the conversation e-mail us wor worldwide@cnbc.com or tweet us. still to come on the program, something much more serious. steve liesman is speaking exclusively with jack lew. that takes place in over 30 minutes. don't miss out, the second hour of worldwide exchange continues in a few minutes.

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exchange," i'm ross westgate. here are your headlines -- unlocking new japanese rallies. we'll bring you an exclusive interview with u.s. treasury secretary jacob lew right after talks with george osborne. general lsti outperforming year's losses. they told cnbc exclusively where

the strength is. >> the country which is doing best is germany. i don't think this is a surprise to anybody in europe. and definitely we see the difficulty of the economies in southern europe, france, italy, spain really suffer. the battle lines have been drawn. cnbc learned carl icahn will fight off a proxy bid by dell. >> announcer: you're woching "worldwide exchange." and the big focus for global investors over the last sort of 24 hours has been the movement of the yen. it's weakened. dollar/yen has finally gone through the 100 mark, 101.36, the highest level for the dollar against the yen since october 2008. it's been taking a while to get through that 100 level but we

have done it. you see the three-month change. yen down nearly 10% against the dollar. we've seen euro/dollar up at a three-year high. the yen weakness continuing. of course, that's having a big impact as well on what's going on with japanese activities. let's get more on this from singapore. hi, sixuan. >> it's all about japan today. the nikkei soared to a 5 1/2 year high, 3%. the japanese index rose more than 6% this week, best weekly gain since december 2009 after dollar/yen soared past the key 100 level. the weaker currency helped drive japanese automakers higher. all enjoyed fabulous gains. shares of suzuki and nissan also surged, not only to weak yen but better than expecting earnings

forecast. nikon up 15%. while the slump in the yen benefits japanese exporters, hyundai and kia down shoorply today. electronics dropped 2% 6%. china markets extended gains in late trade. shanghai come positiposite rall attractive valuations. hang seng turned positive in late trade ending 0.5% higher. in australia, asx ended up marginally in the green. >> thank you for that. that's the focus out of asia. how does that trend into where u.s. futures are trading right now? after the slight close yesterday, dow down, we are above fair value, around 28

points. currently trading 3.5 points above fair value for nasdaq and s&p trading two points above fair value. ftse 100 was up nine points yesterday but still at 5 1/2 year high. up another third today. cac 40 up 0.6%. and on the bond markets, treasury yields a little higher today. 1.85% once again. keep our eyes on italian t-bill sale but italian just edged up to 3.89%. meanwhile the world's biggest bond fund run by bill grace has increased holdings of u.s. treasuries to highest level in over 12 months. the pimco total return fund upped holding of government paper to 39% from 33%. and increased mortgage bond holdings but decreased debt

issued in developed markets outside the u.s. and last week billionaire investor warren buffett stirred up controversy by blasting bonds by saying they're a bad investment. meanwhile, bond investor and head of double line capitals on cnbc overnight gave us his view on warren buffett's recent call. >> over the short term, though, let's say that's six months to a year, maybe 18 months, bonds are not going to be a terrible investment. treasury bonds will be an okay to okay minus investment probably for that time period. just as they've been an okay investment or okay minus investment since we went into qe nonstop, which was the early part of october 2011. since then, the investment that everybody loves to hate, including, i guess, warren buffett, the tlt is a proxy, the

etf of long-term treasuries has returned 3.5% annualized. that's not great but want bad. i think that's going to continue. >> joining us for more is head of fixed income. thanks for joining us. do you think pimco loading up is the right thing to do or not? i mean, not loading up but they have the highest investment levels. >> yes. well, i think that suggests that they are obviously becoming a lot more comfortable with the fact that the u.s. economy is slowing down a little bit at the moment. that's been evidenced in the data not the nonfarm payrolls -- >> yields were 1.62% before the employment report last week. here we are at 1.85%, just below 1.86%. >> yes, it has been quite a volatile situation, of course, just over the course of the last few months. but i do think going forward that treasury yields remain trading within similar boundaries to what we've seen

already. clearly we've seen inflation come down a little bit. i don't think that's going to turn around very soon given the underlying weak growth fundamentals we see in, for example, consumer spending and other outputs, numbers other than, for example, the jobless numbers as we just saw. >> we just got t-bill sale out of italy, sold 7 billion t-bill. it was 0.9% on april. bid to cover ratio below the 1.64. italian t-bill average year -- the point s yields coming lower again. we saw it with spanish debt auction as well this week, lower yields. is this reflective of just the hunt for yield story and is it -- i mean, how much lower can we push italian -- spanish government debt, do you think? >> i think in shorter date maturities not more than already. you highlighted already with

regard to pimco and their latest changes in underlying bond asset allocation. they've been pulling back. and i think that's indicative of the fact that yields have moved quite a bit already in some of those peripheral government bond markets. italian debt, spanish debt was traded at significantly higher yields just a few months ago. obsly, lot more of confidence with central banks pushing ahead with much greater stimulus. not just in europe with the ecb rate cut last week but also if we look at federal reserve, recent comments have suggested that they're also wanting to push through more stimulus in the near term. certainly not in the same place we were a couple months ago where all the talk was about tapering back mortgage and treasury purchases at some point later on this year. we see the same in japan. this is all encouraging investors to move out of cash and to try to get incremental yield in bond markets. >> what's happening in the

allocation between corporate credit and, you know, sort of -- not much aaa left but you know what i mean, sovereign debt. >> i think it is about investors feeling a lot safer that they've got central banks on the same message. they're encouraging investors to seek those incremental yield. probably slightly riskier areas than investors would have belt comfortable a few months ago. >> yeah. in term of sort of weightings and allocations, what are you guys doing? >> what we've been doing recently is picking up some emerging market bonds in in particular where we think there's attraction to developed markets, reducing allocations to government bond markets we think are a little bit overvalued in the near term, given the very strong moves we've seen since the highs in yield earlier on this year. for example, we did have longer dated gilts.

we sold out of that. we had longer dated u.s. treasuries and we cut back significantly on those as well. and we've reallocated toward corporate debt, and particularly low rated investment grade corporate debt rather than an allocation to high yield where we think that's looking a little bit overpriced. >> it was amazing to see bp's bond issue, i think, was yielding 2% and their stock's yielding 5%. i mean, it's -- it maybe explains why we got equities doing so well, right? when you look at those differentials. good to see you. thank you for joining us. head of fixed income at sandlin investment. cnbc learned carl icahn is te teaming up countering the $24 billion buy outfounder from michael dell. reportedly offering $12 a share and cash for pc maker and finance the rest of the deal with $5.2 billion in debt

guaranteed. icahn and southeastern own 16%. wall street journal says in a letter to dell's board icahn and southeastern have proposed replacing directors and management. dell's stock up over 4.5% in frankfurt. and julia has been speaking to mario greco in an exclusive enter swru from milan after they beat estimates for the quarter. we'll hear from julia and the man himself.

here are your headlines. g-7 landed in u.s. we bring you exclusive interview with jacob lew, that will start in about 15 middle. the yen slumped for fresh four-year low against the dollar begging the question just how low can the japanese currency go? and cnbc learns carl icahn is preparing a proxy battle for dell in challenging to founder michael dell. also the ftse moved today. the italian stock exchange leading the gains in europe and down to generali helping out, up 1.2%. posting a 6.3% jump in first quarter net losses. it had a loss in 2012.

how much of a turn-around how we government the company? julia has been exclusively speaking to the ceo and she joins us now from milan. julia. >> reporter: thanks, ross. certainly if q1 is anything to go by the turn-around the new ceo started progszing last year is starting to take shape and the operating profit was driven by performance in the nonlife part of the business. that, in fact, seeing operating profits up 26%. now, he was keen to point out actually that 75% of the business is generated outside italy. but, of course, italy is still their biggest market. i asked him just how concerns he is about the macro economic risk here in italy. this is what he had to say. >> italy is, no doubt, in a profound crisis. this country has never seen a crisis like this one. not even after the first world war. it is now the fifth year of

recession. there is liquidity crunch which is a serious matter for the economy. and fiscal policy is still very tight in its blocking the growth of the economy. so, it is a serious situation. on top of it, there has been political turmoil, there has been uncertainty in the political side. i think it is time now for italy to take some actions. and also europe has to concede growth is the most important issue for europe and for italy. >> you mentioned you need to see italy and europe do things to support growth. what do we need to see from this government now in order to boost growth and support the economy properly? >> well, we need stability, first of all. second, we need reforms. this country now needs a government. you know, often people talk about italy saying italy is better off without a government. that's surely not the case anymore today.

the country needs a government, needs decision to be taken, needs to reform to be launched in stability because we will not get out of such important crisis without stability and reforms. >> you compared the current government in saying it's better than having no government at all. how confident are you, actually, they will push through on the reform process. >> i'm just hoping that they will do it. and i think everyone in europe is hoping that a country as important as italy gets stability and gets also the capacity to take the actions needed to drive the country and all of europe outside of this crisis. it is a very important step for all of europe. i mean, europe cannot succeed without italy and italy cannot succeed without europe italy is at the core of europe. and the destiny, in a sense, of the content is very much leaned to the destiny of this country.

>> i think italy can't survive without europe. europe can't survive without italy. interesting, i think that will be the message taken by the new economic minister when he meets the other euro group finance ministers on monday. at least, strong results on the first quarter for generali. >> good stuff. thanks for that. that's the latest from milan. still to come on the program, the spring art season kicked off in new york this week. whose bank balance is now looking picture perfect? [ male announcer ] this store knows how to handle a saturday crowd. ♪ [ male announcer ] the parking lot helps by letting us know who's coming. the carts keep everyone on the right track. the power tools introduce themselves. all the bits and bulbs keep themselves stocked. and the doors even handle the checkout so we can work on that thing that's stuck in the thing.

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is now providing answers families need. siemens. answers. spring art auctions have kicked off in new york with sotheby's taking in picture perfect $230 million. it's lime paul allen and madonna have been eclipsed by a pastry chef. reached $18 million breaking artist's auction report. joining is phillip hoffman, very good morning to you. what have we learned from sales this week? what's the biggest trend? >> well, i mean, a very strong sale at sothebies to kick off. there was a lot of active

bidding. it was very interesting night. the impressionist market is extremely strong and good pictures maybe good money. one or two casualties at christie's. sotheby's did $230 million in a couple of hours. christie's did about $150 million the following night. very slightly thinner bidding at christie's but, you know, on what we're seeing is the really good pictures, three or four bidders around the world prepared to pay 5, 10, 15, $40 million. if the price is slightly overhyped, people are staying away. >> there is competitive at the right price. where is the bidding coming from? >> well, you're seeing -- the russians are in there. asia, one or two very wealthy asian families are bidding there. obviously, some of the big collectors, the hedge fund

managers, they're back in buying. and people like the fine art front. >> yeah, well, quite right. you said, you know, it was a very strong in the impressionist front. what's going on between comp ten rath contemporary and old master market? >> that's very interesting. on this coming week monday, tuesday, wednesday we'll see some blockbuster sale results at the -- in the contemporary sales. i think contemporary will outshine impressionist. in the old day old masters was the number one impressionest a long there, and then a small third came the contemporary market. now that's all turned round. the fashion and focus and all the big bidding that's going to be going on will happen on tuesday and wednesday nights, richter and bsaki will set world record prices. ten years ago you wouldn't see

somebody paying $30, $40 million for those pictures. now they are. exceeding prices for a very nice. it's slidely more old fashioned. the really big works will, of course, do extremely well. the focus very much is all on contemporary art. that's where the -- there will be much more active bidding than we saw at sotheby's and christie's last week. >> that suggests it's a much more -- it's a much more risky market. old masters got a lot more pedigree, in a contemporary market is more of a bubble. >> well, they can be and you have to be very smart. you have to know what you're doing. some of the -- some people are looking at art as pure investment. others are looking at it as a store of value right now. they're so worried about currencies, so worried about volatility of the stock market. they don't know what's going to

happen with real estate so we're seeing a lot of people put money into art as an alternative investment. and i think that people want to own rare art and they want to own art that -- that is very unlikely to come back on the market again. so, i think you're going to see the very top end of the art market, gains in value and in pricing over the next five to ten years. there are bubbles in one or two artists. people talked about a bubble in hurst. i was at new york auction yesterday and there was an amazing medicine cabinet just over $3 million. you know, the people say, well, that type of thing won't sell again but it will. even hurst did very well. >> suppose the thing about art is, from an asset, it's a portable real asset. property isn't portable. if you're worried about governments wanting tax wealth, you can just port it out of the way. maybe that's the attraction as

well. thank you for that, phillip hoffman. meanwhile, as far as your futures are concerned, after this -- after the pause we had in the rally, we are indicated higher today. s&p implied 2.5%. so, it could still be another week of gains. european stocks are doing okay. gains between 0.5% to 1% pretty much across the board this morning. the ftse doing pretty well, led by generali. and as far as currency markets, the focus has been on the yen. yen weak across the board. dollar weak across the board. dollar/yen at best levels since october 2008. and still to come on the program, cnbc's steve liesman will be speaking exclusively with u.s. treasury secretary jacob lew. we went out and asked people a simple question:

how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age.

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you're watching "worldwide exchange". greenback pushes dollar/yen past new handle, unlocking a new stage of rallies with japanese equities. the g-7 finance ministers this weekend. we'll bring you exclusive interview with jacob lew in a few minutes after talks with george osborne. battle lines have been drawn. carl icahn is set to launch a proxy fight for dell, facing off against buyout bid by the company's founder, michael dell.

italian stocks lead in europe as generali outperforms. recovering from last year's losses. the ceo told cnbc in another exclusive where the strength is. >> the country which is doing best is germany. and i don't think this is a surprise to anybody in europe. and definitely we'll see the difficulty of the economies in southern europe, france, italy, spain, really suffer. moeanwhile yesterday a dip n the equity markets. the dow right now is called higher by some 35 points. implied open nasdaq up five point. s&p 500 implied up three point. just slipping back from record high yesterday. as far as european stocks are concerned up half percent

for xetra dax up. ftse mib up, helped by numbers from generali. michael dell has a potential fight on his hands. what's going on? let's find out. >> hi, ross. cnbc has learned carl icahn is teaming up with southeastern asset management to launch a proxy fight for dell, countering the buyout bid by michael dell and silverlake partners. they are offering $3 billion finance bid. it would buy out shareholders at $13.65 a share, a bid several big investors have said is too

low. icahn and southeastern own 13% of dell shares. michael dell owns 16%. since the buyout deal was announced, dell shares are relatively unchanged. wall street journal reports dell's board has considered options to keep the company public and pay a large dividend by borrowing money. the journal says the board has ruled that out partly because they think it's too risky to both keep dell public and take on a lot more debt. in a letter to dell's board, icahn and southeastern have also proposed replacing directors and management. they say you now have the opportunity to ameliorate the damage we believe you've caused to dell and its shareholders. spokes people for dell and silverlake aren't commenting. in german trading, dell shares are up 4%. >> thanks for that. plenty more to come from seema throughout the day on cnbc.

also to come on the program, just a few minutes away from steve liesman speaking exclusively with u.s. treasury secretary jacob lew. ♪ roomba, roomba, roomba, roomba ♪ ♪ roomba, roomba ♪ roomba, roomba ♪ roomba, roomba ♪ roomba, roomba ♪ got a robot vacuum ♪ cleaning up my life ♪ and it's gonna cut through ♪ filth and funk ♪ just like a knife ♪ dirt won't come back again ♪ thanks to ♪ my brand new friend ♪ got a robot vacuum cleaning up my life ♪

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g-7 finance ministers and central bankers are expected to discuss new ways to jumpstart growth when they meet outside london tonight and tomorrow. our very own steve liesman is in london with a very important exclusive interview. hi, steve. >> ross, thanks very much. i'm here in london with u.s. treasury secretary jack lew, who is in london ahead of the g-7 meetings of finance ministers. secretary lew, thanks for joining us. >> thanks for having me, steve. >> let's begin with the message you have for europeans when it comes to the issue of austerity and when it comes to the issue of stimulus. it sounds to me like the message this time is maybe a bit stronger. are you worried about a backlash? >> steve, i've been engaging with europeans since becoming secretary and this will be a continuation. we feel strongly there needs to be the right balance between austerity and growth. we've seen in the united states

that scheduling the deficit reduction to come a little bit later has left us with a stronger economy. we're not arguing over whether or not we all have to get our fiscal house in order. we all need to get our fiscal houses in order. i think the question is when and how. one is having european economies grow means they need to get the right balance between their budget policy right, so that they can get growth moving. the other is they have to fix some credit market issues so they can get capital flowing into small and medium sized enterprises that do the hiring. that's part of the message i bring. >> how receptive do you feel the europeans will be to that message compared to how they might have been a year ago when there was some concern the u.s. was meddling in their affairs? >> you know, i have found them to be very open to the conversation. we don't agree on everything. but i think the fact that thest the u.s. economy is performing much better is something they've noticed. i think the fact that the academic literature is, you know, been evolving a little bit

is something that the world has noticed. you know, the reality is for a global recovery to go where it needs to go, it can't be led by the united states alone. europe is going to have to do better. countries like china are going to have to do better. and we need to do our part, which we're determined to do, but each part of the world has to grow for this recovery to really be what we need it to be. >> i want to get to our part but let me express on europe. one thing a european said is germany increasing consumer demand. germany should go further into deficit? is that the thinking? >> there are countries in europe that has more fiscal space, as they say here in europe, to create a little bit more economic demand in economic growth. each country's going to have to make its own decisions. they have to look at an overall level of growth in europe. not all the countries in europe have the same capacity to grow. and overall, europe is going to need to do a little bit better.

i think that there's room for progress. we've already seen some progress made in terms of easing off of the rigid deadlines for some of the countries to hit fiscal targets while keeping an eye on the medium and long term structural reforms. i'm hoping to continue making progress in these conversations. >> in britain, is there more fiscal space here n your opinion? >> they have -- without changing their policies they have found a little more fiscal space. obviously, i think that we have demonstrated by our actions what we think has been the most effective path. >> let's go take a trip away from europe to asia where the yen is at 100 to the dollar. are you concerned about that level? is that a level that's going to hurt u.s. exports and the u.s. economy? are you concerned about the methods japan has used to devalue the yen? >> steve, i'm not going to comment on day-to-day exchange rate movements but i think if you look back to the g-7 agreement reached in advance of the g-20 meetings in moscow a

few weeks ago and reaffirmed more recently in washington when the g-20 met there, the world community has made clear that domestic tools that are designed to deal with domestic growth are within the bounds of what the international community thinks is appropriate. that policies that are targeted to effect exchange rates are not. as long as the policies stay within those bounds, we think growth is really important. i just addressed in the european and u.s. context. japan has growth issues for a long period of time that we have encouraged japan to address. so as long as they stay within the bounds of those international agreements, i think growth is an important priority. >> i have to ask, are they within those bounds? >> you know, i'm going to just refer back to the ground rules and the fact that we have made it clear we're going to keep an eye on that. >> okay. from japan to the united states, where the dow is at 15,000, is that a level that concerns you, that maybe there's a bubble as

chairman of the financial stability oversight committee, is that something you're monitoring? >> steve, again, i'm not going to comment on market movements. i think, you know, in the recent report of the financial stability oversight council, we made clear there are ricsks in the world we're worried about. there are risks in the housing finance sector. there are risks in the shadow banking area and a number of other important areas. we'll continue to focus on the areas of systematic risk that our policy is directed at, but i'm not going to comment on market movements. >> if the stock market were at -- something the fsoc team were a bubble, is that something you could see the fsoc taking action about, that's on the regard as a -- as something that's monitored? >> i think if you look at the report, we identified a number of areas of systematic risks. we are going to keep our eye vigilantly on all those areas of systematic risk. you know, some of them are emerging areas. this year cyber threats were one of the areas of risk we

identified. i think if you compare now to a few years ago, there's a much higher level of awareness at the treasury secretary finance minister level, at the head of state level. it's something we just have to be vigilant we keep our eye on what are the risks of today and tomorrow. >> the dow at 15,000, unemployment, though, still high at 7.5%. is there a disconnect between main street and wall street? >> the core fundamentals of our economy have shown over the last number of quarters and months that we're moving in the right direction. the economy is growing. we're creating jobs. it is not fast enough. we have tried to be very clear that while growth is -- it's encouraging, it's not sufficient. our policies are aimed at what can we do to grow the economy more and create more jobs. we have a particular concern that there is a disparity between short and long term unemployment. we have to make sure we don't leave behind the long term employed. either the young, who haven't

made it into the workforce or older workers who are being pushed out of the workforce and have a harder time coming back in. this is something that we give a lot of attention to. >> but it seems like policies by the administration, you had proposed certain things but they don't seem to be getting through congress. what can be done about that, especially in light of the austerity -- the sequestration, which most economists agree are going to reduce jobs? >> steve, the thing that we can do that would be most effective would encourage overall growth and greater job creation because that is going to be the thing that drives employers to get beyond just keeping people in their job and creating new jobs and bringing people back into the workforce. when i look at sequestration, which was a policy that was designed never to take effect, it was designed to be so unpleasant that a balanced alternative compromise would be within the reach of the political system, one of the things that has to be understood about it is that it takes a half

or more percent out of our gdp which translates into 750,000 full-time equivalent jobs. if there was a policy proposed to affirmatively create half a percent of gdp growth and create 750,000 jobs, you'd be a hero for coming up with that idea. we have the idea and the president has put it in his budget. you replace this policy that is not designed to be good policy. it was, in fact, sdintd to be bad policy and you replace it with a sensible balanced approach to put the savings, revenue in medium and long term where the economy needs them to be. not to take them out of our revenue. >> when we spoke in march you were optimistic there would be progress on sequestration. do you remain optimistic? has there been any progress in the past couple of months? >> you know, it's a little early to answer the question. conventional wisdom in washington gets negative very quickly, so i would just caution you, myself and others not to let conventional wisdom become

self-fulfilling. you look at the logic and the analysis. it is so clear that the right thing to do is to reach a sensible compromise on a package that would replace these cuts, which are bad policy with good policy. that we're going to keep working hard at it. >> but you have a couple of republican senators on board, it sounded like, in march. are they still on board? are they still talking? >> yeah, they're still talking. the president just this week has continued his conversations with both republicans and democrats. i've spoken with many of the leaders, my colleagues in the administration are doing the same with, you know, members and leaders. i think that there are people on the hill in both parties that want to do this. obviously, the political hurdles are still am. but we have to keep working at it. and i think that the -- the president by putting forward a budget that made it clear he is prepared to go to a place that's difficult but gets him well into the sensible center is an invitation which we hope is taken to come together and get this done. >> there's something you can

propose or tell us you think can be done to break the political log jam? >> well, first of all, steve, while the political situation over the last few years is not necessarily always been attractive, we shouldn't forget that quite a lot has been accomplished. 2 1/2 years ago we were looking at the need to reduce the deficit by $4 trillion over ten years. and everyone was saying, no way it can be done. we reached bipartisan agreements on multiple occasions on how to cut spending and raise revenue to do $2.5 trillion of that $4 trillion of deficit reduction. we're more than half -- almost 60% of the way there. to get the rest of the way there requires a bit of movement on both sides. the president has indicated he's prepared to move. we need for republicans to move a bit. as you've already indicated, there are a number of -- particularly of senate republicans who want to find that space. you look at sequestration and you look at the effect it has on

the defense industries and on our national defense, more importantly. senators who are engaging with the president like john mccain and lindsey graham, they're actually concerned on the policy here. they don't think see quester is good policy. so, since everyone agrees -- or many agree, most agree it's bad policy, we ought to be able to come together. >> talk about policy and jobs again. there has been some discussion among economists that perhaps the health care act is leading to a reduction in job growth, especially among those who are at that threshold of 50 employees and greater. is that something you've monitored? is it something we need to do something about? >> you know, i get this question a fair amount, steve, and i've asked our council of economic advisers to take a look at it. they tell me, based on their analysis, is we've actually seen jobs growing faster in those smaller, lower paid industries than in the more typically high insurance coverage industries

that you've seen more coverage, more hiring. i think the evidence we have in the economy is not consistent with that. people ask the question, in part, because there's natural uncertainty as we approach the implementation of the affordable care act. we're determined to do the best possible job implementing it, making it clear, providing guidance. and i think we're going to end up in a place where we have more security for workers, more clarity for businesses. and it's going to strengthen the economy, not weaken it. >> is it something you're monitoring would change if you were -- if there was evidence that it was happening? >> we're obviously keeping our eye on how to implement it effectively in a way that contributes to economic growth. >> do you feel like it's had an impact on health care prices? >> we've obviously seen some abatement in health care prices in recent reports. i think that if you look not just at government insurance but across the health economy, it is a big issue in the united states that health care costs keep

rising as a percentage of gdp. if we can slow that rate of increase and bring rate of growth more into line with general economic growth, it would be a good thing for economy. i think the affordable care act will help with that. it makes sure people have access to preventive care so we end up with less need for costly treatments down the road. those things don't happen instantaneously. you need to get it in place up. need to expand the coverage and we're well on our way to doing that. >> i read something the other day that i wasn't sure if the decimal was in the right place but i saw that -- is it fannie mae is going to give a check to the united states government of $59 billion, is that right, at the end of june this year? >> i believe that while i've been traveling they announced the date. >> yeah. i didn't have time to check, but -- >> they will be making this one-time payment, i believe, in june is what they announced. >> is that something that with the appointment of a new oversight -- head of the oversight of that fannie and

freddie, is that number too big? do you want to see use some of the policies that would reduce the amount of money fannie and freddie make, and use that to help the homeowners? >> to be clear, under the terms the federal government went in to help fannie mae and freddie mac, their profits come right back to the taxpayer. so, as they make money, it's going into the federal treasury. they have not yet paid back the taxpayer, but the goal is to pay taxpayers back. i think that it's a little complicated why this payment is being made but it reflects the fact that their core operations are more profitable, which is a good thing. it's a good thing they're paying back taxpayers. it doesn't address the long-term need for reform of our housing system. we need to make sure that we're doing everything we can to make sure the middle class homeowners can refinance their homes if they're under water or

high-interest loans they can't get refinanced. we also need to look at the future of housing finance to make sure we have a system that balances two very important concerns. one is access to credit for qualified borrows so we can keep homeownership as an ideal for the american family and keep construction going. on the other hand, make sure we don't create ever again a situation where the taxpayer has to assume the risk for decisions that are made by companies that are taking risks they shouldn't be taking. we're working on that as we go along. i have to tell you one of the most important things that congress could do would be to confirm a new head of the fhfa, mel watt, because that's an important regulatory body and we need a confirmed head in there to make policy in this area. >> i have two more confess, secreta questions if you bear with me. when is the debt ceiling going to be reached next? >> actually, i can answer that question a little more clearly today than i could have yesterday because of the one-time payment fannie mae has announced makes it pretty clear we're not going to hit the

effective deadline until at least labor day. the statutory debt limit will be reached in just a few days when it expires on may 18th. but because of the extraordinary measures that are available and the cash flow that we now can predict, it will be not until at least after labor day. >> good, so people can relax in the summertime. >> people shouldn't relax. congress should deal with this right away. the fact that they have more time should not put off dealing with this. the uncertainty that's created by putting this off is not good. i don't think that it's in the interest of the u.s. or the world economy for congress to wait until the last minute and create a sense of anxiety. congress has to raise the debt limit. the debt limit does not incur new obligations. all it says is old obligations congress authorized will be paid. for the entire history of the united states, we've always paid

our bills and we have to do that now. >> i'm being told i have to wrap. a year from now, the global economy, what's your vision of it here? >> i think the economy is healing. certainly in the united states. we would very much like to see more growth. outside of the united states, here in europe in particular. i think there are many challenges, but in meetings like the one i'm going to go to where finance ministers meet, later in the spring/summer when leaders meet, it's an important time to ask the question, what can we all do to create more growth and create more jobs? that's what i'm here at the g-7 meetings to do. >> secretary, thanks for joining us and taking time out. >> steve, appreciate it. >> ross, back to you across the river there. >> great interview, steve. look, you're spending the rest of the weekend with g-7 and the g-10 as well. what else are you focusing in on? besides that great interview, which is more than enough. >> well, i think there's plenty to do and to learn as the

relationship of the imf to some european countries and some relations and i think also a lot of talk about currencies is important, even though the secretary had his reservations, obviously, as they always do, about talking publicly about currency valuations. >> steve, good stuff. enjoy your trip overhere. hopefully we'll catch up. thank you for that. and you get plenty more of that exclusive interview, steve's exclusive interview with the treasury secretary will be online, of course, throughout the day. cnbc.c cnbc.com. we'll be playing a lot more on air as well. let's remind you what's on the aagenda. ben bernanke talking at 9:30 a.m. eastern. kansas city fed chief esther george speaks and at we get the federal budget statement. ahead of that, we are called higher today after a pause yesterday in the rally. still looks like we'll finish the week up yet again.

the dow at the moment is currently 40 points above fair value. futures steadily getting stronger. s&p 500 at the moment is currently over 3.3 point above fair value. this is european markets. also getting towards the best level of the day. ftse up 0.5%. ftse up 1.3% that's after today. we also saw good t-bill auction. yields coming down in italy. asset move has been dollar/yen up the week, 101.30 is the highest level for dollar against the yen since october 2008. the yen also at three-year lows against the euro. greenback up across the board. plenty more to come now on cnbc. "squawk box" picks up the reins.

have a good weekend. before that, a profitable day.

good morning. today's top story. dollar hitting a 4 1/2 year high across the yen. corporate news, carl icahn is ready to bid for dell. and steve liesman sits down for an exclusive conversation with u.s. treasury secretary jack lew. it's friday, may 10, 2013. and "squawk box" begins right now. ♪ watch the radio turn it up to ten party people go call up all your friends ♪ ♪ rocking all night weep sleep when we're dead ♪ good morning, everybody. welcome to "squawk box" here on

cnbc. it's friday! yea! i'm becky quick along with joe kernen and andrew ross sorkin. t you'll see green arrows. s&p futures up by four points. the major u.s. stock averages ending lower yesterday as the s&p and nasdaq snapped five-day winning streaks but stocks are still on pace for a third consecutive week of gains. among the reasons cited for yesterday's afternoon selloff, we had the dollar, greenback crossing 100 yen for the first time in four years. it's been awfully close recently. we've been waiting for this to happen. happened late in trading yesterday afternoon. the yen falling and japanese stocks are rallying. nikkei hit its highest level since january of 2008 today. you can see 14,607. shanghai composite was up by 0.6%. in early european trading this morning, you'll see at least at this point that there are some gains here.