welcome to "worldwide exchange." i'm charn cho. these are your headlines tr around the world. boj ministers draw skepticism over the bank inflation targets and concerns about the turbulent jgb market. can they bury the hatchet? trying to resolve a trade confli conflict. this is angela merkel and mr. chang warning difficulty must be

avoided. the eu is investigating app apple for accusations it is unfairly paying less taxes. >> announcer: you're watching "worldwide exchange," business news from around the globe. on today's show, a completely new concept allowing companies to raise income from their own savings. that's where entrepreneur mark hudson claims oxygen finance can do. google's eric schmidt continues to defend google's paying taxes. leaders from middle east and north africa have been gathering in jordan for the world economic for ym. we hear from the ceo about the

challenges of security issues. also coming up, we will visit bangkok. its capital is taking the top spot to london. that's right. we will be joined for more at 11:40 cet. minutes from the bank of japan's april meeting think the central bank should consider measures to prevent a drop in liquidity from the japanese drop in bond markets. the bank's targets as hardly reached by march 2016. here is a look at how the japanese market down another 2% to 3%. this is compounding some of the volatile trade seen as of the close. 469 points lower on the nikkei 225. joining us now is martin schultz, senior economist, fred

coll collins and martingale. let's kick it off. what do you think the japanese stock market is going from here? volatility last week had the economy thinking after sharp corrections. >> i think there's a problem and the problem is that the community, perhaps the japanese community most particularly, perhaps impacted the worldwide community, doesn't believe the central bank in japan is capable of doing what it says it wants to do. and when you have that situation, you have a big problem and you have a problem that relates to the bond market and from the bond market to the equity market. and i think that is what is going on at the moment. initially, people said, okay, great, the central bank is going to do the stuff we like. this is going to be great for the markets as a whole. let's buy some. they've had second thoughts.

they are worried. and once they lose faith in the central bank, you have a problem which you actually probably can't control. >> martin, do you think investors are losing faith in the boj? we saw the minutes today. on the board as to whether this 2% inflation target can be achieved. >> well, i don't think so now. what we are seeing right now is the difficulty of finding a new equilibrium here. and i completely agree that the task of the bank of japan is extremely difficult. most would actually believe that the bank of japan is able to achieve its inflation target, but the measures it would need to do so could be extreme. and extreme means buying even more japanese government bonds, financing the government directly, and that would raise major concerns in the second half the of the year and this is why everybody is so nervous.

>> we've seen enormous gains in the japanese markets. in fact, negative returns from other stock markets like south korea is now the time to stop switching to other trades across asia. >> well, i don't want to get too excited about a shift or reverse of the moves that we've seen. obviously, if you have a market that goes up 50% in the first few months of the year, you have to expect some kind of selling or profit taking. regardless of whether we come down to 13,000 or even down to 11 1/2, that's a big move down, but we've seen a big move up. there's nothing we've seen in terms of price action or volumes or an increase in volatility that suggests anything else. we are still looking at even dollar terms, 25% gains. so -- on the nikkei. we think there's still some more down sides, but it's really -- for us, it's nothing more than a straightforward correction. the market can't -- if the market was to continue going up in a straight line, then you're

going to have a bigger problem down the road. so, yes, having said that, i think we're going to see some selling -- i'm sorry, in answer to your question, yes, south korea in particular is probably going to be the main ben factor of that. given this is the country being perceived in terms of the one moving out of autos, seals, technology, you name it, you know, the japanese, the koreans do it. >> ben, i want to get to some of your thoughts. we've got very wide numbers to where the nikkei could do from here. the likes of what goldman sachs is calling on the market, this suggests some volatility. what the what's your strategy in this environment? >> okay. well, you know, we are looking at increased volatility and that means that you can see, you know, a week or even a month's worth of movement in a day. so you have to have a plan. the way we're trading the market, we did buy some tech, sony, buy some banks and we're selling them i think on thursday last week. the only way really to control

your risk and mitigate in this market is to trade it and have a plan doing it. it is at this level even though we think it's gone lower, it's worth the risk to take some selective stocks in. on a smaller, you have to maintain your investment size to much smaller, like 30% of what you would do. but you can still see the same gains in dollar amounts. the volatility makes moves very difficult to chase. in fact, if the volatility and some of the options surrounding this creating some of these big moves, you're really going to get run over unless you've got your stops in place. >> wa i'd like to ask you, is your opinion on the currency. it seems to me that, in fact, the equity market and the currency are going in opposite directions and the read from the equity market went up so much was because you pushed down the currency so much and a reversal of the curve actually in both areas. and the reason why is because the international community

doesn't like the idea of the yen being pushed down. it thinks the central bank isn't able to do it. what is your opinion of that? do you think the japanese authorities are capable of getting the currency down and, therefore, the equity market up? because that seems to be the absolutely crucial question. >> well, you know, i think their capability, i leave that to people much better suited to judge. but what they are doing is changing a policy that's in place and demonstrated an intention to follow through on change. so a change naturally japan's natural progress, if you will, natural destination given this population is inflation. what they're doing is changing their policies to do that. can they do it? is it makes sense in terms of interest rates to be selling yen right now versus buying the dollar or sterling or not necessarily the aussie, but yeah, i think it does. the fact that there changes in

place, there is inflation taking place, japan is going to last through this long party of monetary easing globally and it's bringing its own punch. so the fact that they're following through and abe is following through on promises he made or trying to follow through on policies he made i should say preelection, that is a new -- that's certainly a new strategy for a japanese politician and the fact that he's coordinating that with the boj and the new governor of the bomg. if it was possible, the risks to them being able to do that is much higher and that's what we're seeing pricing in. in answer to your question about the currency and the equity markets, generally speaking they're very highly correlated. if we see any, the yen as well as the nikkei, i think, needs to take a bit of a breather. so -- and needs to -- in order to do this, in order for the politicians, the boj to get extra confident, a little bit of a correction, some scary strength in the yen would probably give them a little bit more impetus to accelerate their

time frame. so they have a better chance now than they've ever had before. >> one of the concerns is the jgb and the spike to 1% rate. there is a concern that we're not seeing the boj reflation trade. doesn't this have the impact pushing up costs across japan? >> well, one of the main instruments of the bank of japan for now is inflation expectations, inflation expectations mean that interest rates have to go up and this is what mr. occkurodo recommended between. as a policy, the bank of japan will have to push interest rates down again and it will have to do so even more if it sees policies aren't running that well and that the japanese needs to be weaker to support the economy and the exporters even more. so what we will likely see over the next month is that the bank

of japan is pushing even harder getting interest rates lower. that would increase more expectation for carry trades because companies are investing overseas and that would be, then, the main tool of getting the economy moving when the government is not doing enough in terms of structural reforms. complicated case. >> and my issue here is it comes back to the private sector and the central bank. suppose the central bank issues huge liquidity and the japanese public doesn't want to buy foreign assets. let's supposed the money goes abroad on the other hand. then it goes back into japan. but, in fact, they won't let the yen go down because at least they think they know that the yen is the safest and the best currency. then off problem for the japanese economy. you have a problem for inflation staying negative. you have a problem actually that the equity market can't go up because the dollar value of the

equity market is preset. and if the yen is high, the equity market is low. it means the central bank actually has its legs cut off. it can't make things work. and that is my central issue. that i think is the problem that people are now worried about. >> i hear him. i totally agree that one of the reasons for the yen strength over the past few years has been its stability. my point, really, is that the stability of that in my opinion, it's quality or a qualification as a safe asset is no longer valid relative to the probability of interest rates globally going up faster than within japan. i think, you know, the market obviously knows much more than i do and i think much more than most of us do. and it seems to be pricing in a continuation of the risk of inflation of japan is pretty low, but the risk of its relative interest rates to the

rest of the world is pretty high and i think there's a lot of juice left in there. bill gross is talking about getting out of the yen. and also, as far as japanese onshore, the bond markets, they're holding all the bonds and the equity market. these guys are a big deal. they're old, they're sitting on a lot of money and they like to throw it around. i think domestic retail, the currency market is about 8% on any given day. this is when the market is low. my point really is that the japanese are. we're witnessing record number of transactions within japan on things like apple and ibm, all the bellwether stocks in the u.s. these guys are out there buying foreign equities, foreign bonds, they're trading the currency, they've been trading the currency and doing it for a lot longer than you might expect. i agree, i believe that they are

out there spending as much yen as they can because they think it's going to go the other way. i suppose i'm disagreeing with what you're saying. >> martin, come in here. >> yes. the abe-nomics and mr. kurodo is getting the economy going through the domestic economy. this is exactly where the market is the most skeptical about. it's not so much about the ability of the bank of japan doing something, but if the domestic market isn't moving fast enough, the bank of japan would have to stretch its legs even more than might be expected through japanese savers, for example. and that is where the japanese yen comes in again and the overseas investment vatgies of companies. so what we will probably see is a very difficult phase right now where everybody is looking around and japan's industry will look overseas again for sure.

>> gentlemen, thank you very much for joining us, martin schulz and ben collins. mr. nightingale is staying with us in the program this morning. let's catch up with some of the market action across europe. we've got some gains in the xetra dax has bounced up 0.7%. the uk market is not on the board because they're closed for a bank holiday today. some of the markets are indeed moving forward after losses from last week. 0.75% for the benchmark this morning. we have seeing some outsized gains relative to the italian markets. the ftse mib is up more than 1% in trade. let's re ccap the bund markets. the german ten-year gilt is still below 2%.

the jgb, this is where we're seeing volatility. 0.83% is where we're sitting higher and the ten-year treasury is now flat. the question is the timing on of tapering. some of those purchases, that's the reason why we're seeing this t chats to the 2% mark. for markets this morning, let's get up to speed with some of these key pairs are trading. dollar/yen rates, as well, you'll notice the break under 1011. the yen is showing a little bit of strength.

we were very comfortable for most of this year. 0.965 is where the currency is trapping. sterling, 1.5147. let's get more on how the asian session has been playing out. chloe cho is joining us for more. ms. cho, it's great to see you today. >> yes, ms. cho, i feel exactly the same way. volume in terms of value comes from individual investors. that continues to alter the level of volatility that we see here. remember, once again, another huge roller coaster ride that we saw. ultimately, the market did end down about 470 points off 2.3%. at one point, the market sold below that 14,000 handle. the key points coming out from the japanese session is really this. a couple of boj members thought that maybe they should do something in case there's a

decrease in jgb liquidity, but ultimately, the fact that there is no action to do anything about it, i think that is what is unraveling investors. the bank of japan has a meeting with key investors on wednesday. until we get there and if there is no concrete action, we might continue to see a lot of this unvalving moves. what is interesting is that the kuroda, the boj governor said today, 1 percentage point pick up is not a promise to see a reflection of an improving economy. but get this, even according to boj calculations, a 1% rise in rates translate toes mark to market losses, equivalent to about 10% in capital for the big banks and 20% for regional banks. the fact that we're talking about a proportion of 40 billion yen, which is about half a trillion, this is why it's unsettling investors. decent data coming out of china, industrial profit, but we're looking at a low annual compares

job, domestic demand, that continues to sell uncertainty. that said, the hang seng did pick up just about 0.3%. that market was down about four section sessions in a row. back to you. >> chloe, thank you very much. appreciate the context there. today on cnbc.com, the former managing director of the interest rate of financial understandsy doesn't see a smooth role of qe. he will be calling the greenback a commodity industry. the dollar's relationship with oil, go to our website for more on that story. follow us on twitter, @krndzworld. coming you after the break, how spending with become a country's greatest asset. ♪ [ agent smith ] i've found software that intrigues me.

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there's a concern out there over a slowdown of chinese factories, industrial profits rose more than 9% thanks to solid growth in the electricity, electronics and auto sector. the chinese extra activityic agency warned a new figure came off a new base last april when

profits dropped. in china and the european commission will have more talks today aimed at dialing down trade tensions over solar panels and wireless equipment. on sunday, the chinese prime minister and the german chancellor angela merkel both called for a resolution to the dispute warning a trade war would hurt both sides. >> translator: germany will support intense talks with china that we don't come up with permanent import taxes and that we can clear up the issues between china and europe on this subject as soon as possible. >> when the international crisis is not found in india and the worldwide economy is not being brought to life, such measures are particularly questionable. >> meanwhile, china's trade says nonunion members speak to them about getting closer. on the gains, this would be china's first such deal with a major competent. and just four months ago before

the german election, the finance manager has defended angela merkel. in an interview with der is spiegel magazine it was suggested angela merkel is scaring off voters. he ruled out the possibility of a grand coalition. let's get to the latest that's being over the web at the moment. a love story directed by french director kiosha won the best picture of the cannes film festival. during this, the large crowd protesting against gay marriage was encouraged to go and see the film. can a movie change people's minds? does it change your opinion on the subject? if you'd like to join the

conversation on "worldwide exchange," get in touch @cnbcworld or @cnbcwex. finance is hoping to change the company's fortunes by turning spending into a revenue stream. they call it the greatest untapped asset. in the first of the series, looking at these disruptive series, we daut up with mark hoffman and gain by asking him to explain the idea behind the business. >> what we do is look at spending within an organization. and where accounts payable has been considered a liability is that we want to turn that into a asset for the corporation. and we do that by negotiating early payments with the wires, converting that into a rebate as opposed to a discount. and if you have a rebate, then

you can recognize that as income and, of course, cash flowing into the buying organization. so the buyer gets a repayment, which they're happy with. the buyer gets income and cash, so it's a win-win on both sides. >> is it predicated on the basis that companies have cut a lot, they've done a lot with their costs revenue and what revenues are going to be. spend as an asset, right? but what do you do on top of that besides just negotiating discounts? because you take it into your system, as well. yes. what we do is plug into an erp of the buying organization and we do that through the credit module, the credit card mod you'll, which makes it very easy to do. and then we pull the information out that we need to do our calculations. and tieing that together, we do

our calculations, push tax ramifications and other ramifications that we have to deal with. and then we put that back into the system. >> how important is this actually for the smaller guys and the smaller entrepreneur like the me businesses? >> it's really important. as we know, people are stretching out the emts. we don't just go after the big suppliers. we want to go after everybody and the smaller suppliers. and we have to do that in an automated fashion to go after them. but we still want to give them the opportunity to have a discount if they want to take it. they'll come in and automatically sign up and then they'll get paid early. >> so there's a big tech solution behind it. >> there's a tech solution

behind it. it's really made up of financial and tech and implementation. so services and finance and technology. >> now, you're now running this out of the uk, right? >> yes. >> and for europe. you spent a long time, many years experienced in silicon valley, as well. how different is it trying to launch the mobile finance tech business in the uk, silicon valley and the entrepreneurship there .how easy it is to get going? >> well, it is different. if i push venture capital over here, they tend to be more later stage companies. they tell me i need three years of revenue and indeed, you know, before interest and taxes. and that doesn't happen in a start up. so we're going after other types of companies, we're going after

individuals, we're going after other national institutions to raise money for the company. and still to come on this show, how do you invest in these markets? our next guest says investors need to keep adding risk to their portfolios. find out why after the break.

the boj minister draws speculation over the inflation market. can they bury the hatchet? the eu and china hold meetings to try and resolve conflict. this as angela merkel and mr. chang warn a dispute must be avoided. the eu was reportedly collecting information from apple's rival to tell whether it is unfairly choosing its competitors. >> the european market action, you can see today, we've got selling across this market now. the smi is under water. 10% to the downside. the xetra dax and the cac are in

impulsive territory. we're covering some of the losses from last week, but they're scooping up trade on 1%. the boj is across the core. some of the key sectors there in focus like the autos and banks are skoopg up some of the buying. let's move on to the bond markets. the ten-year german bund still below 1.5%. the closing gap ten-year yield. below that 2% mark, across on italy, it's just above the 4% threshold now. we are trafficking weaker than that. closing the gap now with the spanish market. let's move on to rates this morning. we're going south on euro/yen trade. euro/sterling at 0.8543 on the markets. a little weaker, too, the swiss

banks. the big question retire right now is where to invest in these assets. our next guest says gold and equity trades can be moved ahead. christian is joining us, julius bay and martin nightingale is our guest host and staying with us today. we've had so much conversation about the timing. but you think right now is the time to remain invested in equities. tell us why. >> yes. first of all, because there's not much out there and second because the valuations are quite decent and the trend is your friend. so we see a lot of talks about a currency rerating and still note that excessively high valuation levels. so we stick to this.

there will be laggers and they will remain laggers, but the winners are pulling this market off. >> this is a market that has not performed evenly, though. we're seeing some all-time highs on the german market, some okay gains for the benchmark. so which market are you interested in playing right now? >> well, suddenly, if you talk about picking the winners, we have to stick to them. we have lots of concerns with especially private clients who think that all-time highs are basically bearish. so all the markets that i've actually turned in all-time highs, you have to stick to them, the s&p 500 and even if you take from a first perspective some of market fears, especially if you're looking at the currency apps have made all-time highs. it's just to stick to the winners. >> would you be comfortable riding this rally? >> yes, i am.

i think it's going to be volatile and i think the short-term is going to be difficult, but i don't believe for a moment that most central banks are going to take the punch bowl away. i think the liquidity is going to carry on being there because the economies are still profoundly weak. therefore, i'd like to be in the high beater market and within -- i would go -- on the one side, i like switzerland. i don't know whether i'd take my gain from the currency or the equity markets, but it has to come from somewhere. i certainly prefer germany over against france so long as both stay in the euro. of course, if the euro breaks up and the german deutsch mark, as it were, rallies, again, i'd want to be in the deutsch mark to get my gain there rather than from the german equity markets. let's suppose the euro survives for another year or so. i would prefer to be in germany

than france. >> james bullard from the fed, known hawk on the central bank board was telling us last week about the timing of tapering off. and he made it pretty clear that the pace of pure chase, one continue at the same pace, but he was not talking about a 6.5% threshold on the unemployment rate as what the central bank is looking at. he says that's on the interest rate only, not on the timing of qe. so we are looking at a time frame now where the central bank could start to pull some of this stimulus out of the system, which is what has been supported for the markets. >> of course, absolutely. i wouldn't argue against that. although, you know, i think the fed has been very clear lately that, of course, it added a lot of uncertainty and, therefore, i share with you that the short termed will be frumpy because the market has to adjust. and probably will take every print literally as an indication. overall, in the time frame, i think it's still too early to be

worried about this accident and we were talking about a very, very controlled exit. and that's really just leaving like in a stampede. so we think that the overall support will remain there, maybe not as strong in terms of -- but it will be there over time until the year-end at least. >> so what is the trade on gold? because we have seen selling significant bores for the precious metal this year leaving the gold bonds back under the trade this year. what do you do with gold right now and what's the down side? >> it's probably time to sell it. it's so uncomfortable. if you've been in a bull market for over 12 years or so, you feel deeply sorry. and so you have to overcome this psychological trap. but if you look at the fundamentals and if you look at the flows, it really speaks still against gold. the whole production costs are

basically no support. tlf, we think, you know, with the whole normalization of monetary policy, kind of one or two years away, the markets are starting to discount that. and probably safe haven assets such as gold is up from that and will continue to. so i mean, i don't know the fair price of gold. >> more generally, it's been a long time saying that i don't see the value in gold that we see on days when the stock market sells on gold prices. the exception last week where the japanese stock market fell, gold did provide some form of insurance out there. it went in the opposite direction and moved into the green. do you think gold is going to offer any productitection if th a drop in the stock market this year? >> generally, no. everyone hated certain asset classes like, for instance, japanese equities. they didn't know what to do. so by default they put it, actually, in gold. but i take your point, the

fundamental value of gold is extraordinarily difficult to measure. it's only what people want to pay. and that is mostly determined, it seems to me, as far as like the mayan by the trend. when the trend is up, we're going to carry on going upwards. when the trend is downwards, it's probably going to continue to go down. so i would be cautious if not outright bearish about it. >> christian, let's get a final trade from you. a lot of people don't want to directly play the euro, they play the swiss. what's the trade as you see it here? >> well, swiss franc weakness would play into the risk appetite. over the next three to six months, it's quite elevated. i think this is really one of -- gold and the bunds and some treasuries, it's been the trade over the past five years whenever you were kind of in risky territory. so i think there's the normalization there.

fair value is around 1.30, 1.35. so i think we'll move to maybe not at full speed, but slightly gripeding up. so be short the swiss franc for now over the next three to six months. >> thank you so much for joining us, christian. voters will go to the polls for the second day today to select a mayor. among the candidates running, the central left democratic party, martilo did he vito founded by beppe grillo may have been pitted against the berlusconi party. if not candidate receives more than 50% of the vote, runoffs will be held. the european commission this week is expected to heavily criticize for out cutting debt and implement reforms. the commission will, in a report to be published on wednesday, driven funds where hollande's

government unless it takes actions to improve competitiveness and cut by 2015. with india and spain coming under scrutiny, the suggestions the commission could use new power toes impose to address its banking crisis. the french president hollande's credit rating is lower after an all-time low in april. stephane, what's behind the increased support for hollande? >> there could be a couple of reasons, but according to the results of this ifo survey, one of the reasons why francois hollande regained popularity is for implementing the same-sex marriage bill despite protests. organizers of yesterday's protest claims that there were 1

million people in the streets. the original leader did not take part in the demonstration because of security threats linked to the extreme right groups. at the end of the day, nearly 3 hurn people had been arrested by the police. 730% of french people believe that it should act now. the first gay marriage bill will take place later this week on wednesday. almost at the same time as the demonstration yesterday in cannes a lesbian film on the lesbian -- won the top prize at the cannes film festival. the director of the film urged the crowd which demonstrated yesterday in paris to go and see the movie and steven spielberg, who was the head of the jury this year said that he supported the same-sex marriage, but he rejected the suggestion that the award was a promotion of french

gay marriage. >> stephane, thanks for the latest of that. as a new nikkei poll suggests, numbers may be peaking for abe's government approval. >> yes. the prime minister abe's cabinet remains high despite a weekend fall showing a slip downwards. the cabinet's approval rating was at 68%, eight points lower than last month while a disapproval rating rose three points to 19%. the government managed to maintain strong support for its key policies and the approval rate for its handling of the economy and foreign policy issues. those currently stand at around 60%. however, two out of three said that they did not actually feel the economy recovering. on the energy front, a slim majority of 52% said they were against reactivating nuclear power plants that are currency suspended. the state of the economy will

likely become the central issue in the upper house lekdz scheduled for july and the ruling liberal democratic party holds a comfortable lead with 47% of respondents saying they were likely to vote for the party and its members. support for all other parties dwindled in its business. leaders of asia's second and third largest economies set aside new business deals this week. indian prime minister is in tokyo for a three-day visit. he'll hold talks with his counter party this wednesday. the uk newspaper says japan lost -- on infrastructure projects. he says he would like a deal on nuclear energy, japanese and proliferation may be hard against this. meanwhile, japan is offering help and investments for mima. shinzo abe wraps up a trip in 36 years. japan extended half a billion in

aid. tokyo agreed to write off nearly 2 million in debt. and the eubrazilian preside has vowed to rekindle ties between brazil and emerging economies in africa. overall, 12 country res said to benefit from the write-off, including tanzania, congo and zambia. let's give you a look at what's on the agenda in asia tomorrow. australia releases q1 current acts, india with tata communications, petroleum,

india's hindalco is also set to report number pes. st still cocome on the show today, multi nationals have come under heavy criticism for tax havens. we'll be joined right after the break with more. [ male announcer ] i've seen incredible things.

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bay earn munich came out on top this weekend's championship final. and in germany, set to strike today less than two weeks after a previous walkout, the trade union is demanding improved paying continues for its members at distribution centers. 9,000 people in germany say it is already to seek compensation at the upper end of the pay scale for the sector. negotiations between the two sides are continuing. it's said a resolution is unlikely. >> according to the financial times, eu authorities sent up a

question heir last week to mobile networks to determine the distribution terms of apple banks ensuring its rivals are unable to secure better deals. one of the only remaining six original 1976 apple one computers was sold in germany over the weekend for more than $650,000. the buyer's identity wasn't revealed, but the auction house said the bid came from asia. it is one of the first apple computers made by co-founder steve jobs and steve wozniak and it is still in working order. a slowdown in chinese factories, central production rose more than 9% year on year in april. that's thanks to solid growth. the new figures come off a lone base last april when profits dropped. profits are expected to stay under pressure as demand remains weak. china and the european commission will have more talks

today aimed at dining down trades over solar paneles and wireless equipment. it was warned a trade war would hurt both sides. >> germany will support intense talk wes china. so we can clear up the issues between china and europe on this subject as soon as possible. >> when the international football crisis is not found in india and the worldwide economy is not been brought to life sufficiently, such measures are particularly questionable. >> meanwhile, china's trade ties with switzerland are getting closer and fta deal in burne over the weekend. this could be china's first such deal with a major economy.

in an interview, claims were dismissed that the conservative wing ruled out the possibility of a grand coalition with the central left social dlts democrats and the green policy. but will angela merkel bring back policies? martin schulz is president of the european parliament. he told cnbc he doesn't think so. >> no, for sure not. angela merkel's policy is as it is. i think what is happening with this alliance for germany is perhaps all time germany very difficult to understand. but angela merkel in germany is often -- in her own question democratic party to be too left wick. so be too near for social

democrats to be too near to uniforms of social life, to the greens, to the hedonistic societies. and this is a family of very conservative professionals who feel that the democratic union is not longer their conservative party. they want to see it to be and, therefore, i think alliance has a consebive history. one binding element is note to the euro. but behind this is a lot of dissatisfaction with angela merkel's new style of german christian democracy. >> the euro debates ought to go on with the uk with the uk independence party. what message do you have for david cameron and the

conservatives given what's happened particularly with the idea in europe over the last few weeks? >> your question is very difficult how i could give advice to david cameron. but i see what happens. david cameron's announcement on the referendum encourage people like nigel to be more radical every day because he knows cameron cannot be more radical than he himself. cameron in the end must make concessions, compromise. and here he opened the box of pandora, cameron, which is in favor of -- radicals, you can as an acting prime minister of the united kingdom with the responsibility in europe and worldwide, the prime minister of the united kingdom taking in the county country's

responsibilities can never be more radical. this is an advantage for nigel. i think david cameron made a mistake. >> and how does he solve that mistake? >> question you should raise to him. difficult for me to answer. i see only that he is every day under pressure and the radicals on the own party and on the other side. and on his coalition partners, they are in between strategy and that's for sure very difficult position. my advice to david cameron is to water down the whole thing and to take into account that 40 years membership of the united kingdom in the european union brought, in my eyes, a lot over the advantages for the united kingdom. if you make it violence at the end of 40 years, if you take the growth rates during this year, the axis of british industrial

british services to the single market in the european union, by the way, the message of david cameron, i want a deepening of the single market. why? because the single market during the last four decades and also in the future is an enormous -- was and is an enormous chance for the uk. he should open such a debate in the country. then he will convince other people to take advantage. >> to be in the middle. >> a little bit like this, yes. still to come on this show, paris and london or made in new york? which do you think is the current top city destination? it's none of the ones mentioned so far according to mastercard. that's coming up.

welcome to "worldwide exchange." i'm karen tso. these are your headlines from around the world. a third straight day of volatility in japan after the boj manager expresses concerns about the jgb market. germany and china holds sdgzs regarding trade. they warn a war must be avoided. as one of the first apple computers that sold at auction for more than $650,000, the eu

is collecting information from apple's rivals to determine whether it's unfairly squeezing its competitors. >> announcer: you're watching "worldwide exchange," bringing you business news from around the global. >> after some concern that tokyo markets were in negative territory, they had somewhat of a recovery trade to is start on monday's session. the u.s. and memorial day, so we are seeing a fairly muted session despite the green across the charts. we've got the cac just shy of the handle. the long term bullish trends remain intact and this is reflected by the buying action.

some people have been stuck on the sidelines watching this rally. now there's a re-entry point to this market. the periphery outperforming this market with 16% modest gains on the spanish market. i want to show you how the bond market is stacking up this morning across the boards. we've got ten-year german bund down 1.44%. the jgb is up 0.8%. and the ten-year spanish is still holding 4.36% is wa we've got on the charts. foreign exchange markets, this is the lowest across the board. we are seeing a bit of strength in the euro/sterling trade. some of the european trades are have pushed up the euro to the dollar. but the dollar is making its touch to the japanese yen, as well. we are below the 101 mark. there were suggestions, 105, 106

is the handle that traders are looking for. but the market has pulled back from some of those lows. the australian market, it's quite a parity now. sterling/dollar, fairly supported at the 1.515 mark. let's get you some of the action across japan today. japan is showing further losses. let's go out to chloe cho. >> volatility in japan is once again a dominant theme here in asia even as the boj indicated there were ways to prevent decreases in liquidity, the immediate action rallied equity markets and sending japan down 2.3%. the big focus has now moved on to that jgb meeting. take a look at greater china. a little bit of green today. remember, industrial profits looking a little better in april, but remember, there was a

low comparison base from last year, which means that the picture is still unconcerted as far as growth is concern as far as weak and domestic command. you can certainly see that uncertainty in china trickling over to australia. miners getting quite a bit of a hit there. down five sessions in a row. >> thanks, chloe. minutes from the boj's late april meeting have shown some skepticism emerging about deflation. a few members thought the 2% inflation target would be difficult to reach. there was concern at the progress in jgb's buying was affecting the bond markets and the japanese financials were eyes sets to keep the volatility liquid. let's get back to roger nightingale, who had been a guest host here today. roger, enormous purchases of

jgb's rate right across the market. we've had some movement in terms of corporate profits, as well, in japan. why can't they get to 2% on the inflation target? >> what seems to be the case is that the money policy works most of the time. when you are under normal economic circumstances, you load up the economy with liquidity and there's a backlog of people wishing to borrow it and borrow it either to invest or to spend. and they do and the economy leaps forward. so there are times -- they're very rare, but there are times when you load up the economy with liquidity and the people say, i don't want to borrow and i certainly don't want to borrow to spend. in fact, the problems i'm having at the moment are in any view the consequence of my having borrowed too much in the past. i want to do the opposite. and you darn well can't make me. you can lead me to the water, but you can't make me drink. i think we're in one of those situations now. >> if you look at what the

japanese consumer is doing, there is a response to even some of the luxury chains are seeing more spending taking place across japan. >> it's small and it hasn't really worked very well. after all, they've had now on 20 odd years worth of this phenomenon. the economy went from being phrenetically fast growing to being very, very down indeed. throughout this period, they have continually tried to get things up and going and they have continually failed. and yet, people think one more push and it will work. well, it very well won't, i think. i think the obvious conclusion is that it doesn't really matter now what the central bank does. the interest rates, money policy, currency and whatever else. in fact, people won't spend. i'm not even sure they can get interest rates down.

bond yields down, currency down. i think all those things are no longer substantially in the power of the central authorities, but mostly in the power of the private sector. in japan and overseas. >> if you tackle just one of those trades, they have mthd to get the yen lower, but through the 100 mark. whether it holds there is the question. >> that's the issue. >> do you think there is a long-term trend there? if they keep on trending money, the market is not going to want to bet against the boj. >> who knows. they got it down and it came down and then the resistance comes in and the private sector in japan says no, we don't want to hold the aussie dollar or the eu euro/dollar. frankly, we want to hold the yen regardless of what the interest rate is. a lot of people in europe and australia and so a say, yeah, we agree, we want to hold the money, as well. so the money pours back into japan and the central bank finds

itself unable to influence the currency beyond the point. and i think the current level is probably as low as you can get it. >> one piece of analysis, some people are saying they have not increased their short positions on the japanese funds because they're concerned that the short squeeze now are to some of those declineses on the japanese market. >> it rose strongly and they said, we don't want to be against that. but then they saw the yen go down. but now the yen is going up and the equity market reversing. but the dollar value of the equity markets, the sterling value of the japanese equity market, that actually is something that's been jolly stable. you talk about volatility and it's only volatility measured in the context or with the measuring stick itself is made of elastic.

>> as we talk about this, the market has been up 30 plus percent so far. some people are still enjoying returns. roger is stale with us as our guest host. we're going to go to a break, but china and the european union have been at logger heads over trade restrictions. can talks between germany and china in ease the tension? more after the break. all statioo mission a for a final go. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers. a talking car. but i'll tell you what impresses me.

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industrial profits rose more than 9% year on april. celebrating in the electricity, electronics and auto sectors. but china's agency warnings that the new figures come off a low basis from last april when profits dropped. and demand remains weaker. china in's uran commission will have more talks today aimed at dialing down trade issues over wireless equipment and solar panels. they came to a resolution for the dispute warning a trade war would hurt both sides. >> translator: germany will support intense talks with china. so that we don't come up with permanent import taxes and so that we can clear up the issues

between china and europe on this subject as soon as possible. >> translator: when the international foundation crisis is not found yet and the worldwide economy has not yet been brought to life sufficiently, such measures are particularly questionable. >> trade ties between china and switzerland are getting closer. this would be china's third such deal with a major western economy. these are your headlines today. bank of japan minister doubts about the country's inflation targets, leading to another volatile day in the uk. german chancellor angela merkel vow toes avoid a trade war with china. and the eu is gathering evidence to see if apple is unnecessarily squeezing its competit competitors. a love story directed by a

french director won the best picture at the cannes film festival. the committee was chaired by steven spielberg. earlier, we asked can movies change minds? most particularly, has it ever changed your opinion on a subject? the film of "roger and me" serm opened a lot of eyes as to the costs and impact to communities by deindustrialization. then some writers, directors skill flsly add subpreliminarial coding to their work, wiz of oz, pulp fiction, etcetera. for more, contact us via e-mail or twitter.

cnbc went to an event and caught up with social media success stories. >> let me see you jump. ♪ . >> ♪ this is crazy >> they might be some of the biggest names in entertainment right now, but before they became household names in the reeled world, they were famous in the online world. where would you be without social media? >> i mean with it's been a really helpful tool in getting any career moving, that's for sure. >> loading a video at the youtooup tube. the best way to develop an audience is through social media. >> these are some of the new mediums that have made waves for brands and business, giving rise to a new generation of stars and

revenue streams. >> when you've got 1.7 billion people every day viewing, tweeting, following, friending, and what brands need to do is understand what these people are consuming. >> according to gardener, global revenue from social media is expected to reach nearly $34 billion by 2016, up from some $12 billion in 2011. and internet stardom is increasingly being played out in the real world and vice versa. right here at the first awards show honoring the biggest online stars and brands dubbed the oscars of the social media. but if you can't make it down to the red carpet like we did, you can always log on because, of course, the event is streamed live on youtube. contrary to traditional awards show, the winners at the social star wars are decided by themselves. >> the fans, they are through

daily social media have created the winners of our awards. it's completely democratized. it's not a bunch of old guys sitting in the room that have decided he's the best movie or he's the best player. it's not the industry. it's the fans. >> despite social media's immediate global reach, its monetary returns are not as instantaneous. >> a lot of companies, what they really should have focused on is how you create value for your users. and then, once you have the users, they can monetize them over time. >> and while social media can create stars, it can tear down some giants. like yum brands in china when its kfc outlets became the subject of online criticism and sales punched. >> companies need to be very careful in terms of managing their reputation and conducting their businesses. because anything you do wrong can be spread out on the

internet almost within a second and anything good you do can do the positive impact for the businesses. >> love it, hate it, or still trying to build up a twitter following, social media is likely to just keep getting bigger. ♪ cnbc in singapore. >> you've got a big tv profile. how is your social media? >> almost nonexistent. i watch television. i talk to people. i travel around the world. and i love singapore and hong kong, actually, two of my favorite cities in the world. but i don't do the media thing. i think i'm too old. i have loads of children. they do that stuff, i don't. >> twitter and facebook, it's incredible there in terms of the followers you can get. we're going to go for a break. coming up after that, we'll find out how spending can become a

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highs of the xetra dax and the cac today. is smi, 8 shths 8,1 a 54. the swiss market is tracking in negative territory today. the ftse is not on the board because the uk market is shut today for a public holiday. i want to show you the german market, bunds tracking just below 1.5%. in terms of ten-year yields, still tracking below 2%. they've had a list on the italian paper, the ten-year now 4.09%. so through the 4% threshold and closing the game over spain, 4.36%. foreign exchange markets have been fairly stable today. and the dollar taking a bit of a hit to the japanese yen.

they're down about 0.4%. this is as you would expect. we saw the volatility that took us off the 1.03 handle. we're getting closer towards that 100 mark. but there we are seeing stability on the u.s. sterling trades. the australian dollar, also one of those volatile trades that we saw last week is now trying to bounce, but not getting close to the parity mark which we saw the dollar tumble through to the u.s. dollar in the last couple of weeks. oxygen finance is a firm that's hoping to change the companies fortunes by turning their spend into a revenue stream. they call it the greatest untapped asset in the first of a series looking at the disruptive companies. ross westgate caught up with ceo mark hoffman at the fellow entrepreneur conference. he began by asking him to explain the idea behind the business. >> what we do is look at spend within an organization.

and where accounts payable has been considered a liability among these organizations is that we want to turn that into a asset for the corporation. and we do that by negotiating early payments with the wires, converting that into a rebate as opposed to a discount. and if you have a rebate, then you can recognize that as income and, of course, cash flowing into the buying organization. so the buyer gets a repayment, which they're happy with. the buyer gets income and cash so it's a win-win on both sides. >> this is predicated on the basis that companies have cut a lot, they've done a lot with their cost, revenue res what revenues are going to be. this is taking a whole new look. spend as an asset, right? what do you do on top of that besides just negotiating discounts? because you take into it your

system, as well. >> yes. what we do is plug into the erp of the buying organization. and we do that through the credit module, the credit card module, which makes it very easy to do. and then we pull the information out that we need to do our calculations. and tying that together with suppliers information, we do our calculations, tax ramifications, and other ramifications that we have to deal with. and then we put that information back into the erp system. >> becoming sort of a whole really impacting supply chains, as well. how important is this actually for the smaller guys and the smaller entrepreneur businesses? >> it's really important. as we know, people are stretching out payment terms and it's really hurting the smes. so we don't just go after the big suppliers. we want to go after everybody in

the tail, which is the smaller suppliers. and we actually do that in an automated fashion. to go after them. but we want to give them the opportunity to have a discount. >> so there's a big tech solution behind it. >> there's a tech solution behind it. it's really made of financial and tech and implementation. services and finance and technology. >> now, you're now running this out of the uk, right? >> yes. >> and for europe. you spent a long time, many years experiencing the silicone valley, as well. how different is it trying to launch the finance tech business in the uk to europe, silicone valley and the entrepreneurship there and how easy it is to get going? >> well, it is different. if i approach venture capitalists over here, they tend

to be more later stage companies. so they tell me i need three years of revenue and indeed, you know, earnings. and that doesn't happen in a start up. so we're going after other types of companies. we're going after individuals, what the individuals, we're going after other financial institutions to raise money to do the company. >> still to come, do you have any trouble? we're going to talk to global destinations for the first time. after the break, we'll reveal the whipper. i want to make things more secure.

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america travel mug free with your hoveround delivery. call or log onto hoveround.com right now! welcome to "worldwide exchange." i'm karen tso. these are your headlines from around the world. on a third straight day of volatility in japan as the boj ministry receives skepticism over the boj's inflation target and concerns about the jgb finance. angela merkel and mr. chang warn deputies must be avoided regarding trade.

apple's original computer, one of them, sell for $650,000. this as the eu investigates apple to determine if they're unfairly squeezing its competitors. >> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. >> this is the latest look at how european markets start performing for the monday's session. we have gains across the charts and we seem to be holding around these levels. now the uk market is closed for public holiday today and the u.s. is taken out of action for memorial day. so across the charts, we are seeing a push higher for the xetra dax. about 0.6%. the market has come off some of its peaks for the year. today we seem to be pushing forward at least. we are seeing most of the gains today in the italian market. the ftse mib 1.16% higher. across the bond markets, this is

the latest feature. we are seeing a bit of a push higher on some of these numbers. but ten-year bunds, the price is lower. the yield climbing to 1.44%. the gilt trade, 1.92%. ten-year jgbs, coming away from that 1% mark, 0.83%. and fairly stable, too, on the spanish ten-year paper. 4.35%. coming back from the main trade today, this is what the market has been focusing on because volatility in the end, japanese equities and jgbs have been a dominant theme over the last few trading days. japanese policymakers will be desperate to secure a period of calm according to ben. >> generally speaking, they're very highly correlated. the yen as well as the nikkei i think needs to take a bit of a breather. so in order to do this, in order for the politicians, the boj to

get extra confidence, a little bit of a correction and some scary stlengt in the yen would give them a little bit more impetus. >> bang congress has taken top owners at this year's number one destination city. according to a new survey, the thai capital will draw the highest incident her national visitors in 2016 been ahead of london, paris, singapore and new york. the cities are ranked in terms of total number of international arrivals and cross border spending. joining us is mastercard group executive for asia pacific and africa who joins us on the line now and staying with us is martin nightingale who has been our guest host. perhaps you can spell out why bang congress is getting the top awards in terms of its numbers. >> thank you, karen. i think bangkok has had a very good run over the last two

years. and if you take the total international arrival that you talked about, the growth rate for bang congress for 2011 was 18.4%. for 2012 was 18.7% and this year we're projecting 9.8% growth. i think if you take the cities for boangkok, they're pretty muh the fast growing cities within asia. the emerging markets and the increasing proexpensety for residents in these feeder city toes travel. >> how important are other elements such as budget carriers and the amount of access these carriers have provided and political stability for a country like thailand? >> i think they're all very important. and i think the air travel connectivity is an integral part of this index. and that calculation shows the most destination city builds these networks and has connectivity into the feeder origin cities, the better it

does. so if we take bangkok, it has bangkok, tokyo, qualalumpur. all these cities have ridesing disposable income and residents who have an apt attitude for international travel. >> roger, you go to bangkok a lot. it has ten times the traffic. >> you don't go to a bangkok to avoid traffic. you go there to shop and go on to other places. i love bangkok. i go there a lot, at least once a year. and my point of view, though, is that, in fact, from mastercard's point of view, you might be missing some people who come there because i don't use mastercard when i'm there. i use cash because i have bank accounts there. i get there, i draw the cash and just spend. and i just wonder how many people you think do that and how many people, in fact, feel that, in fact, drawing cash or spending on mastercard is a smidgenon expensive.

>> actually, this index is based on public data. it has really nothing to do with mastercard. the data has come from the imf world economic outlook. it has the u.n. data, it has some of the oeg data. so actually, it is independent of whether you use cash or mastercards. we certainly expect everyone will use a mastercard for spending, but more importantly is the leadership in driving the thought about urban economies and how they are resilient even when the national economy is going through ups and downs of the business cycle. and that's something that this index is going doubt, particularly if you look at after 2006 when the united nations said that more than 50% of people are living in urban cities now does become even more important. >> how important are other issues such as access since london came in second behind bangkok? is it to do with raises and application issues for chinese travelers? what is the impact of those

types of access issues? >> i think we're hoping that the tough leadership that this index provides will actually lead to those kind of questions because it is a policymakers of these destination cities who can really drive the growth of the city. because one of the key factors that drive the defendant nation cities is by tapping into these fast growing emerging cities from the feeder origin cities. and lastly, look for growth fund there. so if you take london, for example, london saw growth of about 4% in 2011 and its national list arrival, about 1% in 2012 and projecting about 3% in 2013. the feeder cities for london are dublin, new york, stockholm, amsterdam and frankfurt. again, relatively lower visitor arrivals from there and the overall economy in those cities, obviously, a lot different from what we see for bangkok and their feeder origin cities. >> some of the growth that you

see ahead, there's the different cities, istanbul, for instance, even in those numbers, dubai showing strong growth along with bangkok. why are those particular areas showing the strength? if you look at the goal that's been that challenge in the last couple of years, economically speaking we are seeing a recovery now. are there any interconnected links between how will an economy has done and the materials and numbers that you start to witness and your numbers? >> oh, absolutely. so there's the factor which wasn't in air travel connectivity, which is the number of links that any destination city has with airports around the region. and if you take dubai and is tall bull, they show some phenomenal growth rate. dubey has a growth about 10.9% international arrival and istanbul, which is 11th in our ranking is at about 9.5%. and if the top ten cities stay where they are with their current growth rates, we

estimate istanbul and dubai will rise in 2016 and 2017. so i think creating that connectivity into this fast growing feeder ormgin cities is an incredibly powerful tool for destination cities. >> thank you for joining us. can the u.s. really broker a tax deal on swiss banks without the improvement of switzerland's parliament inspect we'll have the answers right after this break. stay tuned. ♪

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amazon workers in germany are set to strike today. the trade union there is demanding increased paying conditions for its members at distribution centers. amazon which employs 9,000 people in germany says workers are waiting to receive compensation at the upper end of the pay scale. negotiations between the two sides are continuing. a resolution is unlikely. the european commission is looking into apple sales practices of the iphone to determine whether they are squeezing competitors from the market. according to the financial times, eu authorities sent out a question heir last week to

determine the distribution terms that might favor apple by insurance rivals are able to ensure better deals. google executive chairman eric schmidt continues to defend his tax practices saying what they're doing is legal. in an interview, schmidt said he was perplexed by the contribution base. he added that the government should change the laws if it wants to collect more tax. google has come under fire for reportedly paying $10 million pounds in corporate tax between 2006 and 2011 despite having revenues of 11.9 billion pounds. negotiations for a tax deal between switzerland and the u.s. involving around a dozen banks is in the final stage. carolin is in with the latest. >> we know this is simmering in the background for the last three or four years in these negotiations between the u.s. and switzerland have been very

protracted. but over the last couple of days and weeks, we hear that a deal between the two countries could actually be within reach and details could be out over the next couple of weeks. that's the hope, at least. now, this concerns a number of banks, more than a dozen banks here in switzerland which are accused of having helped their clients evade taxes. those are u.s. fines, of course. and some of the banks are among the most affected julius baer which is switzerland's biggest private pay bank could be paying a fine worth $500 million swiss francs. on top of that, it is expected to hand over thousands or hundreds of client names. chris swis has been affected and set aside some 3400 million swiss francs for its specific settlement. but there has been some opposition on part of swiss politicians, because they would only be able to vote on the outlines of the deal but they

wasn't be able to know the details. it could still be held up here. >> carolin, one company, zurich insurance is on the hunt for yields and looking to expand into emerging markets such as china if a and saudi arabia. it forces people to go out hunting for better returns. >> yes, absolutely. and keep in mind that zurich insurance is currently only generates some 20% from emerging markets. 80% comes from developed markets like the u.s. and europe. we know interest rates are very low. that's why it was said we need to expand into these emerging markets. as you mentioned at the world economic forum in jordan, he said he would likely look at china or saudi arabia, for example. he said yes, this is very difficult for the industry and that's why we have to focus on cost cutting and, of course, on the underwriting profitability. karen. >> thanks very much for that, carolin. it is a good example we keep

hearing about. many companies under invested in emerging markets and that's a perfect case in point. to the middle east, a growing chemical industry. are exporters left vulnerable to economic shock? in jordan, the rehab base, within of the world's top petrochemical firms is asked how demand is holding up. >> it is susceptible to the demands and what we have seen over the last one year is that the demand is increasing that much and because of the situation, china demands have subsided to the 7.5% and china is huge in our portfolio because it's -- to china and other place. so as euro continues for the

next two years to have modest growth in the economies. we see a surge in growth. >> china is a very important point to pick up on. it is a key market. but economic growth has been losing steam as of late. how fast does china need to grow for you not to worry? >> this is a good question and we are working three fund. number one, we have utility and buying positions in saudi arabia. we are investing in china and we are looking for area in china that has a very good demand. i think the west region -- i mean, the east region is already saturated with petrochemicals, but we're going to see some more investment in the worst region and the middle of the country. well, we are confident that it will improve over time. >> and how does india compare to

a market like china for sabic? >> well, india has not really proceeded in building a better commercial industry like china. the situation there needs the indian government to look how to enhance and attract investment to india. the petrochemical plants in india are fortunate. but i think they have to attract investment and show that they are ready for petrochemical manufacturing. >> faltering demand in europe is forcing sabic to cut jobs and to consider closing some assets. is this part of a larger retreat from the continent? >> no, not at all. we came to europe from the beginning for -- especially for technology and, you know, europe is 400 million people. it's your big market. it's going to continue to be a

big market. but through the economic recession in europe, people -- it's using plastics and what have you and consider it more important consumer product. they're going to come back and they will ask for more service product. and i think through our innovation, we will satisfy that market with the product venues. >> across the atlantic and the united states, a shale driven revival of the u.s. chemical and plastics industry has been described as both an opportunity and a threat for companies like sabic. which one is it for you? >> i think both. it's an opportunity and that means we can invest. we are a global company. we can invest in the united states and the shale gas product. so it's difficult for us because they will export their product to europe. europe is already -- place.

we are in europe. so it may affect the european situation. >> the sabic chief executive speaking there. we're going to go for a break, but our next guest says find out the picks for the currencies after the break.

are you still sleeping? just wanted to check and make sure that we were on schedule.

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ever changed your opinion on the subject? lexine tweeted the film "one day" changed my views on friends and the possibilities of having a relationship with your best friend. unfortunately, reality is a bit different. let's get back to markets. this is how we're performing across the european space today. we have the uk out of action. expect variance for the rest of the session, as well. still solid on the cac, 1.1% balance for the ftse mib. i want to show you forex rates. we have a bit of a euro strength there to the dollar. dollar/yen down 0.5%. the aussie is moving strongly to the upside after steep declines last week. sterling is fairly solid. joining us is jacov from ing

adversity management. roger nightingale is with us, as well. talk to us about the trades, which ones do you see as having the most traction? >> yes. i think the focus of the markets over the last few weeks has been indeed on general dollar strength. and i think that markets were focusing very much on taper iin of qe and a tighter u.s. market policy. we think that's overdrawn. i think we are farther away from a tightening in monetary policy. i think we should look at the other side of the equation and which currencies can weaken further. and i think we should focus on rare monetary policy can weaken further. i think in g-10, japan, of course, is the most notable example. australia and the uk might see further easing. so we think at these currencies in g-10 space have weakness

against the euro/dollar. >> i agree. substantially with your analysis. i think actually i have to say that the commodity producers all around the world are the ones that are noticeable. what do you think about them? >> yes, i think that the declining commodity prices is a key development there related to what's happening in china, slow growth, and a structure shift away from investment towards consumption which is less commodity intensive. and indeed, look at australian dollar and medium dollar. currencies were very highly valued and i think that optimistic assumptions mark commodity prices was key there. so certainly these countries at risk in a lower commodity risk environment. >> and we've been talking to ben on our website, where the u.s. dollar is a commodity currency now because of the shell gas being produced and the energy dependency now.

do you think there is a trade in the u.s. dollar currency? >> well, i think it's very difficult as a trade, as you mentioned, because i think it's a very important development, but it's such a graduate growth effort, it's so slow moving within true, it's in the next five to ten years. but i think it's very difficult to trade. >> and give us a take away message. more trade on the measures, is it dollar/yen rates? >> yeah, i think in dollar/yen, we've seen a lot all right. if you look at speculative positioning, markets are short the yen already. so everybody is waiting for capital outflows out of japan into the markets. last week, we had the weekly flow data from the ministry of finance in japan. we feel those see any yen selling. >> we've got to go. thank you very much for the investment ideas.

also thank you to our guest host, roger manightingale. ♪ ♪ et toujours ♪ me amour ♪ how about me? [ male announcer ] here's to a life less routine. ♪ and it's un, deux, trois, quatre ♪ ♪ give me some more of that [ male announcer ] the more connected, athletic, seductive lexus rx. ♪ je t'adore, je t'adore, je t'adore ♪ ♪ ♪ s'il vous plait [ male announcer ] this is the pursuit of perfection. 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. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪

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