you're watching "worldwide exchange." i'm ross westgate. our headlines today, global markets on edge ahead of the may u.s. jobs report. krns about the economy ask whether the fed will start pulling back on its bond buying program or not. the sessions end in europe after the dow faces the biggest comeback of the year avoiding a three-day losing streak. president obama plays host to his chinese counterpart, xi

jinping. and calling to an immediate end about to push ahead to the controversial building project. display you're watching "worldwide exchange," bringing you business news from around the globe. welcome to the last "worldwide exchange" of the week. i know it's very sad. there will be plenty to get through today and we'll be counting down primarily to the employment report. also on today's show, at 10:20 cet, we'll bring you an exclusive interview with the polish prime minister david tusk who says his aim is to join the eurozone as soon as possible despite the crisis. but we'll speak to an mp of the opposition party who is calling for a referendum. find out what the president

wishes for the country's future. some say beijing needs to liberalize its process. we'll have more in a moment from chengdu. and monaco, entrepreneurs of the year are exchanging recipes for success. we'll speak to a man who churns his dedication to dairy into a $1 million business in just over five years. if you've got any thoughts, comments, anything you wish to share with us, e-mail us worldwide@cnbc.com. the main focus today is the u.s. unemployment report. payroll is due out at 8:30 eastern. employers likely stepped up hiring slightly last month. another sign the economy is growing. maybe not enough to convince the fed to scale back. forecasts calling for 169,000 in

nonfarm payrolls. it would be the third straight month of job gains below the 200,000 mark. unemployment rate should be holding steady at 7.5%. joining us for the first half hour of the program, from reuters breaking views in hong kong, peter lawson. good to see you. >> hey, ross. >> why don't we talk about the ever important employment report. is this one more important than recently because of the swings of volatility around tapering? >> in this part of the world, in asia, it's very important. we've seen this amazing volatility in the markets. people worrying about the tapering, whatever you want to call it, the pullback of the fed's qe program and the impact that that has had on markets across asia, in china, in japan in particular. and so, you know, this is being

watching very closely. and it kind of needs to be this goldie locks number. not too low because people worry about the economy, not too strong because then the fed might pull back faster than people expect. >> and that's causing volatility particularly in the dollar/yen cross rate. we got below 96. and then we get this, you know, pension fund, the japanese pension fund and we will buy -- we will lessen our requirement on domestic bonds. but at the same time, no sign of japanese money heading overseas. >> no. that's been one of the big set of paradoxes, really. everybody has been expecting this wave of japanese money to come out of japan and japanese funds as people kind of move away from jgbs and into other assets. and it just really hasn't shown up in the data.

in fact, the opposite has been happening. but things move slowly in japan and we've seen that before and we're seeing that happening now. we're seeing big pension fund kind of under direction from the state basically saying we're going to reduce our allocation toes jgbs, we're going to look at other things .that means things outside japan, as well. gradually, i think there will be more money moving out of japan, money moving out of jgbs and into other assets. the question then is what does that do to the jgb market where there's been a lot of volatility in the yield? so the set of push/pull effect which makes for very confusing -- makes people very confused when they're trying to understand what's going on with these markets. >> and we'll get more into that, as well. peter, stay there. don't forget, of course, you the viewer can send in your forecast for nonfarm payrolls number. what do you think it will be? get in touch with us, e-mail,

worldwide@cnbc.com, tweet @cnbcwex or direct to me, @rosswestgate. and today the focus is on a key meeting between u.s. president barack obama hosti ii xi jinping. it's being billed as a litmus test. amid recent allegations of hacking from china. eunice is in chengdu and joins us with more. eunice. >> that's right, ross. hopes are very high here that this summit is going to result in a resetting of the relationship between the u.s. and china. for the past several years, this relationship has been described as frosty. it's been quite tense. and just because a lot of those same issues that you were talking about. cyber security is the latest one, but trade issues, frustration over the way the

chinese set the value of the yuan versus the u.s. dollar. so another point that people have been talking about is what's interesting about this particular meeting is that the in the past, the meetings have been very formal, very official, always carefully planned. but people like hank paulson, who is the former u.s. treasury secretary and now the chairman of the paulson institute told me that this is a very unique event and should be paid attention to. the fact that our president, barack obama, is participating in this really unique meeting with president xi in an informal environment, extensive meeting, shows that he and our government has their eye on the ball and they recognize. we recognize and china recognizes that this bilateral relationship is extraordinarily

important and there's a terrific opportunity for them to build a comfort level with each other. >> this relationship is, as paulson said, very important in terms of trade, in terms of what it could do for both the u.s. and china. and also, i was speaking with the former ambassador to china for the united states, john huntsman, who said that it's really coming at a time when the political backdrop is favorable to getting things done. >> in terms of the u.s. and china, they're political ribbons. the ribbon is very distinct. and sometimes the rhythm would suggest that there won't be any openings because politics takes over. other times, you'll find a wide opening opportunity in the relationship.

we've had lich changes here in china. the rhythm is perfectly harmonized for work now to get done. >> at this conference, several chinese officials have been making grand announcements to the vice premier, saying he hoped to see a faster pace of economic reform, he hoped to see a move towards the consumer led economy. and we heard these types of declarations in the past. at the same time, a lot of the ceos i've been speaking to are much more optimistic that the political climate here in china is favorable to seeing real change. >> okay. all right, eunice. we'll follow that story. we're going to catch you a little later, as well. let's get more on that with peter carlisle from asia editor of reuters breaking views. he's still with us, of course. how important is this meeting and how significant is it, actually, that they're not doing this for the pomp and circumstance of a state visit, but it's sort of two days in private with no sort of formal

agenda? >> i think it's important that they seem to be getting on. and i think the fact that there's a sort of private, informal meeting kind of is a good sign from that point of view. because there's less scope for obvious tension. there's obviously some things that they need to talk about that they could disagree on. but, really, i think it's important for both sides really to send signals both to each other and to the constituencies back at home that, you know, they're getting on and that their relations are reasonably okay. >> look, would it be best if they don't get into big discussions about some of the major topics like some of the military tensions in the region? is this more important that they don't touch those subjects than just come out with a good working relationship?

>> i think the relationship is important. basically, xi jinping is going to be the loot leader for the next ten years, barring any major upset. barack obama has another 3 1/2 years as president. they'll see each other and it's important that they escape some kind of rapport. clearly, they will discuss these issues, whether it's a question of hacking, trade, access to chinese markets for u.s. companies or vice versa, whether it's the south china sea. but, really, it's hard to see what scope there is at this stage for any real kind of movement on any of these issues. and so in some ways, the best approach might be for them to just kind of have a friendly fireside chat, kind of agree to disagree on certain things and leave the door open for future discussions as and when they're necessary. >> where does this leave europe as they get a relationship going? china is facing dumpings on all

sides at the moment. that's going on, of course, with solar panels. >> europe is focused on its own problem at the moment. you have the european commission wanting to put tariffs in. with germ fee, among others sort of complaining that this is not a good idea. europe has its own internal issues and clearly it's not a kind of a single entity that china can really deal with. on the other hand, the u.s. seems to be picking up, potentially becoming self-sufficient in energy terms. there's actually quite a lot of scope for the u.s. and china to kind of clash on things. and it's also important, especially as china continues to grow, it's important that they talk to each other, almost as equal because practically, that's what they almost are in economic terms at the moment.

>> fair point. do you like boats, peter? >> boats? >> yeah. >> of course. i live in hong kong. >> you'll know some secret brand name because the chinese property book is close to buying britain's luxury boatmaker. dalian wanda is looking to buy sunseeker. a deal might be finalized by the end of the month. and staying in that luxury sector, china could reportedly take aim at the car market in further retaliation to the solar duties imposed. beijing is considering imposing import duties on high end cars after receiving a complaint by its automakers. so with china buying up companies and threatening to impose tariffs, do you think china is dictating now more of the world economic agenda? and by how much? weigh in.

let us know, worldwide@cnbc.com, tweet @cnbcwex or direct to me @rosswestgate. elsewhere, thousands have gathered at eastern airport to cheer the prime minister's return to north africa. earlier in the day, he delivered a message to protesters saying he was story for the heavy handed response saying that he would press ahead with the construction plans. he's called for an immediate end to toss demonstrations. the benchmark index down again today, off 15% in the last 30 days. four people have now died in those protests which began on may the 28th. all right. let's remind you of what's happening in asia overnight. shanghai composite down 1.39%. the nikkei relatively muted

performance in the end, just down 0.2%. the s&p/asx down about 0.9% and kospi down 1.8%. we do, of course, get this new about the pension fund which peter was talking about. the pension investment fund. pretty much after the market has closed. that's not a bad performance from the nikkei. here we are in europe, waiting now for the nonfarm payrolls reports. ftse 100 absolutely flat at the moment. down 1.3% in the previous session, following the 2% fall in the previous session. the xetra dax is up 0.25%. ibex up 0.3%. the ftse mib up around 0.5%, as well. bond rates, pretty contained as you were effectively. the ten-year treasury yield still above 2%. all the action, as well, has been on this dollar/yen cross rate. dollar index down 2% yesterday.

the biggest one-day fall in three years. in fact, down 3%, i should say, as well, for the dollar/yen below 96. you can see where 96.66 at the moment. we actually got to 95.90. and euro/dollar, we're at 1.3235. yesterday we got up to 1.33. that was a three-month low for the dollar against a single currency, as well. let's get into this, peter. we'll ask how that rise to japan might threaten the aussie/dollar. and sterling heading up towards 1.56. still to come, prime minister david tonk, could the country's slowdown spell trouble for the country's slowdown? louisa will have that interview in just a few moments. i've seen. otherworldly things. but there are some things i've never seen before.

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the polish economy is growing at the slowest pace in more than a decade. the prime minister donald tusk has defended his record. with more is louisa. she was speaking to mr. tusk and

joins us now. was he in upbeat spirits, louisa? >> yes, hello, ross. i'm keeping my voice a little bit down because we've got a conference going on right behind me. it's an ipo conference, which is part of the reason why we're here. but yes, i did speak to prime minister donald tusk. we were talking a lot about the strength of the polish economy. we're looking at a growth rate somewhere in the region of 2% to 2.5%. previously it was 4% heading into the crisis. i know many people in europe that would be happy with a 2% to 2.5% growth rate. they're ceiling dealing with unemployment at 14.2% at the moment. they've breached their debt levels, as well. and they're not part of the euro. the majority of polish people support an eu membership. 80% of people are very happy on that. 75% of their exports go to europe. they need to see a european recovery. but only 30% of the people support a potential euro membership. which is very interesting.

and mr. tusk is facing internal party revolts. he'll know here within the summer whether or not his own party wants to keep him in place as the party leader. but let's listen in to what donald tusk, the prime minister of poland had to say with regards to the slowing economy. >> translator: when we look at cumulative economic growth in poland since 2008 within it's been close to 18%. when the average in the eu is might beus 0.8%. our task is to keep going, and although this year is going to be worse than expected, we won't see a recession or stagnation. i still believe growth in 2013 will be above 1% gdp. as far as unemployment is concerned, you quoted a number that's quite alarming at 14%. but when you apply the method that europe applies, unemployment would be measured at around 11%. that's the average for the

european union. so it's not that dramatic. but we have to admit that double digit unemployment is unacceptable. taking into account the point of departure we had, the fact that we're to only country in europe that hasn't gone into recession is significant. to make sure 2013 isn't a year of sag nation, we have to maintain this trend of investment. >> you had a budget deficit in 2007 which was just below 2% and that peak just below 8% in 2010. you've overshot the limit, the target that the government at 3%. how much hope does poland have for fiscal stimulus? >> it's not a bad achievement. for 2012, the deficit level is 379%. the fact that the european commission granted poland two

additional years to get to the 3% level of the deficit would greatly facilitate our reaching that level in a balanced way. the level of growth rate, especially when we talk about public debt, taking into account the pension system, polish public debt is very safe. the problem with the deficit is, the budgetary levels are lower than we assumed. from our point of view, this means increasing revenues without raising taxes. >> the yield hit around 2.5% recently, half of what it was a year ago. and the finance minister at that point tweeted something along the lines that this is showing us the confidence in the polish economy. a lot of people might argue it's

confidence in quantitative easing and in stimulus coming into the economy either via the fed or via the omcb's program. how worried are you about what happens if the global economy weakens or if the fed and the ecb start taking their programs and you see a reversal of those inflows into emerging markets starting to happen? >> i always warp my finance minister against being optimistic. but some degree of optimism from my minister of finance is justified. it's a huge leap we've made as reflected by those polish bond yields is pretty impressive. it shows quantitative change in terms of trust and securities from the global market. recently we've seen a few

jitters. to sum up, we can be pretty satisfied for the pricing of polish sovereign debt. we realize the valuation of that debt is heavily dependent on what's happening in the u.s. or emerging markets and how emerging markets are generally valued. i'm no fortune teller. all i can tell you is from a polish perspective, the situation shouldn't deteriorate over the next few years. however, should there be some kind of major crisis or collapse external topoland, then my influence is quite limited. >> remember poland is the only eu country that hasn't dipped into recession. it's worth keeping in mind. poland is in a much more secure position now politically than where it's been in a long time.

it needs to push through some of the reforms. we've been doing a lot of talking to the top people here in warsaw, including the ceo of the warsaw stock exchange who left the door open for a official merger or alliance to take place in the region, too. so a lot to talk about. the opposite side of where done add tusk stands. that should be interesting, guys. ross. >> louisa, thanks for that. well done. you didn't raise your voice too much, either. well done. good stuff. we've got news out for the european auto association talking about this anti-dumping complaint being received from china, being filed with china's ministry of commerce.

they assume china will retaliate with provisional duties should the eu commission not back down from the current trade stance. acea says it could affect cars built as early as september. some of our german members are taking this threat extremely seriously. bmw is down about 0.3%. they didn't think they did a great job with greece, so on they did it, anyway, just to keep the baulg rolling for the euro. ollie rehn says they are throwing dirty water on european shoulders. we'll take a break.

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edge amid the concerns about the economy and whether the fed might start pulling back on its bond buying program. it's a volatile start to the session in europe. the dow staging the biggest comeback of the year, avoiding a three-day losing streak. and president obama played host to his chinese counterpart xi jinping. this is europe's auto association confirmed a complaint has been filed in china over anti-dumping duties. >> european equity res a little mixed this morning as we wait for the u.s. employment report. all flat. the ftse 100 flat, yet down another 3% following 2% fall on wednesday. the dow trading in a background range, of course, yesterday. down 116 points, at one stage 80 by the close.

ftse mib is the best lid up at 0.5%. on the bond markets, yields are trade at a tight range. just below 2%. treasury just over 2%. ten-year jgb, 0.85%. on the currency markets, that's where we've seen most of the action surrounding the dollar/yen. dollar index down 2% yesterday. dollar/yen having a 3% fall in the last 24 hours. it's the biggest one-day fall in over three years. we did briefly go below 96 to 95.90. we'll get into more of this in a few moments, but first with the nikkei 225 hovering near bear market territory, let's get more from the nikkei with toshiko toshida in tokyo. >> hi, ross. the nikkei 225 started off in

negative territory, but the index trimmed its losses when the government said it will hold a briefing regarding a change in the country's public pension fund. rebalancing by the fund has been closely watched by investors. the government announced after the bell that the world's largest public pension fund with more than $1 is trillion of assets will change its portfolio strategy. it will cut back on domestic bonds and invest more in domestic stockes and overseas assets in a bid to seek higher returns. the fund said it will raise its target allocation of japanese stocks to 12% from the current 11% approximately while lowering its yen bond rating to 60% from 67%. the government has done this so it could help support the pum l pummeling stock market and curb the yen strength. after the announcement, the yen strengthened to 96 per dollar.

back to you, ross. >> have a good weekend there in tokyo. and talking about japan and market timing, the nikkei 225, investor george soros is reportedly back looking for deals. soros fund management which has $24 billion under management is buying japanese stocks again after pulling back last month. they now see japan's economy improving and corporate market ticking up. the nikkei down 20% from its intraday high on may 23rd. peter lawson is still with us in hong kong. peter, how much of this strength that we've had or this pullback in dollar/yen, this strengthening yen, how much of a dampener does that public on abe-nomics? >> well, i think you have to remember that the yen was -- when abe was elected, the yen was trading around 80/85. and so we actually had a big

move in the yen. which has come off a little bit in the last couple of weeks. but it's still -- you know, if you're an exporter, things are looking better for you now than they were when abe was elected in december. but the problem is, the volatility. so, you know, if the yen is really going to start bouncing around an awful lot, you know, these sort of 3% moves you talk about, that is clearly going to make life a bit more difficult for people when they're trying to assess the value of their gts goods that are manufactured in japan, overseas and what they do, the impact on imports and so forth. so i don't think the absolute levels are necessarily a worry, but the volatility is. clearly, we know what japan's course is in terms of where they want to send the policy. i suppose it's a question of how effective that might be .how contingent is it on what the fed is going to be doing and how the fed influences global assets.

>> that's exactly right. japan can do a certain number of things domestically. we've seen very effective moves from the bank of japan in terms of doubling the asset base -- the monetary base, sorry, and the effect that that's had on the yen. we've seen what the government can do in fiscal terms and also in terms of influencing the policy of pension funds. but you're right, to a certain extent, the money that has flowed into japan, part of it has been money flowing from the u.s. and trying to seek a better return uls where. suddenly, the u.s. becomes more attractive, some of that money flows back and you see potentially sort of disorderly unwinds of trades in japan and around asia. it's that volatility, really, that is the worry. and that to a certain extent is beyond the abe government or the bank of japan's control. to a certain extent, they've

given it their best shot. all they can really do is more of the same. that's concerning peep. >> peter, always good to see you. thanks for that. have a good weekend in hong kong. now, could you run a company with more than 17,000 employees? that still has been displayed by brazil's candidate the ernst & young entrepreneur of the year award. that is why carolin is very smart. >> yeah, certainly not the worst place to be, though i hear it's pretty nice in london, as well, ross. i'm very glad. i'm joined by marco stefanini, president and ceo of stefanini it solutions. tell me about the ease of starting a company in brazil. nowadays, compare it with what it was like when you started your company 25 years ago. >> it was totally different.

it was a very tough country. inflation was very high. the rates also was the same. now brazil has a very positive -- in the last ten years. they are doing a good job. >> yeah. brazil has been somewhat disappointing in its growth because its growth is lower in other places in emerging markets. and inflation is somewhat higher. the s&p just put brazil on a negative outlook because of the weak economic growth and a worsening deficit. what has gone wrong? >> i think that brazil has a lot of challenges. in terms of infrastructure. but in the last two years, we are not performing so well. but i think it is a stage, a period that brazil can solve it and the next 40 years, i think that we will come back to a higher level in terms of growth.

>> many industries have lamented a high level of state intervention. now we're seeing the lifting of tax on capital inflows. how much more needs to be done in terms of lessening the impact of the government on the economy? >> it is a little bit difficult question to answer, but, of course, there are some different points of views. and i think that the government next year, i think they can balance better in terms of interference or not in the economy. and i think that they can solve it. >> you've got two very exciting sporting events coming up in brazil over the next two years. you've got the soccer world cup and then the olympics. how much of a boost is it going to be to the economy and for your business in particular? >> for my business to be whole, it's not a high impact. because we are i.t. service. but in general, for the economy and maply for the -- brazil is a unique opportunity to show us as a bigger country.

i think that we are very excited about this as a brazilian. >> let's talk about the i.t. outsourcing in general. we're seeing a lot of relocation of jobs, some to, for example, mexico, latin america. do you think we're going to be seeing a relocation of i.t. services from south asia back to the u.s. or mexico, for example? >> i think so. i think they will become more democratic. we can suppress these jobs opportunities around the world. we have a lot of countries that, for example, in eastern europe, in asia, in latin america and the u.s. i think that we have a good opportunity to increase that all over the world.

>> we are heading into a u.s. jobs report later in the day. what is your view on the job market and jobs in the u.s.? >> stefanini, we are hiring new people. our headquarters are in michigan. that is an area that was written a lot because of the crisis. and we build a very interesting model, how to train, how to hire more jobs. i believe the u.s. coming back can hire. >> thank you so much. back over to you guys. plenty more to come on today's show.

the polish prime minister is defending his record. but europe is casting doubts on his success. we'll rejoin louisa in warsaw right after this.

the polish prime minister has been defending his record in an interview with louisa this morning. let's rejoin louisa in warsaw. you've been speaking to members of the opposition. >> yes. exactly, ross. and important to note that he is the first prime minister post communism in poland who has won back to back elections. and also, as you said in the interview that i did with him, that is not uncommon, either, that when you have been holding the post for six years that people aren't as happy with you when they elect you in the first time around. both of those points are very valid. let me introduce a member of the opposition party. his name is powell shoamaha and he joins us here at the warsaw stock exchange. first of all, just for the benefit of our viewers who maybe don't know all the intricates of

polish economics and politics, as well, what does your party stabbed for? >> we would define ourselves as being right of the center. in terms of the differences of what the current government is doing, we suggest that we as a country should have solid industrial policy. that is, we think that the government is doing everything the financial sector asks for and neglects or does not appreciate the traditional part of the economy, meaning manufacturing, jobs, industrial services and it allows for these to be eliminated or leaks out elsewhere or just closed down. many examples branch by branch. >> under the current government with the financial crisis in full upheaval, we still managed to see a cumulative growth of

approximately 18% since '08 and poland hasn't dipped into recession. many might look at poland and see the current prime minister's government has done a great job. >> the last quarter, 0.1%, which means it's meager growth, it's almost stagnation. so it seems that these stimuli, which works for the last years, are not working any longer. the european funds, debt and some receipts from privatization processes and the government has failed to formulate the ambitious agenda which would stimulate the economy for the next years and that's been seen. >> all the research i've been reading is 0.5% for the first quarter. >> it depends on whether it's related to the previous quarter or the previous quarter of the same year 70.5% or 0.1%. >> with regards to unemployment, we're at 14.3%.

double digit regardless of which measure of statistics that you use, how would you combat that issue? >> well, we think that first we should act towards youth. we've seen 1.5 million immigrants from our country going to ireland or the uk and we suggest that the levees and taxes on the first jobs, on the first employment contracts should be significantly lower. we suggest a cut by 50% so that the people who enter the market and gain some experience and built on this experience prove themselves to be worthy for the employers. this is a key issue because as it were, as almost -- sorry, this is the social and economic

problem facing governments. >> so poland -- excuse me, the eu accounts for approximately 75% of polish exports. so very, very important market for poland. i was asking the prime minister, donald tusk, about whether or not joining the euro would be beneficial right now. and he was fast tracking that strategy just before the lehman crisis took hold two weeks before lehman collapsed, essentially. now they've backtracked and says he needs to see a eurozone recovery before joining the euro. where do you stand? should poland join the euro? >> that's correct. just before lehman was going to be bankrupt, he said we will join euro in 2011. we do not think -- >> 2012? >> we might go back to that and double-check. i think he said we will be able to in 2011 and we will be admitted in 2012. but anyway, we do not think it's

a sound idea, actually. and the fact that we kept our currency was kind of a buffer for the experts. the currency evaluated a bit and we were able to maintain the exports. >> i'm so sorry, very briefly, should poland join the euro, yes or no? >> not within the foreseeable future, definitely not. >> thank you so, so much. we appreciate it. thank you very much, mp from the law and justice party. ross, back to you in london. >> louisa, great stuff. thank you very much, indeed, for that. disappointment amongst analyst and investors. at the cb seems to have run out of bullets and ideas. mr. novotny is now trying to disavow that notion. he's saying that there's a whole range of unconventional measure

res still being discussed at the ecb. says the discussions are very constructive, possible side effects, though, have to be analyzed fairly carefully. so kind of to reign in that view that maybe there was an awful lot more of the ecb going to do. and that is just sending euro/dollar down to the session low. meanwhile, myanmar's opposition leader an san suu kyi announced her decision to seek presidency in 2015. the current president will be seeking re-election himself. martin soong asked him. >> i've been asked this question by many media and i have also answered this question to many media. frankly speaking, i'm nearly 70. because of my age and my health, if it were just based on my desire, i would want to retire.

however, given the circumstances of the situation of the country, as well as considering the wishes of the people, i have to consider whether i stand in the forthcoming elections or not. >> let me ask you this, then. when we were talking about the possible changes to the constitution, you were saying that it basically depends on a 75% majority as well as possible -- in other words, the will of the people. if it is the will of the people that the opposition leader, now a parliamentarian, ang san suu chi, if you were to step back, what would your words of advice be to her? >> as i said earlier, if there's

approval of the parliamentarian, if the parliament as well as the people wish to see her, wish to elect her, the wishes of the people will be my wish, too. >> what i was more curious about was if this happens, as someone who ushered in the biggest changes that myanmar has seen in 60 years, surely you would have advice for the new leader. i mean, you would be handing over to her something that's very precious. so if you were to give her words of advice, what would they be? >> translator: i only have one advice for her. the current reforms i am undertaking is the fulfilling of the wishes of the people of myanmar. so my own advice for her would be to continue to fulfill the wishes and the desire of the majority people of myanmar as i'm doing now. >> all right. now myanmar's prospects have

topped the agenda at the worldwide economic forum in east asia. is the city ready for business? martin soong also sat down with the deputy managing director shin ohara and asked what economical shape the country is in. >> we are very pleased with the progress made so far in this country, especially in the process for opening up the economy. openness is really important. very important ingredient for the sustained growth in countries such as myanmar. also, we are very pleased with the commitment of the authorities to the macro economies. the recent -- with the authoriti authorities, in the short-term, the growth is very wearied. we are expecting a growth to be around 6.8%.

for the near medium term prospect, we are expecting around 7% growth. so the prospect is very good. >> talk to me, though. i understand i had a quick look at the negotiations between the two sides and i think macroeconomic risks are there for countries like myanmar, which is opening up so fast. you only have to take a look at what is happening with prices in yangoo on n, commercial prices. inflation, imf is estimating 5.5%. is this something they're going to have to keep a close handle on? >> inflation is not a threat this morning, but the pressure would increase on the inflation front. so what is important for the country is to have good constitutional set up to -- with the risks. what i'm talking about is the

macroeconomic monetary policy which is not -- yet so the imf is working to beef up the monetary policy so that they can fight against inflationary pressure that might come in the future. >> you are a former japanese government bureau accurate, a very senior one, i might add. i just want to get your take quickly on abe-nomics, what people are calling abe-nomics. is it going to work? >> well, it's a very ambitious comment that has been made. you know japan has been experiencing stagnation for the last two decade easy. and i think it is very bold. you have to wait and see what is going to happen next. it is too early to come to a conclusion. >> the latest numbers we see is

that that push is starting to happen which is part of abe-nomics. what ultimately needs to happen, though, is demand pull inflation, right? that is going to depend on japanese companies investing at home, on them raising wages for workers, as well. is that going to happen? >> in that sense, it is very important for the japanese government to tackle on the structure of the reform agenda. the government has been announcing some of the majors that i think ambitious ones will come. we are looking forward to, you know, reforms of the japanese economy. >> all right. still to come on "worldwide exchange," the chinese premier is visiting president obama. we'll talk u.s./signo relations when we come back. [ kitt ] you know what's impressive? a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel.

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all right. you're watching "worldwide exchange." i'm ross westgate. a recap of the headlines today, global markets on edge ahead of the may u.s. jobs report. concerns about the economy and whether the fed will start pulling back sooner or not in the bond buying program. it's been a vol tile start to the session in europe. this is after the dow had its biggest comeback of the year. it did avoid a three-day losing streak. president obama is playing hoed host to xi jinping today. tensions running high over

security trade barriers. this as the eu says it's taking very seriously a complaint filed in china that could see duties slapped on import luxury cars. intelligence officials confirmed they're tracking internet traffic in terms of potential security threats overseas. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. all right. if you've just joined us, welcome to the start of your global trading day stateside. there's one big focus today front and center, it will be the u.s. employment report with markets so volatile in terms of what the fed may be doing in nerms of asset purchase. this number becomes even more important than the previously important numbers is the way that it's been. so the may forecast at the moment, 169,000 is what we're looking for. slightly higher pick up from the

april 165,000. but it would be three months in a low of job creation below 200,000. the unemployment rate is expected to stay steady at 7.5%, as well. there are those who will look at the adp number and the manufacturing ism saying the risks are to the downside in this number. but other than, we could see a bounce back in construction this month after poor weather in march and april. so plenty to play for for asset makers today, asset investors, as well. that will be the focus ahead of it. let's bring you up to speed with where global equity and assets are trading right now. so we kick off today's globe markets report with a recap of where the asian session finished today. the shanghai composite down 1.3%. the nikkei, which flirted with bear market territory up 20% from its highs recently. just down 0.2%. now we did see a lot of volatility in dollar/yen.

we'll get into that in a few moments' time. what did help towards the end of the session was the japanese pension fund investment coming out and saying they would make an announcement about whether they may buy less japanese domestic bonds and more risky assets. the s&p/asx down 0.9%. the kospi in korea down 1.8%. three hours into trading -- or two hours into the trading day here in europe, as well, and with the futures pretty flat at the moment. the dow is currently some 12 points below fair value. the nasdaq at the moment at 2 points below fair value. the s&p is pretty much trading on fair value, as well. the it's worth pointing out the s&p briefly below the 30-day moving average, looking key for the s&p 500 at the moment. european equities, then, ahead of the u.s. open just nudging up a little bit. the ftse mib off 0.3%.

the ibxe down slightly. the ftse 100 is fairly flat. it was down 2% in the previous session, soared over 3.2% in the last two trading sessions. treasury yields, 20755%. about it just below it at 1.98%. on the currency markets, all the volatility in dollar/yen, we saw the dollar index down yesterday, dollar/yen down 3%. the biggest one-day fall in thee years on that particular cross rate. we got below 96, 95.90. currently above it at 96.51 is. there's a question, of course, of if we get this rise in the yen much more, how much will that threaten abe-nomics? aussie/dollar is weaker. sterling/dollar, nearly up to 1.60. euro/dollar is below 11.33. we did get up to 1.33, which is a three-month low for the dollar against through, as well.

that's where we stand. we'll have plenty more. right now, we switch our attention to politics. the u.s. president barack obama is hosting his chinese counterpart xi jinping in a highly anticipated summit in what is being billed as a litmus test. >> president obama sits down with chinese president xi jinping in california to try and forge a relationship with the new chinese leader where the issue of cyber hacking has taken center stage across american companies, hundred he of billions of dollars every year. john huntsman warned that the ability of government itself to crackdown on a problem that also involves the chinese military and chinese businesses isn't all that great. >> limited. you can create red lines, sort of boundaries beyond which you

do not go. beyond that, i think the longer term play is going to be engaging this entrepreneurial society that's coming up in china. they're moving very quickly and they want to have name brand respected entities. they want to go global. they want to come here to the united states. and they know if you carry that image and reputation of being a rip off artist, that's going to hobble you in the marketplace. so they're going to begin putting pressure on their own government at some point because their stuff will be ripped off, too. >> and interestingly, one part of china's ability to move up the economic quality food chain, expand its roll in global markets is the recent purchase deal announced by a chinese meat conglomerate of smithfield hands. they're going to have to clean up their act and raise their game on cyber hacking and a whole host of other issues, as well. we'll see what happens in california today, but it's the first of many discussions that u.s. and chinese officials will

be having on this at very high levels. back to you. >> that was john harwood. eunice is talking about this in chengdu. she has more on the meeting. hi, eunice. >> hi, ross. there's a lot of optimism here is that the summit could lead to a reboot or a reset on the relationship between the u.s. and china. there have been so many issues that have come to the fore that have caused the position to deteriorate over the last several years. cyber security is one of them. and when these two sides meet, the meetings have always been quite officials, very proper. and very well planned out. i was speaking with hank paulson, and he was saying that the informal nature of this particular meeting is unique and it's really designed to help get both of the sides moving and hopefully pave the way for them to get things done. >> the fact that our president,

barack obama, is participating in this really unique meeting with president xi. in an informal environment, extensive meeting shows that he and our government has their eye on the ball. they recognize and china recognize that's this bilateral relationship is extraordinarily important. and that there's a terrific opportunity for them to build their comfort level with each other. >> and there's definitely a need to build a comfort level. but one of the problems that the two sides face is that the trust deficit and overcoming that trust deficit on the part of the u.s., there's been several complaints as you guys have just heard that cyber security and cyber attacks have been going on for too long. people have been saying that the trade practices haven't been fair on the part of the chinese and on the china side, though,

there's a lot of feelings of distrust, as well, and concerns that the u.s. is building its power, its military power in the south china sea and with its asia pivot, that's one problem, you know, that the chinese see. and also, oots not only militarily, ross, it's economically, as well, where there's been some concerns and eyebrows raised here about the trans-pacific partnership which is a free trade deal that would include pretty much everybody around china and the united states. but not china. so there's a very tall order here of both sides really having to come together and fill in that gap. >> yeah. that's a fair point, eunice. thanks very much, indeed, for that. that is the view from china. just before we bring in the panel, these things are never completely unrelated. the pboc, peoples bank of china says they are going to gradually move ahead with exchange rate reform, gradually move ahead with interest rate

liberalization and they will improve deposit insurance system, as well. from the peoples bank of china, but to preview more on this u.s./china summit, we're joined now by an exclusive panel. tom nigorski is in new york.. tim sum is a senior consulting fellow for the asian program in hong kong and james braiser, analyst at ishb global is with us, as well. gents, welcome to you all. tom, let's kick off with you, first of all. eunice mentioned this. this is sort of the informal format of this meeting. how important is that? >> well, the informality has gotten a lot of attention here and i think universally from this side of the pond. but i think in china, as well, it's a good thing. you are absent, then, the trappings of typical super power summary. it's viewed as a good thing because xi jinping is accepting a much more informal approach

here. a kind of getting to know you session, although these two men have met before. but an approach that maybe can begin to repair what your correspondent referred to as the trust deficit, which we all know is severe and serious and six hours of relatively speaking unscripted conversations will probably go a long way, although these things, as you know, ross, are never really unscripted. >> does that mean we should have modest hopes for this summit? is this about anything more than relationship building? >> well, maybe modest hopes in the sense that i don't think we're going to hear big pronouncements at the end of these two days of huge -- you know, the typical summary statements. on the other hand, you can't overstate the importance. it's a getting to know you session but it's a getting to know you session with huge, huge stakes. i think there's two ways that the relationship can go right now on all the fronts that

you've outlined. and one road is a pathway to trouble, quite frankly, on the cyber security issue short-term, but on regional security issues on the economy. what people have to remember and it's a selling point that i think both countries have to do to the other is there's a huge, huge up side, perhaps on the economic front in particular. foreign direct investment in this country from china is -- it's growing, but the upside there is enormous. we did a report at the asian society recently shah showed we may have $1 trillion coming in from the chinese by 2020 and maybe north of that. that's a jobs issue when we're talking about today's jobs report. you may have jobs in this country created because of chinese foreign direct investment. that's a message that needs to go out to the people here. and the chinese need a lot of help, too. so it's a matter, i think, of managing the competitive problems and focusing on common interests. >> yeah. i mean, clearly, you know, the takeover of u.s. properties of

smithfield could have been big news this week, tim. but i wonder, because of what tom was talking about with some of those issues, are they going to tread fairly -- i mean, look at hacking, okay, first of all. are they going to have a frank discussion about that or is that going to be side stepped? >> they're clearly going to have to talk about the hacking issues, so much coverage of it in the media. but it would be unlikely for us to expect any major breakthroughs in that. actually, i would say the temperature is pretty high on this, it seems to me in the u.s. in particular. and hopefully this discussion between president obama and president xi can lower the temperature a little bit, take a step back from the political heat that's been thrown around on this issue and work out what practical steps the two sides might be able to engage in to take this issue forward and

really to have a more workman like dialogue on this over the coming months and years. >> james, we talked about the importance of the trade relations here. what do you think is going do be key in this meeting? >> it's very important to understand that you cannot separate the trading relationship from the security relationship. we've heard an awful lot about the u.s. strategic pivot towards asia. the distribution of u.s. maritime land forces away from the cold war battle fronts of western europe. it's important to understand that this is not a purely a adversarial move by the united states. maintaining the trade lanes from china's united states is actually critical to supporting the u.s. economic recovery, to supporting china's own economic ambitions. and this is not purely challenged by the chinese in terms of their growing military

capabilities. it's also challenged by the actions of some of china's smaller neighbors. so untangling these two issues and trying to keep them on an even keel, trying to manage the security relationships in the asia pacific is critical to achieve the economic goals of both countries. so just bear in mind when considering the adversarial point of view. because it is a complex scenario in terms of both the two issues. >> yeah. look, when push comes to shove, as well, emphasizing to the people here, to the people of america and china the importance of this relationship seems to be key. but there are some other issues that we've clearly got to get through. not least, of course, militarily, james. and tim, as well. how do they get through those discussions? tim, you kick off.

>> i lost you slightly. are you talking about the military issues? >> yeah. >> well, the military issues, i think the military strategic projection in east asia is actually fundamental difficult issue in this relationship at the moment. over the last few years, we've seen shifts in policy from the u.s. with this rebalancing towards east asia. we've seen shifts in approach from china becoming more confident, perhaps more assertive in the way that it projects itself around east asia. we've seen changes among other east asian countries, particularly in japan under the new prime minister. and so attention being generated here, which was not around a few years ago. if the two leaders can at least start to understand a little bit more where they're coming from, that would away positive outcome

of these discussions in california. but i don't think, again, in this issue they're going to have any great resolution of these military security issues in east asia. >> and, james, throwing this into the mix, as well, we've got the creation of trans-pacific partnership, united states, japan, britain talking about china at the moment is excluded from that. do they view that as a hostile move? >> we saw an interesting intervention from the chinese last week where they did unilaterally voice their intention to join the app and the state department gave that a pretty short rift in its response. the thing to understand about china is it's not willing to be a resource bank in the united states. it has a military industrial catching up policy in order to secure the tech logical leading edge that is currently held by the united states. and it is pursuing every means of disposable to catch up. that includes cyber wear faarfa

hacking, and understanding the very cutting edge of technology that china needs to pursue high road development rather than low road development. obviously, if you're the united states and you're trying to protect your own corporate interests, your own intellectual property, then china's activity on both the military and the industrial fronts is pretty alarming. you're eroding the competitive advantage of major and minor american enterprise. so this is really, to me, the key issue at hand for both xi jinping and barack obama and whether they can confront it, given that it's gone on for 20, 30 years is probably beyond the scope of this meeting. >> yeah. but we have to start this. there is one other -- i did mention earlier, we saw earlier in the week smithfield foods, a bit of a windfall. chinese producer announcing a

$4.7 billion bid for the company. one investor says a 30-year-old banker made a 3,400% return which translates into 3.2 million by trading in options for a week as a profit has alerted official who applied for court orders to freeze assets now looking for a possible insider trading scheme. but looking at this particular deal, tom, it's raised a lot of concerns about, you know, how much are the chinese going to buy? what do we know? is there a concern among the general population about chinese buying u.s. assets? and is it anything to be worried about, particularly in the '80s? it was the japanese who were buying everything. >> i was just going to say the same thing. you beat me to it. for those of us with long memories, this is reminiscent of

a quarter century ago. different issue, you can overlay the food safety question. i don't think it's relevant here, but it comes up because we know the chinese have a big, big problem in that area. so all of a sudden, they're buying a pretty well known big american food company. but again, i come back to this is probably in the long-term put aside smithfield itself. i think it's the harbinger of good things as long as it's managed well. the chinese obviously have a huge demand for domestic pork and other things and that's what's underlying this. and hopefully in the same way that we came to a point where we weren't so afraid of japanese involvement and investment. i'm speaking to you from rockefeller center and i remember all the discussions when the japanese were coming after big real estate investment like this one back then. we can come around to a time when that isn't seen as such a threatening move. and as james said, you know, those kinds of issues are -- even if they don't get anywhere

this weekend, if the two presidents can come to some understanding -- and i frankly think in this sort avenue area they both understand what the needs of the others and their own interests are and it's a matter of communicating them back to their own general public. >> all right. tom, thanks very much for that. tom nigorski. tim summers thank you and tim brazier, as well. we appreciate your time. chinese property group, meanwhile, is not only looking at american asset wes it's close to buying britain's biggest luxury boatmaker, dalian wanda is expected to pay around 3 million pounds for sunseeker. with china increasingly buying more assets overseas, is china now dictating the world's economic agenda or not? weigh in, e-mail us, worldwide@cnbc.com, tweet @cnbcwex or direct to me

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a sharp fall in bond yields across emerging markets, louisa is in warsaw and she's been

talking to hedge fund managers at the ipo summit. hi, lou. >> hi, ross. absolutely. we're seeing a large amount of money flowing into emerging markets due to, among other things, the stimulus that's been put in place from both the fed as well as the ecb's support that has been lending the markets of the omc program. the issue is whether or not this will continue and what happens if you see a reversal of this taking place. i spoke to mark mobius, the president and the chairman of templeton's emerging markets group. this is what he had to say. >> a lot of people have been chasing yields in these countries so you can go to rwanda and you get a 6% bond which is equal to what spab is offering. i think in some cases -- not that rwanda didn't deserve it, but i think some of this may have gone too far so we have to be cautious about that. particularly if you're going into local currency bonds.

>> so how do you make it tradeable? and what are some of the strategies that people are looking at? peter oppenheimer thinks you should go long the ftse versus the smi. take a listen. >> the uk equity market, he think, is interesting. we're optimistic about some form of domestic recovery, which has some exposure to. plus, it has some very good quality companies that are evident to the global economy. it's a currency play, 45% or so of dividends in the ftse actually paid in dollars. so with sterling weakness, you get some positive translation effects, as well. >> and be sure to tune in for the special edition of investing edge with the polish prime minister. when we come back, we'll ahead to monaco for the ernst &

young entrepreneur of the year award. plus, of course, it's a countdown to the u.s. employment report after wild swings on the dow yesterday. remember, we're trading in at nearly 200-point range. futures right now suggest the s&p is opening flat. the dow down 30 points and the nasdaq just down two. volatility, as well, on the cross rates. particularly dollar/yen. we'll get into that, as well, and assess what a stronger or weaker employment number will mean for asset prices. the last part of "worldwide exchange" continues in just a few moments. ♪ [ engine revs ] ♪ [ male announcer ] just when you thought you had experienced performance, a new ride comes along and changes everything. ♪

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global equity markets on edge ahead of concerns about the economy and what the fed might do with its bond buying program. it's been a volatile start to the session here in europe. the dow facing its biggest comeback of the year avoiding a three-day losing streak. president obama is playing host to his chinese counterpart xi jinping in california.

this as europe's ascea association says it's taking very seriously a complaint filed in china that could see tariffs slapped on luxury import cars. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. all right. if you've just swoeken up stateside, hello, welcome to the start of your global trading day. front and center is the employment report today in the united states. nonfarm payrolls for the month of may. their forecast to rise about 169,000. they're up 165,000 in april. it would be three months of jobs creation below 200,000 mark. the unemployment rate expected to stay steady at 7.5%.

but the adp number and the jobs components of the nonmanufacturing ism. there are thoughts to the downside. the risks here are to the downside. on the other hand, there might be a snap back in construction jobs because of the poor weather that we had in march .april. that is going to really dictate what happens today because it will feed into the debate over the fed and whether it tapers sooner or rather later in its bond buying program. now, how does that play into the futures? this is where we stand at the moment. pretty steady, really, after the wild swings we had yesterday. closing up 80 swinging nearly 200-point arc. that three-day losing streak we haven't had so far this year. right now, the dow is some 22 points below fair value. the nasdaq at the moment is around 4 points below fair value

and the s&p 500 is just about a point below fair value. it's trading at 1621 on the futures. for a short while yesterday, we moved below the 16-day moving average. some looking at the 1600 level as a key level for the s&p 500. keep your eyes on that. the ftse cnbc global 300 is unchanged. showed you just how flat we are and nervous. ahead of the european report, pretty flat. the ftse 100 adding to wednesday's 2% fall with a 11.3% fall yesterday. right now, it is flat. xetra dax is down 20 points, 0.25%. the ibex is flat. so is the ftse mib, as well. we're going to get into the jobs report and what we have to look for in around 10 or 15 minutes. before that, america's entrepreneur of the year award is hamdi yakayev. it is the entrepreneur behind the best selling yogurt in the

u.s. this year, he was included on the forbes billionaire list for the first time. ernst & young's entrepreneur of the year is taking place in monte carlo, monaco, whatever you want to call it. and carolin is there because she's a very smart lady. carolin. >> of course i'm a very smart lady. only go to the most beautiful places in the world. now, mr. -- or ham did i, rather, he has an incredible story, really. he was born in turkey. he brought a greek product to the u.s. and now you're the man behind the best selling yogurt brand in the u.s. the american dream is still possible, isn't it? >> it is definitely possible. the dream is definitely possible. it is very, very alive. >> recent economic data out of the u.s. has been pretty patchy. just how is business at the moment and how healthy is the u.s. consumer? >> we look at our business, we

started in 2007. growth mostly happens within really difficult times from being a billion, it happened from 2007 to 2012. this year, we've gone from almost 49% to 52% in growth. and we hired almost 800 people in that time. and, you know, we can't make it enough at the moment. i think the consumer is looking for a different things, better things. they are very informed about the food that they're purchasing. but we do not see any slowdown on our side. >> no slowdown whatsoever. consumers are still buying the small luxuries of life, greek yogurt, for example. >> absolutely. the food has always been safe. but what we're looking at, being less than 1% in 2007, greek yogu yogurt, we think it's going to be 6 of 0% 70% in the next

couple of years. we also believe yogurt market is going the double in the next three to five years. so on the consumer side, we see a lot of opportunities. but i think the opportunities arrives as you look at not changing category and come up with something different, something better .something more interesting. and that will make customers to come and get engaged more. >> we're heading into the u.s. jobs report, which many say is the most important one. over the last couple of years. i mean, are you hiring at the moment? and are you finding enough hiring skilled labor out there? >> we are hiring. we are close to 3,000 team members right now. we are hiring in idaho. we don't sometimes, but, really, it has been that chobani is bring to someone who is passionate and who is willing to learn and let's do this together. and in idaho, we did the most amazing things. we did partnership with the college there. and before the platform was

offered, everybody was 80% informed. so between that and the factory, we don't find that to be a very difficult thing. but, of course, what we make, chobani, is very crafted product. so including myself, we spend a lot of time when people are hired in making sure they do the product the best way. >> finally, i know that dwrur expanding into the uk and australia. but interestingly enough, you don't have a growth strategy for the emerging markets. that's completely absent. why? >> because when it comes to yogurt, america is an emerging market. americans are eating two to eight times less yogurt than if you compare to europe and canada and sometimes south america. yogurt has long way to go in america. so we think we're going to be in a -- pay more attention to where we see the most opportunity. but at the same time, the brand is a global brand. in australia, we did really well. i think we're either number two

or number one brand in australia. in uk, we're having some challenges. but it's not an easy place to do business. but we believe in london, in surrounding areas, we have an opportunity. we'll be searching for a factory, searching for a place to make. we're really excited about england and i think it's going to be great in england, as well. >> thank you so much for that, ham did i, president founder and ceo of chobani's, the maker of the best selling yogurt brand in the u.s. >> thank you so much for that. still to come, a virtual who's who of top designers, including the one and only martha stewart took the big apple by storm last night as jcpenney took the wraps off its new home collection. but will the new line lead to a rebound in sales? we're look at that. [ whirring] [ dog barks ] i want to treat more dogs. ♪ our business needs more cases. [ male announcer ] where do you want to take your business? i need help selling art. [ male announcer ] from broadband to web hosting

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otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business.

because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪ jcpenney has undergone recent struggles dealing with sagging sales. it's had a legal dispute with macy's and management shake-ups. courtney reagan is at cnbc in the states with more. court, good to see you. so what are the grades for this? >> yeah, good do you see, too, ross. i was at this event last night.

by and large, it was fairly impressive. i think that's what all in attendance felt. today marks another key day in j jcpenney's transformation. 505 of its store will be outfitted with the new home shop. some designers like maurth, terrance conrad and others. last night, there was an event held in new york city to launch the design collection. i spoke with ceo mike uhlman at the event and he said, quote, we are very excited to be back where the home building business is picking up. our dotcom business is likely to grow over 50% home in the near future. now, martha stewart, a woman synonymous with home has been a vocal supporter of former ceo's ron johnson strategy including the elimination of sales and coupons b which are now back at jcpenney's.

>> i joined because ron johnson was there with a new concept. i thought it was a very appealing concept. now it's changed and i have yet to see the -- see the success of it. so we're looking forward to it. >> home was once a counselor stone at jcpenney, thing for 21% of sales in 2006. but it was just 12% of the sales in 2012. the vision of home launch belongs to ceo ron johnson. saying, quote, i'm responsible no matter what happens. that's what you sign up for. i have no difficulty being responsible. i bear the responsibility, i feel the responsibility for a lot of people's well being. that's what it's about. it's the reason they came back. people deserve a chance to be successful. i hope i can help in some way. bullish investors hope ulhman will help get jcpenney's house back in order. ross. >> we'll see what happens.

good stuff. thanks, court. you were out late night last night and upper early this morning. >> i was. i'm running on just a little bit of sleep today. >> it's important that it's friday, court. so wish you all the best. >> thank you. >> thanks a lot for that. some of the other stories we're following today, the u.s. is collecting american phone records, another one suggested government is monitoring internet traffic. the guardian and washington post say a program called prism allows the national security agency to access server firms such as apple, google and facebook. it collects dab data such as e-mail, video and logins. the director of international intelligence james clap confirms the program and says it's not intentionally targeting u.s. citizens and is using on targeting data on security threats overseas. it is authorized by congress. the internet firms say though don't allow open ended internet access to their servers, but have complied with specific

legal requests for information. walmart is holding meetings today in its home state. u.s. ceo bill simon says he's optimistic sales will recover from a rehabilitate rough patch as shoppers are becoming more confident. he also says consumers are figuring out how to budget and splurge on special events like mother's day. walmart u.s. same-store sales fell 1.4% in the first quarter. in frankfurt, walmart shares are up around about 1% today. and all that gliters is not gold for john paulson. the journal reports the hedge fund manager will stop including the performance of his gold fund in monthly updates to investors in the company's healthy advance. investors in the gold fund will now receive separate word and the firm will conduct separate conference calls. the gold fund is down 47% this

year through april. here is a recap of the headlines, as well. investors are counting down to the crucial u.s. nonfarm payrolls report expecting meager jobs growth. president obama and his china counterpart kick off the so-called short summit in california today. and the u.s. admits tracking internet and phone records are critical for security reasons. aw this is tragic man, investors just like you could lose tens of thousands of dollars on their 401(k)

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♪ [ 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. [ female announcer ] today, cisco is connecting the internet of everything. so everyone goes home happy. president obama will be meeting with chinese president xi jinping later today in california. ahead of that meeting, china appeared to be stepping up its trade fight with the eu, the

european car association confirmed earlier that a complaint had been filed with the china ministry of commerce over automakers selling cars in the country. calls for an investigation could see anti-dumping tariffs slapped on car imports in the country. the acea says german members were taking the threat extremely seriously. and, of course, turn to focus today on the jobs report. we've got jessie writing in saying, i predict the u.s. will add 143,000 jobs this friday morning. and we also had a question, as well, for china. they say at the margin, china has dominated trade for the last five years. china is getting rush icher, bue real winners are countries like singapore and those countries that look at its model. we were asking about that

subject a little earlier. european equities, pretty flat, really. the ftse 100 up four points. the xetra dax down 13. cac 40 is up 2. u.s. futures slightly negative at the moment. the s&p is actually flat. the nasdaq called down 0.5 point and the dow at the moment is down around 8 points. it's all flat because at 8:30 eastern today, we get the may u.s. jobs report. employers likely stepped up hiring just a bit last month. forecasts are calling for an increase of 169,000. it was 165,000 in nonfarm payrolls in april. unemployment expected to hold steady at 7.5%. joining us is jim strugler, mkm partners. and as ever on a jobs friday, patrick o'keefe, former deputy labor secretary under president reagan. jim, patrick, welcome to you

both. patrick, let's kick off with you, first of all. is the risk to this number on the down side because of what we saw on the adp and the ism? >> yes. i think both those numbers, when we look at the data we've got, we've seen some indication that's maybe job growth is going to be below where we were. i was expecting about 180,000. i think what we have to say when we look at all the data points right now is that employers have really become cautiously schizophrenic. >> explain that. >> it means that what they're doing is they're reacting to increase demand. they are not anticipating where the economy is going. and so what they do is when they see their order book, as we saw it in the ism, maybe trailing down a little bit, then they're also adjusting downward or upward their employment expectations. but they're not doing strategic planning, they're doing reactive hiring. >> jim, we're in a schizophrenic

market at the moment, very volatile market. how does this machine play into that today? you talk about a lose-lose situation. sure. exactly. our view is from a volatility cycle perspective. we're six months into an extended period of low volatility in the u.s. however, we will experience bouts of volatility. we're in the midst of one of those right now. in our view, in volatility terms, the vix is probably capped at 25. and the s&p probably pulls back a maximum of 7%, about halfway there. but it does suggest some vulnerability into the payroll report today. >> yeah. how much hedging is going ahead of this number? >> i think not much. surprisingly. we've seen option volume actually tail off in the last week post memorial day. so there doesn't seem to be a ton of hedging going on.

but i will say, though, that vix has been walked up to a high of 1750 yesterday in the context of its own realized volatility being near historical lows. what that's saying is the market is seeing some risk, but there just isn't that turbulence yet. >> how does this -- and just on a view of the fed, how does this play in? if we get a number as expected around the 150,000 mark, that would suggest we've got reasonable job creation, not strong enough to cause early tapering and not weak enough to say the economy is going off the rails. would that keep everybody sort of as they were, do you think, jim? >> well, again, that gets to your lose-lose. more thoughts about tapering a weaker number. obviously, concerns about economic growth. you had a contractionaryism later this week. markets can come in here a little bit more and perhaps we can look out to the two-day fomc

meeting on the 18th and 19th for fed chairman bernanke to just realign his message as far as what the fed's intent is on qe. >> yeah. .look, in that sense, patrick, this number today could shift the dial. how big a number do we need on either side to shift the dial on fed thinking? >> well, fed thinking focuses on unemployment. but looking exclusively on the number of skrobs, one of the things that had been encouraging over the last five months was our tlooi three-month average. our three-month average has been over 200,000. in order for us to maintain that average, however, we would need a number of 270,000 net gain this month to stay on that three-month average. so i think anything we get under, let's say, 250,000 for the fed is a nonevent because the longer term movement in the hiring is really decelerating as

we've seen in the past couple of years in the springtime. >> what's the chances of construction sort of surge today? we had poor weather in march and april, which might have held that sector back. >> construction employment on the residential side, we have seen a steady increase on the nonresidential side. the jobs have been negative for the past couple of months. i think there's some seasonal adjustment going on in there and that goes back to your point about the weather. i'm looking for a high side number on construction. but that's still a relatively small industry in the scheme of things. >> and, jim, look, wherever we come out here, what's your view on how you position for equities right now? >> we want to be cautious in the very near term, but we want to be aggressively long coming out the other side of this correction. in our work during low volatility regimes, economically sensitive sectors begin to take off at the six-month mark. that's where we are right now.

so we want to be owning post this correction what's worked since the april lows for the s&p 500. that means financials, technology, and energy, industrials. that's really what we want to be focusing on the second half of the year. next few weeks could be choppy, though. >> how important is the 1600 level in s&p? >> i don't think it's massively critical. quite honestly, we've been looking sort of around the 1670 level. that's where it broke out over multiple years. that would reflect about a 7% pullback from the highs in may. so the 16 level, i'm not too worried about or i'd be more focused on that 1570, 1580 level. >> jim, thanks for that. patrick, thank you, as well. always good to see you on a jobs friday. patrick o'keefe. that's it for "worldwide exchange." there's only one place to keep it, though, here on cnbc.

"squawk box" will count down to the employment number. have a profitable day, whatever happens. 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. ♪

good morning. with the possibly of tapering or not, the talk of the town, this morning's report is as important as ever. it's friday, june 7th, 2013 and "squawk box" begins right now. good morning, everybody. i'm becky quick along with joe kernen and andrew ross sorkin. the forecasters say the economy probably added about 169,000

jobs last month. if it did, this will be the third straight month that payrolls outside the farm sector increased by less than 200,000. meantime, the unemployment rate is seen holding steady at 7.5%. if you think you have what it takes to weigh in, vote in our poll. all week long, we've been talking about how this is building up to this number to tell us how the economy is growing. today's employment report, as we mentioned, could be a key one for the federal reserve. that's why it is a great morning that we're going on be joined by alan greenspan. he is ow newsmaker of the day, joining us exclusively at 7:30 eastern tim. so we look at his take on what all these numbers mean, on what he thinks the fed could and should be doing right now. u.s. equities reports are