you're watching "worldwide exchange." i'm ross westgate. the headlines, hundreds of turkish riot police move into istanbul's tack sim square, firing tear gas and water cannon in a bid to clear the area. the government protesters. stocks fall and investors wait for the showdown between the bundesbank at a court hearing. no strength from bank of japan. it holds policy steady, disappointing some investors hopes from move to curb bond market volatility. and softbank sweetens its bid

for sprint nextel. but will the new offer be enough to make sprint investors dis dish? all right, good morning to you. throughout the show, we'll keep our eyes on what is going on in taksim square as riot police moved in to remove some protesters. the dollar is at 1.8944 at the moment, responding to some of the comments. you heard yesterday, last night, the turkish prime minister making his first gesture toward

protesters, agreeing to meet with them this week and we saw the police trying to move into the square as well. we'll be speaking to a journalist who is in istanbul in and around 30 minutes time. any thoughts or comments, e-mail us, worldwide@cnbc.com. first up, mario draghi speaking last night, the ecb defended his bond buying program or the monetary transactions. today, germany's constitution court begins a two-day hearing to decide if the ecb is overstepping its mandate with the plan. here is an excerpt from the interview where draghi rejects accusations he artificially lowered the risk to spreads. >> -- to remove only that part of the spread that has to do with the confidence, with confidence crisis in the euro, which was the situation prevailing last year. >> how do you tell one from the other? >> we have plenty of indicators, volatility, dispositions, short.

we have plenty indicators to decide that was the confidence crisis. the interest rates are gone so -- have become so high that people will pull out of this country's interest rates will become so high and so on and so forth. >> that's the way the market works. he's overdrawn his accounts and he's punished by going bankrupt. the ecb says you will not go bankrupt. we'll back you up. >> no, the ecb does not say that. the ecb says if there is a confidence krirs is confidence crisis in the euro, which is threatening not beyond what the fundamentals are, we will intervene but not to ensure the solvency of the countries if they're profitable. in fact, in order they have to sign programs with the imf and

european union to make sure they do not go bankrupt, that they do take measures that are enough to make them solvent. >> and joining me in the studio is the vice president of intelligence at karsten. any investor risk from the court hearings? >> no, i wouldn't overestimate this. we have to keep in mind what are we talking about today? one part is the question of the constitutionality of the zen right. today is the follow-up, the main proceedings following up on last year's verdict from september when the constitutional court cleared the way for the bounds stock to ratify. on that front, it is inconceivable that the court would roll back or fall behind its verdict from september when it cleared the way for the parliament to ratify. the other question is the omt. and the really interesting question here is if the german constitutional court actually sees itself as being in the right position, having the

authority to make a proper and full verdict here or whether it will pass on this case to the european court of justice, which will be kind of a revolution by german legal standards. >> yes, because they don't -- they live in the supremacy of the german court. >> they do, but at the same time, you know, it is becoming more and more obvious and the court indicated at this problem in its last verdict and really more and more moving toward the outer margins of what is possible on the domestic german constitutional law and what is possible for the constitutional court to decide on. so that is the really interesting question with regard to european integration. >> carolyn is outside that court. is it an investor question, carolyn? what is it? why are we there? >> we're here because it regards the omt which as mr. draghi said last week, it is possibly one of the most successful monetary

policy tools in recent history. and, yes, it is widely credited with restoring calm in the bond market in the periphery. if there are any limitations imposed by the constitutional court on what the ecb can do with the omt, yes, there could be jitters in the market. but, again, the ruling isn't expected until after the german elections in september and that just shows you how politically fraught these hearings are because there is a certain amount of pushback by the german public. we saw a survey conducted this morning showing one in two germans actually want the constitutional court to rule that the ecb can continue with the omt pond buying, even though it hasn't -- never been used before and only 31% actually believe that, you know, this complaint is unfounded. so there is a lot of skepticism on part of the germans and many would argue on the ground this is a political exercise ahead of the german elections.

ross? >> yeah. europe constant is a political game that we're playing. just what do you think is going -- are we going to get movement after the german elections? >> we're going to have some movements necessarily simply because the markets have priced in september or november deadline once the new german government is in place. but it is veclear there is a strong expectation in the market we'll see stronger moves, quicker moves towards the close integration. look at the banking union debate, something that will keep european leaders busy all through the next year, and, you know, these are the questions that paris and berlin have to dress after the german elections. >> yeah, look, how much does it matter if we don't get substantial move? how long can the omt -- i suppose the question is how long can the omt or threat of the omt

hold things in place for? >> no, absolutely. because i think that post german elections also moving to a new setup which is draghi and the ecb on the one hand, versus member states on the others because keep in mind that draghi's promise came at the condition last year of member states moving towards closer integration. and it is very clear that in a way the omt has been too successful. it has really taken off pressure from member states to move towards closer integration. the ecb -- >> francois hollande coming out yesterday and saying it is over. >> you have angela merkel -- >> you can't believe that, why would you do anything? >> exactly. the question is if market pressure were to come back, and that is the absolute precondition, member states would have to move again. and at this point, we're going to face this old and unresolved question between germany and france again when the germans will push for close integration and centralization of political authority on the european level

by the french. all these problems are not resolved and will come back with a vengeance. >> thank you very much for that. karsten. carolyn, catch you again later. thank you. we'll kick off our global markets report with singapore. >> no policy change from the boj which was within expectations. looking for new steps to curb the bond market volatility. the nikkei closed down 1.5% today and the yen regained strength on the greenback weighing on exporter stocks. in terms of the subindices, realistic counters and steelmakers were among the worst hit sectors. the best performing in asia was the australia market, coming back from yesterday's holiday, it got to react to last week's strong u.s. jobs report.

but a weak turn took a toll on some of the miners and on the whole gained a modest .4%. elsewhere, mainland china markets remained closed until thursday and shares in hong kong tracked lower ahead of tomorrow's dragon boat holiday. property stocks lost ground for the tenth straight session on fears of more housing curbs. and in south korea, the kospi shed .6% today. and sam seung wsung was the maj lost about 10% since midlast week. it became the second broker in the week to cut the outlook citing weak demand for the galaxy s4. and the southeast asian markets, also deeply in the red today. back to you. >> thanks for that. here in europe, over an hour and ten minutes into the trading day. 8 to 1 on the dow jones 600.

down 11 points, around 6,400. we're below 6,400, another 60 points lower at the moment. those bond yields are rising. we'll get more on that. let's show you where we are with turkey. we have seen the statements from the turkish central basement. up 1.6%. we're going to try to curb some volatility within the lira market. the dollar/turkish is lower, had some impact on those comments. ten-year turkish yield, 7.34%, higher today as you can see on that. other bond rates right now, italy and spain, spanish yields higher, spain up 4.66%. italian up to 4.34 as we wade our way through. treasury yields, 2.3%, getting up to near that may high. and we had s&p coming out

yesterday, moving now with the credit rating for the united states revising its outlook at aaa plus to stable from negative. the reaction to that fairly subdued. playing down the impact. another suggestion that maybe the economy is getting better. the economy is getting better, bond yields hedge higher. that's the way that works. as far as currency markets, another volatile day up and down day for dollar/yen. 98.21 at the moment. got down to 97.78 after they talked about no further easing steps, no talk of calming market volatility. aussie/dollar, 9349 is where we stand. down to the september 2010 lows. everybody seems to be universally bearish about the aussie/dollar. sterling 1.5542. we'll keep an eye on industrial production coming up. bank of japan, resisting fresh

measures to calm market volatility. we'll get into that when we come back. plus, the darlings of the fashion world were out in force. chanel opened the doors to the new flagship here in london. we'll hear from the architect behind the boutique and what he told us about his vision. >> a series of luxury condominiums on the move. first of all, space travel and i like sort of exotic combined with luxury and making people's lives better. so that's where i would go. >> the sky isn't the limit? >> absolutely not. no limits. do i look like i have limits? we went out and asked people a simple question: how old is the oldest person you've known? we gave people a sticker and had them show us.

we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪ 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. ♪ [ 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 to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better. ♪

investors hoped for additional steps on the bank of japan to ease recent market turbulence were disappointed today. the central bank's board kept monetary policy unchanged. the reason for doing so, japan's economy is picking up apparently. domestic demand looks fine. they also say extending fixed rate operations was debated but was felt markets will stabilize over time.

our senior economist joins us from singapore. chris williamson is from market. alvin, this is interesting. the market volatility first of all. normally central banks get upset about volatility. there has been plenty of yen volatility. why are they not going to do anything about it? >> i think during his press conference he thinks things are stabilized somewhat and he's going to give it a bit more time while the bond buying program for the boj actually gets in more traction maybe. so he's probably waiting for a bit more action, bit more reaction within the markets itself and basically if you look at the two ten-year spread yields, it is probably -- it has come up a bit from 90 basis points, came around 70 basis points. things are holding stable for

now. >> is it actually an admission of prices being pushed around by as much as what the fed does as the bank of japan? to go from 103 on dollar/yen to 94.98 as we were on friday in a matter of a week or so and to bounce back up to 98, seems to me extreme volatility. maybe it is because he realizes can't do anything about it. >> okay, firstly, i guess from where we came from, if we look at where the yen was at its strongest, less than half a year ago. now from where we are, certainly right. we have seen yen still very much recur in six month horizon. i think that volatility was unfortunate, but as i think corrodia -- i think he puts it, if things stabilize, we find it -- it might still see a pickup in the dollar/yen rate.

maybe in mid-july elections, resounding victory for abe. we'll see dollar yen back to 105 or higher from there. >> do you agree with the revised assessment of the economy? >> certainly if you look at the latest numbers, especially at q-1 numbers, things are looking a bit more positive. of course q-1 numbers could also be improved by the fact of the currency being such -- the correction in the yen itself. but going forward, i think that optimism needs to be a bit more cautious because i do think that the external environment still is very much negative for i think exports. in terms of like export growth itself. and japan, the market itself is still fairly dependent on that. so i think growth itself still be a bit more cautious. i would still say it is positive, but may not be as rosy a picture as they painted it out

to be. >> you probably agree with the assessment right now, but you would retain that caution? >> yeah, i think in the case of japan, it is a very good looking environment at the moment. the first quarter gdp revision was good news, brought it more into line with the pmis. and good data so far in the second quarter. so first half of the year is looking really good. and when you look at the foundations, strong confidence there among consumers and businesses to extend that within japan. a good looking environment. but mentioned the external environment is weak, nothing like it was at the start of the year, down from last year. i think you'll see more and more people revise japan's growth up for this year and into next year. >> alvin, what is the scope for disappointment after the -- we're waiting now, given the upper house elections are out of the way, so we can then see the whites of the eyes of structural reform. howing about a scope ing aboub disappointment?

>> i think judging from history itself and the recent stock market movements, it is a reflection of some kind of cautious approach because you may not see the full extent of the arrow being released by the prime minister abe. again, if they get resounding victory, there will be a boost towards the positive sentiment, but as history has shown, i think it is better to be a bit more cautious rather than be highly optimistic on the full recovery from the japan economy itself. >> okay. thanks, alvin. good it see you today. joining us from singapore. chris stays around, a bit more to talk about with him. the success of the ecb's measures will play no role in deciding whether in fact they are constitutional. very important, important part of that. and we also have news out of greece as well. asking creditors to lower the

2013 target for privatization. this comes after we heard they're pressing for greater debt forgiveness for greece as well. here is a bit of a mistake. a german bank clock who fell asleep while trying to transfer a small amount of cash made a multimillion dollar error. he dozed off with his finger on the number 2 button on the keyboard. the transaction was made for $222 million. a lot of 2s. have you ever fallen asleep in an inappropriate place? i'm sure we all have. what is your best sleep story? let us know. e-mail us, worldwide@cnbc.com. tweet @cnbcwex or direct to me @rosswestgate. don't fall asleep at the

controls in the airplane. we are continuing to keep monitoring events in istanbul. turkish police moved into taksim square. we heard they're trying to curb volatility in the lira and we'll keep you up to speed with events there as they unfold. elsewhere, the austerity growth debate has become the height of fashion in financial markets. one luxury group is betting big on expansion with the opening of a new flagship store in london. julia was there to look at the newest boutique. >> reporter: it all starts with the string of pearls. rising 11 meters from the ground. it is the centerpiece of chanel's new shop on bond street. >> bond street has the most international clientele of any place in the world. here you've got chinese, russians, you have indonesians, you have indians, you have

everything on bond street. and i can't really say that about fifth avenue anymore. we're a bit far away, and we have never been a large player to the gulf states, we're just too far away. >> reporter: behind the project, peter marino, designer of choice for high end boutiques around the globe. >> thanks to peter marino, a mix between architecture, art, which can demonstrate the creativity and luxury which is chanel. >> i'm the premiere interpreter of luxury brands today and what i present to the customer. and i think i'm very important to this new fusion of architecture, fine art and fashion. the force of these three has never been what it is now. today at chanel, for instance, we have over 25 commission site specific works of art which is

an extraordinary thing. this is an asset allocation class now this is not spending money. so everything has changed. the game, the mixture, the business, the boutiques has become quite complex. >> reporter: the international glitterati put their best fashion foot forward to wander the 12,600 square foot boutique inspired by coco chanel's apartment. >> most important for us is twht is right for chanel and to be modern, one of the most important cities in the world for us, and we have the right location and the right competition. it is more about that than being the kind of competition. >> reporter: despite a blowout budget, in 23 original works of art, even this project will go out of fashion. >> a work of art is an asset and after six years it increases in

value. >> reporter: so it helps these companies finance the project like this? >> i help them spend their money wisely. >> interesting character. still to come, we'll hear more from the architect of the new boutique. who is buying fashionable in beijing? we'll find out what peter marino thinks. and we'll look at a new part of markets global. aw this is tragic man, investors just like you could lose tens of thousands of dollars on their 401(k) to hidden fees. thankfully e-trade has low cost investments and no hidden fees. but, you know, if you're still bent on blowing this fat stack of cash, there's a couple of ways you could do it. ♪ ♪ or just go to e-trade and save it. boom. ♪

these are the headlines from around the globe. hundreds of turkish riot police move into taksim square in a bid to clear the area of anti-government protesters. stocks fall, bond yields rise in europe as investors await a showdown between the bundesbank and ecb over its omt program at a court hearing in germany. no straying for the bank of japan from its bond buying path. the central bank holds policy steady, disappointing some. and softbank sweetens its bid for sprint nextel, mixing in $4.5 million for cash for shareholders. will it be enough to make sprint investors dis dish? we are waiting on the constitutional court ruling on the efficacy of the omt.

ahead of that, we're hearing that the german court, tsaying they must determine if the ecb is using powers it does not have, framing where their thought processes are going. we're also about to get industrial production numbers out of the uk. data looking better. let's see whether this follows the patent as well. uk industrial production up .3%. up .3%. up half a percent in three months. industrial production up .8%. let's get this. industrial production at -- i got a whole bunch of different set of numbers. industrial production forecast flat a month, down on the year. also a number that says industrial production up 1%, that is better than expected. manufacturing output, minus .2%,

down .5% on the year. and output forecast at plus .1%, minus .2%. so manufacturing output is a little bit weaker. industrial production is a little bit better. the plus 5% i was talking about is the three month manufacturing output. and industrial production on a three month basis up .8%. i'm pleased i got that in the end. apologies for that. chris williams still with us. sorry about that. slightly confusing. industrial production slightly better. output weaker but a whole raft of data including pmi. no assessment this morning. how sustainable, how much stronger is the uk economy getting? >> it is looking good. i know these numbers are down, but we're expecting bigger falls than that. that's linked to the time of easter and payback from the previous month. i think the key figure is that .5% three month on three month growth in manufacturing output. because that's a gauge of how quarterly trends are moving.

and so we're suggesting that the manufacturing sector, the goods producing sector will contribute more to the economy than the first quarter. so that .3% gdp growth, first quarter, looking for a better figure. everything now is building up to the picture of around .5% gdp increase in the second quarter, so gathering rate of momentum and not just the good producing sectors, we have other indicators suggesting how they're feeling, the best they felt around three years. looki ining quite robust, a goo picture. >> yeah. quite a good picture. what do you think -- they talked about trend growth, growth coming back to trend. do you see that happening? >> yes, depend what trend is. i think we have now moved from precrisis when people talk about 2.5% trend growth, now you look at around 2%. interesting s&p looking at the u.s. downgrading their trend growth to 1%. lots of discussions going on. no one really knows.

we're looking at around 2%. so .5% growth rate, you're looking pretty much on trend. what does this mean for policy? i think qe is finished. i don't think we'll see it anymore. >> the nail firmly hammered, the last nail hammered in that coffin. >> some time ago, yeah. >> okay. let's talk about something else. financial aid to services and industrials led growth around the world last month. this is according to your first ever, right, global pmi report. basic materials and telecom services, both sectors contracting in may. this is the -- what have you done here, chris? you've taken your global pmi data and decided to see what else it can do? >> absolutely, yeah. many years ago, seems like another lifetime, there was a whole group of economists got together saying what is the future holding for economic data? the whole table agreed what they would love to see is economic data that doesn't look at country performance but stock market sector performance.

we thought we can do that. not yet, it will take a few years, but now we're in a position where we get pmi responses from over 20,000 companies, and 28 countries around the world, so this is the data that feeds into the iryo e eurozone pmi, all the countries come in and we slice it a different way. >> no surprise that the weak ones are basic materials and perhaps telecoms. the interesting is how well financials are doing. why is that? >> well, when you look at the stock market gains, not entirely surprising. there is a correlation there with how busy these firms are, but interestingly, you look within financials, what other financials which are doing the best, that's the nonbanking financials, insurance and real estate. so this is the investment, the pension funds, doing well at the moment, seeing good and closing money. clients interested in investing. there is some good stimulus

signs there. what is really interesting is the graphics we got up talking about the output index from the surveys. that tells you what is going on now. really as an investor you want to know what is happening in the next couple of months what is driving the earnings growth. enwe' we're looking at different ways to look at the backlogs. what are they doing? what are charging? that big standout performer at the moment is autos. autos really starting to pick up. had great weakness late last year, picking up now, even in europe. right down the other end of the scale the weakest is transportation, which reflects the mining and basic materials fewer stuff moving around. they have no pricing power. that's a bad bet. you can look at the scores for each sector and allocate your

investing appropriately. >> this will be out quarterly? >> this will be out monthly. every month, bang, all the data comes out we'll see more of you, i fear. i don't fear. i mean, chris, good it see you. thanks for joining us. return to turkey. more live pictures as turkish police moved into istanbul's taksim square, firing tear gas, rioters into their 12th day. the latest demonstrations follow a pledge that erdogan will meet with protesters this week. he also implied the occupation of taksim square could be over by the weekend. emra devery joins us on the phone. he will meet with protesters but then also moves in to clear the

square. is that the right tactic? >> it seems like kind of weird to me in the sense that on the one hand he's saying that he's going to negotiate with the protesters, but on the other hand, you know, he moves in. i thought you had peace while you're negotiating. and then the negotiation is kind of weird as well because the taksim, there is a platform who presents to the protesters. they said no one has contacted with them to meet with the prime minister. it seems that the prime minister is choosing which one he's meeting with. >> yeah. which is -- look -- how -- where are we now with protesters and how big a threat is it posing to the government and how much -- how is it going to change the polit politics? >> it depends if these protests are going to go on or not. if they are going to go on through the summer. we are going to see -- there is

a meeting, as i told you, there is a meeting scheduled with the protesters at least, i mean, who the prime minister chose as representing the protesters tomorrow, and after the -- right now, the taksim square has been cleared by the police. protesters remain there. if they are going to continue or not, we are going to see after tomorrow's meeting. >> this is all started because, of course, the heavy-handedness approach from the government to an original protester about redevelopment of a park. is that redevelopment still going to go ahead? if they're going to go ahead with the thing that caused the original protest, is anybody going to be satisfied? >> the government has said a couple of days ago they are not going to put in more because

according to the prime minister and other top government officials in the area, it is not fit for more anyway. so it seems the -- they want to go ahead and build something out there. so basically it used to be a historic building, they want to make a replica of the historic building and protesters are against that. so, i mean, there isn't that much progress on that front. >> how polarizing is this right now among the turkish people and the political parties? >> not the political parties. i should emphasize that protesters -- contrary to what the government claims, the government is saying they are the main opposition party, but the protesters are not affiliated with an opposition party at all. so not political, in terms of

political party, it is extremely polarizing in the sense that, i mean, there is a sizable chunk of the population who still support suppor supports prime minister erdogan and there is also a sizable chunk who oppose the government, the government party and also the prime minister. so it is a deep polarization at the moment. >> emre, thank you for joining us. data out this morning, gdp expanded 3% from the same period a year ago compared to a dough jo dow jones forecast of 4.3%. nearly up 8%. and we also heard from the central bank this morning saying they're going to start shorter monetary to try to stabilize the

turkish currency. european stocks are down this morning. we had losses around after 1%, fell across the board. that's where we stand at the moment. ftse down .75%. yesterday, off 11 points. bull market yields are edging higher in the peripheral and italy and spain, 4.35% for italy. also higher in the u.s. as well. treasury 2.25%. getting up to above the highs we saw from may last year. we'll keep our eyes on that. and, of course, the currency mash ets, dollar/yen volatility continues, back down to 97.86. and the bank of japan saying there is no talk of curbing volatility, did mean we saw the yen strengthen. also in japan, softbank is sweetening its offer for sprint nextel, boosting its total bid to $21.6 billion from $20.1

billion, shoots very large 78% stake. >> a couple of days after unveiling an alternative plan to buy t-mobile, japanese wireless giant softbank finally proposed the revised plan for the sprint deal. the bank has agreed to raise $1.5 billion to increase its offer to asquare sprint, hoping to fend off a rival offer from dish. this offer comes the day before sprint's scheduled shareholder vote on the bid, now pushed back two weeks. the new plan raises softbank's offer to $21.6 billion, but it is still below the dish offer of $25.5 billion. though the japanese wireless firm said the new deal will offer sprint shareholders $16.6 billion in cash, compare with $12 billion before the revision. sprint special committee and board of directors have approved

the amended merger agreement and have recommended the shareholders to vote for the softbank deal. some are saying that softbank's bid is more solid, as one of the sprint's largest shareholder paulson said it would vote all shares in favor of the new softbank deal. dish now gets time to propose the new plan by the 18th so it is uncertain if softbank's revised offer can clench the deal. softbank shares seesawed today but ended almost flat. back to you. >> thanks for that. and staying in japan, more trouble for the 787 japan airlines. dream liner bound for singapore forced to return to a tokyo airport after it left engine alert went off related to the de-icing system. the plane which had 163 people on board landed smoothly. no one injured. the airline says it is the first time a 787 had problems since the plane was brought back into service last month. that's good.

the first time we had a problem since last month. jl shares slipped nearly 2%, slightly underperforming the broader nikkei 225. over in india, shares of steel and power are falling pretty heavily. the country's central bureau of investigations alleges that the firm cheated and conspired by misrepresenting information to win blocks from the government. cbi has been investigating how it was rewarded last year. that's when the federal order said the government lost out in $33 billion over seven years by not holding auctions. jindal steel says it is law abiding and cooperating with police. still to come on the program, fashion followers were in central london last night for the opening of chanel's new flagship store. julia was there. who is the man behind the design

of this boutique? >> i think i'm a premiere interpreter of luxury brands today of what i present to the customer. and i think i'm very important to this new fusion of architecture, fine art and fashion. .

well, getting more pictures here. this is the turkish riot police moving into taksim square. things seem to have calmed down from earlier this morning. at same time, the central bank says it is holding interday foreign exchange selling auctions if necessary. the amount of each selling auction will be $50 million. and as far as stock markets, the bist 100 is rebounding, the lira slightly stronger against the dollar. 189.30. ten-year bond has been sold off slightly. we'll keep our eyes on that. also keep our eyes on what is happening over here as well. just worth pointing out, bond yields in italy and spain rising as well. treasury yields, keep your eyes on that.

2.25%. it is now stable. aa plus stable from negative. perceived as another sign the economy is getting on to a more sustainable path, we might get more early fed tapering. i could talk about that with jules. you've been doing something else instead, right? chanel opening their new flagship store. we won't talk about u.s. treasuries. >> thanks for that. >> you could do both. i am interested in this flag ship store. what is going on? >> well, it is actually quite interesting. they opened this flagship store but it follows a number of high profile things. the competition element here and how much of it is about demand, versus he's done it there, we need to do it. there is one consistent element in this, and that's the architect, peter marinmarino, i number of these high profile

openings. 61 bow teeutiques he's looking this year. it shows you where the key demand is. that's what i asked him. where is he seeing the growth potential? >> up until last weekend, one of them had been turkey, from about 2004 on, greater china was exponentially enormous for luxury brands. there were brands who had absolutely no stores ten years ago who now have -- who could have anywhere between 10 and 40. so you can imagine the kind of expenditure in china that happened. i refer to it as greater china because thailand is absolutely booming. taiwan is also very, very strong in the luxury sector. >> had a significant leadership transition in china. just how has that impacted consumer behavior and people's willingness to spend? >> with the communist party's meeting and changing of the guard, we find beijing itself

has really changed the nature of buying, of gifts, of gifting, of showing luxury products. we don't find it out in beijing at the moment, just in the capital. >> there has been a push by the luxury companies to branch out into second and third tier cities in china. >> but you have to realize that a second and third tier city in china has 50 million people, so you say that to a european, like, what about a second tier city like perhaps zurich with 300,000, second and third tier city is enormous according to western standards. second or third tier city in china is larger than new york or l.a. it is enormous. >> have you seen any fall in demand aside from the beijing issue? >> no. if anything, in the shall we say second and third tier, it is actually increasing. >> how concerned are you about turkey? >> every time i see a

demonstration, i get concerned about anything. we're building a luxury hotel in beirut and i'm quite concerned, sorry, for personal reasons of how it is going on next door two hours away in syria. like -- >> is it stopping people investing in these areas? >> it is slowing down, it certainly is, yeah. it is slowing down in the gulf. >> so i think the key point to pick up about what peter was saying is this increase demand in the second and third tier cities are seeing stats suggesting over 170 cities have a population more than 1 million people, which is a point he was alluding to there. actually we may see issues in beijing, but actually the strength elsewhere in china. >> i like it. jules, good stuff. thank you very much indeed for that. the new store follows the opening of lots of high profile stores in the neighborhood. luxury brands show resilience, but they have run out of steam as well. we also have prada due to report first quarter earnings today after they missed estimates in

april. are we going to get many surprises from prada? >> not much so we expect high growth but we think markets should be estimating that. keep two things in mind. prada is struggling with comps. growth 14%, same store sales 19%. at the same time, at this low rate of growth, they're still better than the sector. the sector slowed down, but prada will be high single digits, still better than the sector. having said that, the market should -- >> that's in the price, isn't it? the rating is not high compared to the luxury sector average. is that justified?

>> yes, partly in the price. they're trading 20% premium to the sector. it is built in to an extent. >> how much concern is there over the chinese consumer? we got an environment with potentially slowing demand there. >> actually more than china, chinese demand in china, the concern is more on the chinese consumer because, like, just to give a number, mainland chinese roughly one third of the global demand of the luxury companies, more than one third actually. and good chunk of it comes out of european centers, european brand shops. 50% to 60% due to tourist demand. there has been some impact on the foot holds of chinese. having said that, chinese is growing elsewhere. southeast asia is doing very well in terms of chinese demand. u.s. consumer started to pick up.

if you compare on year on year basis, chinese demand is coming down. so for these brands, that's what we have seen over the last three quarters that u.s. and europe were very important markets. not because of the domestic demand. and that has now started to come down. >> it seems to be a fairly confuseding picture. you talk about burberry coming back to growth because china is recovering and china slowing down. i'm not sure, is it different for different brands? >> it is -- basically the broad picture we're getting is a slowdown. there are a couple of brands that have outperformed. burberry is one of them. burberry is recovering from a low bid. last year they had really weak chinese numbers. and most of the brands, most of the luxury brand is reporting a slowdown. >> thanks for that. vice president of consumer equity research asia. prime minister erdogan is

speaking, prime minister of turkey, of course. and this is the parliament building in ankara. we'll -- he's been speaking in turkish. we don't have a translation, but we will get snippets of what he says and bring that to you as the protests continue into their 12th day. turkish lira has got a little strength after the turkish central bank came in and talked about trying to curb volatility. opening 50 million interday foreign exchange selling auction. will be 50 million. and the bist 100 rebounded as well a little bit. as far as wider currency markets are concerned, we keep our eyes on dollar/yen, fairly volatile. 97.66 where we stand at the moment. we have been over 98 during the session. the yen strengthening after saying we don't have any further

easing steps and won't do anything to curb volatility. dollar/yen down to 98.48 on friday. european index softer after the open. production slightly better than expected. manufacturing output a little weaker. the interdakotas and cac 100 all down. still to come in the next hour, our next guest said fed chair bernanke is in no rush to wind down stimulus. i want to make things more secure. [ 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

to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better. ♪ 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. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪

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. ♪

this is "worldwide exchange." turkish prime minister addresses parliament in ankara as riot police move into taksim square, firing tear gas and water cannon trying to clear the area of anti-government protesters. the showdown between the bundesbank and ecb over its omt program is under way at a court hearing in germany. the court's president has already stated the success of the policy will be no measure of its legality. and softbank sweetens the bid for sprint nextel mixing in $4.5 billion in cash for shareholders. will the new offer be enough to

make sprint investors dis dish? the man who says he leaked details about u.s. secret surveillance programs dropped out of sight. lawmakers call for him to be sent home to face prosecution. if you're just joining us state side, welcome to the start of your global trading day. you're looking at pictures from ankara, the turkish prime minister is addressing parliament. this is after we have seen that move to try to clear taksim square of the protesters, taking place for the last week and a half. those moves follow pledges he made yesterday that he would meet with protesters later this week as well. we also had news out from the turkish central bank. they have been saying they want

to curb the volatility. they're having auctions for dollars of around 50 million in each lot. that could help the dollar weak a little bit against the turkish lira and the bist 100 firmed up this morning as well. so that's what's going on with turkey. meanwhi meanwhile, up to speed with the rest of what happened in the world today. >> asian markets feeling the blues today. asia index fell to 6 1/2 month low, wiping out all the gains for the year. we saw sentiment turning around in japan after yesterday's rally. while the knnikkei pulled back 1.5%, investors were disappointed because the boj did not offer any measures to curb the volatile. property counters were among the biggest losers, down 4% to 5%

today. stocks in hong kong also underwater, extending their sell-off for the tenth straight session as investors worry about fresh curbs on the sector. the gaming stocks in hong kong also pulled back sharply after their recent run-up. latest data shows revenue for first week of june was much weaker than expected. quick look at the south korean market, kospi ended in the red, down .6%. this index heavyweight samsung electronics fell for the fourth straight session. the stock tumbled 2.5% today and has lost 10% since midlast week. morgan stanley just became the second broker in the week to cut samsung's profit forecast on concerns that sales of its flagship may be slowing. that's a recap of asian markets. back to you, ross. >> thanks for that. i should show you where we are with futures now. slim losses. yesterday dow down 9 points.

the dow is some 42 points below fair value. the nasdaq is currently five points below fair value. and s&p is nearly 6 points below fair value. the ftse global 300 a little weaker as we have gone through the session. just down about a tenth of a percent at the moment. european bosses meanwhile also weaker than yesterday. ftse down, we could see we're firmly below that. what we're really focusing on is continuing to see u.s. treasury yields climbing a little higher. 2.24% is where we stand. this brings us back to levels we haven't seen since around april last year. we'll keep our eyes on that. we heard s&p saying we're having a stable rating of aa plus for the united states. the economics are improving a little bit. economics improving a little

bit, what does that mean for tapering? what does that mean for bond yields? we'll get into that story in a second. keep your eyes on that. ten-year spanish yields, 4.75. as far as currency mash ets, more moves surrounding dollar yen. at 97.50. the yen strengthening. the bank of japan saying we're not going to do anything to curb volatility and there are no further easing steps. revised up their forecast of japanese economy. that made the yen firmer against the dollar. the aussie dollar continues to weaken, 9358, down to numbers we haven't seen since november 2010. everybody bearish on the aussie as well. sterling dollar holding steady at 1.5555. production data came in a tick higher than we might have expected. euro/dollar is firm at 183 it

the -- 183.89. hi talking about the ecb. this comes ahead of today's german constitutional court which has begun a two-day hearing to decide if the ecb is overstepping its mandate. here is an excerpt from the interview where draghi rejects accusations he has artificially lowered the risk to spreads. >> -- to remove only that part of the spread that has to do with confidence crisis in the euro, which was the situation rever reprevailing last year. >> how do you tell one from the other? >> we have plenty indicators to decide that was the confidence crisis. the interest rates have gone so -- become so high that people

will pull out of this country and interest rates will become even so high and so on and so forth. >> that's the way the market work. somebody has overdrawn his account, and he's punished by going bankrupt. but the ecb says you will not go bankrupt, we back you up? >> no, the ecb doesn't say that. the ecb says if there is a confidence crisis in the euro, which is threatening the solvency of the country's not beyond what their fundamentals are, we are ready to intervene. but we will not intervene to ensure the solvency of the countries if they're profitable. absolutely. and, in fact, and, in fact, in order to avoid that, they have to sign programs with the imf and european union to make sure they actually do not go back, that they do take measures that

are enough to make them solvent. >> interesting interview. carolin is on the ground in southern west city of carl's river. you've been listening in on the first hour. it is interesting some of the comments coming out and saying effectiveness is no guide to its legality. so what is the framework then they're laying out that they'll make their decisions based on? >> basically they have to decide whether this violates german basic law. if it doesn't violate it, well, then the german constitutional court really has no jurisdiction over what the ecb will be doing. it could be transferred to luxembourg, but many legal experts say this is very, very unlikely. as you said, the hearing has started about an hour ago. some opening statements have been made, and one of the plain tips said the ecb issomely basking in the glow of the omt

success, celebrating its mario superman. so a pretty heated exchange that we're seeing inside and later on we'll also hear from none other than german finance minister who has been invited as an expert and as he entered the building a few hours ago, he said there is no doubt the ecb acts within its mandate and he's confident on an outcome. the big showdown will happen between the bundesbank who has been staunchly opposed to the omt purchases from the get go, and on the other hand, the ecb, who will defend the claims saying, yes, our primary goal is still price stability and it will not compromise our independence and really it is here to safeguard the financial stability within europe. now, a ruling is not expected today or tomorrow, that's only expected to come after the german general elections in september. ross? >> all right.

carolin, thanks for that. that's the latest what is going on. we'll monitor events there as we have been monitoring events in turkey as well. the prime minister currently speaking, erdogan in parliament in ankara. he's done on the one hand last night saying he would meet with protesters and then sent forces in to try to clear the square as well. still waiting to get a snapshot of what he suggested, though we don't necessarily have it at the moment. but we will continue to look at what is going on. this is after the turkish central bank came out and said they'll try to stabilize some of the volatility in -- in the currency with some aucks around $50 as well. this comes after further clashes in taksim square. right. that is the latest as well from taksim square.

things are calmed down from this morning. there were police vehicles on fire. investors who hoped for additional steps from the bank of japan to ease recent market turbulence were disappointed. central bank's board kept monetary policy unchanged as i mentioned earlier. the reason, because the economy is picking up. overseas demand appears to be gaining pace and domestic demand looks firm. the governor kuroda says extending fixed rate operations was debated but was felt the markets would stabilize over time. in the united states, charles claus has been repeating his mantra saying now is the time the central bank to slow down its bond buying program. he says the fed has done enough to stimulate the economy, which is getting stronger. in an interview on nightly business report, he said he would like to see the fomc begin to begin the tapering process and next week's meeting. >> if it was just up to me, i would begin scaling back, toning down the dial, the volume, a

little bit at the next meeting. i think the economy can stand that. i think it is justified by the improvements in the economy since last september. >> claus does acknowledge the fed policymakers are struggling with how to calibrate the unwinding of the stimulus program saying it is something with which they don't have a lot of experience. gina sanchez, good morning to you. >> good morning to you. taking inflation is low. we can go at it aggressively. what do you think? >> i think it is more that inflation is low. that's helpful, but ben bernanke has been clear he's looking for signs of a self-sustaining recovery. and those signs are going to be in places like the labor markets, the manufacturing data came in weak, it is in contraction. there is still at least going to be some pullback and probably

q-2 or q-3 data in terms of fiscal drag. in terms of timing, that would be a terrible time to taper or announce that you're going to begin to taper. as soon as you make that announcement, the long end of the curb will go right back up. >> yields are going up. ten-year yield, 2.25% is where we stand. that's the highest since april last year. >> yes. >> if we go up, though, because we are getting a self-sustaining recovery, not a bad thing is it? >> not a bad thing, but it is going to threaten the viability of the stock market returns we have seen this past so far the beginning of this year. the stock markets are up in the u.s. over 15%. you'll give some of that back. right now, bond yields are above the dividend yield in the s&p. that's not really sustainable if you expect the s&p to continue chugging away. not that that's the end goal, obviously. but at the end of the day, the fed -- >> not here to sustain equity

markets. >> we aren't. but ben bernanke is looking for a self-sustaining recovery. my point is you still see weakness in manufacturing. the labor market, the headlines look fine. you dig into the numbers, there is still some weakness. what ben bernanke know, if he pulls back too early, he doesn't have probably enough firepower to continue to start a new program later. meaning that the bias in my opinion has to be on caution, meaning that there has to be clear and evident, you know, clear and evident recovery and not just sort of, you know, sparse data here and there. it is still -- >> okay. i get that. i get that point. this idea of sustainable recovery, i would think we're there. i know -- >> with manufacturing contracting? >> hold on. look, we all -- we had patchy data now for this period of year for the last three years. why should this year be any --

some season -- seasonal pattern. we're still creating jobs. i know we're not over 200,000. i know the unemployment rate ticked up, that's because we had a bigger labor force, a good thing. >> in the end, that is a good thing. however, you still don't see sustained planning, forward planning in terms of ceos. if you look at the data coming in through earnings, earnings numbers have been fine, sales numbers are still tepid. most of the sectors missed in terms of sales expectations this past quarter. that, to me, isn't a roaring recovery. that has nothing -- that's not a fundamentally driven recovery. that is a stimulus recovery. absolutely. >> with yields going back up, the s&p yield, that will change. >> i think so. >> all right. i'm enjoying you being here. stay there. we'll come back to you in a few

moments time. keep your eyes on the turkish story as we have seen some riots in taksim square. turkish central bank has been talking about the -- for the foreign exchange. $77 million the lowest price. 1.89 liras, the actual price is 1.8934. this is mr. erdogan has been speaking in parliament this morning. he's been saying he will meet with protesters towards the end of next week. we'll keep our eyes on what is going on in turkey. also what is going on with the ten-year treasury yield as well. yields continue to climb higher. a big impact for global investors everywhere. i want to make things more secure. [ 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 to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better. ♪

just joining us, a recap of the headlines. tear gas and water cannons used by the turkish government to clear taksim square protesters. this is the hearing into ecb policies is under way. and u.s. lawmakers call for the man who says he leaked

information. he checks out of a hotel and disappears. turkish prime minister erdogan speaking before parliament in ankara. says we must distinguish between different groups on the streets at the protest, so we don't ignore the calls of the people on the streets. talking about investors saying they're scared. the image of turkey has been harmed. we have seen the central bank today offering auctions to try to calm down the volatility in the dollar turkish lira cross rate, just re bound slightly against that. bist 100 up around .75. bond yields are higher. we'll get into that as well. more to come on this. more to come as well on where futures are tracking ahead of the u.s. open. "worldwide exchange" continues in a few moments.

a quarter million tweeters musicare tweeting.eamed. and 900 million dollars are changing hands online. that's why the internet needs a new kind of server. one that's 80% smaller. uses 89% less energy. and costs 77% less. it's called hp moonshot. and it's giving the internet the room it needs to grow. this ...is going to be big. it's time to build a better enterprise. together.

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

[ engine revs ] ♪ [ male announcer ] just when you thought you had experienced performance, a new ride comes along and changes everything. ♪ the 2013 lexus gs, with a dynamically tuned suspension and adjustable drive modes. because the ultimate expression of power is control. this is the pursuit of perfection. edward snowden leaked details of the government's top secret surveillance programs and has dropped out of sight. he reportedly checked out of his hotel on monday. the guardian says he's still in the chinese territory. several u.s. lawmakers including the chair of the house

intelligence committee are calling for snowden to be extradited and for an aggressive prosecution. house members will be briefed today on the nsa snooping programs and the senate on thursday. as far as the agenda in the united states, wholesale trade is out at 10:00 eastern. just a pair of notable earnings today, natural gas and ulta salon. negative stock for u.s. equities. now down 8.5 points in the s&p 500. dow 66 points. nasdaq down 15. this as we see treasury yields continuing to back up, now at levels we haven't seen since april last year. over 2.25% on the ten year, 2.26% is the ten-year yield. also yields in italy and spain as well. gina sanchez still with us.

the importance, that's where global investors price everything off. >> absolutely. >> it drives their view of everything. >> absolutely. you have a sell-off, a backup and rates, you see a backup in credit markets, high yield markets, emerging tech markets, you've seen that across -- and equity. the markets have been repricing and yields are obviously going to go up. the question is when. they're inching up, on a trajectory that is going to take them higher. >> how badly exposed are emerging markets? we have already seen quite a bit of funds come out and the brits have been hit hard, even now the mexican paeso has been hit as well. that's a fundamentally improving economy. how expose ready emerging markets as we get back up in u.s. yields? >> they're pretty significantly exposed. obviously they price entirely off the ten-year and, you know,

it is a conundrum for the local currency markets because the local currency markets have been on hold with no rate hikes and that would kind of continue to help that situation. so in local currency terms, probably not a bad thing, not going to see a backup in rates locally around the world. so but in dollar terms you're going to lose. that's going to be a challenge. >> the yield hungry money, global flows -- are going to come back. >> or do they come back into u.s. bonds or come back into u.s. stock market? >> my view is that while rates are clearly going up, they're moving up in a channel and they're at the top of the channel. i don't see how we continue in a straight line. i think we're probably going to back -- probably going to come back down as we start to see -- i think there is a little bit of mixed data that will calm the

markets. >> there is something here about the low inflation, really important. even if the fed starts tapering its buying, it is not the flow that matches. it is the stock of bonds that they hold is more important and with low inflation, even if they stop tapering, they can keep actually yields fairly low. would you go along with that? >> i would say that's fair. i think though that psychologically for the markets, to begin the taper is going to cause a significant backup in the 10s and 30s. you'll see the curve steepen quite dramatically and it would be fairly negative for risky mash et markets around the world. there will be some data that will allow for a softening of that coming through the summer and the fall. >> and until the fall we stay volatile, do we? >> absolutely. volatility continues to go up. that's been a central premise of what i've been saying lately.

>> gina, good to see you. >> good to see you. >> thank you very much. >> chairman and founder of quantico global. global even. erdogan speaking in parliament, we have been seeing the pictures going, following clashes in taksim square. we have seen police vehicles on fire this morning as they attempt to clear the square of protesters. that's the latest. looking calmer than it was earlier on. we'll continue that story and continue monitoring treasury yields as well. more to come in the last half hour of worldwide exchange right after this. [ male announcer ] citi is over 200 years old.

in that time there've been some good days. and some difficult ones. but, through it all we've persevered, supporting some of the biggest ideas in modern history. so why should our history matter to you? because for more than two centuries, we've been helping ideas move from ambition to achievement. ♪ and the next great idea could be yours. ♪

watching "worldwide exchange." i'm ross westgate. a recap of the headlines today. turkish prime minister addresses parliament in ankara after riot police moved into taksim square and fired tear gas and water cannons to clear the area of anti-government protesters. showdown between the bundesbank and ecb. court hearing in germany. the court's president states a success of the policy is no measure of legality. the man who says he leaked details about the top secret u.s. surveillance program drops out of sight.

this as lawmakers call for him to be sent back home to face prosecution. softbank sweetened its bid for sprint nextel mixing in more cash for shareholders. is that new offer going to be enough to make sprint investors dis dish? prime minister erdogan been addressing the turkish parliament this morning. he's been speaking in ankara. he says turkey, this is an illegal uprising and protesters are trying to mask it. he said protesters should see the bigger picture and withdraw from the protest area. this comes after they sent in forces today, trying to clear the protest area in taksim square. this is the latest pictures from there. and things have calmed down from an hour or so ago.

slightly calm as you can see. we did see pictures of tear gas and clashes and what appeared to be a police vehicle on fire earlier this morning. focused on turkish assets as well. we had central bank in, trying to calm the volatility on the dollar, turkish lira. had some auctions this morning. the bist 100 is up .8%. turkish bond yield is up as well. u.s. futures meanwhile, indicating a negative start now. s&p 500 nine points below fair value. 13.5 below. the dow on the left of your screen is down some 67 points at the open. european markets weaker as well. losses around 1% across the board. ftse 100 down 1.25, 1.50. one reason might be this. keep your eye on there.

ten-year treasury yields 2.2567%. that is the highest yield on the ten-year since around april last year. certainly for well over a year and we have seen high yields in the peripheral. keep your eyes on the ten-year. just heard of course from gina sanchez saying this may be the top end of the range. if it is not, global assets priced off the yield on u.s. treasury. what happens with that very important for everybody. keep your eyes on that. we have been asking investors today what you're supposed to do. here is a recap of what some experts have already told us. >> the curb is going to continue to steepen, but i think more the biggest risk is that you get a wholesale rise in jgb yields as banks basically continue to reduce their holdings and they are the most important ones. >> india, for example, the

currency got absolutely smashed yesterday. we saw south africa selling off 10% in two weeks. turkey is under pressure. this is a huge story. they're just going. and i think it is the beginning of the a dollar boom market. >> the general picture is still quite supportive. we are in a trading range, i think, over the summer. but generally the picture hasn't changed and i think the bull market is in tact and, indeed, this bout of volatility has given me more confidence because bull markets grow on skepticism. >> softbank is sweetening its offer for sprint nextel, boosting its total bid to $21.6 billion from $20.1 billion as it shoots for a bigger 78% stake. a key component is more cash for shareholders. $4.5 billion more to be precise.

already a key investor supports the offer. the vote is pushed back to june 25th. it also has given a june 18th deadline to revise its bid. dish for its part says it is now weighing its options. a softbank shares closed flat today. joining us from singapore is a.j. sundaye er a.j. sunder. thank you for joining us. what do you make of this? >> if you look at the offer, i think sprint definitely would be in a cash rich position if they offered the softbank position. 16.6 for the shareholders with $5 billion for their own cash infusion which gives them enough confidence moving ahead from the spectrum licensing. overall, i think this deal is

good for sprint. >> what it does do, though, it means sprint would have 3 billion more debt than first. the one thing they had over softbank had over dish is that dish is a leveraged takeover. so are they slightly eroding their advantage? >> in a way, yes, you're right in saying that. but if you look at how this cash will be used by sprint, that could be the bigger question. if the cash infusion by softbank is being used, i don't think that will be the optimal use for the cash infusion. what sprint needs to do is to make sure that it has the right kind of spectrum. i think it should prepare itself better for the spectrum licensing which is due next. if sprint can do that, i think this deal will help them and be prepared for that kind of spectrum licensing bid.

>> more tempting offer for sprint shareholders who sell. i suppose the thing is just how attractive -- now they got it compete, how attractive are the two competing offers for those who stay? >> right. i think another aspect of this was this deal might be easier to push through rather than the other deal because of the fact that softbank is a foreign investor and you're not reducing the number of stake holders in the country. might look at this a bit more positively rather than another offer. >> yeah. fair point. good to speak to you. thank you for joining us. we finally get it see what the new playstation 4 looks like. pretty good. the company showed off the console. it costs $299 and will go on

sale this holiday season. at the same time, earlier yesterday microsoft revealed its details about the x box one going on sale in november for $499. big drawback, it is not compatible with all the games. microsoft has some exclusive titles. the company isn't retiring the x box 360. those two stocks are worth looking at. sony up 2% today in japan. microsoft off a little bit. alex simmons is uk editor in chief at ign. a price differential between sony playstation and the microsoft game. how key is that, do you think? >> i think it is essential to be honest. in terms of the games that they're offering, it is a very similar package. there are exclusives on xbox one and playstation 4. the driving factor is price.

$100 cheaper, that's a big deciding factor. >> yeah, nearly a quarter percent, 25% cheaper. the other thing is sony will trade in your games, right, for free and microsoft reserves the right not to, and i'm presuming if you're a gamer, right, that's quit a -- i'm not. i presume that's a big deal. >> yeah. if you're going to spend 40 pounds, 50 pounds on a game, you want the right to go and sell that game so you can buy more games for less. and microsoft really muddied the waters when it came out and spoke about secondhand games, the announcement three weeks ago. so basically what it is is saying is publishers and retailers reserve the right to have a trade-in fee. so when you trade in your game, you have to pay a fee to buy it back, but playstation listened to the audience and said you can do it the same way you've been doing it for the last ten years. any game you buy is yours and

you can sell it how you want and share it with friends. >> two big points for sony, what has microsoft got? >> well, they're pitching it as a broader entertainment box. i'll be honest with you, that put a lot of traditional hard core gamers off when it was first announced. they're in it for the long run. it is going to add layers to televisions. you can interact with tv in ways you've not been announced to before. i'm sure that playstation 4 will do the same. because e 3 is a game show, they focus on the games. i think it will be very close, but i think judging what happened today, sony delivered that killer blow. >> nintendo had the best-selling game, they had wii and now seem to be quiet compared to sony and microso microsoft. >> nintendo coming out tomorrow and they'll reveal more about their plans for the rest of the year tomorrow morning in los

angeles. but the console has been out for a year already. the problem it had, it hasn't had much software support. you had the console, but not many games. that's put a lot of people off. if they can have a good lineup running into christmas this year, it will be about half the price of playstation 4 and xbox, it could put it back. >> it has to face up to mobile gaming and free to play. haven't got time to get into that. thank you very much for joining us. uk editor in chief at ign. staying in the tech world, the wait is over. apple taking the wraps off its long awaited streaming radio service. it will be part of the company's new ios mobile software which will launch this fall. it is free for people who already subscribe to apple's match music service. and it is supported by ads like pandora, you can customize your own radio station by genre, skip songs or tune into some 200 featured stations.

frankfurt down 2.25%. still to come, a surprise shake-up at lululemon rattles investor as the ceo quits months after an embarrassing and costly recall. more details after this. i want to make things more secure. [ 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 to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better. ♪

pull out the paper and what? another article that says investors could lose tens of thousands of dollars in hidden fees on their 401(k)s?! seriously? seriously.

you don't believe it? search it. "401(k) hidden fees." then go to e-trade and roll over your old 401(k)s to a new e-trade retirement account. we have every type of retirement account. none of them charge annual fees and all of them offer low cost investments. why? because we're not your typical wall street firm that's why. so you keep more of your money. e-trade. less for us. more for you. it's lots of things. all waking up. connecting to the global phenomenon we call the internet of everything. ♪ it's going to be amazing. and exciting. and maybe, most remarkably, not that far away. we're going to wake the world up. and watch, with eyes wide, as it gets to work. cisco. tomorrow starts here.

just joining us this morning, a recap of the headlines. water cannons used by the turkish government in a bid to clear taksim square of protesters. the president of the constitutional court says ecb doesn't make it illegal. this is the hearing that gets under way. lawmake karlz frs call for the claims he leaked information. he checked out of a hong kong hotel. protesters have been in the square in taksim square again today. turkish government forces have been trying to clear the square. there were fairly violent clashes earlier on this morning. things seemed to be slightly more peaceful as you can see the at the moment. this is the 12th day of

anti-government democrat str demonstrations. he's called it an illegal uprising and protesters are trying to mask it. joining us on the phone is a journalist at heriat. thank you for joining us. the prime minister said they want to meet with protesters later this week. on the other, they then sent in forces to try to clear the square, which we're looking at the moment. he says -- then he says that we must distinguish between different groups. and while at the same time, saying it is an illegal uprising and protesters are try to mask it. he seems to be speaking both sides. what in your view is going on? >> well, things are very peaceful until this morning. as you mentioned before, things

were going really well, people were protesting quite peacefully and even there were talks about having a discussion with the prime minister erdogan himself tomorr tomorrow, with the representative of the protesters. but then this morning at about 7:30 here in turkey time, riot police started to circle around taksim square while -- started -- about what they were going to do. he said our only aim is to clear taksim square of the protestes s that belong to illegal groups. but then things started to go a

bit violent and there were clashes between the police and some groups reached according to turkish -- not the real demonstrations, real protesters who are in the crowd, but some sort of provocateurs, people argued that these are police and civilians in disguise and people say they're wearing the same masks and same vests that the police wear. and there were some -- around the internet now, maybe you have seek th seen them. one protester more than his 40s, maybe 50, wearing clean colonialcolonial -- clothes, had a firecracker in his hand, and people thought

this was a statement. but a couple of minutes ago, came up, this time and said that this was a person from the democratic party of turkey, which is a very, very, very minority party, i'm sure. like more than 99% of the population in turkey has never heard of the party. >> okay. >> he said this person was from that party. he has some jail time, like, six months before, and he was trying to -- the demonstrators against the police. >> okay. sevin, thanks for the update.

sevin turan. we turn to facebook, it is meeting with shareholders for the first time today. what issues are going to be on top of the agenda? acquisitions, how to generate more revenue, or the stock price? we'll preview the gathering when we come back. right now, seven years of music is being streamed. a quarter million tweeters are tweeting. and 900 million dollars are changing hands online. that's why the internet needs a new kind of server. one that's 80% smaller. uses 89% less energy. and costs 77% less. it's called hp moonshot. and it's giving the internet the room it needs to grow. this ...is going to be big. it's time to build a better enterprise. together.

[ male announcer ] i've seen incredible things. 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. ♪ 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. ♪ facebook executives are hoping shareholders like what they have to say today. the social networking giant is holding the first ever annual meeting by live stream and in person at the western san francisco airport hotel at 2:00 p.m. eastern. up for a vote, usual items like re-electing board members and compensation for management. scott kessler is i.t. group director and joins us for more. good to see you. how much of a discussion will there be on the share price?

>> well, my guess is that shareholders could very well be interested in asking about that. but my sense is that comments made by management are going to focus strictly on really the kind of vision and strategy related to the business and then, of course, the underlying fundamentals. >> this is a company, though, that has notably underperformed its peers since its listing. >> yeah, no question about that. and you could see some comments lead to the disappointing ipo, the botched ipo of some people have referenced it. so there could be some chatter related to that subject and perhaps how, if at all, it affected perceptions related to facebook. but our sense and our belief is that the company is actually has done a much better job than given credit for in terms of execution, particularly on the

front of growth. when you consider the fact we have seen accelerating growth the last couple of quarters and the company continues to make investments and innovate. we think that notwithstanding the stock price of late, they're dong a lot of thins right and we upgraded the shares a couple of weeks ago because we see a disconnect between the reality of what facebook is doing and what it can deliver versus what seems to be implied by the stock price. >> yeah. look, it is interesting you just upgraded it. you clearly believe things are turning around. how do they leverage things like instagram. their mobile rates are picking up. how do they -- we got a clearer steer on how they're going to monetize better. >> yeah, i think we do, actually. i mean, go back to, you know, right around last year, when the ipo was pending and completed. there were substantial questions about that very issue.

and really if you look just over the past year, facebook has almost astoundingly gone from zero mobile revenue to a run rate indicated in the march quarter of $1.5 billion, accounting for 30% of all advertising revenue for the company. so they have done a very good job in our estimation and as you reference, they have a lot of new properties and offerings that at some point we think sooner perhaps rather than later they're going to look to monetize, instagram is one of them, gifts is another, graph search is another and facebook home is another as well. >> scott, we got to go. good to speak to you. thanks, scott kessler. ahead of the u.s. open, european stocks are down at session loews of 1.5%. u.s. futures following them lower. we are caught down now 30 points. and it follows a backup in u.s. treasury yields 2.25%.

"squawk box" is up next can the countdown to the u.s. open as we continue to look at events in turkey as well.

good morning. today's top story, the bank of japan disappoints investors by failing to talk about market volatility. the nikkei closing lower on that news. in the u.s., authorities are said to be hunting for the self-described leaker of the nsa surveillance program. and in corporate news, sony and microsoft are launching a gaming price war. it is tuesday, june 11th, 2013. and "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on

cnbc. i'm becky quick reporting live from our nation's capital this morning. joe kernen and andrew ross sorkin are back at headquarters. among our d.c. newsmakers this morning, we'll be talking about the strength of the economy, with the national association of manufacturers. plus, senator bob corker will join us to talk about everything from immigration reform to self-professed nsa leaker edward snowden. also with us today, we have house budget ranking member chris van holland and our guest host, famed corporate leader jack welch. first, though, before we get to all of that, andrew has a roundup of the morning's top headlines. good morning. >> thank you, becky. great job in d.c. this morning. >> thank you. >> headlines this morning, the bank of japan taking no action as expected. but some investors were sfoied that the boj failed to address recent market volatility in the monetary policy statement. nikkei dropping on that news. we'll have more in a couple of minutes. in europe today, germany's constitutional court is beginning a two-day hearing into legality of ecb's bond buying