"worldwide exchange". i'm ross westgate. market turmoil, stocks in europe down. fears spark the dow second straight triple-digit loss. japan leads the losses on a stronger yen down over 6% back into bear market territory. bonds yield continue high. greek ten nearing an 11% as workers of greece take to the streets to protest the closure of the state's broadcaster.

investors react negatively to the bank's ceo departure. >> we certainly engage with treasury on conversations about the right leadership for that sort of exercise given that stevens got quite a bit of years behind him and not too many ahead of him. you're watching "worldwide exchange," bringing you business news from around the globe. we kick off, looking at equities and the nikkei off 6% during the session, 6.35%. ke carrie is in tokyo. >> it was, indeed. 6.5% of the nikkei 225 and a big drop in the dollar/yen.

a lot of factors playing out in the markets today. one that might have been a trigger point the bank of japan's governor was called in and he emerged from this noon meeting and investors were hoping nor than the standard line. that's all they got. he said well markets eventually will calm down when the economic growth story kicks in and that seemed to have been a trigger particularly in the equity markets. there's also growing course of people talk become the reality and viability of this so-called agenda as it relates to structural reform. we had one tokyo watcher on earlier this morning to say that might be the market's biggest fear. >> when the bureaucrats get their hands on that framework, you tend to see it even then in parts of it getting whittled down and narrowized into a

certain number of industry segments as opposed to being market wide measures and that's because the bureaucrats get their power and authority from key industries that they regulate. >> what he's talking about, potentially, tax reforms. the finance minister is in a great fiscal bind. but there are plenty of people still on the other side of the fence who say this is part of a correction that started on may 23rd including jpmorgan. you can't negate the importance of the yen, dollar/yen below 95 is entering a critical zone. most of the major corporations in japan are fact torring an exchange rate between 90 and 95. this acceleration of the yen strength has been very fast. so if this is a medium term trend that hedging strategy may

become more apparent that's what's fueling the down side risk. another volatile day here in tokyo. >> the flip side is we know a lot of people were investing in emerging markets and borrowing in yen and that caused to spin that out as well. let's get more of a view of what's happening in asia trading. let's go to singapore. >> asian markets took a battering from fed tapering trade and volatile currencies. japan's nikkei 225 wiped out 800 points and over 6% of its market value. shanghai comes back with a 3% tumble. investors continue to fleece out these asian markets as the s.e. t. losing at the moment and philippines market tanking almost 7%. back to the damage report in japan, the nikkei 225 plunged into bear market territory for a

second time in the week. the yen strengths to 94 against the u.s. dollar. we're seeing bloody selloffs. in china after dodging bullets for the past three days the shanghai composite got react to that down beat economic data over the weekend tumbling to six month low. cyclical sectors felt the pain especially automakers. elsewhere in hong kong the hang seng came back from yesterday's one day lead after closing down 2%. following the weakness in the mainland shares were down nearly 3%. chinese lacked behind banks trieded dividend. cyclical factors took the brunt. china coal slumped almost 5%.

>> around 24 stocks in the dow jones 600 are up and rest are in red territory. ftse 100 was down 46 points. down another 1% as well, seven week lows. number of individual stocks not least amongst them rbs down nearly 6% after the announcement that steven hess would step down towards the end of the year the theory being they want to get a newman in staying a lot longer. people think it will be hard to replace him. who might want to take the job. mulberry group off a percent. posted a 28% in annual profit.

stock took a hit earlier. after emma hill announced her departure. and wh smith down 1.7% comparable sales drop of 6% saying sales were down but had difficult comparables because last year they were boasted by the best seller "50 shades of grey." bull markets, looking where we go with yields. spanish yields back up to 4.6%. 30 year auction today. 013 billion of the 30 year. up 2.29% a couple of days ago. world assets are priced at treasuries. currency markets check in on dollar/yen, 94 is where we

stand. go down to 93.90. preach where we started back to where we were before the bank of japan started it move. we're ten big numbers back behind. the question is is there any more fresh incentive to sell the yen and buy stocks. aussie/dollar sheltering away from that mark. now, looking at these currency markets, dennis gartman told cnbc the recent moves in the yen are something to be feared. >> when you start to see three handle changes in three days in a row, a handle change being one big figure from 95 to 96, three big figure changes is not unprecedented but highly unusual. i haven't seen action like this since the russian problems back

in '97. i'm cutting my position way down just because the volatility is so large. >> joining me now in the studios is richard lewis. gartman is worried about volatility in currency markets. how do you feel about it? >> what's going on in markets from our point of view is that there's a wash out of popular trades going on, and all the trades as ever linked across bonds, currency and equity markets. the initial trigger was bernanke's speech but before that the dollar was showing strength. as the dollar strengthens which is reversing a lot of relationships which previously had been popular trades what we have discovered now is how leveraged people were in those popular trades and i guess there's going to be some accidents that will be reported when people's numbers come out for the second quarter. is it a great concern? i think the initial trigger, the initial move to dollar strength

is a sign that things are improving in the u.s. economy, and there are some very fundamental good news stories on the u.s. economy but we have to get through trades first. >> people borrowed yen and euro to invest in emerging markets. >> that's one of them. bond conversions, trades, emerging market equity trades, the short yen and the long trades were the interlinked macro trades. >> let's get more on this from our japanese strategist. dollar/yen 93.90. we rewound the impetus where the bank of japan started its measures. where is there any fresh impetus to put the trade back on? >> well, i think that a lot of the correction has to do with

frankly inflated expectations about particularly the structural form part of the economics agenda. i think a lot of investors particularly offshore were anticipating, you know, abe to deliver quite a lot of impactful immediate reforms. countries in europe and united states elsewhere structure reforms don't happen overnight. there were some disappointments related to items like absence of a corporate tax cut in the package that, you know, went missing and people were quite disappointed but at the end of the day this is only phase one, prime minister abe has come out and said we're going to deal with tax reforms come the autumn. there's obviously a very critical election for the upper house coming up july 21st. you're view is after july 21st elections we'll see more visible

progress on these structural reform agenda and the disappointment surrounding the bank of japan, you know, everybody has their view on how much this is justified but at the end of the day we're convinced that this is not the end, and you already are looking at a string of very powerful, positive data points coming over on the microside of the economy. we'll get more data point from the corporate sector wales. the whole earnings recovery, economic recovery is not about dollar/yen. it's about an economy that's finally back on its feet, corporates that have been battered by everything and anything that could have gone wrong in a much leaner and meaner position so with the exist deflation and prospect and we're seeing evidence of that already, we think that the earnings recovery is going to be quite powerful and japanese evaluations with more than half a market trade below block is compelling. >> a lot of front running by

international investors seems to be what you're alluding to then which is causing overinflated expectations in prices. what are justified fundamental prices then for things like equities and the currency? >> where we think fair value is? >> if we got ahead of ourselves, what should stocks be trading at? >> well, we think that on the basis of the earnings rebound that we're forecasting, we're forecasting essentially a doubling in japanese eps for the market for the next three years, out to fiscal 2015. we're anticipating some resumption of yen weakness on the back of those numbers, but essentially we think the market should be trading on a year's basis about 1400 topix or 17,000 nikkei relative to what it's trading today and that's based

on our earnings estimate between 14 and 15 times earnings. we do not think that is at all out of line. we think the market did, those get ahead of itself back in may so i think this pull back much of it i think is probably justifiable pull back but it's not to say the fundamental story is over. so we think that the uptrend will resume once people get hold or convinced by some of the more solid micro/macro data. we're neutral on the market. not to mention all the things going on outside of japan so i think this volatility both in the bond and the equity market here is going to continue for a few more weeks. >> okay, good talking to you. kathy matsui on the phone.

so, should the market make itself at home in bed, find out what verifies are telling us on cnbc.com. also comment, write to us, e-mail us, worldwide@cnbc. >> we'll talk southeast asia at 10:30 ct. france telecom's ceo has been placed under investigation for fraud. wheel we'll have the latest on the wide ranging scandal. we talked about equities, global assets on a bit of a roller coaster. will fresh data have any impact? we'll preview the release of u.s. sales. how will that jump into the taper debate. all too much for you? we can do this for you instead, the u.s. open is set to take off

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. greece's two biggest labor unions have called 24 hour general strike as the public backlash over the closure of the state broadcaster ert gross. the new democracy government present ad draft law outlining plans for a new streamlined broadcaster with around 1,000 employees. the prime minister took the unilateral decision to close the ert on tuesday heightening tensions. leaders of the smaller democratic left party made their opposition to the closure clear in a bheegt the prime minister yesterday. international monetary fund wrapped up its seventh bail out review of portugal. and announced easing of the country's deficit targets. they must continue with economic reforms. and world bank of scotland is reviewing its future strategy.

they want to exit all structured investor products and derivatives saying 2,000 jobs could be loss. shares all impacted by the news that the ceo is going step down. he'll leave his post at the end of the year as the british government prepares for privatization of the bank. the chancellor is expected to announce details of the privatization plans in a speech next week. and had this stay to say about stephen hester. >> rbs was on the edge of collapse and stephen hester did a good rescue job. we have to move from taking rbs from the brink to a new phase where rbs does more to focus on the economy and get british taxpayers money back. >> where does this now leave rbs and its future which is what the chancellor is talking about.

>> clearly, shareholders don't like that stephen hester have left. shares of a gone down 5% already this morning. we've been told by the chairman that privatization is going to being kicked back to the end, back end of next year, which is a longer date than when thought. i think the next thing we're all waiting for is the mansion house speech from the chancellor to set out how they are going to do this, what the structure is and what kind of a bank rbs is going to be. >> that seems to be the key point because it seems to me that the government is talking about we want it to be privatized but we want it to be a uk bank. those two things getting the best bank for privatization and getting a uk bank that's a politically correct uk bank is two different things. >> that's how people see the split of opinion between stephen hester and the chairman possibly, definitely the chancellor because this idea

that rbs should become a second rate it's just a uk retail bank is different from the kind of bank it is. it has a strong u.s. business and stephen hester was keen to keep hold of that citizens which is ipo in the next couple of years he wanted to keep hold of that and benefit from the uptick in the u.s. economy. >> so, can you -- have they damaged -- here's the point. has this move damaged in investors' minds, has it damaged the prospect for rbs this announcement of him leaving. >> they call it plain stupid. first they think why has it come now? we got the banking commission coming out with their report on what they think the future of rbs would be. we're expecting them to say that possibly it should be split between a good bank and a bad bank. that's incredibly controversial. people are saying that should

have been done years ago if it ever should have been done. you got the mansion house speech coming up next week where we have an outline of what will happen. why at this point is hester suddenly leaving? they feel very nervous about it. >> look, whether hester's departure was politically motivated. >> terrific job in rebuilding the strength of the bank in the last five years now and attributed to his work we can contemplate privatization. we have to see. there's work to do. most of that restructuring work is done and we hope the bank will be in a position to be privatized with a big prospectus towards the end of 2014. that's our hope and the government would like to have that possibility. really that's what's produced yesterday's announcements that at that time in a year and a

half's time steven would have done six years in post and would need to recommit for three maybe four years and that's what's customary in that sort of exercise. speaking of nine or ten years which is a long time in an extremely challenging job. >> steven was saying last night that he still believes the government could get back their investment the 45 billion pound. do you think that's possible? >> yes, it's possible. banks as we know, as we know now better than we did a few years ago are highly geared investments. we thought they were safe and sensible and dull and then it became volatile. in built leverage in banks does mean they can go up as fast as they came down. if we get a sustained recovery, rising interest rates, falls in impairments all of those things come to a bank's bottom line more quickly than many other

businesses. >> the market hasn't liked the look of the departure, so can you be very honest with you, did he fall out with chancellor george osborn? >> no. we've been talking about board succession on a regular basis, of course and when chief executives come up to five years or so in post given most chief executives do five, six, seven years typically that's an intense focus in boards. we do have an extra dimension here. we have a discussion with the treasury about their thoughts, they need to vote everybody on to the board and so on because they are a controlling shareholder. they have a particular interest, of course, in getting this business back fully into the private-sector as do we. we certainly engage with the treasury on conversations about the right leadership for that sort of exercise. given that stephens got quite a lot of years behind him and

arguably not so many ahead of him. >> there may well be an issue of calendar here for mr. hester. what the government is trying to do with this bank seems to have changed. if the government wants to privatize it which seems to be the aim then it has to come to the market in the form it's in. if on the other hand the government want as much cleaner uk domestically based bank there's things that need to happen and to push that to achieve that this side of the election is pushing it. maybe stephen hester is looking at that thinking maybe not for me. >> i think it's very difficult for the chancellor because he's in a position where he's set up this banking commission, but it's not clear that he's going to follow any of their guidance. it's very unpopular internally with rbs at this point to break it up into this good bank and

bad bank. people want to move it along and privatize it as soon as possible but still a universal bank. >> for the insiders at rbs there's also an unsettling change of direction here. all this discussion about breaking it up and good barngs and bad banks should have been done a long time ago. we're four years from the crisis point and there's more powerful vested interests involved in that negotiation. >> okay. thank you very much. richard stick around we'll get some investment strategy from you. still to come will the swiss government stop wealthy americans as a basis for a tax haven. we'll get the latest from zurich. we went out and asked people a simple question:

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protesters in greece take to the streets to protest the closure of the broadcaster. you stephen hester's exit is not because of a falling out but government. we've certainly engaged with the treasury on conversations about the right leadership for that sort of exercise give end stephens has quite a few years behind him and arguably not so many ahead of him. european equities are at seven week loss. 2% for xetra dax. spanish yields up to 4.66%, six weeks highs which we hit on tuesday. treasury yields are a little bit lower today, 2.17% we hit 2.22

yesterday. today we'll keep our eyes on 30 year auction. on the currency markets focus on dollar/yen. 94.16. almost a ten figure retracement from the 103 level that we had a couple of weeks ago. most analysts expect central bank to hold rates. the governor acknowledged the risks of the u.s. stimulus exit but assured investors that bok will respond as need. the south korean government said it's monitoring the domestic bond market but no sign yet of any big capital outfloss. indonesia central bank is full of surprises. it hiked its rate by at that basis points.

the philippines central bank kept rates unchanged. still at 5.5%, borrowing rate at 3.5. economic growth remains strong driven by pretty good internal demand. joining us from singapore, head of equity research for asia and richard lewis is still with us. thanks for joining us. first of all how does this shake out in emerging markets, the swings in japan impacting the rest of southeast asia? >> you're right. there are a number of factors that are affecting it. i think after the fact was talking about tapering of the asset purchase we expect some volatility going forward and, of course, yesterday the world bank reduce the growth outlook for 2013 from 20.4% to 2.2%.

so there's two concerns that the markets are focusing. so asia, of course, had received a lot of money in the past few years as central banks implement their quantitative easing. so, again, the fear is a lot of this liquidity will get up the asian markets especially with the u.s. dollar strengthening. so it is expected that, you know, those markets that have seen the steepest gain like the nikkei and also like philippines and thailand which have done so well the last couple of years continue to see a lot of volatility as investors weigh in on the growth concern as well as the fed's tapering. >> downgraded indonesia and thailand as a result. what is interesting you think malaysia should be an overweight. why is that? >> yes. okay. like i say, both indonesia and

thailand have done really well the last -- especially for thailand the last couple of years. indonesia saw ten of last year and i think that for indonesia itself there's a lot of concern with the current deficit as well as the rupir weakness. people will focus on inflation and volatility. this is a good time to take profit on it although in the longer term i do like it and especially what bi has done recently yesterday raising the facility rates and today surprised the market by raising the policy rates. i think that is a move in the right direction. that should pave them for at that way to reduce the fewer subsidy which is a drag on budget deficit. as for thailand, like i say the fact that the market has done so well means that valuation is not that attractive and as a result

without any positive capital going forward it's time to take profit. on the other hand, malaysia has not done so well pre-election. there was a lot of concern with political -- with the election uncertainty. so with the election having gone through and the recent nationale having the wind seeing much more growth friendly. i think it's underown and valuation has not gone up so much so a lot of political uncertainty will continue to be priced out and the government can continue with their prime pumping. >> thanks for joining us. we move from southeast asia to subsaharan africa.

>> spot on. take the report by mcken decide and company they forecast the region's consumer sector to grow by $410 billion by 2020. representing the confidence largest business opportunity. move across its own data from the world bank. foreign and domestic growth to 54 billion by 2015. again, a lot of potential opportunities here but where are the real chances here for investors? i spoke to a partner at the group and here's what he had to say. >> nigeria, we're very active in financial service, oil and gas services, fast-moving consumer goods. it's a large market, 150 million people growing urbanization

across the continent. people are brand conscious. there's an emerging middle class. so i think you can put two and two together. if an economy is growing at 5%, your cities are growing at double that, 10%, and the good companies are growing at 20%. >> now remember that the imf recently upgraded it's outlook for subsaran africa. that growth is causing some concern because according to word economic forum that growth is not inclusive growth and that want raises questions about sustainability. the current growth is trickling across, trickling in across asset classes including the property space, i spoke the emea ceo. here's what he had to say on the opportunities there. >> you know it's always a question whose success, the success of the developer who is

getting in and getting out of very quickly or the success of the long term investor? i think what we're seeing is clearly at the moment a situation in ghana and others that looks very solid and could be an opportunity even for more long term investors. one of the challenges we have in going to anigeria is the qualit of the construction. so, when you look at the lots of hotel developments which you're seeing in lagos some of these hotels although built new after two years they look like a 25 year hotel in paris or washington. we're looking to improve the quality of construction to get more long term investment. >> that's just a little bit of a preview of what's coming up tonight on this special investing in africa. make sure you tune in.

>> we will do that. you said for now. thanks very much. now, let's get some final investment thoughts with richard lewis. we've seen these forms now. down 8% ftse japan back to 12,000. are you expecting further shake out and in this shake out is it going to throw some opportunities? >> there may well be more shake out. we don't know how long it takes. when the dust settles what do we want to own? geographically first question is japan. there's a big change in fundamentals in japan. we think that the commitments of the policymakers have made are so strong and so public they are not going to back off of them in one month's time or three month's time because of volatility. markets have gotten impatient.

so, that's the new story. much more established story internationally is the u.s. and the outlook for the u.s. equity market and corporate profits is still very strong. that's a geographical pattern we like. in terms of sectors what's going to take us forward in the next upphase in market is not the same leadership we had in the previous ten years. not the emerging markets story or industrialization story. there's new leadership in the consumer discretionary area particularly in united states because of housing. new leadership in health care because of advances in innovation, particularly in the oncology field. authors the stories we're looking for for the next move. >> the interesting thing is just going back to japan for a second, because, you know, we were speaking earlier with kathy talking about the fundamentals how they've improved. it's a question about how we price, though. what the price should be on

those fundamentals when you got a lot of speculative flows and front running. >> pricing of the japanese equity market has been a dark art for 25 years. and one thing the japanese equity market has shown more than any other equity market is this very happy trading in a very wide range of multiples. what i draw from that is that there's no right target price for that. >> so how then -- that makes it so much harder. >> there are bounds in which you operate including 9,000 nikkei lower bound don't crash through that again. where is the upper bound i don't know. probably 20,000. what governs where you are within that is money and confidence. one thing we do know about the japanese system there's a lot of money injected into it because they committed to doubling the monetary base and will the confidence be there, the stories be there? that's all to do with the policies announcements. if you think about where the opportunities are in markets today, i think japan has got to be a good one.

>> okay. good to have you on. thank you for joining us. got any thoughts or comments on anything you heard e-mail us at worldwide@cnbc.com. parliamentary government labeled google as contrived. report from the public accounts committee criticizes the british tax authority for failing to challenge google and its called on the government to close loopholes exploited by multinational companies. google denies any wrongdoing and said it complies with all uk tax laws. british retailers are accused of not paying their tax. two of 25 well-known stars are paying their fair share. reports say retailers saw profits rise 45% over the last six years while the tax they paid rose 22%. >> barcelona football star is

denying any wrongdoing after being accused of tax evasion. his father is accused of filing false returns and defrauding the state out of 4 million euros. prosecutor claims the pair used a series of shell companies to hide income from the sale of messi's image reits. if found guilty he could face up to four years in prison. >> switzerland's upper house allowed the u.s. to obtain information on its citizens swiss bank accounts. how will this work? >> let me tell you why this is important because this is essentially the basis for a settlement with authorities and these 12 swiss barngs that u.s. authorities are investigating. ubs is exempt because it settled with u.s. authorities back in

2009 and agreed to hand over client names. that settlement has been in the works for the last three to four years. it's been a loser so far. very important step for these banks to put those legacy issues behind them. the vote in the upper house of the parliament that was a little stronger than expected, 24 lawmakers voted in favor, only 15 against. given that there had been so much opposition against this deal beforehand basically lawmakers complain that they don't know the details about the swiss u.s. tax deal. really this is just the first hurdle because the bill will be sent to the lower house. they will be debating it on tuesday and the vote is expected to happen on that day and if you believe recent press reports the opposition in the lower house is even stronger than what it was in the upper house. so there's still a lot of uncertainty around this and still the chance that it could be scuttled by lawmakers. back to you. karen, thanks very much,

indeed for that. we'll take a short break. could developing markets be the real loser when it finally comes time for the fed to taper. more on that in a few moments. 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. ♪

the german government source calling to dow jones news wise say they want the g-8 to plot lateral stance on tax evasion. they also say this summit wants to send a signal against protectionism and discuss the japanese macro economic policies as well. compare japan's economic policy with others. meanwhile, in france the fallout continues as stephane richard is placed under formal investigation for fraud. it relates to his role as chief of staff. the ripples keep spreading out stephane. i understand mr. richard is not feeling very well either. >> reporter: well the question this morning is about stephane

richard, legally there's no reason for him to step down but based on what happened on being placed under formal investigation unions are wondering if he's able orko stay ceo of france telecom. it's not the first time we have a ceo in france placed under formal investigation. we had in the past the ceo of another company. so if you look at what happened in the past none of them were forced to step down because they were under investigation. the french prime minister says that there was a question mark about stephane richard being able to remain ceo of france telecom. the prime minister called yesterday for a board meeting that will take place next neil diamond discuss the latest developments at france telecom and perhaps they will discuss

replacement much stephane richard. the french government is the main shareholder of the company with 27% stake that's the reason why they have work. >> thank you for now. the economy is transitioning to a period of more stable but slower growth according to the world bank's mid-year global prospects. i spoke to the author of the report yesterday. he warned about the risks of qe tapering especially in emerging markets. >> basically in term of the potential for interest rates to rise, what that might expose in terms of vulnerabilities, loans that have been undertaken at higher interest rates won't be viable and the concerns it might have particularly in countries in the east asia and pacific where there's been very significant increases in credit over the last several years. >> is there also concern about lack of capital then also

flowing into developing countries? >> well, that's part and parcel. as liquidity becomes less abundant there's going to be less supportive global environment so that's going to show up in these higher interest rates. it's a concern that, you know, is muted in some sense we've been in a very unusual situation over the last several years where we've had these very low interest rates. that's something that clearly isn't sustainable over the very long term. >> what is the outlook for those countries, the commodity exporters? >> commodity prices seem to be rising every year. now all of a sudden we're starting to get to perhaps close to that switching point where commodity prices start to decline. we see that in energy markets pretty clearly with the u.s. sort of the big increases in u.s. production, big increases in non-opec production globally and also in middle markets.

when we look at the global economy our concern isn't so much in our baseline we see that as being a stable process but there's a risk that decline in mode prices occurs more quickly and if it does it will hit the exported countries particularly hard. in our simulation, if that were to occur sort of more rapidly you could see gdp in the oil exporting economies in africa, for example decline by 1.7% relative to the baseline. pretty significant slowing of growth. pressure on government accounts. pressure on the current account. which if it occurred in its condition where financing was more tight might pose difficulties. >> so, given some constraints what do developing countries need to do to keep themselves open and growing? >> by and large developing countries have recovered from their crisis. so it's no longer a story of

demand stimulus, no longer a story of easing monetary policy and situations in high income countries change. rather it's more a story of concentrating on the supply side. looking to the reforms in terms of increased infrastructure investment, in terms of human capital, education, social welfare investments but in terms of regulatory reform that will allow their supply sides to continue to expand very rapidly and support growth over the longer term. >> despite recent world market swings bank of japan's chief is convinced markets will come down to more roast improvements and convinced abe that the bank will support japanese growth. two had a meeting ahead of next week's g-8 summit. japan's government upgraded its assessment on the economy citing the pick up in the country's

exports and industrial output. the nikkei 225 the usualling tod -- tumbling today. hi. exporters especially automakers led the losers as the nikkei 225 entered bear territory and yen had a two month high against the dollar. toyota fell by 4%. honda slipped 4.3%. the recent nose dive in the key index reflects disappointment for the government's growth strategy dubbed as the third arrow. the boj let down expectations when it didn't come up with new measures to control the rising long term interest rates. today just as the market was widely fluctuated prime minister abe exchanged views on the

global economy prior to the g-8 meeting next month. the press was told the volatile market will soon become calm reflecting positive moves of the economy. back to you. also a recall on the mini car. the prime minister from turkey is speaking. more focus on the cabinet in japan which is set to approve abe's third a rogrowth plan and we'll get more details. and india's fight. still to come in second hour of the program, famed currency

strategy ace markets are a scary place to amidst the roller coaster ride are high yield bonds the flies be or are they scary. more after this. [ 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 ] how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age.

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the headlines today, assets in turmoil again around the

globe. stocks in europe down after tapering fears sparked the dow's second straight triple-digit loss. in japan the 225 leads the declines on a stronger yen down over 6% back into bear market territory. bond yields in the periphery higher, the level of greek year ten year 11% as workers in greece take to the streets to protest the closure of the state broadcaster. rbs shares are down heavily investors reacting negatively to the announcement, the unexpected announcement of the departure of the ceo the bank's chairman told cnbc that stephen hester's exit is not because of a falling out with the group's biggest financial back terrify british government. >> we certainly engaged with the treasury on conversation about the right leadership for that sort of exercise. given that stephen's got quite a lot of years behind him and arguably not so many ahead of him.

>> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> welcome to the start of your global trading day. if you're waking up right now on the east coast we're waking up to more heavy falls overnight in the nikkei 225. back down to 12,445 after being up to 16,000. let's get more on those details on the session we've had. carrie is with us in tokyo. hi, ross. you know as you pointed out more than 800 points shaved off the nikkei 225 again today. this is a loss of more than 6%. means the market is trading at levels we saw before the bank of japan's monetary stimulus was announced on april 4th. we talked about these big lurches several times. but this time around the pace of

the decline in the dollar/yen. big drop in the dollar/yen in the asian trading session which exacerbated it. hard to pinpoint exactly what was the trigger point. there was a little bit of talk that government officials and the bank of japan have not paid as much lip service as they would have expected in these times of volatility. particularly when the governor went to see the prime minister around lunch time and emerged from that meeting with very little else to say than the standard line they won't comment on day-to-day market operations and expect volatility to calm down and recovery scenario is intact. at the end of the day we're trading at 12,445. this is the second time the market as entered bear market territory in two weeks. dollar/yen if you call-up that chart. these levels just below 95 are not a huge threat to the profitability scenario.

most of the companies will start reporting their first quarter results in four weeks' time. even the very bullish of the estimates are factoring in around a range of 90 to 95 so we're not at a level where the profitability is threatened. but the pace is worrying. the trigger point, the declines we saw in the china market after that three day holiday, we saw the ripple effect from the tapering off scenario from the fed into the southeast asian markets. that's snow balled. then the losses start to mushroom in the afternoon trading. there, is however, growing concern about the whole third arrow structure reform agenda here, ross. people are concerned about the implementation of some of these structural changes because the government can outline some things. at the end. day it's up to the bureaucrats and there's some questions growing here in japan whether or not the bureaucrats are going to really deliver on some of these

structural changes. >> thanks very much. that's what's happening in japan. carrie talked about the falls we saw in shanghai and hong conditioning. let's get more on that. asian equities had quite a tumble this thursday with heavy losses. japan's nikkei 225 lost more than 6%. after surging to a fresh possible two high. nikkei is a bear market territory. there's no joy in china either. markets returned to trade after a three day holiday after the selloff happened. as investors got the first chance to really' racket to the weak data that came out over the weekend. the shanghai composite and shenzhen board lost about 2%. shanghai came back from yesterday but closing down over 2%. following the weakness in the mainland chinese financials in

cyclical sectors listed in hong kong were among the major drags. in south korea, the kospi, the bok kept rapts stetes steady. the bok sank to 1900 level for the first time since november. australia 200 dropped to a five month low despite its may job data. asian markets like philippines and thailand were not spared earth. philippines pse index was worst performer in asia today it lost almost 7% today. and set trading lower. >> thanks for that. how does that play into the u.s. open? it finally happened. took to us the mid. june. but three consecutive days.

we're called lower again. the dow 60 points below fair value. yesterday we were up 100 points before closing down 126 points. nasdaq at the moment is some, about 18 point below fair value. s&p 500 is another nine points below fair value as well. so it's about 81 points below fair value. it falls a session here in europe down near session loss. ftse 100 up. as far as the top stocks we're focused, rbs shares very much in focus today. sharply lower. down 5.7% after the ceo stephen hester announced he would be stepping down towards the end of the year. the story officially being we want to get a newman in to take us towards and beyond

privatization. we'll talk about that. lloyd shares moving lower top executive prepared to answer questions in parliament next week over failing lure to sell branches. mulberry group had a drop in annual profit. the stock took a hit earlier this week after the creative director announced her departure. she's credited with the elixir handbag which was a big seller for them. wh smith down. the reason the comparable is not great because this time last year they were boosted by the "50 shades of grey" novels which i'm told is an interesting read. as far as bull markets this is where we stand. yields in spain back up. ten year treasury yields are

low. more auctions today. we're looking at a 13 billion over 30 year. yesterday 2.27 is where the yield went. on the currency market we keep our eyes on dollar/yen. 94.30. we got down to 93.90. ten big figures back from that recent high around 103.70. aussie/dollar climbed off. now speak being to cnbc famed strategist dennis gartman explained how he's positioning himself in relation to all this volatility on dollar/yen. >> first of all, i'm still going to be very bearish about the yen. over the next two years dollar/yen sees 125, maybe 150. i traded dollar/yen back in the '70s when it was at 285.

so it's not that large move for me. >> that was dennis gartman. these wild market swings have spared few asset class. our next guest says junk bonds might be the best performing bond market. joining me is the founder of phoenix investment adviser. thank you for joining us. we have wild swings here as he evidence by dollar/yen volatility. look, sharp rise up in core bond yields. the bank of england said the biggest threat to financial visk a blow up of a bond bubble. how does that spread down in entire fixed income space. >> clearly there's been a lot of volatility, a lot of interest rate risk has been going on over the past few weeks or so. but if you look at the u.s. high yield markets, the financial conditions of these companies are in very good shape. the default rate is low, probably going to stay low for

the foreseeable future. i don't think you'll see a blow up in the u.s. -- >> not a blow up, this was a space that got heavily priced. >> it's reoperation. the average junk bone was yielding about 5%, all-time record loss. back up to around 6%. so just like all bond markets yields have gone back up. but i don't think -- i don't think there's any signs really in the junk bond market -- >> i suppose the question is, when u.s. yields of government bond yields have been so low, whatever kind of investor you're in you've got to hunt for yields. that's boosted prices every where, right? >> yeah. >> so, if we get tapering now in u.s. government yields keep heading higher does that change the dynamics of everything? >> it does. so, if u.s. interest rates continue to rise, u.s. high yield bonds the yield will rise which means the prices are

lower. historically the best place to be in a rising interest rate environment in bond market is credit. the reason being is you're starting out with a lot more yield, you're starting without a lower dollar price and these bonds have lot shorter duration. so if bond yields back up all bonds will be affected but the credit is least affected. >> what about that basic question bond yields back up. do you think actually we head nearly 2.3%. is that the ceiling? >> that's a good question. we're not interest rate forecasters, but i think if you look at the fundamentals -- >> you have a view? >> we do. if you look and say what's the inflation rate in the u.s., is there a threat of inflation, i don't think there's a big threat of inflation in the u.s. i don't think the growth rate, everybody is saying the gdp will accelerate between two and three up to four and five. i think treasury is two and a quarter, two and a half. probably a trading range at some

point. high yield bonds usually about four or five hundred more percentage points in interest rates. if high yield bonds are at six or seven that's where the world shakes out. >> there might be a bubbling in government but your point is no bubble in high yield. >> that's right. if you look at the company specific fundamentals they are at all-time records. they've done a great zwroin u.s. pushing out maturity, reducing financial risk, deleveraging the balance sheet but they are bonds and subject to interest rate fluctuations. >> sort of extraordinary when bp was issuing debt and what they were paying for that and then you looked at what their dividend yield was. >> yes. >> on stocks. >> the mismatch. >> it was huge. >> yes. and that was a function of the fact that government rates were so low that it did skew the bond

markets. >> good to see you. good to have you on. policemen more dome. peripherals in europe, we'll bring that analysis right after the break. 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. ♪ can help you do what you do... even better. 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.

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peripheral. we've had comments out from

spending on education should be increased. government should fulfill all of its social obligations. he's presenting his three year budget plan today. says the effectively they have obligations but need to find new ways to stimulate growth and some programs need revisions. we'll keep our eyes on the russian budget proposals. if you just joined us let's recap some of our headlines. roller coaster continues for equities. autos and financials the biggest losers in europe. after the nikkei 225 is down over 6%. hitting levels we saw in early april. turmoil back on the streets of greece. this was the yield on the country's ten year bond spikes to nearly 11%.

coming up, we'll have the results of the latest italian efforts to tap the bond markets plus global markets, will they have any impact. we'll be back in two minutes time. [ male announcer ] i've seen incredible things.

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they sold 3.41 million of that three year versus 2.5 billion and 3.5 billion. the yield 2.83%. that was to be expected. and they sold 1.5 billion of the 2028, which is the 15 year. between that was the maximum amount they were looking for as far as that was concerned. so they raised the amount they wanted yields are higher as we might well expect on that 15 year. that's the same as the yelled they got in april. longer yield are the same sharply higher on three year. got some two to three billion looking to raise on the floating rates. they are still raising the money yields as expected, going higher. have we seen the lows this year for, do you think, for auction

yields for italy and spain? >> the lows in terms of yields? i think we could have a lot of volatility over the next several months. it's interesting looking at these options this morning there was an interesting bid. prices began to rise quite aggressively. it reflects the fact there was 1.5 billion to get done. you've got some nice yields and offer there today. 4.7% for the 28s and two and a quarter for the 16s. these are big pick ups over germany. we're going through a period where yields are on the upside. there's a little bit of pressure on peripheral markets. overall auctions getting taken down. over the course of the summer this, in fact, downward potential for the likes of italian yields, still good value

there relative to other markets. >> that would be the key, right? as yields go higher makes it more attractive to buy. is that going to impact the treasury's auction the way they approach it? >> i think, you know, typically these issuers, the professional issuance, they understand when it comes to the market they would sell paper at the level of the market trades and thankfully today we do have a market, couple of years ago we didn't have a market, it was an awful set of circumstances getting auctions done but we have moved back to some normality in terms of guesting auctions done. italy has good size in the market today. i don't anticipate any problems especially from the likes of italy going forward in terms of getting paper into the market. >> okay. thanks for that. let's get a view on italy and

final thought from jeff. one of the things we focus on is this emerging being market and the rise in u.s. yields having a big spill over in that part. what's happening now with, you know, corporate debt in emerging markets. >> sure. the big issue here is, is there's a risk off trade, corporate bonds fall into that space. a lot of times people look to sell corporate bonds in what can be an ill-liquid markets. these markets have grown dramatically over the last two or three years. now those people look to sell them. sometimes these price moves can be pretty dramatic. so that's a concern is there enough liquidity to take on all of this debt as it looks for a home. it looks like everything is somewhat orderly but that's the big question. >> if we go for the excess -- >> first one out. >> and that causes the selling

price -- >> exactly. >> as well. jeff good to see you today. thank you very much for coming in. can we turn our attention to royal bank of scotland. it's been vaelg its strategy. the bank was to exit all structured products and derivatives, 2,000 jobs could be loss. the focus in the news as the stock is down 6% is stephen hester has been asked to step down the ceo leave his post at the end of the year as the british government prepares for privatization of the bank. speaking after the announcement the chancellor, george osborn is expected to announce more details of the privatization in a speech next week had this to say about stephen hester. >> five years ago rbs was on the edge of collapse and stephen hester has done a very good rescue job. but now we need to move from taking rbs back from the brink and out of the rescue phase to a new phase where rbs does nor

support the british economy and we focus on trying to get british taxpayers money back and that's what we're going to do. >> speak being earlier to cnbc the chairman of rbs addressed unhappy shareholders and how stephen hester's departure is not in the bank's best interest. >> stephen hest sear highly talented, highly effective chief executive and businessman. but stephen recognizes that given where we are, and given his time in post and given what we want to achieve he absolutely understands, we had lots of long discussions about it, he absolutely understands the advantages of having a chief executive in place in 2014 who can creditably say to the investors and markets this is what you're buying and i'll be around to deliver it and if stephen was in place already

with six years behind him as it were at that time that's a much less credible argument to put forward because everybody knows and there's been speculation about his departure, you know, quite a lot in the last couple of years. so i think the credibility of an enduring stint for stephen i think had a big question mark over pinpoint >> there's a perception out there that the government wants this privatization program to be well under way by the election in 2015. if the government's investment is still significantly underwater is that a deterrent to the timeline you gave and can i ask if stephen had any problems with pushing through this privatization process so quickly. >> no. i think stephen, his top team and the board we all want this to be done as soon as possible. nobody wanted rbs to be in government hands in the first place. the sooner it's out of government hands i think the better for the business, and

better for our customers and better for the government. so we all want to it to be done as soon as possible. our cycle is not an election cycle. these are matters for the government. what price the government sells is a matter for the government. stephen has done a fabulous job in giving the government the possibility of those options. >> right. joining us is our british editor. what he talked about sounds plausible, right? stephens has to go because he won't be there for the long term after privatization. but investors don't seem to be buying that plausible story. what's their concern? >> they see it as kind of another example of political interference and that for them is the opposite of getting rbs back to being a strong commercially run investment bank that is getting privatized.

we've had rows about bonuses, pressure about leaving leaving, scandals at rbs that created political influence where investors don't like it. what they want to see is rbs being protected. the divisions that make money, the investment bank, the u.s. business to be kept on board. >> because floatation assistance. >> exactly. the fear is has this been a political decision? is this again interfere forensic the chancellor. most people think yes. >> the big question, of course, then leaves, hester going towards the end of the year, who would want to take this job on? >> it's a totally poison chalice. it almost should be kind of a charitable role that somebody comes in to do for one year only and departs without any political pressure. i think that's the problem. how do you persuade someone of a

high caliber. i think most investors really respected hester and that's the issue. you know, he's not the easiest man network with, i think most people would say that. but he's very well respected, seen as being very intelligent and did well back in 2009 to separate internally within rbs a bad bank and a good bank. he trimmed a trillion pounds off the balance sheet. that's not easy work. >> thanks for that. that guessing game. stephen hester's departure surprised investors. one major shareholder called it plain stupid. to get the reactions on that move head to cnbc.com. still to cobble the show, meanwhile, a big and dangerous line of storms could threaten to wash out the first-round of the u.s. open golf tournament today. what's going to happen and if we

get through the storms who will actually take the major? we'll update with you the book maker's favorites when we come back.

last half our of "worldwide exchange". this is a recap of the headlines. today markets are in a bit of a turmoil. stocks in europe led lower,

financials tapering fears dow's second straight triple-digit loss. in japan 225 leads declines. strong yen down 6.4%, nikkei back in bear market territory. bond yields and periphery head high per. greek and the year up 11%. russian president vladimir putin warns the country can't raise spending forever and suggest as three year budget. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. good morning to you. if you just joined us stateside the dow having its first triple-digit loss of the year, took us to mid-june to achieve that. first triple days of loss. the two days of triple-digit losses is what i should say.

looks like that will continue at the open. s&p 500 at the moment is about eight points below fair value. nasdaq 100 is some 16 points below fair value. dow so moment is some 61 points below. these features have turn up from their blows half an hour or so ago. it follows a weaker session here in europe as well. down to seven week lows for european stocks. ftse off a percent. ftse off a third. cac down a third. big falls have come from asia. nikkei down 6.33%. we were at 103 a few weeks ago. ten big figures we lost in the course of the last few weeks. topix down 4.7%. shanghai back trading.

hang seng off as well. big selling day in asia. question for investors is what your supposed to do? here's a recap of some of the thoughts we've already had on cnbc today. >> treasury selloff which means it's going to be up relative to treasuries. it's a very difficult environment when, you know, sovereign yields are rising pretty much across the board and i just think this situation will be sustained for some time. >> i think the trade he's hinting for since the beginning of this year, in an environment that the growth is stabilizing and starting to play out and potentially heat up a little bit. >> russia, we really feel in the

case of equities valuations have come down far too much. when we're trading on multiples of about four and a half times things are getting ridiculous here in kerterms of valuation r. there's issues facing russian equities but valuations really are screaming in favor of them. and the next piece of important data thrown in the mix is retail sales in the united states. investors hoping for an uptick when the commerce department releases those figures. stronger than expected jobs recovery last month and recent jump in auto sales fueled expectations for solid consumer spending. looking for a 4% increase in may which marks the biggest jump in three months excluding autos. and vice president and

senior research analyst joins us. good to see you. thanks for joining us. what's your view of how the consumer feels in the last few weeks compared to previously? >> greet to see you as well, ross. what's interesting, very interesting reflection point. we're at our 33 yard annual consumer conference. it's a two day conference. the sentiment by and large i would put it at neutral to positive. i think what we've seen here to date we've seen an outperformance in luxury versus the lower end with a mass market. that i think that's been tied back to more of an early kind of rise in some of the equity values that we've seen which is definitely helping on the wealth effect from upper limit income consumer. the sentiment is reflebing and we'll see more broad based discretionary recovery if we see consistent trends of improving

labor. >> it's interesting to look. you know likes of general motors, gap amongst some of those companies that benefit, seems to be a big up in hiring in the u.s., higher stock rises all helping. how patchy is it amongst who is benefiting from this slight improvement? >> sure. as i mentioned earlier you're starting to see upper income, luxury, accessible luxury brand starting to outperform first. i think in part what's driving the broader based discretionary income spend as well on more of the fashion or retail side there's still a fairly constructive trend as well on the apparel as well as kind of starting to see replenishmen on footwear. we're more in a constructive product cycle. if we get more consistent economic trends that would be fairly constructive again for the lower income as well. at this point the early out performance has been concentrated more towards that upper income consumer accessible

luxury, luxury segments of the market. >> we saw pvh come out with some blow-out sales. is that an example of what you're talking? >> sure. with pvh there's a couple of things going on there. they did just have an acquisition. you did see in the first quarter very tough weather trends but despite that they were able to see kind of the underlying or stronger trends of their core brands. they were able to pull forward some orders given the more concentrated demands. you're starting to see that in the most recent numbers that's hitting the tape. >> what will it take for the mass channel to sort of get going? how much longer do you need to see that to get back up and working at full tilt? >> sure. great question. i think you do need to see a more constructive employment

kind of trend to gain the traction of the mass consumer the lower income consumer as well. >> all right. erin good speaking with you. is this two days of conference, three days? >> it is. two day conference. so we went through a whole day yesterday. got 75 companies reporting. >> okay. good. have a good day today. now also staying in the rail attention safeway number two grocery chain is selling it's canadian stores to the empire company for $5.7 billion. the deal expands empire's reach in western canada with addition of 213 stores. analysts say safeway's canadian branch account for a third of its annual profit. the firm will use those proceeds to pay down debt and buy back shares. they are not going reinvest it. safeway up 30% in after hours and up 29% in frankfurt.

luxury good groups mulberry cite ad slow down. the report comes days after the group's creator announced her departure. she was the driving force behind the bag elixir. one handbag. that news has prompt ad bit of a sell off in shares with the stock hitting a two month low. it's steady today. that sell off coming during the course of the week. excuse me. i'm coughing because i'm getting to the exciting part of the show. u.s. open starts later today, merion golf court. preparations have been beset by rain so heavy. merion is the shortest u.s. open in a decade but expected to provide a challenge for those who are of a wayward nature.

joining sues senior sports trader at spreadex. thanks for joining us. all the talk here is about the weather and how that changes the likely winners. what's your view? >> the weather has been big on the agenda the last few days, on the practice rounds had to be cancelled and there was talks of using some holes from the other course but i don't think that will happen. forecast today is pretty bad. soften up the course, make the green softer and should make the course easier for the players to play. >> does this bring mcelroy back into contention. when he won at congressional it was soft. >> it was soft. he has been battling. you look apartment his recent form, nine pga tour events and missed the cut in eight of them. the course may suit him. his current form goes against him. we got him at 22-1. >> what's tiger's odds? >> he's the favorite. 5-1. although he wasn't won a major

five years now. five years to the day when he won the u.s. open back in 2008. won four of the eight pga tour events we won this year. he's the big favorite and one to watch and someone we expect to be out there. >> i mention these two together and then there's scott. one, two, three. they are playing together. >> they were picked together and playing together. >> so he's the one, he's the only one that can win the grand slam this year? >> yes. mcelroy practiced together as well. that's where most will be looking today, that's going to catch the imagination of those three. we'll see who wins in those three as well. >> very briefly, good outside tip? >> johnson. i think he'll go well. and also garcia. >> interesting pick. we won get into that. good to see you. coming up investors will get

their hands on a sweet smelling ipo and coffee maker cody hits the market. will it have a fragrant debut? we'll talk about it. 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. ♪

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that's why. so you keep more of your money. 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. a recap of the headlines. roller coaster ride continues for stocks.

autos faeinancials biggest lose in europe. nikkei swoons on stronger yen. and peripheral yields march higher. markets have been fairly active. another potentially sweet smelling deal will start trading today. jackie has the details for us. hi, jackie. >> good morning. cody prices ipo last night at $17.50 a share. the mid-point of the expected range. the perfume and beauty maker raising a billion dollars. could it increase to 1.5 billion with potential sale of extra shares to underwriters. make at any time largest ever u.s. ipo by a consumer products company topping carolina group debut in 2002. trading starts today.

this company found in 1904 by coty who sold fragrance to paris department stores. sales have risen fast up 21% between 2008 and 2012. revenues have been flat in 2013 hurt by a lack of skin care sales and smaller presence for the company in asia. coty is number two fragrance company behind l'oreal. no the proceeds will go shareholders. following ipo, 90% will be

controlled of coty's voting rights. 77 deals so far, one analyst telling me we could see 200 by year end and most new issues we've seen so far have been trading up year-to-date. bean pretty good market in 2013. we'll see what happens. have a good day. the u.s. government is reportedly started hunting for edward snowden days before he started to leak secrets. snowden worked at an nsa office in hawaii for a month before saying he was ill and failed to return. that prompt ad search by his employer booz allen hamilton and the government. google is down playing its role in the united states surveillance program. "the washington post" says the company is detailing how it would transfer data to the government if requested. brazil is taking more steps combat the weaken iing real.

the real rose sharply. brazil is doing most of its controls and expectation of tighter monetary policy in united states. which has meant the currency is now down to a four year low. coming up, not just currencies that are facing a wild week. stocks and bonds have too. is this a pause or start of a full blown correction. we'll get a technical perspective 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. 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? ♪

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weeks down another percent this morning. dax is down. ftse is down .4. fairly solid demand particularly for longer in the 15 year. cac down around about a percent. how does that translate into the futures right now? this is where we stand. the dow is currently called down some 77 points at the open. remember the dow is on its first three day losing streak of the year. we saw it second day of triple day losses in a row. where we start doesn't mean where we finish. yesterday it was up 100 points before closing down 126. the nikkei down over 6% overnight, 6.35%. this is dollar/yen continue to sell off the yen strengthening. one stage we got 93.90 over 103.70. ten big figures we saw pull back

with big daily volatilities with the dollar/yen change rate causing a lot of shake out. we're back down to where we were before the bank of japan essentially started its efforts so people are wondering what will the fresh incentives be to sell the yen and buy equities. let's get more on what dennis gartman had to say when he talked to cnbc. is it something to be feared? >> when you start to see three handle changes in three days in a row a handle change being one big figure from 95 to 96, three big figure changes is not unprecedented but highly unusual. i haven't seen action like this since days of the russian problems back in '97. these are scary times. these things frighten me. in got to tell you i'm cutting my position way down just because of the volatility being so large. >> dennis gartman on dollar/yen. joining us on the phone is

mcneal curry at bank of america merrill lynch. if you can hear me, hopefully can you, very briefly all this volatility. look, what do you see on the technicals? >> well from a technical perspective what we have seen is a continued unwind of the carrie trades in fixed income in much of the foreign exchange space. yen to a lesser extent sterling euro and dollars are becoming well bid as investors exit these relative high yielders of margin fixed income and emerging market foreign exchange and rush back to the safety of the large three currency payers. >> that would explain why the dollar has been rising but being sold off against the yen and euro. >> yes. very much so. >> i know this is difficult question, are you expecting this

sell off this volatility to continue for a few more weeks. how long do you think this shake up will last for? >> i think kit. if you go back and look what started this was the turn higher in u.s. treasury yields. not just the fact that they turn higher but their rate of assent. we had a very sharp move to the top side pretty much across the treasury yield curve. that precipitated a lot of this unwind. what's interesting is that if we look yesterday at the price action between u.s. fixed income and equity markets, despite the fact that equity sold off pretty hard with the s&p and whatnot, down about 1% give or take, there was no flight to safety into treasuries. treasuries went out at their low of the day, effectively high yields of the day. ten year eelds closed at their high evident level since 2012. treasuries can't catch a bid in that environment, they are likely to don't sell off and that turn should be continue

exodus. >> thanks for that. have a good day. "squawk box" is coming up next. have a profitable a day. 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. ♪ what do you do when you can no longer get around like you used to? when you fear losing your independence? who do you call? call hoveround now, to see if you qualify for america's premier power chair. hi, i'm tom kruse, inventor and founder of hoveround. now you can do more, see more, enjoy life more. here's why hoveround makes it easier than any other power chair. hoveround is more maneuverable to get you through the tightest doors and hallways.

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good morning. our top story, gloshl markets understand pressure, nikkei plunging more than 6% overnight and europe opening up start liu in the red. u.s. equity futures are off to a rough start but not triple digits. it's thursday, june 13, 2013. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. i'm andrew ross sorkin along with joe kernen. becky is on assignment.

we're joined by kayla tausche this morning. what do you have? >> mountain dew. >> you're promoting the brand. do you like mountain dew. that's almost as caffenaited as red bull. let's bring you up to speed on the global selloff. nikkei planninging to levels not seen before bank of japan launched its mass civilian stimulus program. it's now down 21% from last month's 5 1/2 year high. nikkei is back in the bear market territory for the second time in less than a week among the reasons being cite forward the selloff short term traders taking money off the table warning a move below 12,000 would for the market into dangerous territory. also the dollar/yen now dropping below the 95% handle as japanese inves