hello. you're watching "worldwide exchange." i'm ross westgate. earnings weighing on sentiment in europe. bmw hits the skids, missing expectations with a 6% drop in pretax profits because of discounts in its core european market. va vindy steam lines, selling its stake for 4.2 billion euros. that will help it to pay down debt and focus on its media

business. china's central bank promises to watch for inflation after the premier league sounds a hawkish warning. and initiating countdown sequence, india just minutes away from launching asia's first space mission to mars, heating up a new global space race. all right. a warm welcome. we're into the two-hour "worldwide exchange" again after the u.s. changed their clocks over the weekend. now, a lot of earnings out today. details out in a minute. nissan shares taking a big fall in japan today. the automaker cutting its profits down by 20% because of weak sales in asia. we'll get the details in around 10 minutes. helia is in london for a first

on cnbc interview with the owner of imperial tobacco. we'll get more at 10:20 cet. and in new york, the year-long mayoral race draws to a close as voters head to the polls today. about front-runner bill deblasio score a victory or is a last-minute upset on the cards? plus, we'll speak to the italian finance minister about his vision for the future of europe. that's at 11:40 cet. and if that's not enough, we're on track -- or are we on track for an equity meltdown? we'll be in philadelphia to discuss the growing fears of an equity bubble. that interview, coming up.

but first we start with a big focus on earnings here in europe. here are all the stocks in focus. marks & spencer today up 11.9%, despite the fact that closing sales from fallen for the ninth straight quarter. nonfood sales down 1.3% in the 13 weeks to september. but the grocery business is better, up 3% to provide more than half of group sales. thou, in contrast, ab foods stock is down 3% despite the fact they had some stellar closing sales. it's primark business witnessing a profit over the year. they beat forecasts revenue of 13.3 billion. now, the uk insurer legal & journal down 1.7%. it saw growth bound in the third quarter. this year, nigel wilson told

this channel how the company is prioritizing regions. >> we're very focused on the uk. we think the uk is a great place to do business. there's a huge opportunity for us here in the uk. we're very focused on america where we're seeing great success. and we're just beginning a strategy in asia. >> now, the chairman of imperial tobacco is going to retire. the world's fourth biggest tobacco company post ago net profit of 937 million pounds for the year to september. the stock up 11.8%. come up, we'll hear from the ceo alleyson cooper. mean wile, whole saul down 1.8% in switzerland. profits for the world's biggest cementmaker is under stress. the firm admitting its sales this year will not match the previous year after the demand saw third quarter sales down 8%. now, csm is up 2.5%. the dutch foods and chemicals group reporting third quarter

operating profits in line with expectations. the word world's leading vitaminmaker stuck to 1.4 billion euros. the cfo has been talking through the numbers. >> they delivered 27% higher ebita. and it's really all businesses. there is not a single business which is below last year. it's 23% plus in life sciences. >> in germany, fresenia, the health care group confirming its 2013 hour. it's revealed a 9% rise in sales to the year september. adjusted net profit for the same period, up 12%. the stock up 278%. bmw stock, a rare down day for the german luxury car group, off 3.65% slipping a gear with its third quarter figures blaming high tech costs for growth earnings. but they managed to increase

their net profit to 1.3 billion euros. that's a number of the earnings that we've had out in europe. quite a few of them in germany, as well. let's get more on that bmw figure. annette is with us in frankfurt. what's going on with the core market, then? >> well, the core market germany is doing okay. but the problem for bmw is europe. they have sold 482,000 cars only in the third quarter. they're just 50,000 cars more but at the same time, revenues down compared tlooft year's third quarter and that is because the company is, as well, engaging in prize awards with their competitor. it's not only technology costs for new models they would like to sell us, of course, that story, but it is as well, the

sales margin. that is spooking investors. compared to daimler, they're still in a sweet spot when it comes to the ibet margin for the car sector. daimler had a margin of 7.3%. bmw now is having 9% while volkswagen's audi is the best in class carmaker here with 9.4 had%. so all in all, revenues were coming in slightly less than expected. overall ibid was better than expected, you about there, as well, there might be some currency effects because they have a lot of things, a lot 06 sales in the united states.

with that, back over to you. >> annette, thank you. also joining us, an automotive and transportation consultant at sullivan. a rare slip for bmw today. do you read much into it? well, i think what we feed to consider is the fact that bmw has had big investments into the car market. they had almost increased 60% investments into r&d. obviously, this is on the back of the launch. >> yet the bmw, the battery powered or electric power -- is it fully electric? >> yeah. so unlike the other carmakers like audi or daimler, they've invested a lot of money into this new platform. this is obviously because they have a long-term future, a long-term vision for the future and they're quite open about that, you know?

>> is this vision based on the fact that they see the development of 30 mega cities in the globe? everybody is going to be living in these high concentration areas and actually the demands are going to change on what we want from the vehicle. >> absolutely. bmw has been one of the early movers in terms of selling a customer, but not selling a product. with the i-3, they are looking at what you will get from the car every time you step in and out of the car. >> so do you think they are going to be -- they've been this rare outperformance over the last decade. do you think this is going to enable them to continue that? are they seeing the future right? >> we believe so. we think the first carmakers who push through the first forecast for consumers.

they're looking at getting electricals into the car line. audi has a backup and has gone to electric. but no oem has completely invested money the way bmw has and consumers will remember this for a long time to come. >> let's move away from the luxury segment to nissan. shares have been thrown into reverse today, down 10% in japan. we had a holiday yesterday. first chance to react today. this is after a 20% cut in the automaker's full year profit outlook. nissan announced management changes, rea-sunniing a chief operating officer and that has led to questions over succession plans over the ceo carlos gohn. your thoughts? >> from talking to the premium car market, they have had good performance over the last year. the mass market has been experiencing more.

they have factory shut yoeouts, etcetera. forney san, they've had good sales in america, in japan, and europe has really pulled them down. they've had good sales, but the profit margins have been struck by these incidents. definitely they're looking at costs, cutting down on costs, and this is deflected by the management change of the ceo recently. >> just bringing your attention to what we've got on screen, as well, india has launched its first spacecraft. we'll try and get some pictures of that for you, as well. that's a momentous picture, as well, in terms of space development. now, how long can carlos gohn keep going? >> they had 8% off its margins. for a carmaker in the mass market, that's big. 8% is big. carlos gohn has been attributed

to some of the big changes in the automotive market. i think he has it in him, especially considering renault and bringing together the synergies. i think he's first in his position and i think he can pull this off. >> good to see you. thanks so much indeed for joining us. >> thank you. >> let's bring you up to speed with where we are in global equities right now. the dow jones stoxx 600 because of all that earnings, weighed down a little, about 5 to 4 earners outpacing advancers. pretty flat at the moment. all the focus on the earnings, xetra dax down 10 on points. the cac 40 off a little bit less than 0.2%. on the bond market, treasuries rallied a little bit yesterday.

we had a yield of 2.6%. we're right in the middle, 2.61%. really on hold ahead of the nonfarm payroll report a little later. we'll keep our eyes on the gilt yields, as well we have services pmi coming out shortly. on the currency markets at the moment, euro/dollar was just off the seven-week low of 1.3442. euro/dollar is down there. 1.3485 is where we stand at the moment. keep our eyes on sterling, back below 1 is.60. the dollar/yen, 98.23. the aussie under a little bit of pressure today. the rba said they aren't comfortable with the currency at these sort of levels. the central bank keeping rates on hold after its last cut in august. >> as expected, the reserve bank of australia has left reserve rates on hold today. central bankers looking to see how that's feeding into economic

growth. and we have, of course, seen improving numbers domestically. now, we know that the reserve bank of australia has been trying to talk the aussie/dollar down. today's meeting, no exception. pointing to the statement as the dollar being uncomfortably high. the rba saying it is likely to remain on target for the next couple of years, but the central bank is closing to the fact that global growth needs to remain on average with a chance of a pick up next year. in terms of what's next, it looks like consensus is moving to the rba, start to go increase rates in late 2014 or early 2015. back to you. >> that's oriel with that report. meanwhile, china's domestic economy appears to be gaining some momentum. the hsbc market pmi gauge ticking up 52.6. employment up, new business

growth up at a seven-month high. and india's service sector showed improvement, as well. it jumped to 47.1 in october. it was 44.6 the month before. but it is still the fourth straight month of contraction. it is responsible for 60% worth of indian gdp. now, hawkish comments from chinese premier weighing on investor sentiment. in a speech published daily, it's said easy credit is double the level of gdp, meaning any further money printing could create inflation pressures. the premier li noted the mainland needs to keep up its economic growth rate at least by 7.2% to keep a healthy jobs fund. let's get the reaction to all of that news out of asia. li sixuan is with us out of singapore. >> thank you for that, ross. we saw some selling off in the markets earlier in the morning on the back of those comments from the premier li signaling a

tightening bias and warning about inflation. but they're also rising hopes for reforms going into the communist party later this week. still, the shanghai composite managed to end the session in the green and the shenzhen composite gained over 1%. the nikkei ended higher by 0.2%. the kospi lost 0.6%. the asx 200 outperformed its asian peers helped by miners while the rba holds rates steady as oriel just mentioned. peng an bank was isn't tumbling, ending higher by 0.75%. other lenders trimmed early losses. there are hopes out there that the preferred shares program likely to start by year-end, that will help shore up banks' core capital.

that's a look at asian markets. back to you. >> okay, sixuan, thanks for that. you can head to our website for more on china, including why americans see it as the dominant economic power. this story is spiking a lively debate. and you can also join the discussion, as well. also, find out why the cloud over u.s. listed china stocks may be list lifting. follow us, too, on twitter. we'll take a short break. still to come. we'll get the latest on vivendi. stephane will join us from paris. ♪

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all right. plenty to talk about today. vivendi has agreed to sell its stake in maroc telecom in a $4.. for more on that, stephane is

with us in europe. >> you probably remember vivendi has been looking for a buyer. the french company wanted at least 3.9 billion euros for that stake in maroc. a group finally accepted to pay that plus a dividend of 300 million euros for 2012. as a result, the transaction will be 4.2 billion euros in cash. it's probably of the broadest strate strategy. a few weeks ago, vivendi sold most of its stake in the video game producer activeision for 2.8 billion in cash and it's selling off its telecom unit which eventually would be listed separately at some point next year. there's a question about t. it doesn't really fit in that

new business profile. although the main shareholder of vivendi said recently that no more disposal was on the agenda. you should remember also vivendi tried at some point last year to sell gdt, but the process was canceled because it couldn't find a buyer with the minimum required price. vivendi, in the meantime, is increasing its media activity in france. last year it signed a deal with a french media company to buy its 20% stake for at least 1 billion euros. >> we'll see what happens, stephane. thanks for that. now, google wants to help you out. it has launched a new helpout video chat showing live experts providing cooking instructions and home repair to marriage counseling. google is teamed with about 1,000 partner necessary fashion, fitness and other topics.

sessions can run from a few minutes for several hours depending on topic and pricing is set by the individual expert. google will take 20% of the fee charged. interesting idea, really. anyway, would you use this new google service? and if you did, what would you use it for? e-mail us, tweet @cnbcwex or direct to me @rosswestgate. we'll take a short break. still to come, october services pmi expected any moment now. well, in around about four minutes. we'll bring you the latest and what this means with the bank of england's policy committee meeting.

earnings weigh on sentiment in europe. bmw hits the skid, missing specations with a pretax profit. vivendi sells its stake to maroc telecom helping its to pay down

debt and focus on its media unit. china's central bank promise toes watch for inflation risks and sticks to prudent policy, this after the chinese premier sounds a hawkish warning. plus, initiating countdown sequence. india has launched asia's first space mission to mars, heating up a new global space race. all right. in just over a minute, we'll get the latest snapshot of britain's dominant services sector with uk pmi expected to come in around 68.4 pmi. ahead of that, european equities are down about 0.1% at the moment. similar amount for the xetra dax. the ftse mib, a similar amount, as well. as far as bond markets are concerned, treasury down,

10-year gilt yields, 2.65%. bund markets off slightly. sterling below 1 .60 ahead of the dollar. euro/dollar, near that seven-week low at the moment of 1.3487. it's moved away figures from the 1.3833 two-year highs that we were at around two weeks ago. and that's where we stand right now. let's bring you in contention with the pmi, composite pmi. let's bring you the services number first of all. the services number pmi up 6/2.5 in october. it is stronger than the expected 59.8 and it is stronger than the previous figure, 60.3. the new business component, 63.4 in october. since 60.6 in september, that is the highest since the series began back in 1996. it means the composite index,

61.5 in october. again, the highest since the series began in 1998 and this kosit pmi now pounds to quarterly gdp growth of 1.3%. and that services pmi number, the highest since may 1997. new orders and employment up strongly. prices up, as well. it's a strong report. james knightly is a uk economist at ing wholesale banking. he'll join us in a few moments time. sterling/dollar, 1.60 as a result of that reaching that particular mark. and there will now be an expectation that we still see the growth of employment and this series of numberes and that feeds through into fourth quarter gdp, as well. the bank of england may well be revising its view that we're going to not hit the employment threat over 7% until 2016. and that is -- they had originally said the rates would not go up. the market is begin to go price in rates going up at the

beginning of 2015. a big discussion we had on the resilience of the uk economy and, of course, particularly, as well, on what goes on with the housing market, too. let's show you the gilt yields going higher. gilt beeld sold off, 10-year gilt year, around 2.65% just before the data came out, as well. it may well mean the bank of england revises its jobless forecast next week. meanwhile, were turn away from the uk to the eu. it's coming up with an awful lot of forecasts at the moment. and i know they're absolutely flooding through. it's almost impossible to bring them up. but there are so many of them it's extraordinary. the eu sees forecasts of economic growth more challenging. gdp there to 0.3% in 2014.

the austrian -- if you are sitting right where i am sitting, they're literally flooding through. poland 2015, budget deficit at 3.3% of gdp being dropped wab as well. i think we're kind of interested in what they get. the eu's france missing the economic target. they see french gdp up 2.3% in 2013. up 0.9% in 2014. basically, that means they would miss their economic target and they will fail to meet francois hollande's public finances and unemployment. as far as spain is concerned, which will be the other interesting point, they see government debt in spain rising to 104.3% of gdp by 2015, '1 6/.

the spanish budget at 0.9% of gdp in 2014. 6.6% in 2015. as for the unemployment rate, we see spanish unemployment at 26.4% in 2014 and 25.3% in 2015. they're looking for gdp growth forecasts to be 0.5%. it was previously 0.9%. so they've cut their growth forecasts for spain, as well, and now only see a moderate economic recovery. they said france are going to miss economic targets. that is the latest on the eu or european commission forecast. vice president ollie rehn is delivering the statement, as well.

now, let's recap the uk pmi figure. very strong. strongest composite since we saw the series begin. james knightly is uk economist at ing wholesale banking. james, very strong services number. it beat up again from september. what are the implications for what the bank is going to forecast? >> we're looking at composite gdp growth about 1.5% q on q. would you so you're talking nearly 6% annualized. so it does suggest that we're going to see ongoing employment gains. it suggests that investment spending, which, of course, has been the real weak link in the uk economy is going to pick up. it's still up 23% and if we can get that pushing higher, that gives hope that the sustainability of the story is there. it pushes up expectation that the bank of england will have to

tighten monetary policy far sooner than they're currently suggesting. >> when, do you think? >> their assumption is that the unemployment rate is going to be pretty slow to fall. they're assuming productivity is going to rebound dramatically. that's just not what we're expecting. we think the participation rate can probably fall further. similar to the story in the u.s. rather than to say 800,000 to 900,000 jobs we need, we could need less than 250,000 and that's very, very achievable in the next 18 months. >> we've created a million private sector jobs. it also depends, of course, on how much we cut more public sector jobs. what's your forecast there? >> it's been very little. we talk about austerity loss in the uk, but in real terms, given spending is up 8.2% and on normal years, we're spending more this year than in previous years. so i don't think we're going to see a massive change in public

sector employment, at all. >> just how strong is going to going to be, then, going into next year? clearly, the fourth quarter could be as strong presumably as the third quarter. >> yeah. if you look at what analyst res expecting for all the g-7 economies, it's a real pick up analysts have seen over the last four or five months, really. back in june, we were talking about growth in the uk for about 1.5% in the last year. and a lot of analysts are now expecting close to three. we would be, of course, at the top end of that range. >> 3% growth for the uk? >> i think we're talking 1.7% personally, but there are others talking about 3% plus. which would make it a strong economy on a g-10 level. what's going to happen to sterling? is sterling going to get stronger and actually help ease some of those inflationary pressures? >> yeah, i mean, we do see up sides, particularly against the euro. i think the eurozone woes are

going to continue. we're looking at the eurozone far, far weaker than that in the uk. so that's probably where the big -- is going to be. also potential in terms of the u.s. dollar i think is probably less. so we're looking for the u.s. story to improve once we get past the political situation in december/january and that could lead to a stronger dollar a basis. >> thanks for joining us. we'll take a short break. still to come, twitter has looking at the nasdaq. ali baba is now causing issues around the world. i caught up with the ceo of the london stock exchange at yesterday's cbi conference. we'll hear from that interview when we come back. at farmers, we make you smarter about insurance. because what you don't know, can hurt you. what if you didn't know that posting your travel plans online may attract burglars? [woman] off to hawaii!

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strong services sector activity in the uk, we've had the eu and the european commission issuing their latest forecast for the area. a u.s. fed tapering reaction and debt ceiling standoff is a risk to the eurozone. talk about a very modest labor market improvement. but not until 2015. they say structural reforms will

show more firmly in 2015 and eurozone debt levels are likely to continue rising in 2014. as a result, they see the eurozone as a whole shrinking 0.4% over the course of this year. it will grow 1.1 mers in 2014 and 1.7% in 2015. the previous forecast had the eurozone shrinking 1.4% in 2013 and growing 1.2% in 2014. so they had to scale back their forecasts slightly for 2014. and the economy was flat in 2013, as well. for the eu economy, the eurozone inflation seen well below 2% throughout forecast period, which may be a nod to the ecb. people wondering whether the ecb might decide if they've got a sort of deflationary threat with core inflation running up 0.8%

at the moment in the eurozone. right. that's the latest on the eu. euro/dollar, down at 1.34 levels. back on the seven-year lows. over in germany, munich's prosecutors say they're investigating deutsche bank's ko-ceo over the collapse of the media empire. annette joins us from frankfurt for this. how far do these allegations go? >> actually, for now, they are only saying he's a suspect along with other suspects. but the former ceo. the bank is saying, of course, that they are expecting those allegations or suspicions to be cleared. so what does this say for the bank? last year, there was a ruling that the deutsche bank may have or have damaged the media empire

by 150 million to 1.5 billion euros. so what is still not clear is the settlement price, up under -- so once it was set to almost have reached the settlement between deutsche bank and leo kier's family of 800 million euros, so the banks would have put that already into their litigation provision. but, of course, it's a big blow to eugin's reputation here in germany. when it comes to tax evasion, deutsche bank last year, at the same time, seems to be taking out of bad light when it comes to german subblissty.

to jergen is taking the plane here in terms of the management board. there are investors saying they are concerned that management has been de -- from their charge of restructuring the bank. over to you. now, twitter may close the banks today, one day earlier than initially planned. this according to strong demand amid twitter stock to raise the price of its ipo from $20 to $25 a share. twitter still intends to price shares on wednesday and begin trading on the yc by thursday. now, why twitter decided to list on the nyse, the social media firm's ipo comes amid continued rumorses as to weather alibaba

will choose to list. london is still trying to fight to get the listing. and with that background, i caught up with the chief executive in yesterday's stock exchange group and he told me the next five to ten years will be very exciting and rather a radical exchange for the industry. >> the exchange industry is about infrastructure. it's not just about the traditional businesses, the ipo businesses. as critically important as it may be. it's about balance sheet management, intellectual public indices, about technology and many other things. that industry is right at the cusp of xud changes in terms of its scale, its scope, its relevance to the real economy. .i think the next five to ten years will be very, very exciting. >> you can go out and issue retail bonds, you can do crowd sourcing.

there's a lot of ways for you to go and raise mope. that's a big, fundamental challenge, isn't it? >> i think you're making an absolute correct point here. in the age of the internet economy where shares are globalizing, the vertical silos, the protected markets, those ways are going to be gone very soon. it's about offering more choice, reducing costs, and about financing the real economy. change is coming. it's going to be very, very big. the industry itself is going to grow momentously and i think we're very, very well positioned, feeling very optimistic about the future at the london stock exchange. >> no, every week cnbc is talking to you about bringing our online poll. this is asking how will twitter close on its first day of trade? simply higher, lower or flat? head to trader poll.cnbc.com to

cast your votes. have your say on twitter using #traderpoll. plenty more to come on twitter. meanwhile, the first half of the earnings season in japan is heating up. we have more from tokyo. hi, tosiko. >> her, ross. nearly 60% of the financial companies that are reported so far show increases by sales and profits over the past couple of years. many japanese companies looked to cost cutting for profits. jfw holdings booked its first sales increase in two years. they had higher sales in profit. and the trend is likely to continue with toyota, yamaha

motor, which are all expected to release earnings this week. ross, back to you. >> thanks so much b deed for that. now, imperial tobacco has report d a 5% jump in earnings despited the missed earnings. this is the world's fourth biggest tobacco group, reporting that its chairman would retire from the board next year following the agm in february. stock, though, is up some 3%. what kind of mood did you find them in, helia? >> i think they're fairly positive. revenue res down 5%. profits came in above 1%, not huge, largely flat, but they had a very weak first half. and that is quite key. this half looks better.

they've got this cost cutting program, they've got head count productions all over the place. for them, i think the question is how do they transform businesses amid declining headwinds. i spoke to alleyson this morning and asked her if this represented a change in the result especially since imperial has been up 4% year on date and imperial has been down in terms of its share price by 1% this year. >> 2013 has been a tough year in the industry. and for imperial, we're in the middle of a transition. so we're having to manage that transition while dealing with some quite severe market headwind necessary a number of our markets. but it is a very robust performance given the environment, 6% earnings growth, and we're continuing with our cash distribution to

shareholders, 1 so 1.6 billion this year in terms of dividend and shareholders. so very much focused on those cash returns, as well. so it's not just the headline numbers. it's surrounding the quality of those focused within that. we're focused on our growth plans which is what we see potentially. we're a total tobacco company. revenues about 5% in the year. so the quality of growth is coming through, as well, and the results we're generating. the cost program associated with the strategic transition. savings is going to built over next year. >> can you tell us a bit more about those growth markets. >> markets like u.s. it's a fantastic market, the u.s., and i know for some companies they truly focus on emerging markets or so-called

emerging markets for growth. i think you have to see where the real growth opportunities are around the globe. the u.s. is a great profit market. it's something we see opportunities in. in the last year, they've been executing this strategy. getting customer engagement and with key accounts and the new team focused on key accounts in the states. that's turning around numbers in the second half. going into this year, we've got new portfolio initiatives going into that .i'm really excited about the u.s. >> a lot of europe is a mature market for them and declining. one of the complaints that analyst ves made is that they've been slow to pick up on innovation, things like ecigarettes. i asked alison what the company was doing to combat that. >> 2014 is a key year for that transition around the brand

portfolio, around the footprint and around those new consumer opportunities that we see. and, you know, we probably aren't as -- as other people around some of these innovation areas. we've got a lot going on. we've just bought the assets of dragonites, which is the original ecigarette inventor. there's a lot going on, but we'll talk bit whether we're really ready to go, rather than warming up people ahead of time. >> how important is that? >> i think you have to look at it from a consumer perspective. this isn't e-cigarette focused. .i think making sure that you understand the consumer and the aspects of the consumer require here rather than just looking at alternate nicotine deliver will be key to success in this area. >> i think the company is still

going to have to prove to investors that they are taking those innovations seriously. obviously, their announcement today that the dividend was up by 10% will help and will be good news for investors, but there's a lot more to do, especially on the cost savings side. >> yeah. we'll have to see what happens. thanks very much, indeed, for that, helia. now, we've had some hawkish comments from chinese premier li weighing on investor sentiment. he says easy credit is at double the level dp dp, meaning any further money printing could create inflation pressures. but premier li noted that the mainland needs to keep up its economic growth rates at least by 7.2% to keep a healthy jobs front. and this is as the china central bank appears to be echoing concerns about the china's premier. it will keep monetary prudent while watching closely for higher inflation. the government should use market

source to help mount local government. it's warning it will reign in speculation in the property market. do you think they are going to be able to reign in speculation as they say on the property market? >> it depends on the number of things. first of all, speculation in the luxury sector, i think, is going to be difficult to control and when it comes to nor affordable housing, there's not that much speculation going on. so i'm not really worried about the housing market overall. the housing market overall is healthy. so those are the worries at the moment.

>> twice the size of gdp, he's quoted as saying, and what they're going to do about that while also keeping the level of growth where they want it to be. well, the biggest problem that they've had is the shadow because you've had controlled interest rates. so thoef to decontrol interest rates. the central bank will stop setting those. i think that's going to be one of the reforms coming out of this weekend's third plinerary. so that's a very important thing to happen. not just the lending means dmoft rates should be freed up. under those circumstances, i think the market will be able to reign until the shadow banking

system to a significant event. overall extension is not is that big of a deal. the infrastructure, development, etcetera, needs to continue. >> how committed do you think beijing is going to be towards pushing through unpopular reform. >> well, i think very committed. it's quite an important date for them. the big first reforms happened in 1978 happened at the 1111th plenum and right now we expect something similar of a similar magnitude and significance is going to happen this coming weekend and into early next week. so, yes, i think there are a number of hard decisions to be made that will will be made. i think there are going to be a number of decisions to be made that will please decisions on the region.

where chinese investors will be able to invest in hong kong and in other markets that are markets abroad for the chinese mainlanders. >> what xwathsd r xwagsd will that have offered holgs columbus mgsd snl. >> flvpsz ever. >> there was a lot of discussion about this happening and it never did. and the market reached its peak in hopping congress on the back of that. so i think we're not going to see a replace of that. but without any question, there's going on to be a positive impact. it's also important, as you know, that london and singapore and hong kong have been designated as places from which direct investment into the stock market in shanghai can occur going forward. and in the r&b sector. that is going to be another important thing for china, as

well. >> very good to see you. thanks very much for joining us. you can head to the website, as well, for more on china, including why it's seen as the dominant economic power. >> you want to check in on that, head to cnbc.com, live via facebook or twitter and join the discussion, as well, on that. still to come, the european commission has warned over france's deputy target. it hayes more measures must be taken to stay on track. we'll get more from paris and find out how italy is faring. the italian minister of economic and finance. the second hour of "worldwide exchange," next. ♪ stacy's mom has got it goin' on ♪ ♪ stacy's mom has got it goin' on ♪

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on this is "worldwide exchange" and i'm ross westgate. the eu warn france may miss budget targets as they remain below target revenues. vivendi selling its stakes in maroc telecom.

the price, 4.2 billion euros. and china's central bank promises to watch for inflag risk and stick to prudent policy after the chinese premier sounds a hawkish warning. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. if you've just joined us stateside, welcome "worldwide exchange." the do i is some 46 points below fair value. fass dak at the moment is around about 10 points below fair value and the s&p 500 at the moment is some 4.5 points below fair value. the cnbc ftse global 300 has been negative during the session, just bounced off the session lows, currently down 0.1%. the ftse yesterday was up 28 points.

this morning with all that focus on earnings, we're down 40 points. we are now down at the session low. we have moved lower, as well, after the latest eu forecast. we had some very good uk dealt services sector pmi coming up for the high since may 2007. the composite number for the uk at the highest is known as a strong number beat expectations and have been up. big upgrades for growth forecasts in the uk since 2014. it means the bank of england will probably have to trim or reign in its forecast for horms how long rates will stay low for. the xetra dax down 0.4%. the cac down 0.5% and the ftse mib down around 0.3%. on the gilt markets, 2.7% is where we stand at the moment. treasury between 2.6% on the yield for the ten-year.

currently yielding 2.61%. on the currency markets, the euro/dollar slipped today. still above that seven-week trough of 1.3442. the pound at the firmer, back over 1.60 following that services pmi number and the aussie, 94.81 is where we stand at the moment, slipping because the rba talked about the currency being a little bit too strong for them. let's get more on that asian session. li sixuan is with us out of singapore. sixuan. >> thank you for that, ross. in fact, most of the asian markets were heading south this morning on the back of premier li's hawkish comments while signaling a tightening bias and warning about inflation. but there are rising hopes for reforms going into the communist party's third plenum this week. the shanghai composite ended 1.3% higher.

the nikkei 225 back from yesterday's one-day holiday ending higher by 0.2%. south korea's kospi lost. >> ground and australia's asx 200 outperformed its asian peers, helped by miners while the rba holds rates steady as expected. peng an bank was sent tumbling ending higher by less than 1%. other lenders trimmed their early losses. there are hopes out there that the preferred shares program will help shore up banks' core capital. shares tanked over 10% forney san after they cut guidance on a slow down in the emerging markets and the major vehicle recall. investors put the brakes on other automakers, so a lot of on these auto stocks under some selling pressure today. that is a look at the asian

markets. back to you, ross. >> thank you so much, indeed, for that. head of economic research at natixis management is in paris and joins us now. good to see you. how much of a cloud is the french economy under? >> well, we've had that as most of the european countries for 20140 have been downgraded in france. but provocation in spain and germany and for the euro area as a whole. so we're still in a week in the situation in europe.

and in france maybe we've seen that for the manufacturing sector. so we asked, in the -- clearly in a weak position. but what we have to look at -- when we look at the eurozone commission forecast, we see that the environment is not so good for the euro area, as it was mentioned, it was mentioned this morning. because we have very low growth, maybe an improvement in 2015 with 1.7 gdp growth. but at the same time, we have lower inflation rates and that is something we have to keep in mind. in 2015, the european commission

expects inflation rate through the area, 1.4%, it's slow the ecb targets. and that's something we have to be very attentive to. >> with unemployment at a record high in the eurozone and according to the european commission it's going to keep ticking higher, no improvement until 2015 and core inflation matching a record low of 1 is.8%, should the ecb react? if so, how? >> that's what we will wait on next thursday at the ecb meeting. it's clearly the ecb has to do something. we have 0.7% inflation rate currently, 0.8 for core inflation rate. deflation in different countries, in greece, maybe it will be the case and so in spain, in ireland, in portugal,

in cypress and malta. the ecb asked us to the something. it target is 2%. it's not 1% unflagz rate, it's 2%. so it has to change the picture and change people's expectation to improve the situation. we cannot accept that we had in europe with low inflation rates and unemployment rates going up. that is something that is not -- was balanced and we could have a kind of social unrest in europe. . >> phillipe, for now, thanks for joining us from natixis. reminder in the united

states today, the october imf services is out at 10:00 a.m. eastern. jeffrey lacker and john williams both speak today right around noon. defile automotive, directv, liberty media, michael kors, aol and 211th century fox report results before the opening. after the close, we'll hear from tesla motors and zillow. now, google wants to help you out. that's very nice of them. they want to launch a new help house sur way today. so apparently you'll be able to offer many things. google at teamed up with around 1,000 topics in fitness and other topics. sessions can run a few minutes to several hours and pricing is set by the individual expert.

goose t google will apparently take 20% of whatever fee has been charged. we are asking viewers today, would you use this new service from google? and what would you use it for? joe tweeted in to say i would ask google to help me understand women. he said i don't know if even google will be able to do that, even with their their cash they may not be able to come up with the research for that. keep your responses coming in. worldwide@cnbc.com, tweet @cnbcwex or at the direct to me @rosswestgate. i think i say to my producer, men are easier to understand. yes? no. we'll come back in just a few moments. risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities.

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plenty of earnings out of europe today. marks & spencer was up nearly 3%. ab foods, in contrast, had a pretty stellar closing sale witnessing a 44% rise in profit for the year. but the stock is down 3%.

legal & general, stock is down 2.6%. wordwide sales beat forecasts at 1.84 billion pounds and the chairman of imperial tobacco in napier is going to retire. the world's biggest tobacco company post ago profit of 970 million pounds for the year through september. let's look at holcim, under a little bit ooh stress after finding out 20 is 13 sales would not match last year. sales down 8%. the stock off around about p 6%. dpm, on the other hand, shares up over 3.5%. this is despite, what, they've been basically reported third quarter operating profit in line. dsm, the world's leading vitaminmaker sticking to its 2013 target of around close to 1.4 billion euros per sales.

german health care group fresenius, stock up 2.7%. confirmed its 2013 outlook with the release of a 9% rise in sales for the year to september. and the fall of the day, unusual for bmw to have an awful lot, but now over 4%, slipping again with its third quarter numbers. the german automaker blaming high tech costs for a fall in its growth earnings. but they did pay less income tax, so they still managed to increase third quarter net profits to 1.3 billion euros. the stock off fairly heavily. talking about bmw, they're recapping the headlines today. the automaker failing to avoid european speed bumps. and china's central bank is ramping up its inflation watch. this is the chinese premier adopts a hawkish tone. still to come, it's the

first tuesday of november. and that means election day for millions of americans. we'll take a closer look at one of the races bringing big change to the big apple. we'll be in new york when we come back. ♪

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all right. if you've just joined us stateside this mortgage, u.s. futures are pointing downwards at the moment after the gains yesterday. the s&p currently implied just under five points below fair value. the dow jones at the moment some 46 points below fair value. the nasdaq implied at the moment is down 10. european equity res weaker, as well. the ftse 100 off 0.5% despite a big pick up in services pmi. we're now point to go a fourth quarterly print of gdp. xetra dax cac 40 down 0.5%, as well. a rather dispiriting outlook from the eu today on the eurozone economy. some of the other stories we're following, some big banks, including morgan stanley, goldman sachs and jpmorgan may reportedly still do business with sac capital, despite the firm pleading guilty to criminal insider trading charges. under the settlement with u.s. prosecutors, sac will close its

investment advisory business to outside investors. "the wall street journal" says sac's prime brokerage services from several wall street banks. in a statement issued after the settlement was announced, sac says the chinese faction of wrong doers does not represent the 3,000 honest men and women who have worked at the firm during the last 21 years. leo brenard is stepping down from her post at the treasury department ahmed she's been under consideration for a seat at the fed. she's played key roles in pushing china towards a more flexible u.n. and europe to tackle its debt crisis. brainard previously works in the clinton administration as deputy director of the national economic council. talks between jpmorgan and the justice department are reportedly heating up again, this after disputes threaten to derail their landmark settlement

last month. the journal says it's possible that the final terms of a deal could be reached this week. the 13 billion dollar settlement will result in several issues over jpmorgan's sale of mortgage bonds before the financial crisis. a big sticking point has been whether the bank can count $5 million from a settlement with fannie mae and freddie mac towards the $13 billion total. jpmorgan stock today in frankfurt just down 0.3%. also in the sector, morgan stanley says it may face a lawsuit from aig over deals that the firm has worked on before the financial crisis. morgan says the potential suit relates to $3.7 billion in mortgage securities that the bank sponsored or underwrote between 2005 and '7which were then bought by aig. morgan stanley says it suffered losses on seven trading days during the third quarter, down from 12 in the second. morgan stanley stock flat in frankfurt. and new yorkers are heading

to the polls this morning to vote for a new mayor. this is mike bloomberg's bids farewell to 12 years on the job. bill deblasio is widely expected to defight his republican rival, joe lehotta. what's at stake for the big apple under a new leader? catherine joins us from brooklyn, new york. what are the polls they say leading up to this? >> ross, yes, good morning. from brooklyn, new york, as far as the voters go, they describe the mood as something to be excited about. as you mentioned, mayor michael bloomberg, he's been the mayor. voters elected into office. in 2001, we will have a new mayor, the first one in 12 years. where we are right now, one of the polling places here in brooklyn. we do expect to see voters in about 40 minutes or so. the people arriving here, though, they are polling place workers and this should be busy because this is also where bill deblasio, the democrat and the

front-runner will be voting later this morning. he's always accompanied by his wife. what we saw yesterday was the two candidates made the most of trying to reach out to voters. they were literally standing on street corners shaking hands and hugging potential voters, potential supporters, if you will. the republican, joe lotta, he is trailing by at least 40 pernlg points, but we was xaping with the former mayor rudy giuliani, who was mayor during the time of 9/11. bill deblasio reaching out at a community center. both men busy yesterday and you will find them voting early this morning. then they have back to back campaign events leading into the final party of the evening, where them have their campaign headquarters or what we find with the candidates. they are trying to reach out to voters. the mood among people who will be casting their votes on votes, they tell us that they are

excited. we also ran into a lot of people who are undecided. and one of those, who is the lesser of two evils, a lot of people we talk with, not exactly ecstatic about the candidates. some people enjoy having mayor bloomberg as mayor for the last 12 years. lots of construction has happened. but strange lifestyle changes for people, for example, no smoking in parks, also a draw back from what is on the menu at restaurants, really a curtailing of transfats, changes to restaurants, a time of people didn't like that about mayor bloomberg. so we'll see who will be voted in for mayor tonight. >> catherine, thanks for that. that's the latest from brooklyn. joining us now is christina grier at fordham university. christi christina, thanks for joining us. after 12 years of mayor bloomberg, big bill deblasio is in the lead at the moment in the polls. wa sort of change are we going to get? >> well, i think we're going to

get a change in taupe. that's probably the most important thing that the voft majority of new yorkers are looking for. i mean, if you look at the polling data, new yorkers aren't necessarily disappointed with what bloomberg has done over the last 12 years. they're largely disappointed in the way he's done it. it's the tone that he's struck. it's essentially it's my way, i'm the mayor and you have to deal with the changes that i'm making. so i think deblasio's first order of business is to set a new tone to say new york is a city that's not just for the wealthy and for tourists, but also for working class and middle class americans to enjoy. >> what does that mean in terms of policy change? >> well, in terms of policy, we know that he's going to have to work much more closely with unions than mayor bloomberg did. we also know that he's going to work with teachers and charter schools and educational facilities in a way that bloomberg did. we know deblasio will not give up merrillal control, but the way he works with others within

the five burrows to push forward a more progressive agenda as he would call it is essentially the plan for himself and for new york. >> we're basically assuming that deblasio is going to win. is there anything that could happen for joe lhota to become new york city mayor? >> oh, my gosh. if joe lhota becomes mayor, i would expect to see dinosaurs rising out of the hudson river. he's from the quintessential republican play book in the sense that if you don't have fresh ideas, you talk about crime and the past and the last time a democrat was mayor. so you look at joe lhota's ads, they're all about the 1980s with some weird sort of violence thrown in that happened a few weeks ago. but it's about safe streets and do you want to go back, do you want to go back. it's a very backward looking set of visuals. but it's because there's a lack

of forward thinking policy there. so i don't see him getting any traction. i mean, i do think that because deblasio has led so strongly in the polls this past month, there might be suppressed voter turno turnout, just because many democrats or many people who appreciate deblasio's policy initiatives might assume that why do i have to interrupt my day because he's already won. so there might be a smaller turnout that we anticipated, but i think that deblasio will win pretty handily. with that large margin of victory, he's then got to figure out how to build coalitions to make sure he capitalized on the momentum. because four years comes very quickly and he doesn't want to be challenged from within the democratic party and he doesn't want to see joe lhota again in 2017. >> christina grier, thank you very much for joining us from new york. still to come, activision's new call of duty, will it hit

the mark with gamers or will it fall victim to the success of grand theft auto? plus, we'll hear from fabrice saccomanni, the eye trillionan minister of economy and finance. more to come from "worldwide exchange." ♪ [ male announcer ] the parking lot helps by letting us know who's coming. the carts keep everyone on the right track. the power tools introduce themselves. all the bits and bulbs keep themselves stocked. and the doors even handle the checkout so we can work on that thing that's stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. so everyone goes home happy.

this is "worldwide

exchange." a recap of the headlines today, earnings weigh on sentiment in europe. bmw hitting the skid. it's missed expectation wes a 6% drop in pretax profits because of discounts in its core european market. the eu has warned that france may miss budget targets as tax revenues dip. china's central bank promise toes watch for inflag risks after the chinese premier sounds a hawkish warning. and activision call owes gamers with its latest installment of call of duty. will it shoot grand theft auto off its perch? >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. we're going to get into ac

at thisvision. mean while, futures right now are pointing down towards. the dow down 8. the s&p 500 is trading some 4 points below fair value. the fass dak at the moment is about 8 points below fair value and the dow futures are trading some 39 points below fair value. the ftse cnbc global 300 is down by around 3 points. not a huge amount. we're seeing the session low here in europe a short while ago. losses around 0.5%, pretty much across the board for the likes of the ftse, which was yesterday up 28 points. we did have some good data out of the uk. we saw essentially pmi coming in for the services sector. we're looking at quarterly gdp growth implied of another 1.3% for the fourth quarter. but the composite series at the highest level sips records began in 1998. the xetra dax is down 0.3%.

the ftse mib down 0.3%, as well. they scaled back some of their growth forecasts for the eurozone and unemployment is going to keep ticking higher from these record levels, as well. that is where we stand right now in europe. here is a recap of some of the thoughts of some of the guests we've already had. >> this is a borderline call or semi call for credit. five-year part the curve is very attractive. it's cheapened up a lot in this five-year bond that's on offer and very cheap for its surrounding paper. and also the 1822 is another cheap part of the curve. i like it as an extension out of something lower yeeling, such as germany.

>> the big place where they are still up is emerging markets. both emerging europe and emerging asia. we think that that is geared play on that three to 12-month view is the best play that you've got at the moment. longer term, however, we will look at places like japan. we think that's still one of the most underrated plays out there. >> we beat up theside, particularly against the euro. i think the euro is looking far, far weaker than that of the uk. so that is probably where the big selling is probably going to be. >> meanwhile, today's launch of activision call of duty ghosts will be the last before microsoft introduces new gaming consoles later this month.

gamers over the age of 17 can shell out over $60 for the first person shooting game. the top seller of the year, on the other hand, will most likely fall to -- or fail to take interactive's grand theft auto. for more, we're joined by eric handler. welcome to you both. it's amazing, the last four releases have surpassed 1 billion in sales for activision. what's this one going to do? >> every year when you look at call of duty, it ships more than 20 million units a year. this is a year that should become another $20 million unit

seller. >> how do they keep this one fresh? how do they move the story on? >> well, it really makes call of duty unique, it revolutionized the online multi player perspective and it's almost become an e-sport every year. people playing with their friends, playing with groups, that's -- it's the online multi player aspect that really makes this exciting. >> do you go along with that? >> yeah, absolutery, i would agree. >> it's a lot of online gaming hours. >> it's a very different story this time. they've got two brothers commanded by their father and the dog is going to play -- >> you have a dog that works with you. but the great thing about this game, they've been focusing on evil dictators and things like that.

it kind of grows from an oil rich country in south america. very much like two different kinds of games. ign.com gave it an 8.8 out of 10. that's not the greatest rate, but it's scoring pretty high. >> you're going to have great levels of realism. the graphic will be better. so rather than 64 people playing

in a game, you might have a bigger number of people playing in one arena. that is in e-sports as well as other things. the whole idea of competitive gaming and people making money from gaming. that mean there's going to be a big focus on the prize games of this year. how important is that? >> well, the pride itself is what is basically unique. what makes unique is, you know, video games, it used to be you would play with -- you know, you would have your first campaign, you would play with yourself and you would move on to the next game. with the online element, you can keep adding elements from the company because you have an upline.. it's something that we haven't seen before this current

generation's cycle that we're in right now. and you just have more competing capacity as we get into the next cycles, there's more and unique things you can do. and you're doing the it in a group atmosphere rather than looking at just one person. >> thank you very much for that. >> okay. thank you to you both. now, still to come, we'll take a short break. the eu has cut its growth forecast in italy this year. i'm afraid that's not a game. but it says rome is on track to meet target deficits. find out more when we interview the italian minister of economy & finance. ♪

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stick with innovation. stick with power. stick with technology. get the flexcare platinum. new from philips sonicare. now, it's been nearly five weeks since the ee bam ma administration launched the health cacare.gov website. they're still working to fix glitches with the website. yakny deang his is looking at was going on and injoin us from hq in the united states. >> the centers for medicare and medicaid services, the agency responsible for overseeing healthcare.gov now says it's

going to take down the site for daily maintenance between 1:00 and 5:00 a.m. eastern time. the marketplace has been plagued by tech issues. just yesterday, the site experienced an unscheduled 90-minute outage making the application and enrollment pages unavailable. but tech teams have made progress in addressing various issues and believes that the site should be working more smoothly by tend of the month. president obama trying to deflect criticism over the affordable care act is vowing to press forward with the rollout at a rally of core activists who helped get out the vote for him during last year's election. the president asked for help to enroll people amid signs that early numbers would fall short of expectations. >> when you're undertaking something this big, this important, like health care reform, we knew we were going to get resistance. maybe not to the same degree as

we've gotten, but there's a reason why this hasn't gotten done before. and by the way, there's a reason why the opponents of this law throughout have never been able to actually offer a better alternative. >> "the wall street journal" says people are so far avoiding signing up for coverage. priority health, a michigan insurer, says the average age of enrollees has picked up to 51 for new commerce. that's a concern because older, less healthy consumers could drive up health care costs for everyone. left lane be more concerns into capitol hill this week and to work on the trouble with

healthcare.gov. >> jackie, i know you don't need a lot of help with a lot of things. but apparently google has now launched a new help house later today. what we want to know is this new google service for you? let us know. e-mail us, tweet@cnbc.com. regarding the thanksgiving turkey, would it be helpful if you could pull somebody up on your computer and have a chat with them? let us know what you think.

meanwhile, here is a recap of your headlines today. profits slide at bmw. france may miss deficit reduction targets. the eu warns tax revenues head on. and china's central bank ramps up its inflation watch. also, still to come, are we on track for an equities pullback? we'll be in philadelphia to discuss growing fears over a global equity bubble. are they real or not? all my students have the brand new surface. it has the new windows and comes with office, has a real keyboard, so they can do real work. they can use bing smartsearch to find anything in the world... or last night's assignment. and the battery lasts and lasts, so after school they can skype, play games, and my favorite...do homework. change is looking pretty good after all. ♪

impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. ahead of the u.s. open, u.s. futures are indicating a down start at the moment for u.s. equities. not by much. the s&p is he moment is around about 4 points below fair value.

around about 46 points below fair value. a recent strength in global equities has raised fears that markets could be performing a bubble. some analysts warn that a combination of stock prices and increased volatility might indicate that a pullback is on the horizon. brandie warren, chief investment officer of warren financial services, good morning to you. what is that telling you? >> yeah. the vix has been falling steadily since about october 10th when it topped 20. .now, it even hit below 13 yesterday. so that kind of indicates that we're definitely in a bull market. the vix is steadily coming down. the s&p is steadily going up. you can probably expect some choppy, you know, run in the next few days.

but we expect the market to pretty much continue to rise up and to year-end. >> what is driving that? >> mostly the thing that drives the vix lower is the s&p going higher. and the expectation of volatility for traders. it's important to use the vix as an indicator, though. we use the vix in our hedge fund to lower the volatility for our clients in their portfolios. >> yeah and what is driving the market higher? is everybody just chasing performance? they figure, look, you know, there's not much that's going to upset us between now and christmas? >> part of on it is chasing performance. i think there's a lot of big manageres from mutual funds to hedge funds that are a little bit behind on performance and would like to pick up some of that performance through year-end. and you're right, there's not a lot of big, major events that

are scheduled between now and christmastime. so people see the market just generally rising into year-end and they want to get a piece of that. and so with things rising pretty steadily, it seems safe for investors to jump in. we think it's pretty -- we agree with that philosophy, basically. >> okay. is there any indication that the market is overbought, then? >> yeah. definitely. it seems like the market is a little bit overbought. it's a little bit frothy. we may be pulling some performance in from next year into this year. but it's going to be data dependent. it's going to show in the economic numbers. there is a fairly good bull case out there in the sense that perhaps china is just now starting to recover. perhaps europe is just now start to go recover. gdp numbers that came out this morning, out of europe, 1.1% for next year, that's not too bad. going from contraction into expansion. so there is some possibility

that with the rest of the world, our trading partners, starting to do better, that the united states could also start to do better. >> yeah. slightly more down beat forecasts for the eu, the eurozone to the european commission than we thought. nevertheless, look, if we are getting this recovery building, what are the sectors that you would run into the holiday season? >> we're very much overweight the industrials right now. we like things like transportation stocks. here in the united states, there's a confluence of factors that are leading towards airlines actually making money for the first time ever. it looks like usair looks very, very strong. delta. some of the other travel stocks look good. there was just a chinese travel stock that ipo'ed the other day. there's a lot of good looking industrials in the united states that are looking very, very

strong right now. and those should do well going into year-end. and also the retailers are looking pretty strong right now, which is a little bit surprising. but they're probably going to have a decent christmas and a decent run going into year-end. >> randy, good to see you today. randy warren joining us from warren financial services the. now, i talked about the european committee in its forecast. it says italy today will stay on track with budget targets, achieving a 2.7% deficit limit next year. they downgraded growth to 2013. jeff has joined us on set and he's been speaking to the italian finance minister. >> and mr. saccamoroni will be delighted those numbers suggest they will meet their 3% limit. he has been at odds somewhat with the italian government's own statistical agency. and he thinks they will have better growth numbers in the fourth quarter of this year.

but that's not what i focused on. i wanted to know about the banks in italy, will they pass the stress test, and i also wanted to know whether they will see some kind of liquidity injection from the central bank this thursday. let's listen in. >> what league could be more effective is certainly the injection of liquidity, but also some measures that would signal that the stance of monetary policy in europe also is taking into account the fact that the euro is becoming very strong. because, you know, italy is very keen on promoting its exports and, you know, an exchange rate that nears 140 certainly is considered to be not facilitator for our expert industry the. >> do you argue in favor of that liquidity instrument? because italian banks are at

saturation point when it comes to buying the government's own debt? >> the latest indication are that italian banks are actually reducing their share of governing bonds, which was never bigger than 7%, 8% of your total assets. so to consider that this has been some sort of an implicit bailout by the italian banks is an exaggeration. given the high level of nonperforming loans on some of the balance sheets, do you worry that it may be an italian bank that ultimately fail tess stress test or is caught out by the asset quality review program? >> i'm a bit disturbed by this idea that asset quality begins to when the ecb would start doing it. you know, frankly, the asset quality review is the bread and butter of any serious supervisory institution. we estimate that the bank of italy is done and which has been

corroborated by the international monetary fund which hahn conducted recently the financial sector review show that even in the worst case, that you can make, the italian banks will completely wipe out the profits for this year. without making any dent in the capital structure. so i don't expect that there will be major prices. >> that fall interview will play on closing bell, but we're pointing out that he continues to argue the banks will not -- or italian banks, indeed, will not be the key failures in this stress test process. but a fascinating conversation. we talk about airitalia, we talk about the future for telecom italian. he says the government will not interfere. the market will be allowed to take its natural course. >> that would be refreshing, indeed. geoff, good stuff. thank you very much for that. right now, that's it for

"worldwide exchange." coming up next, the countdown to the opening markets stateside with "squawk box" pv. whatever happens, keep it here on cnbc. have a profitable day. bye for now.

good morning. the day's top stories, central banks on center stage. comments from china and australia overnight. plus, an ecb decision is coming later this week. in corporate news, jpmorgan talks with the justice department and reportedly gains momentum. they're back on. plus, it's election day and a number of states in key races have major implications for the national political stage. andrew has already voted. how many times did you vote for deblasio? >> five times. >> five times voted for deblasio. it's tuesday, november 5th,

2013. "squawk box" begins right now. >> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. we have a developing story out of new jersey this morning. a suspected gunman was found dead a couple of hours ago after at least six shots were fired at the garden state plaza mall in new jersey. the gunman fired at least six rounds after entering the complex at around 9:20 eastern time last night. thousands of shoppers fled, but no injuries were reported. scott cohen is on the scene and will bring us the latest in just a few memberships. but first, let's get to some of the morning's top business headlines. china's central banks says it will maintain policy settings to ward off inflationary risks and keep the economy on an even keel. preventing systemic