over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter.com/offer2. exchange." i'm ross westgate. >> and i'm jewel la live in rome. here are your headlines from around the world. italian president napolitano set to meet in around 30 minutes' time where he's expected to be formally appointed the country's next prime minister. could germany's fragile coalition be the next political victim in europe. the german chancellor forces her first crisis. disappointing day. the gdp falls well below

expectations. incompetent vestors don't seem that disappointed. and french wheat tells low after it told investors it took a $2 billion hit related to its stake in alston. >> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. and a warm welcome to today's program. we're going to be an extra hour longer, three hours, because of course the u.s. markets are still to come. we're going to kick off in rome where you're seeing jules is located. they're going to ask matte matteo renzi for more time to agree on their agenda. jules, i hope you had a nice week end in the italian capital. how tough are negotiations going

for mr. renzi. >> incredibly rough, ross. we are expected him to be given a mandate at 10:30 cet. there were delays in the talks. a angeleno alfano. he's talking about a german style pact here. he wants to set out the forward progress of this coalition and what reforms are going to be enacted. he, of course, broke away from berlusconi last year. since then he very much wants to protect the party support and what he does here, and this just crystallizes one of the issues that matteo renzi is going to face. we've had berlusconi speaking, he's never far behind, saying that he seems to be in tune with matteo renzi. that's a criticism. he says he'll continue to

support electoral reform, and this, of course, one of the crucial issues that matteo renzi has to face once he pulls this coalition together. people in the cabinet are standing back saying we're not going to be in the likes of the ceo of luxotica here. it's been a very quick change. a lot of people are second guessing just what will happen next. for now we're going to be waiting to see him formally handed to be that prime minister and then start work on just what he does with this cabinet and this coalition going forward. we're interesting to see all of the crucial elements. berlusconi's party, we'll see what he thinks of the changes and the idea that they want to hold on to this cabinet and this government until 2018. i'll speak to a senator, luico malan. that's coming up in 30 minutes. >> absolutely.

we have a strategist from monaco securities. mark, despite political changes, what do you see? >> potentially. he's better than mr. letter who was going absolutely nowhere and was never going to achieve anything. i think mr. renzi sets up some very, very highfalutin and high grade goals but i can't see how a government -- >> if he's the great hope and he fails, where does that leave us? >> i think there's two things. first of all, most important thing is whatever government is initiated for however short a time period, it needs to bring in political -- a reform with a political biting system. that in itself would be a great achievement. at least then if we go to newer elections we're not going to end up with the same situation we had before.

if he can cobble together something else, it will be very good. i suppose the big questions are mr. renzi is being tauted by a new berlusconi in terms of being the new force for italian politics. he's also being compared to tony blair. i think both the comparisons are somewhat unfortunate if one looks at both of their legacies. if he can forge some form of government, it will be good. i think it will take a long time. italian politics is, again, becoming rather vulcanized even within its own p.d. party and the p.d.l. you know, they're all somewhat broken up now. it's reassuring for them that they've been given effectively a little bit of time by the ratings agency with moody's moving them to a stable outlook. i think it's interesting from that aspect that effectively what moody's is saying is the negative feedback loop between the sovereign and the banking

sector is not as acute as it was. well, we'll see about that because at the end of the day some form of government does need to be formed. i think there's grounds for optimi optimism, but i wouldn't want to overstate them. >> you mention the connection with moody's downplaying. clearly skeptical. much depends on growth rates because the economics aren't going to get -- fine. they're no longer in resection. that's what the flash estimate told us last week. that's nice, what, after 11 consecutive quarters or something. there's some growth. the debt dynamics gets worth? >> the debt dynamics gets worse and the youth jobs get worse. they feel largely disenfranchised. for the younger generation mr. renzi represents a break with the past. whether he actually lives up to that hope, of course, is a completely different issue.

>> well, it may be out of his hands. >> it's meant to represent the break from the past and very much not. >> it's kind of in a sense out of his hands. he has to do deals. >> he has to do deals. deals always have to be done in italian politics. it's quite a difficult deal because on one hand he's trying to deal with mr. alfano and also dealing with mr. berlusconi. i don't think he can forge a coalition which involves both parties and that in itself is a problem, particularly as there are also a number of people within his own party who would -- don't really like the way that he's gained power so there are a lot of -- it's a very, very rocky road ahead. >> yeah. to say the least. marc, you're with us for the first part of the show. german chancellor angela merkel set to meet her coalition partners in a bit of a crisis in the forced exit of a conservative expert.

annettea is there. why is this one more important than any other? >> actually, because it had a little bit of a dirty secret story behind it. allegedly the gentleman who left on late friday has told one of his spd colleagues more or less confidential information regarding someone else in the spd being investigated regarding allegations of having child pornography stuff at home so now the spd -- the csu is saying their minister actually only had to leave his job because he was honest and told and warned the spd of that forthcoming investigation from the attorney general. so that has happened in the past. now over the weekend with them stepping down as well because angela merkel has stepped up

pressure on him, the csu is demanding some personal consequences as well within the social democratic ranks. one of the problems is the whip who is allegedly coming under more and more pressure. what does this all mean actually for the government? of course it was only a small affair which eventually developed into that big government thing now. angela merkel has the huge challenge to really calm everybody down again because don't forget this coalition has to work together. they have to ratify projects together and currently it doesn't really seem as if they really get along with each other very well because there are huge allegations coming from the csu. they're saying that the social democrats have ruined the trust in each other. now back to you. >> thanks for that, annetta. that's the latest on the german political scene. let's see where we stand with global markets today.

we are 1:10 into the trading day here in europe. you can see we're just about weighted to the up side at the moment on the dow jones 600. 6 to 4, more like 6 to 3, advance ser outpacing decliners. the ftse 100 was up and we had a second week of gains for the dow and the s&p and the nasdaq. the dow and s&p up 2.3% and the nasdaq up 2.9%. ftse 100 up. and the cac up as well. a couple of individual stocks that we're keeping our eye on today. the peugeot family will meet to see if they will give their blessing to the recapitalization of the family. that's needed if they're going to take direct stakes as planned. the stock up just about 1%. puig is down 3/4%.

it will take a write down reducing the value of the turbo maker's value sheet to just over 3 billion our ross. check in on the currency markets today. stirling, big move last week. up near three-year highs on stirling. 16762. a basket of currency. have minutes coming out, inflation data tomorrow, producer. it's going up. it's going up because they think inflation is going up. if you reduce inflationary pressures, it makes it less likely. dollar/yen, 101.82. kind of where we finished last week. europe dollar ticking higher to 1.37. that's where we stand right now here in europe. i mentioned that japanese data, how is that going down in asia? let's get more about that.

sixuan is with us. >> there's disappointing private consumption. markets are now, in fact, expect the b.o.j. to hold firm to its current plan in the policy meeting that ends tomorrow. the nikkei did end higher by .6%. over in china it's a mixed bag for bank shares despite strong bank loan data. licker ma link licquor makers are up. down under the asx hit its three-month closing high. and minors clocked in very strong gains today. among other activitictiveactive are strong.

meanwhile, chinese aviation firms also among the top gain ners today after local media report that china is soon to release a blueprint on low altitude air space management so look at aero engine surged up by 10%. that's a look out of the asian markets. back to you, ross. >> sixuan, thank you. the strength of japan's economic recovery is in question. gdp coming in below expectations. are all those arrows miss firing? we'll be in tokyo to find out. fifteen minutes could save you fifteen percent or more on car insurance. everybody knows that parker.

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. our lead story, italian president napolitano expected to meet with matteo renzi and appoint him prime minister. can renzi achieve more than mr. letta? >> well, this is a good question. he will have to deal with when the same about the same majority mr. letta had. this remains an open question. certainly he's a very charismatic person. certainly he would try to give a

kick to the reform process, but at the end of the day he would have to deal with the same people. so how much he would have to compromise remains to be seen? that's what really would drive his success or not. >> what are the expectations that are going to -- are investors going to build in? and does it make any difference for italian asset prices? >> there are a lot of expectations with respect to what mr. ren zi can do. we know he has a strong endorsement coming from employers but also from labor unions so definitely there is some big expectation of the lever in structural reform. the real issue is by how much he will have to compromise. how much mr. alfano, the new right party, will try to raise the barr when it comes to drafting the new agenda, the new government and whether mr. renzi will have to compromise a lot, again, remains to be seen.

we are optimistic on this, but we also know -- with respect to asset prices in italy, well, i think short term, the changeover in government should not have any major impact. it's more important to see that on friday there was moody's bringing its rating out back to neutral. i know global funding, possible government and possible improving in the economic funding. this in the short term is going to drive the market. mr. renzi can make a difference with the perception of italy's long-term goal potential if he's a reform mat is successful. >> thank you for that. now abenomics has hit si set back in japan as gdp missed its mark. they're all holding back the economy with just .3% in the fourth quarter.

they're expecting a gain of .7. this data comes as the bank of japan meets for a two-day policy meeting although it's unlikely to meet its mark. joining us from tokyo, the chief economist for japan at namura. good to see you. are you worried about this number? does it suggest that abenomics is failing? >> not really. the good news about what was announced today is that we have seen private investment and also the private consumption gaining traction. the bad news is that obviously the exports was not -- performance was not as strong as we had expected while the imports actually surged. so that resulted in the negative impact on the gdp growth rate. >> what happens now? i mean, these expectations,

because you have the sales tax hike, consumption is being brought forward. is that going to happen? >> yeah. the one reason that -- why we had seen the rise in imports is there's a rush demand before the consumption tax rate hike and so i think we are going to see the acceleration of growth in q 1 this year but q 2 just because of the consumption tax rate hike, we will see negative growth. we think the negative growth period is just one quarter and japan should be able to recover in the third quarter as the exports and the investment picks up. >> just a question with regards to the infamous third arrow of abenomics. it seems to me that while there may be a little fog, q 1 gets better, q 2 not so good, but what's mr. abe going to do in the long run in terms of implementing structural reforms

which will give this recovery rather more traction? >> yes. yeah. that's a good question. we think that mr. abe is going to announce the second round of growth strategy sometime in june. he's going to focus on the labor market reform, medical reform and also the agriculture reform and these are the kind of necessary items to -- for japan to move forward. we recognize that without the serious labor market reform that japan's labor force is likely to decline by about 2 to 3 million people by 2020 so we need to do something on this front and i think the government recognize this factor. >> good to see you. thank you for that. joining us from lemur. marc, have investors got it right in japan? >> i think at the moments it's a bit of a chopping and changing

game because there's so much uncertainty in the world and because japan ironically is perhaps one of the only g7 countries which isn't going to have a lot of weather impact on q1 and q2. it is right in the spotlight of us maybe being able to form a judgment. i think they're all grounds for optimism, but i really do want to see what mr. abe -- >> we've baked a lot of optimism in, haven't we? >> yes, we've baked a lot of optimism in and mr. abe needs to deliver on these structural reforms because i think the love in, so to speak, with the current b.o.j. policy will start rather thin unless we see some improvement. some of the data we've had is quite worrying. not only have you got the weakness that we've seen in the gdp data today but orders for q 1 are expected to fall by 1.4% on the quarter.

that hardly suggests an economy with a loss of momentum. given the concerns about asia broadly, you really are going to need to see some of those i shall shan kasian countries picp which are the missing link at the moment. >> you mention you say they're not dealing with any weather issues unlike southern england and wales which have been battered by gaels up to 80 miles an hour. floods account for 13% of gtp while pwc says the economic costs could top 630 million pounds. so far the british government has pledged 130 million with cleanup costs. we're joined by nick dixon. nick, what's the situation like

today? >> reporter: well, good morning to you. the situation is the rain has eased a little bit this morning. there's more on the way though, and to be honest, the break in the weather has come a little bit too late for folks here. as you can see, so many people have had their homes absolutely devastated. if you look here, these guys that live in this house, they were evacuated on tuesday of last week. they tried their best to save some of their furniture, but it hasn't happened. the carpets are absolutely soaked through. the house is completely flooded. that's one problem. in addition to that, the folks here also have a contaminated house at this point because the toilets in this house, the sewage from the toilets pumped out with the flooding into the house and it is now riddled with bacteria, hence, i have to wear gloves. we have to be very careful what we touch inside the house. obviously it's been devastating for the family. the kids are having to wear masks over their faces because of the stench because of the bacteria is just absolutely horrific. guys, good morning to you. i'm so sorry you've had to deal

with all of this. sandra, how are you been coaching? >> we've each got a carrier bag full of clothes because we can't come back to the house. the hotel that we're living in, we're there till friday but we don't know what's going to happen after that, whether we're still there or where they're going to put us or whether the council is going to help us. we just don't know day to day sort of thing. >> i mean, over the last week or so since you came back, you've pretty much lost everything. >> we've lost everything. everything is gone. these two keep having nightmares. they're frightened they're going to drowned in the flood. i've had this one keep crying where she wants to come home. we all want to come home basically and we're looking about eight, nine months before we can get back in. >> beyond friday, yo you are' staying at a hotel. you don't know? >> we don't know until friday. >> the government hasn't told us. >> all right. thanks for joining us this morning. >> thank you.

and more flood warnings in place this morning in southern parts of england and the southwest. people like these guys are looking of maybe a year of being out of their homes. >> nick, thank you for that. that's the human cost of the floods. thank you for bringing us that report. thick snow has blanketed areas of japan over the weekend as well leaving 12 people dead and thousands without power. most of the snow around tokyo melted on sunday. travel and work disruptions persist in other parts of the country. suzuki says production has halted at three of its plants because of the heavy snow. every week cnbc is asking you to talk the trend by taking part in our online poll. this week we're asking which sector are you betting will be a bad weather winner? head to trader poll.cnbc.com. cast your vote. you can have your thoughts on twitter using #traderpoll. now don't judge a company's been its title. china's gold leaf company might

be an unlikely suitor for the texas company with a $665 million 3wbid for e.r. resource. the energy assets will help it avoid overly focusing on processing gold jewelry. so what's the oldest mna deal that you remember? what made no sense? there's a few of us. join the conversation on worldwide exchange. get in touch with us. e-mail us, tweet @cnbcwex or chat me @rosswestgate. think about that. there's a lot of mergers that proved to have made no sense. still to come on the program, has the demolition man already run into an italian roadblock? prime minister matteo renzi says

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and the headlines from around the globe, italian president is expected to meet

with matteo renzi. could germany chancellor face her first political crisis after being forced to fire a minister over the weekend. disappointing data out of japan. gdp falls well short of expectations. investors don't seem that disappointed. and they're trading low after they tell investors they're taking a $2 billion hit last year related to its stake in alston. italian president napolitano set to meet with matteo renzi where he's expected to formally appoint him as prime minister. matteo renzi has promised radical reform for the government he believes can hold power until 2018 although some of our guests this morning are far less optimistic.

>> italy has more deputies than the united states. italy has more senators than the united states, and all these senators get paid more money than american politicians. now this is exactly the type of reform that renzi is going to make and he's going to have enormous, enormous difficulty. they're going to eat him for lunch. >> he cannot do much. he's a good guy. he's the youngest guy ever. mr. letta was doing an excellent job. but what can they do? they can not do nothing with this treaty that we signed, as i said, march 11 in 2012. we will have 22 consecutive years of budget cuts of between 45 and 50 billion so what can they do? >> i'm not so optimistic on how it's going to work because he doesn't have the necessary support, the necessary backing to implement these reforms because some of these reforms

are quite unpopular and you really need strong support from a party in the parliament when you want to implement such reforms. and this is the room where mr. renzi is going to have the meeting with president napolitano. let's get out to jules who's also in rome. jules. >> reporter: thanks, ross. pardon me. start choking here. yes, he is expected to give matteo renzi the mandate to form a government here, the question is what next. there was speculation that he would take it back to florence to talk to his people there and work up just what the plan is going forward and how they address that. he may also meet the new center right leader, ang leino alfano to talk out further details of how this coalition works but, of course, another key element here is going to be mr. berlusconi and his part in the electoral reform process. the two have signed a deal to push this forward. i'm joined by a senator of the

italia party, senator lucic milan. if he can produce on the reforms promised he'll be the best senator. >> if he does. if he does. we hope he will. we hope for the best for italy. what happened so far is not so encouraging because he has taken the place of mr. letta after weeks and months of promises of not disturbing him, just supporting him in his work as prime minister. so what happened, the first steps are not good ones. we hope that the next will be better. we have an agreement with him about the reform of the electoral law that has been ruled unconstitutional by the constitutional court. we want him to keep his promise, keep the word and approve this new law. >> perfect. no matter what happens, you are to continue to support reform to the electoral law here? >> well, we will support of

course these reforms, but we take also account of the fact that the electoral law has been ruled as unconstitutional and we vow the majority that was under scrutiny, this government wouldn't have the majority. that's right in the senate nor in the house. so this is why letta had kind of a mandate of 18 months and now thinking of being in the government for five years, i think it is not justified by the circumstances. we should make these reforms and then to vote as it was agreed. >> is that what you're going to push for them? as soon as we get the electoral reform signed off, you're going to push for new elections? >> new election is what we would like to have. since we are not in the majority, doesn't depend on us, but i think it would be just the fair thing to do. very normal. we have a parliament that is structured around -- after a low

that has been ruled unconstitutional. there is no reason to keep going with a government that is just based on one party, democratic party, and other very little parties who have very little support in the people -- among the people. >> do you think as we go forward here that even if matteo renzi fails these reforms, he can turn around and say, i tried very hard and the people will be with him, or is that an opportunity for your party and mr. berlusconi? >> currently, all the parties say we are in the lead. the center right is in the lead. this is why they are doing anything to avoid elections and then of course the people will judge and people are the rulers in democracy and we like that. but we like it also when we are in the lead. >> mr. berlusconi said this weekend actually that he was in tune with matteo renzi and that he rates him as a politician.

what was he doing there? >> he was in tune because we made an agreement about the reform of the electoral law and some institutional reforms. we are not in tune with many of his proposals and then we will see about the economic proposals. there are those about we had the most disagreement with letta cabinet that raised taxes and caused the highest unemployment rate in decades and the highest public debt. that is not a good combination. >> interesting point there. no matter what happens here, mr. berlusconi's department saying they will stick with the electoral reform. back to you. >> absolutely. thanks very much for that, jules. more to come from jules in rome. take a look at where we stand as well with the spread zone here. ten year italian gdp, we're down

to the lowest levels since may 2006. marc, no shortage of appetite for italian paper. >> yes, i think there are a couple of things to take into account. one, we do know that the italian and spanish banks were, because of aqr, asset quality review of the ecb requirements, sellers of their local government there at the end of last year and it would appear from the flows that we've seen that they've been very strong buyers at the start of this year as they replenish. >> does that continue? >> i think it's probably largely starting to run its course. the moody's -- well, the upgrade to the outlook, one should say, is certainly a positive, but we're getting to that point where we have to look at this a little bit more closely. it's not just about the spread, which still looks relatively large at close to 200 bases points, but also the fact that there are other alternatives outside of the euro area, above all, u.s. treasuries.

if we believe that u.s. treasuries can be quite stable, then that 90 basis point premiums, the btps in ten year terms have over u.s. treasuries isn't exactly a lot. and if it narrows too far, one can see even the domestic investors in italy saying perhaps while the euro looks a little too strong against the dollar, particularly as people are still saying that the euro is too strong given relative economic reform to the u.s. i wouldn't say it's a sell but i wouldn't want to be accumulating anything more at this particular point. >> fair enough. you mentioned the u.s. we had a big drop in manufacturing output last week, .8%. biggest drop in eight years. where do you stand? there's a combined question here. weather related economics, frozennomics and global growth. what are the chances global growth will be weaker than many have thought this year and,

therefore, the implications for asset prices in terms of equities and bonds? >> in terms of the u.s. specifically, i remain fairly optimistic. i think we're going to have to have a long period where we're going to have to look through a lot of this underlying data, weather affected data. it's going to be extraordinarily difficult. i think what was -- >> the taper taper? >> i don't think it's going to have much impact on the taper. i think ms. yellen as much as she won't express it explicitly is keen on getting rid of qe. she can't see where the benefits are and it is about that cost-benefit analysis. the friday data that we had was the auto sector lost quite a lot of momentum. whether that's actually demand related or weather related is written in the stars. i wouldn't want to prejudge that. i think the u.s. has good

momentum. i think overalthough in terms of the debate on global growth, i think there is probably too much optimism on the developed world outside of the u.s. there's probably too much pessimism on the emerging. >> they might -- which will probably cancel each other out. i think in some of the countries which we were worried about before like indonesia are carrying some positive signs. >> thanks for joining us today. mark oswald, strategist at monument securities. now stocks of japan's largest shopping mall plunged on friday. it was after the prices had closed. we have news from the nikkei from tokyo. hi. >> reporter: hi, ross. the shares were down 13% at one point and finished 9% lower. purchasing viber will cost the

country $900 million which is more than double the profit. the online retailer says the cost is justified since it will bring in 3 million users to expand the business global gli. market analysis are skeptical. they also booked a net loss of 29 million last year. the core businesses in online shopping and traveling services are strong and operating profit for 2013 has jumped 80% from the year before to around $880 million but whether it can gain from this buyout remains to be seen and that's all from nikkei business report. back to you. >> thank you. have a good evening. still to come. london fashion week is underway in the capital but this season it's not all about the clothes. why not? we'll find out what legendary designer vivian had to say about all things, fracking, rather

than frocking.

india's finance minister is

promising to wrestle down the deficit. they say the deficit will come in 4.6% of gdp this year but his goal is to cut that down to 3% in a couple of years and he wants to set up a public debt management office to help out. we have more from cnbct in mumbai. hi, heckta. >> it's impressive in the budget. it will be capped at 4.6 with estimates of 4.8% in fy '15. what was more interesting, this is the last budget that was announced before the national elections come on board is that the fy '15 will be capped at 4.1% of gdp. now most of the market will be back with that on the positive size but now there is some amount of skepticism rising on

how exactly that 4.1% estimate will be met. for example, there is an estimate that there will be a gap close of 19% coming in. remember, this comes at a time when the tax estimated growth for fy '14 should have 19% but we've only managed to do 7% of the nine months of fy '14 indicating that this may be a bit more optimistic. in fact, the finance minister himself is talking about the budget. >> fiscal deficit for 2013-'14 will be contained at 4.6% of gdp, well below the red line that i drew last year. more importantly, the current

deficit that threatened to exceed last year's amounts 88 billion will be contained in u.s. dollars, 45 billion. >> let's give you a look at what's on the agenda. thanks for that, ekta, by the way. the bank of japan will get a chance to react to gdp data whilst in australia the rba releases minutes from its february minutes when it dropped its easing. and in hong kong bank of east asia and macau legend report as well. the french industrial group puig has taken a write down. stefan has more for us. hi. >> hi, ross, that's basically a profit warning this morning. bouygues says it will take charge of 1.4 billion our rows to reflect its 29% stake in a

french engineering company after they lost 37% in the last 12 months and that's the reason why bouygues is taking this down to the last quarter in 2013. the company says it will not affect its cash position and it will not impact its operating performance, nevertheless, it's going obviously to impact the net result and we're not expecting them to be unprofitable. before this announcement this morning the average announcement is profit of 746 million our rows. the revenue would be a statement of 33.2 billion our rows. they're expected to report its full year results on february 26th. we are now, as i was saying, expecting the company to expect a full year loss for 2013. >> stefan, thank you. a fashionable man is stefan so it will be interesting this next story.

the glamorous crowds in london as the capital's fashion week is well underway. our next fashionista, karen went down to the shows to find out what's hot and what's not. >> 2014 has been hit and miss so far with fashion industry profits, but here at the biannual showcase in london, designers are doing all they can to fire up consumer spending. >> trends show layering and a bit of help of intricate detailing. they're looking to the future. pringle of scotland is steeped in history. the queen is a customer. it hasn't stopped the country from venturing into the country. 3-d printing was used to create these. >> it's a change from many disciplines such as design and also design architecture is

being uselized for architecture. it is the first time that 3-d printing is almost woven and interconnected, knitted together with something which relate fashion and garments. >> here at vivian west where despite the bevy of activity, the aim of the game is to sell less not more as the designer strives towards sustainability. >> quality doesn't hurt the planet as much as quantity. >> and it wasn't just restrained consumption. the designer used her show to highlight the case against fracking in brittain. >> everything is being done for a quick profit. you know, that's what we're doing with fossil fuels, that's what they're trying to do with fracking and everything. quickness. get it out and then it won't be there anymore. a few people will have made a lot of money and it's just absolutely terrible what's happening in the world. >> emerging markets once a

source of huge sale growth for luxury brands have become a sore spot for some in recent months. companies have rattled investors with warnings of slowing growth in asia, but it's not all doom and groom. swatch recently said 2014 was looking bright especially in china. pringles design boss says fashion brands need to start thinking about the emerging market customer differently. >> the market is becoming more global. the emerging market, very knowledgeable market. we have a very interesting scene in china. pringle is offering new shops. chinese customers learn very quickly. >> but whatever 2014 holds, the fashion industry still gives a stylish boost to the u.s.

economy. there's a more than 20% jump from four years ago. this is karen cho reporting for cnbc in london. joining us is the managing director at cantore fitzgerald. good to see you. thank you for joining us. how important are these shows? >> it's difficult to put a number attached to them, but i think increasingly important. mostly because as a result of these shows the companies are able to really flex their fashion muscles and get credibility which ultimately feeds into raising brand awareness, creating just a know how of the brands and also ultimately leading to pricing power and it entices customers back into stores. it's just one component of communication which is an increasingly vital part of a luxury brand strategy. >> to get the brand awareness out, right? how much do firms spend on marketing their brand? how much bigger chunk of money

does it take in percentages? >> it really depends on the size of the company, but i think typically the range is 10 to 12% of sales. that can really change depending how big or small a company is and how well the brand is known in the newer markets. it all depends on how you define that. marketing comes in many different shapes and forms. clearly communication is one part of that. there's traditional print media but there's digital marketing with i is a whole new area for these companies. stores are actually marketing to themselves as well. especially in newer markets where the brands aren't as well known, opening stores in key locations is absolutely critical in order to establish that brand presence and awareness, not only for the local trade but also for when those consumers travel into more developed markets and, you know, we recognize the brand because they've seen it in their own market. >> it's a big year. the ceo christopher bailey has the creative talents, what's the outlook? what's going to be the key for

them as we go into this show? >> i think burberry has been an incredible company. double digit organic sales growth. that's a really impressive performance. i think it's done really, really well. the strategy's been very consistent over the past five, six years. they've delivered well on those strategies. i think there's a number of different factors behind that but ultimately the elevation of the brand within which communication has been a key part has been very successful. now looking ahead, i think in the management transition, that's probably one of their biggest risks. clearly any time you have a senior person leaving the k company, there's a transition risk. i think given how well respected she is, that risk is greater. on top of that, they've given christopher bailey two big jobs within the company.

he's not only leading design, he's also going to be ceo where he's relatively untested. there's no doubt to me that he's a very talented individual. i think it remains to be seen whether he can manage that position and assume those responsibilities successfully especially after such a big example and such a big person to follow. >> when you take the sector that burberry trades in, the luxury fashion sector, a little under the impression and under pressure some earnings downgrades. where's the bright spot? >> i think this is a momentum driven sector. as long as there's earning downgrades i think it's difficult to make any valuation case for the sector even though it argues the multiple doesn't look particularly stretched to these levels. the issue for the cycle stems from two factors. firstly it's fx. with the strength of the euro and the pound versus many other currencies there's been the translational impact which ultimately even though it's not necessarily a reflection of the underlying business leads to

lower numbers and lower earnings and therefore the multiple contracts. first and foremost, especially within soft goods, you've had repositioning strategies and ultimately it's all about he investing for the long term and performing and enhancing brands. that may come at the expense of short-term growth. we've seen that being the case the last couple of quarters. those repositioning strategies will take time. >> logan, good to see you. thanks so much, indeed, for joining us. we'll take a short break. we'll be back in rome where president napolitano is locked in meeting with matteo renzi. what a lucky pair. we needed 30 new hires for our call center.

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. in terms of democratic legitimacy. there's nothing unusual about that. >> quite, exactly, you know,

there's something to be dissatisfied there and it's no worse than it was before. and, in fact, he's got a great deal of support within parliament as opposed to a bit more specific bet of the president. >> yeah, clearly we continue to see demand for italian and spanish paper as well. was thinking, you know, i'm not sure i'd actually buy anymore of this. it's starting to look rich. what do you think? >> yeah, i think that's certainly the case. versus european spreads. >> basis points. >> yeah. >> remain very positive. but at the same time, the kind of spread over things like treasuries is really beginning to seem quite bizarre really comparing the economic and political environments in those two regions.

>> yes, but 80, 90 basis points. guys, stick around, more to come from you. >> now, german chancellor angela merkel is set to meet her coalition partners in a bit to head off a crisis over the forced exit of minister crisis meeting with her own party. and more details on this. just explain exactly what she's doing. >> actually, we're just hearing it's not a coalition meeting, it's a crisis meeting of the party leaders. only angela merkel of the sister party, csu, and the spd. and that's a clear sign that this affair around the stepping down late friday has actually evolved into an affair or crisis for the government. now, again on the table how they

want to cooperate together. the head of the csu is saying the topic of tomorrow's crisis meeting will be how we are going to cooperate in the future. and that's only two months after the grand coalition actually has been sworn in. so, you see, it is very difficult to operate in that grand coalition above all because they're a huge reform project and, as well, a tremendous change in the way germany is planning to form foreign politics. still a lot of claiunclarity he. >> that's the latest on the politics. what about the markets. the first cnbc global 300 is currently just up 12 points. the ftse last week was up around 1.4%. this morning, over 2 hours into the trading session, a little bit higher during the session,

flat elsewhere across the eurozone landscape. no treasuries yesterday, we're out in the united states. yields in germany, a little bit high. and in the uk, keep our eyes on this, 2.8% is where we stand. sterling up to 3. expectations is rates might go up this week. this is after the bank of england last week raised their forecast for growth and hinted if inflation stayed where it is, we might see rates in 2014. we've got minutes from the last bank of england. and inflation data tomorrow which may slip below 2% on the cpi level. if inflation stays low, there would be no reason to raise rates. aussie/dollar, batting off the 3 1/2-year lows.

dollar/yen below 1.02 at the moment. and euro/dollar, just a tick high back up to 1.37. that's where we stand here in europe. the update for us and the reaction to the japanese data in singapore. >> japan's latest gdp numbers indicate a disappointing private consumption, business sentiment and shipments. holding in the policy meeting that ends tomorrow. so the kninikkei managed higher by .6%. despite strong bank loan data, but cyclical sectors, liquor makers and aviation stocks outperformed on better market sentiment and also hopes of supportive policies. so the deposit ended higher by 1%. and rallied almost 2%. in south korea, ended near their four-week highs, up .3%.

and australia hit the three-month closing high thanks to solid earnings. we also saw a rise in copper and gold prices. australia miners are clocking strong gains while the aussie/dollar inched toward the one-month highs. financial stocks in south korea rallied thanks to a strong buying from foreign and institutional investors. this helped by sentiment after the exports numbers last week and also the eurozone gdp data. that's a recap of the asian markets. >> thank you. that's the latest as we say out of singapore. we'll take a short break. still to come. we'll keep our eyes, of course, on what's going on in rome. waiting for mr. renzi to be appointed the next prime minister. [ children yelling ]

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you're watching "worldwide exchange." >> the headlines today, currently locked in a meeting with the italian president. expected to be announced prime minister. a political scandal divides, merkel set to hold crisis talks. and japan's economy grows less than expected despite forecasts for a jump in spending.

google's acquisition fears continued with the tech firm revealing it acquired the israeli start-up. the authentication firm verifies users' identities by using sound waves. the financial details haven't been revealed. google recently purchased nest for $3.2 billion. shares in google up 40% over the last six months. warren buffett's berkshire hathaway has unveiled the latest buys and sells. dumped stock in dish network while adding to the holdings in goldman sachs. the firm also added substantially to the stake in general electric and usg. and the presidents' day holiday stateside has delivered a temporary pause to earnings season, a season so far fairly positive. s&p 500 companies have reported

results, 66.3% beat them. that's above the historical average of 63%. guy foster still with us. was it enough, though, in the forecast about revenue, guy, to keep us chirpy? >> i think the general ratios of beats to misses have been pretty reasonable. there's greater concern, really, about the outlook. and i think a lot of those results particularly in the u.s. have been supported by the weakness of dollar which is certainly something which investors continue to expect is going to unwind over some stage of the year, albeit at the moment it's not happening. >> 2013 looks set to be unwarranted and we've unwound that a bit. is it going to be a rather difficult sort of first six months of the year do you expect? >> first month or so, obviously, we have seen a number of disappointments. but you could see that surprise

indices and the general balance of bullishness to bearishness had certainly got to elevated levels. and now we've got us a slightly more challenging economic environment. we've had big weather-related impacts. i think you have to accept the fact that could weigh on economic activity as the year progresses. but in terms of what that means for asset classes, it's probably quite positive for risk-on assets because it's going to push back at the point you start to see any kind of tightening from central banks. and that's been the biggest concern that i think a lot of people would have as they move into 2014 and 2015. >> yeah. even if we get softer data out of the u.s., do you think take the -- and we cope with that okay. >> well, you know, there's a lot of things to be concerned about in terms of that. modestly weaker data, we will

not upset the fed's plans in terms of its tapering ambitions. the thing that the -- the problem the fed has is last may and june, it laid out this timetable for tapering. it kind of really has to stick to it to a certain extent because that's killed issuance in the mbs market and made it much more difficult to reverse that policy. it's not going to be able to continue buying as many mbs and treasuries as it has been able to in the past. >> guy, stick around. more to come from you. also, don't judge a company by its title. china's gold leaf jewelry company may seem like an unlikely suitor for a texas oil and gas operator, but the asian gold retailer is looking to diversify. it's tabled a $665 million bid for erg resources. gold leaf says it will finance through nearly $1 billion private placement through investors. and helping it to avoid what it

says are overly focusing on processing gold. some sort of diversification. what's the oldest m & a deal you remember? if you want to join the conversation, get in touch with us, e-mail us, tweet at cnbc, or direct to me @rosswestgate. think about that. a few failed m & a deals. still to come, difficult if not impossible. that's the opinion of eu commission president. we'll look at the political hurdles for scottish nationalists right after this. first the cookie at check-in...

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>> it'll be extremely difficult to get the approval of all the other member states. to have a member, a new member coming from one member state. we have, for instance, spain has been opposing the recognition. for instance, it's to some extent a similar case. it's a new country, and i believe it's going to be extremely difficult if not impossible. >> yeah. i think he was sort of commenting indirectly, directly. joining us is sam bowman, with us is guy foster, as well. sam, good to see you. >> good to see you. >> we're going to hear from him, says if you leave the union, you leave -- you can't have currency union, basically. they don't have to give up the pound, though, do they? >> well, that's exactly it. everyone seems to think that

currency union means this is the only way to continue using the pound. what it means is the central bank will consider your interests when it's devising money policy and act as a lend every of last reporsort. i'm not sure how important they are as it is, i'm not sure they'll be giving up that much there. what's interesting is to look at countries that have adopted the dollar without the permission of the federal reserve. panama, ecuador and el salvador. and according to the federal reserve of atlanta, which did a study very recently, they have much more stable financial systems than their neighbors. >> because you know you can't print money and you're not going to get bailed out, presumably -- >> that's exactly it. >> you've got to behave yourself. >> we're always talking about moral hazards when banks know they're getting a bailout. here, it's impossible for the bank to bail them out. the government, i suppose, could if it wanted to, but it would be very, very difficult to bail out

rbs. what we would see, i think, possibly, is rbs moving south of the border because they'd get that bailout. that's something that scots need to think about. >> well, part of lloyd's. >> true. >> it is an english bank. >> true. but many of the operations are north of the border. and there's a question about whether that would be bailed out or not, or whether they would have the same kind of heft. >> well, it's a wholly owned unit of lloyd's. if lloyd's had a u.s. business that got into trouble and lloyd's took the hit, i don't know who would be -- >> it's a good question. >> i don't know. i'm just working that out. rbs -- the interesting thing, what happens with rbs. >> exactly. >> it's zoned by the government. >> yeah. >> majority owned by the british government. >> i think that's an open question i don't know the answer. but what is interesting is that actually scotland had a system very similar to the one it would be implementing during the 19th

century or early 19th century. basically the scottish free banking era was a golden age and all it meant was that banks were free to issue their own notes as banks currently do as promissory notes on reserves. the difference would be, there wouldn't be promissory notes on gold. it could be bit coin if they wanted. what you probably see is a much more stable financial system. you'd have banks with much, much bigger reserves than they currently have. and -- >> we'd go back to the days of prudent scottish banking, right? >> that would be -- that's the wish. but the problem is that the smp don't seem to be too keen on this. >> they wouldn't be able to tax and spend willy nilly. they'd be in a straight jacket. >> this is it. and it is a funny question. i'm not sure scotland really needs to be in the eu. i'm not sure it needs to be in a currency union. but the vision of scotland seems to be a socialist model rather than the open one it could be.

>> very briefly. as an adam smith institute, created of a famous scotsman, where do you stand on? do you have a current position? >> no, we don't take a position. it's up to scots to decide. i'm irish myself i can understand why they might be in favor of it or why they wouldn't be. but whatever happens. >> you wouldn't come -- the institute isn't coming out with an economic yea or nay. >> no. >> research director at the adam smith institute. now, there's plenty of action in sochi over the weekend. tom mackenzie has been taking a look back at day nine. >> eva samkova took gold in the women's snowboard cross. the first time the event has featured six riders rather than four. samkova was pushed all the way

with dominique maltais. a fourth consecutive olympic gold in the event clocking a time of 1:18.14. silver went to american andrew weinbrect. germany with seven golds, but the dutch one two three means the netherlands are second and norway move into third. >> right. that's the latest on the olympics. still to come, mark carney has defended the decision to use a second phase of forward guidance. is he right? we'll have more. we needed 30 new hires for our call center.

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i'm ross westgate. headlines from around the globe. aparentally locked in the room you can see in the picture with renzi expecting to emerge having been appointed prime minister. could germany's coalition become a political victim. the german chancellor facing her first crisis over the weekend. disappointing data out of japan caught the gdp well short of expectations.

exports dragging, investors don't seem to be that disappo t disappointed. and barrasso weighs in warning eu membership may be impossible for the independent nation. you're watching worldwide exchange, bringing you business news from around the globe. >> right. welcome, it's presidents' day holiday right now. no program in the u.s., 1 1/2 hours more to come of the good stuff. the ftse global 400 is up at the moment. it's been fairly flat through the trade and not getting an awful lot of support this afternoon. up about a percent, it was up 1.4% over the course of the week. u.s. equities had fairly good performance. the nasdaq up 2.9%.

fairly flat here in the rest of europe. dax up a tenth, we wait to see whether mr. renzi does become the new italian prime minister. so the start of the new week, what are investors to do. here's a recap of some of the thoughts we've had on the channel today. >> a lot of what's been going on, the downward positions, and a lot of people focused on the down blip in the data. but it has come and people are now concerned as to how long it will last. they waited for further data. so every single piece of data is met with a degree of reaction. predominantly down to positioning. >> it is quite volatile the difference between two respective yields. of course, significant concerns in the moment on the election, a potential italian election. and that might, i think, cause yields to perhaps be pressured

towards the upside. >> we still think that given, you want to be overweight equities, looking at developed markets. we very much like the opportunities happening in europe right now. but the way valuations have moved over the last year, things are getting a little bit more difficult. they perhaps post fair value. you have to be that much more discerning, selective about what markets and sequence your entering, as well. >> so the italian president napolitano currently locked in talks with renzi after we expect him to be appointed as prime minister. head of regional research at standard charter bank, sarah, nice to see you. too many hopes for mr. renzi? >> well, certainly hopes are

very high, but i think there's a lot of realism at the same time. given how difficult it's been for previous prime ministers to press ahead with reforms. he has a big agenda, electoral reform and economic reform. and he hasn't given too many details about the economic reforms, but i think everybody's clear about what needs to be done there. the question is, can he really push these reforms through parliament? >> if he gets the electoral reform, he's saying he wants to stay until 2008. and if he gets the electoral reform bill through, will we see a spike up in italian assets on that news? >> well, certainly that would be really positive. it would mean that future elections would return much more clarity on the government. you wouldn't have the situation where trading between small parties, you know, happening, informing the government and once the government has been

formed, the government previously has been vulnerable to defections and the new electoral process would really get away from that. you would have a clearer system and therefore more stability. >> yeah. the good news is, very slim good news. if it's no longer in recession, growth of .1%. but look, how much more growth do we need to improve the debt dynamics. is the debt problem just going to get worse? >> well, over time, the debt problem will get worse. and growth can really pick up. the management of finances has been reasonably good recently. you haven't seen the huge deficits that say greece, spain in the run-up to their crisis. the debt is very high. if you have chronically weak

growth over a prolonged period, the debt dynamics don't look very encouraging at all. >> yeah. and we've got unemployment growth. look, you get the electoral reform through, sarah, and mr. renzi has to cobble together some sort of power base. what was the important economic reform or structure reform we should implement? >> i think more broadly, making market forces more responsive to the market. the labor reforms went a certain way but didn't go far enough more broadly there's a very heavy bureaucracy that makes it difficult for businesses to get set up and to make the profits once they are established. really more needs to be done to help and support the small to medium-sized enterprise which has been the power base of the italian economy over the past.

if we look at what's happened to competitiveness in italy, then there's been quite a substantial slide in competitiveness compared with, say, spain over the last couple of years. not something which needs to be addressed if italy is to be able to grow at a much more sustainable, stronger trend rate. >> yeah. okay. so stay there. we've got more to talk about it. mark carney, meanwhile, has defended the bank of england's decision to introduce a second phase of guidance saying will only raise interest rates once more slack is used up. he added business should be at the forefront and rejected fears of a housing bubble arguing housing activity remains below historical averages. >> what we've seen in the housing market is an adjust from very low levels. if you look at the level of transactions, how many houses are purchased, how many mortgages are struck? they dropped by more than 50%

from the average before the crisis to the levels of the trough. they've now bounced back, but still more than 25% below historic averages. we have to be very conscious and we are very conscious of the history, the economic history in britain. and there is a history of boom and subsequent bust in the housing market. much of what's driven in london, of course, is not mortgage driven, it's cash driven, the top end of london is driven by cash buyers, by foreign buyers. we as a central bank can't influence that. >> okay. let's get your view, guy foster with us, as well. when in your opinion, do uk rates move? >> we're expecting the rates will have to rise from the first quarter of next year. we think they can stay on hold for this year. there still seems to be slack in

the economy. we think that the unemployment rate will continue to decline. but at a slower pace than it has over the last six months. nevertheless, if you look at what the bank of england is concerned about. it measures stock really by the labor market still. even though it's using a broader range of labor market indicators. we think by the beginnings of next year, the monetary policy committee is going to be concerned that over the medium term, inflation pressures will start to build. so that's not to say that inflation will be rising at that point. we think inflation is going to stay around the 2% level over the next couple of years. but the mpc we feel they'll have to withdraw some of that stimulus by early next year. >> sarah, thank you. nice to see you. sarah hewin joining us. and the final thoughts from guy. are you more interested in ftse 250 than ftse 100?

to play that or not? >> well, a lot is made of the very international focus of the ftse 100 and supposedly more domestic focus of the 250. but it's still only about 50/50 domestic and overseas. that kind of trend is probably quite a positive one or negative on utilities which form a reasonable part of the domestically focused ftse 100. so it's things like domestic cyclicality, which are quite attractive stories at the moment and the 250 is quite rich in those. >> guy, always good to see you. thank you so much for coming. and we'll take a short break. still to come, what's warren up to? the latest buys and sells from the sage of omaha. h, fifteen minutes could save you fifteen percent or more on car insurance. yeah. everybody knows that. did you know there is an oldest trick in the book?

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recap of the headlines. renzi is expected to be announced prime minister. a political scandal divides germany grand coalition. set to hold crisis talks tomorrow. and japan's economy grows less than expected despite forecasts it would benefit from a jump in spending.

berkshire hathaway has unveiled the latest buys and sells. while adding to its stake in goldman sachs. the firm also added substantially to the holdings in general electric and usg. google's acquisition fee continues with slicklogin. verifies users by using sound waves. google recently purchased smart device creator nest for $3.2 billion. shares in google are up some 40% over the last six months. may seem like an unlikely suitor for a texas oil and gas operator, but the asian gold retailer is looking to diversify with a bid for erg resources.

gold leaf says it will finance through a nearly $1 billion private placement with key investors and that the energy assets will help on overly processing gold jewelry. what's the oldest m & a deal you remember? or one that made no particular sense. let us know, join the conversation, get in touch with us, e-mail us worldwide @cnbc.com. and we'll take a short break. still to come. as u.s. retail sales suffer an unexpected fall in january, is the weather to blame? we'll have storms of a more economic nature put off the consumer. we'll get into the blame game right after this.

it's presidents' day in the united states, so no u.s. markets trading today. we'll have to cope on our own here in europe. the ftse 100 up after gains last week of around about 1.4%. all pretty flat. it is worth pointing out, italian debt yields have hit an eight-year low on ten-year paper of 3.62%. an eight-year low on italian debt at the moment as we wait for mr. renzi to be appointed, we believe, as the next prime minister. although, talks going on for some time. sales at swedish retailer h & m up 15% in january, pretty much in line with forecasts. the swedish retailer says it has over 3,100 stores worldwide as of the end of last month. the stock in stockholm up .7%. and u.s. retailer, although we were closed for the presidents' day holiday, u.s. retail will take focus this week as we get a

slew of major firms including walmart, kohl's, jc penney and abercrombie & fitch. we'll be keen to get guidance after u.s. retail sales fell unexpectedly in january. economists had expected sales to hold steady but freezing temperatures hurt clothing, furniture stores and restaurants in particular. cnbc's retail analyst joining us onset. always good to see you. >> good to see you. >> welcome. for purchases and things that weren't completed in january because of bad weather, are they -- are they just postponed? or have some gone forever? >> well, hopefully the theory is that they're postponed. but what was interesting if you looked at the retail sales that came out for january which were disappointing, even the online sales were disappointing. if you consider that, okay, you can blame it on the weather, the consumer couldn't get to the store. wouldn't they be home online a bit more? that didn't happen. >> you'd be waiting a while, as well, for the delivery. >> exactly.

>> maybe that factors into it. but, you know, the theory is that we have to sort of wait until march, again, we got clobbered with the snowstorm in the states this past weekend. we have to wait until march to see is it really the weather legitimate blame game or the consumer falling off? >> well, there could be a point where they might feel a little tapped out. >> yes. >> that's the concern. >> yes, and i think also it's a very much, you know, the haves and have nots continue. walmart is reporting this week. we know their comps will be negative for the fourth quarter in a row. what did they tell us? they said that the assistance benefit, the snap food benefits cut off in the united states have had a larger impact on their sales than they expected. the low-end consumer is under a lot of pressure. >> we've had sort of tax refunds in the last couple of years, how does that weigh in in comparison this year? >> yeah, so tax refunds hit around february 6th, a little later this year. and we'll wait, i think, one of the key things to hear from

walmart when they report on thursday is, you know, as people get those checks, are they opening up their wallets again as the weather gets better and as they get those refund checks? interestingly enough, last year, it was a bit disappointing when those hit the mailbox. >> besides walmart, as well, kohl's, jc penney. >> sure. >> so this week we have walmart then the following week the department stores. i think jc penney, they pre-announced their sales. also, i think the big issue will be gross margins. everybody overpromoted this year, particularly with the weather. it's sort of who didn't pre-announce already. some think that kohl's will sort of be giving back some share to jc penney. i think both of them are in a tough position and would avoid both of them. >> yeah, and abercrombie you're saying has made shareholder friendly management tweaks. >> they have. over the last few weeks, there was a lot of controversy. should the ceo/chairman leave the company altogether because of all the publicity problems

that have plagued the company. so they've separated the chairman and ceo role. so they're doing shareholder friendly things. >> they need to because the shares down 60%. >> yes, and if you look at the european business, about 30%, that's been sort of the biggest disaster, comps are still down double digits. you know, you look at those stores. i travel all around europe looking at stores, traffic. they're still under immense pressure and they're incredibly expensive real estate as you know. >> who's winning then, stacy? >> who's winning is macy's. offers the best value and also they offer the best omni channel experience. the retailers that can do everything in terms of online, in store and put all the pieces together are winning. >> you see that in uk. relatively speaking pretty good christmases compared to everyone else because they do the omni channel thing. >> their consumer that shops online and in store, that

crossover shops four times as much as the consumer that just shops in store. that is key. you have to have to get that right as a retailer. >> good to see you. >> good to see you. >> pleased you didn't break a leg skiing or anything for you. right. we are just hearing that renzi has accepted the talks of holding government. they've been meeting behind these doors. apparently mr. renzi has been invited to try to form a government. he's now going to have to hold talks with key parties. that may be a little bit harder than you might think. but it is worth pointing out that italian government bond yields are short while ago hit eight-year lows of 3.622%. so italian yields, we'll get more from joules in a few

moments. the key is whether he'll be able to introduce an electoral reform law. key thing, actually, whether he'll be able to form a government in the first instance that might be able to do that. but anyway. we'll now have to hear from mr. renzi and see how long he was given. there it is, italian yields 3.63, we have been down to 3.62% fairly shortly. more to come, rome's latest reaction, plus, a look at japan. slow growth in exports, consumption and investment held back the economy growing just .3% in the fourth quarter. analysts polled war expecting a gain of .7%. it comes as japan meets for a policy meeting, although unlikely to change its view. economists expect a pick-up ahead of a sales tax hike in april. and if bank lending is any indication, then china's economy -- the pboc said bank

loans reached more than $2 billion last month compared with $80 billion in december. although, analysts say banks tend to lend more at the beginning of the year after being granted lending quotas. and beijing expected to keep a grip on credit. more on that, also just to reconfirm, we understand that mr. renzi has been asked by president napolitano of italy to try and form a new government. his first talk will be to talk to interested parties. may take a while, might be harder than some think. in reaction to that italian bond yields a short while ago hitting a fresh eight-year low. just above it at the moment. well, pretty much on it, actually, there you go. we'll have more, as well, from rome and reaction. the next part of worldwide exchange coming up. ♪

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