welcome to "worldwide exchange," i'm julia chatterley and these are your headlines from around the world. better 0 of alone. shares in astrazeneca fall as pfizer withdraws its 17 billion pound bid and the uk pharma giant gets hit with multiple analyst downgrades. investors buy into another deal. and further reports on whether russia and ukraine are making progress on signing a gas deal. and european leaders meet to

commiserate their loss at the ballot box. david cameron says the union cannot ignore the shift to the right. you're watching "worldwide exchange," bringing you business news from around the globe. welcome again to "worldwide exchange" on this nice tuesday morning. we've got plenty coming up on today's show, trying to stop the smog. beijing cracks down on air pollution as it plans to pull millions of overpolluting cars off the streets. we'll also be heading to cairo where the egyptian election is in full under the watchful eye of the military but just how democratic is the process we'll be asking? also, are you looking for new investments? we speak to an expert who encourages investors to turn to the new world rather than the old.

so stay tuned to find out why your next business trip should be somewhere like ba gogota. interesting. and astrazeneca in the red after pfizer confirms it's thrown in the towel into its bid to take over the british drugs firm. pfizer withdrew a $9 billion pound offer and must walk away for at least three months. ian read has hit back at the uk government, criticizing britain's complicated takeover rules for the missed opportunity adding that regulations capping drug prices discourage investment in the uk. he also casts doubt on whether his approach for astrazeneca could be described as a foreign takeover, saying astra has a huge presence in the u.s. astrazeneca's response says the firm has attractive growth prospects and momentum as an independent company. the chairman also welcomed the

effort of the management team over a period of uncertainty. katherine boyle joins us to talk more about this. so walking away with a bit of a bitter taste in his mouth in taking a swipe at the uk government as he does it. >> absolutely, julia. there's a rocky early courtship for astrazeneca and pfizer. it's definitely gone a bit bad romance. what you've got is a testy statement from ian read, criticizing astrazeneca management and the uk government, generally coaching it in terms that are quite bad tempered. having said that, that doesn't mean pfizer won't necessarily come back to the table for astrazeneca. they have three months in which they can try and woo sha shareholde shareholders, obviously while sticking within the complicated takeover reels. if astrazeneca management are persuaded enough, they could come back.

if not, another six month's time, pfizer could come back with another deal. >> i thought it was interesting last year,en was saying this deal shouldn't go ahead. we're concerned about what pfizer will mean for r & d and research in particular. now analysts are questioning whether or not if astrazeneca has the goods to continue alone going forward. does this make them a target for somebody? else. >> i think there's only so many peoples that have the cash needed to stay astrazeneca out and pfizer is one of they will. there isn't that many big pharmaceutical companies that would be as good a fit. one of the key attractions for pfizer is the tax inversion. another question is whether that tax inversion policy will be in place if pfizer were to come back for astra in six months time. there's a potential deal in the

pipeline. >> i can't see them doing that in england in a short spell of six months. >> it would be surprising. that's one of the reasons pfizer seemed to want to get this deal done. in two or three years time will it still there be? >> yes or no, do you think they'll be back? >> i wouldn't be surprised. >> katherine -- we're joined by yannick noll. >> it might be a victory for astrazeneca. because now they will be under incredible pressure from the shareholder that they've lost recently that will demand very, very strong result which will be very difficult in fact to achieve. i don't think as well they will be likely -- of astrazeneca anytime soon. if pfizer doesn't come back in six months time, i think it will be very difficult for the

company to continue on the same track. >> what about for pfizer then in the interim? what about them looking at somewhere else, merck, bristol-myers? what's the prospect of them looking elsewhere? >> it is more target, more potential target. >> absolutely. >> potential there? >> yes. >> i think obviously there are a few targets. i'm not sure they will be able to extract as much synergy or cost-cutting tax incentive for the other target but it's a possibility, yes. >> all right. yannick, good to have you on the show. you'll be staying with us. siemens is readying a former offer for alstom. the deal reportedly involves the transfer of its rail activity and less than 7 billion euros in cash. the cash component is smaller than ge's offer, half of what the u.s. giant is offering. both siemens and alstom have

declined to comment on the report. shares in intercontinental hotels group trading significantly higher after press reports that the hotel has rebuffed a 6 billion pound takeover bid from a u.s. rifle. according to reports on sky news and in the telegraph newspaper, the board of the crown plaza and holiday inn operator met a few weeks ago to consider the offer but agreed it was too low to accept. according to analysts cited, the missfully bidder could be starwood or a specialist investment firm. we don't know. stay tuned. we'll be talking with william vereker, head of corporate client solutions at emea. that's coming up at 11:00 cet. any questions or thoughts for yannick, get me @worldwideexchange or tweet

me @juliachatterley. you can also e-mail at w "worldwide exchange" wwch worldwideexchange@cnbc.dom. the uk independence party's historical gains signal the setback, too. prime minister david cameron's conservative which is face national elections in a year's time. i think the results show a very clear message, people are deeply disillusioned with the european union, the way that it's working and the way it's working for britain. they want change. the challenge is for my party to demonstrate they with have the plan to deliver that change,

renegotiate britain's place in europe, get a better deal for britain, to change europe and put the choice to the british people in the referendum before the end of 201. that is what we'll do. the real test for that plan will come at the next general election. >> nigel celebrated his victory, a major win for the euro skeptic party. >> first they ignore you, then they laugh at you, then they attack you, then you win! >> french president francois hollande used his latest speech to express concerns over eu power. still with us, yannick naud. i don't see this as a catalyst for thoughts. what are your thoughts? >> the main risk for the parliament if we have a large group of people that have the power to block any kind of deal or arrangement, i think there will be a larger representation

of anti-european party, far left in greece or the far right in france or italy. it's very unlikely they will work together in order to push for specific legislation. i think there's quite a big possibility that most of the vote will not exist because it will not really be represented in terms of people working for new legislation. >> as much as we will have been concerned about what this will mean at the eu level, what we're seeing is very little because they're not a cohesive group. they have different views. quite frankly most of them don't it the like each other. they can't combine to push for change as far as at the european level is concerned. what about the national level then? >> yes. i think the main impact is for domestic policy. in italy, the clear winner is h hamzi. in france it's the opposite.

you have francois hollande which is weaker an weaker. in march, they lost new possibilities for election. after this blow, it will be very, very difficult for francois hollande to implement what has been announced but not yet implemented, which is 50 billion of consolidation and structural reform. in the next three years there's a risk nothing will happen. >> i think it's interesting the reaction in the markets yesterday is they ignored the people that were punished, the likes of the uk and france. they celebrated spain and celebrated arenzi in particular. he said we're not going to have elections, this government will remain until 2018. do you buy into that? >> in italy, we have seen a drop recently. it is coming back. our strategy for peripheral bond

is coming back. we'll have further news on the 5th of june, we think italy, spain, it is probably the right thing to do. the expectation is not incredibly high. now the yield is obviously much lower than six months ago. >> yannick, great to get your thoughts as always. yannick naud, managing strategist. ukrainian forces launched attacks on donetsk airports to take back control from pro-russian insurgents. dozens have been reported dead and injured in the clashes. while gas talks continue, the ukrainian prime minister says the gazprom must return $2.2 billion meters of gas stolen due to the annexation of crimea. steve is in kiev.

i see this as positive that these gas talks are continuing. if we listen to nafta, the gazprom talks are pretty much stalled and the prime minister saying we need to reach an agreement by thursday or we'll have to take this to arbitration. as far as i can see on the surfa surface, these talks are going nowhere fast. >> the fact that they're talking about going to arbitration rather than walking away from each other. the fact that you have minister to minister conversations as well, i think that's absolutely positive. i'm not going to take the negative just yet. you're right. nafta said we want progress. yatsenyuk said we want back the gas that was stolen. comments are coming from lavrov and poroshenko about normalizing things.

he said we don't want the russian people to be suffering any more as well. everyone is making the right noise. we can't look at the gas talks in isolation, including the june gas bill, yes. the ukrainians owe a price of somewhere in the region of $5.1 billion to the russians. i know the ec commissioner was hopeful that some of this down payment could be made in advance and we could move forward from there. it's no the in ice lay we see the talks. links between russia and ukraine happen on a multitude of levels as well. the trade between the two nations as well. around about a quarter of trade done in ukraine is done with the rugs as well. despite the fact they're west leaning and looking to greater association with the eu and financing from the inf, very important relationships still. i'm moderately positive at the moment that the right noise is being made. this one issue, can be a step forward. when you were here, julia, we didn't have a government, a legitimate leader.

the russians recognized. yet a couple days later within the russians are saying we recognize the will of the people. poroshenko got an astounding 55% of the vote. most negatives perhaps not in the gas talks, the russians are saying, do not attack the separatists. poroshenko is saying we will not deal with terrorists as well. the language is very far apart on this issue as well. we'll get an update within the next hour and a half from the authorities here. there has been enormous blood shed in donetsk at the airport there as well. one side saying as manies a150 casualties, the other at least 30 as well. there have been deaths. that is of course violence in a region which is needed to bring back in the fold if poroshenko canute his country. back to you. >> we'll catch with you later in the show, as you said. thank you, steve. let's look at the performance right now after european stock markets, 64 greens to red this morning. the stock market up 0.1%.

the uk markets yesterday in particular were closed. we're making gains, catch up gains for the ftse 100, off 0.3%. relatively unchanged for the dax. strong gains there in yesterday's session. the cac current losing a bit of ground and still the ftse mib, the key outperformer, up 3.6%, continuing to add to these gains in today's trading session so far. let's take a look at the top stocks, key movers. africa focused oil and gas company has slummed to the bottom of the stock 600, ophir energy. that down just shy of 5.5% here. accor gaining just shy of 1.5% after the group said it's spending 900 million euros to repurchase around 100 hotels in europe. accor sold the hotels to morpark

for 747 million euros back in 2007. and over to the uk now, and we've have i.t. engineering firm aveva trading to topside, gaining more than 11%. the pre-tax profit jumped 11% and the company says it's confident on nurnlg growth. we spoke to the ceo earlier and asked him as whether a high margin business, if a strong pound really matters. >> we're still growing the business in spite of that. i think, you know, it's perception as you say. it's a question of reporting. if we were reporting in dollars, things would be different. you know, it swings in round abouts. >> quick check on bond rates, bunds relatively unchanged. continuing to see the descent.

uk ten-year gilt, 2.64. mario draghi spoke yesterday, reiterating his vigilance as far as the dollar is concerned. we're sitting around or flirting with that 200 moving day average around 1.3635. but lacking movement in either direction right now. next week is the key. dollar yen under a bit of pressure, 101.80. they were significantly higher than the year's low we failed to breach last week at 165. we were talking about dollar/yen. right now let's check in on the asian markets in particular. political risk is the topic de jour, sri. what are we seeing now as far as india is concerned? we now see a new government in play. >> that's right. we're seeing give back in the markets, although this will probably be constructive for the

higher level. air has been named the new finance minister. he's seen as a safe pair of hands. his comments are worth listening to. he said that the emphasis of this budget is really going to be squarely on fiscal consolidation. there could be a drag on growth rates as that tightening happening. elsewhere, we continue to keep our out on the market. it is seeing consolidation right now. yes, this is a country under military rule. the military council has been endorsed by the much revered king. the military seemed to be getting down to broad task of trying to fix the economy. they have started to pay the rice farmers for the rice they've pledged under this flawed subsidy scheme under the previous government. that seems to be positive. that should help rule consumption to a certain extent but probably won't be enough to offset the decline in tourist arrive afl -- arrivals and

private investors as well. volumes are quite thin because we didn't get any lead from the u.s. or the uk markets. the nikkei, we did see weak highs earlier on in the session. that's where we stand. jewely, back to you. >> we'll catch up with you later in the show. still to come, egypt votes for its next president. how democratic has this progress been? we'll be discussing right after the break. stay with us. we needed 30 new hires for our call center. i'm spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast? go to ziprecruiter.com and post your job to over 30 of the web's leading job boards with a single click; then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates.

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the second and final day of voting is getting under way in egyptian presidential elections with el sisi with the majority. his main opposition ham dean sabahi is saying it is not a fair fight. to our guest now, thank you for joining us this morning.

they are raising concerns about political polarization, there's a severe concern about how democratic this process with with suppression of the opposition. where does that leave us if he wins this election? >> it leaves us with an election result which is skewed. it's skewed in view of the fact that we have supporters of ere sisi turning out en masse, casting their ballot. and there's an alliance that includes a contingent of muslim brotherhood supporters. the april 6th movement is not partaking in the vote. we have an effective boycott by a significant segment of the population. it's interesting to note, france, that approval ratings for el sisi stands at 54% of the population. we are not dealing with an

overwhelming majority of the population that supports the general. we're dealing with a marginal advantage he has despite the perpetuated message coming forward saying general el sisi. >> it's the same amount of people that -- to go back to the point you said about young people not voting is a risk we're storing up further tensions after this vote take place? >> there is indeed a risk. there is this view in egypt that somehow a strong man will be able to bring about greater stability, that he'll be able to generate jobs that socioeconomic inequality and poverty will ab dressed. poverty stands very high in egypt. has worsened since the revolution kicked off. it's an unfulfilled revolution. i think a key point relates to unemployment.

unemployment, according to official estimate stands at 13%. effectively it's much higher. 82% of the unemployed are between the ages of 15 and 29. poverty is likely to worsen, i would say, in the short term before it improves. this has accounted for pent up sources of instability looking ahead. as we see, there has been a significant security issue here with militants attacking state security forces in the delta, in the nile valley and the sinai peninsula. this is anion going source of concern. >> we're talking about the possibility of further violence. we're saying he has huge issues to deal with as far as the associatio economic situation in the country. >> the markets understand el sisi enjoys the support not only of the army but intelligence services, also of the police

force and states and private sector media across egypt. he enjoys the support of big business which is crucial. another important plank in terms of his overall perspective is the fact that gulf arab states are forking out billions of dollars in the form of aid. they are unlikely to cut off this aid in the short term. gulf arab states also understand this is a sensitive period and there needs to be a slow transformation. el sisi risks a public backlash if he suddenly cuts subsidies and he's mindful of that. there needs to be a slow evolution, which is supported by handouts and an overall increase in the standard of living. but it's a difficult task for him to engage in. >> incredibly delicate balance. still to come on the show,

as investors -- should emerging markets be concerned about currency turbulence? more currency turbulence? we get the view from the bank of mexico governor, right after the break.

you're watching "worldwide exchange," bringing you business news from around the globe.

better off alone. shares in astrazeneca fall as pfizer withdraws its 70 billion pound bid. and the uk pharma giant gets hit with multiple analyst downgrades. investors buy into ihg following a weekend report that a u.s. buyer has made a secret offer for the british hotel group. kiev ramps up the rhetoric in its negotiations to sign a gas deal with russia, this amid increased violence in eastern ukraine. dozens are killed in clashes around the donetsk airport. european leaders meet to commiserate their loss at the ballot back. france's hollande says it is incomprehensible and david cameron says the eu cannot ignore the shift to the right. quick check on the european markets this morning. and as you can see, gains for the ftse 100 playing catch up on

some of the moves we saw in yesterday's trading session. it was closed yesterday for the bank holiday. xetra dax relatively unchanged and the cac current losing a bit of ground. these two both gained in yesterday's trading session. the ftse mib adding on to the increase we saw on yesterday's session. continued tightness we're seeing in italian spreads this morning in particular. an 18 basis point drop on the back of the european election results yesterday for that country in particular, relatively unchanged for the core treasuries, german bunds and gilts over in the uk. in the foreign exchange markets, euro dollar relatively unchanged, 13 .48. the level floating with that 200-day moving average. we have from mario draghi, reiterating the low inflation. the question is whether or not what kind of stimulus we get at the next meeting. of course he's reiterated the

bank's willingness to employ unconventional measures to tackle low inflation. speaking at the central bank forum, draghi said policymakers must be watchful of the downward price final. did he say anything different than what he said at the last meeting? he continues to lay it on thickly. there is likely to be more action next month, in fact, next meeting next week now. anything new? >> the news is that he was more explicit or more detailed when it comes to its assessment of inflation. he calls it the autonomy of inflation. he was more, as i said, detailed. and also the reaction function of the ecb might be clearer. they of course would cut rates as using a conventional tool in

order to fight the strong euro. they would also consider helping a small and medium sized enterprise so act as credit because that is a huge problem here in the eurozone and only if everything really went to a worse case scenario, they would consider quantitative easing. but any way, talking about currency markets, that is one of the aspects as well for emerging markets. yesterday i had the chance to exclusively speak to the head of the mexican central bank and ask him about his take of the eurozone. >> i think there has been substantial progress done during the last two years in terms of strengthening the institutions and bringing financial stability into the region. there's still challenges ahead, mostly related to how to stimulate growth. but i think that compared to a

few months ago, things are looking much better. >> when it comes to monetary policy in the eurozone, it looks as if the ecb was to ease its monetary policy stance with effects on the currency. are you afraid of currency turbulences? >> well, i think certainly the monetary policy of the ecb is very important at the global level. i think that there is more unconventional monetary policies that can have effects on the rest of the global economy. but at the same time, it's important to have a strong europe. and if the monetary policy helps to strengthen europe, it will have a net positive result. >> how do you prepare for one of the biggest markets for the

siene area that the ecb might venture more into unconvention it'unconventional territory. >> also what is important is the fact that we need to keep strong fundamentals if you keep strong fundamentals, it's very likely that the volatility in capital markets wit not be that large, especially when then conventional monetary policies wind down. i think the key is precisely that. >> as we speak, behind me, there are sessions ongoing. the topic of the day is inflation and also the question of which is the right target of inflation. i just came out and listened to paul krugman who is arguing that actually we need a 4% target in order to have more lee way as well as statistical mistakes

when measuring inflation. he also says there's a lot of reluctance to discuss that change of inflation target among central bankers. of course, the highlight of this day will be mario draghi speaking during the course of the afternoon. he will speak in an armchair discussion again, probably about the outcomes of that meeting here of the conference. but perhaps we also might get a little bit more about what might happen next week. in an hour's time, i'm going to speak to adam posen, president of the peterson institute about his take on monetary policy and also what might happen next week at the ecb's meeting. back to you. >> thanks so much. if you have questions for adam posen, e-mail at worldwide.cnbc.com. i'd love to hear from you.

strong word out of ukraine this morning as the finance minister says they won't pay back russian aid until the country lowers its gas prices. this, of course, on the back of reports of violence at the donetsk airport, reports of killings and wounded there, too. steve, the standout for me when i spoke to pore shnk coshenko i he's zero tolerance. it looks like he's stepping up the campaign in tells of what we've seen in the last 24 hours. where does this fit with the relationship with russia and their threats that actually he shouldn't do this in the east? will they overlook it, do you think? >> ukraine is a sovereign nation. what they do internally to quell what the russians call separativeseparate i separateists, what he calls terrorists, who poroshenko has

is legitimacy from a vast number of ukrainians who are able to vote, 33 million out of 36 million were able to vote. it gave him an overwhelming mandate, 54% in a field of 21 people. he obviously feels he has got the authority to go in pretty tough on donetsk and luhansk and remove what he calls terrorist almosts. his point is he doesn't believe these people should be allowed to turn this country into, in his words, another somalia-type situation. the russians feel they have a vested interest in that part of the reengen and are asking mr. poroshenko to tread very carefully. what is very clear is there have been tens, if not over a hundred deaths in the latest 24 hours of violence around donetsk airport which of course is symbolic as well, because that is where poroshenko said he's first going to concentrate on rebuilding the nationhood of this country. at the same time, there is a very interesting set of dialogue

going on, literally by the minute, with the russians over gas as well. there was optimism from the ec commissioner that they were get something kind of deal. i've seen a whole stream of e-mails from yatsenyuk, the finance minister, to all kinds of people representing nafta saying we're not that close to a deal. i think what is important, we have dialogues going on, natural dialogues between customers and suppliers. that's a bit more of a norm normalizati normalization. inneed, the fact that we have someone who the russians see as legitimate. there was some violence but it went pretty well. why don't we listen to what she had to say about it? >> we had 1,000 observers right across the country and we're not here to declare an election legitimate or otherwise. but we do assess whether they

meet international standards and their own national standards and we were able to say, yes, they did this time around. >> so the election looks like everyone's accepting it as legitimate and run credibly by western standards. while that is positive, you have a president that the russians are recognizing, that is positive and dialogue rather than threats across the border, julia. >> thank, steven. you keep talking about the mandate. that mandate wasn't provided by voters in the east. many of those people don't recognize they're still part of ukrainian sovereign territory. how does the pickup in violence that we've seen, the response from the ukrainian government fit with this idea of a united ukraine? >> let's be clear about it. we're talking about donetsk and another region, 33 million people were able to vote. and the fact that between 10%

and 15% people in donetsk and luhansk got to the polls is a bit of a miracle in itself when armed men were preventing people from voting as well. the separatist movement in those regi regions, even with people who consider themselves of russian ethnicity isn't perhaps as strong as russia would like to portray. 27% consider themselves want be to be part of some form of new russia as mr. putin would put it. it's hard to tell what those people would have voted for if indeed they had the opportunity. there's no enormous reason to believe they would have voted aggressively for the other candidates. the whole country got behind poroshenko. >> thanks so much, steve. i hear you. not necessarily pro-russian but they don't know what pro-eu means either. we'll catch up with you later in the show. vcb has seen profit plummet

by a massive 98%. the margins were due to loan provisions. still to come on the show, we weigh the risks and returns of gold mining with a west african producer looking to develop one of the region's biggest minds in the conflict-ridden ivory coast. stay with us.

welcome back to the show. japanese electricsmakers are laking to ban together to make panels. we have the story live from tokyo. good morning -- good evening. get it right. >> hi, julia. it's evening here. sony and panasonic plan to form an alliance to make panels for tablets, smartphones and wearable devices. the group will form a new company by the end of june and potentially come together on production down the road. a tokyo-based public/private fund incg, plans to provide a majority stake. japan will invest around 20% to 30% in both sony and panasonic will have 10% each. all the pans are said to be the front-runner in the next

generation tv race. these companies are currently developing prototypes separately. pan s they tried to double up the panels in 2012 but ended up dissolving at license at the end of last year. with this new company, the company plans to make displays within two years. modi has been sworn in as the new prime minister. he promised to maintain the integrity of the nation. we are joined now from delhi. what's your take on what he will be like for the country and how he will interact with the central bank? >> well, the finance minister of the country is a bjp veteran.

he has held the ministry of commerce, the ministry of disinvestment previously when india was in government. he knows his way around town. he is a reformist, a lawyer by profession. he has taken charge of the finance ministry earlier this morning. he's also going to be given another large ministry, that is the defense ministry along with that, he also get corporate affairs. he does have a full plate at this point in time. mr. mody's cabinet is leaner than the previous cabinet. modi decided to keep a leaner cabinet. we have about 45 ministers who will be responsible for the government's functioning. there's been another interesting attempt by mr. modi which is to restructure government or several overlapping ministries or several complimentary ministries. we have an integrated energy

ministry where we are seeing the power ministries being clubbed together. it looks like this government means business. they are trooing to send out the right signal. it's day one. let's see how investors take note. >> can i ask you about the structure setup? there's been criticisms that he hasn't got control of many of the states right now. he didn't have the control in particular of the upper house. he'll be inheriting a significant amount of leverage positions in both the corporate and public sector right now. how do you see him handling those difficulties? >> well, i think as far as the upper house of parliament is concerned, it is something that they will have to deal with. they have such a strong political mandate in the lower house of parliament, significant numbers on their side. i don't think that is going to be of critical concern today. even as far as legislative action is concerned, we'll cross that bridge when we come to it.

at this point in time, mr. mo democrat i will be focused more on executive actions, he wants to get the economy back on track, clear fast track infrastructure projects. he wants to send out a message to investors that india is open for business. legislation will require numbers in the upper house which i don't think will be of primary concern at this point in time. priority will be to get the engines of growth revving up. >> couldn't agree more. managing editor at cnbc tv 18. 2013 marked a turning point for bmw with china overtaking the united states. as the group's biggest market. with one in five of the cars sold to chinese consumers, how does bmw grab the market? china's ceo engel takes us inside the business from the production line to the final sale. >> reporter: bmw's china chief engel is on a quest to conquer this market. one out of five bmws are now

sold in china, more than in the u.s. >> without china, a car make can't be successful. because the main growth in the world is happening in asia and mainly in china. >> reporter: the german carmaker redesigned certain models to appeal to chinese tastes. >> in china, customers are driving with a driver. they are sitting in the rear seat at least during the week. they expect the space to be there for themselves or the family. on the weekend they probably drive themselves. >> reporter: roughly half of the bmws sold in china are made in this country and all of them are built right here. the company has to make sure the engineering is as good here as in germany or the u.s. it's a big selling point. chinese like to have powerful high-tech cars. >> most important ways to sell a car in china is word of mouth. if you do not deliver the highest quality all the time, your customer satisfaction goes down and dissatisfied always talk sales will be going down.

prices for a bmw range from 42,000 to $250,000, roughly 50% higher, manly because of taxes, compared to germany or the u.s. at the car dealership, they need to differentiate their brands. >> if you look into other countries in the world, probably the farthestpeople are more awae defenses between the cars. the premium image has been there for the last 50 years. >> reporter: yet it's catching up as more chinese see cars as a vehicle for a modern life. eunice yoon, cnbc, beijing. let's give you a look at what's on the agenda in asia tomorrow. china's industrial profits for the month of april will be out. we may get an idea on whether china's slowing economic growth is taking a hit on the bottom line of state-owned companies. meanwhile, india's new ministers take charge. more clarity is expected to emerge going forward and as

thailand continues under marshall l-- martial law we trak the impact on the economy and the markets. a mining producer is seeking to develop the tenth largest mine in the country. the ivory coast project is fully funded and is expected to extract goal at $700 an ounce, making it profitable at current market prices. what are the risks of investing in a country that has seen two civil wars in less than a decade. i have loads of questions. i want to start on the numbers there. your break even around $700 an ounce. you said your average cost of production is $760 an ounce. when for most of the big names we talk about in the gold sector, average cost is around $1,200 an ounce. why so cheap? >> well, julia, the big advantage of being in this part

of the country, the infrastructure is quite phenomenal. our project is located 5 kilometers from a hydroelectric dam and power costs from that da dam will be 9 kilowatt hour. the infrastructure really is what drives the robustness of the project. >> when we think about the ivory coast we don't think about advanced infrastructure if we look at some of the other countries in the region. is it that much better than those would you say? let's talk about, noio, nigeria, for example, how would you compare? what are we looking at in terms of how good the infrastructure is in this country? >> well, i mean, nigeria has had the benefit of oil for the last 10 to 15 years. they are much more advanced than

the ivory coast. ivory coast, prior to the initial upset in 2002 was one of the foremost former french colonies. it had a very strong backing from the cocoa industry which is the world's largest cocoa producer and the country had driven itself really on the back of agriculture. gold and mining is a new step forward for the company. and the president has been very vocal that he wants to see the country as an emerging nation by 2020 and he sees that mining is a key leg in delivering that. >> you're talking about the government actually being supportive of this as a new enterprise. i noticed recently the african development bank is coming back to the country after 11 years. you're seeing a decline in the perceived political domestic risk there right now, too. >> i think that's absolutely true. we've been involved in ivory

coast since 2004. and in that time, you know, the country has gone through difficulties. but it's bounced back very, very quickly because it has quite a phenomenal civil service. civil servants don't change as governments change. it basically has that strength and depth in the country. i think that has allowed it to bounce back very, very fast. >> you say you'll be up and running by 2017. you hope pulling gold out of the ground. can i ask you a question that's off subject but very much to do with it, the recent fine of barclays for manipulating the gold market. do you think there needs to be more regulation as far as the gold mark set concerned? it will have a knock on supplies done the road. >> we have small gold production at the moment in baquino faso. it is a concern to see what's happened in that market. but i think that as markets

develop, markets change, we're quite happy to looking at using electronics pricing. >> good luck with your operations there. john mcgloin, executive chairman of amara meaning. the interior minister saying dozens of separatists have been killed at the donetsk airport, clashes, that the operation will continue. still to come, talking takeovers. pfizer walking away from astrazeneca. what is driving the pickup in m&a? we'll be discussing right after the break.

welcome to "worldwide exchange." i'm julia chatterley and these are your headlines from around the world. better off alone, shares in astrazeneca fall as pfizer withdraws its 70 billion pound bid. and the uk pharma giant gets hit with multiple analyst downgrades. investors buy into the ihg following a weekend report. kiev rahm -- ramps up the

efforts in signing a gas deal. always read the fine print. reports say bank of america discovered it made a costly $4 billion accounting error when it found the fed changed the ruls s for the capital. you're watching "worldwide exchange," bringing you business news from around the globe. if you're just tuning in, thanks for joining us here on "worldwide exchange." let me give you a quick look at how the u.s. futures are shaping up ahead of market open. certainly indicating higher for the dow. s&p 500 was record highs in friday's session by around 7 points and for the nasdaq, higher by 17 points, too. a real focus on the economy as far as the data is concerned. we have curable goods, inflation, revisions of q1 gdp.

we've bounced off some of the lows in the european markets, now all making gains. the ftse 100 catching up. that market was closed yesterday. gains across the board for the broader european indices, including the italian markets, 3.6% rally adding to that here, too. we also see peripheral yields coming lower yesterday as a result of the european elections, of course. very much so for the italian market in particular. now trading around that 3% level in particular. quick check on the foreign exchange markets, in particular we heard from mario draghi yesterday, underlining their focus as far as future stimulus is concerned. the euro/dallollar trading arou 1.36. dollar/yen, 101.8 there.

and we watch what's going on in thailand, also in india as the new cabinet of the government shapes up. sri is in singapore with the latest. sri? >> hi there, julia. let me start with thailand and bring you the latest. we're getting fairly dramatic pictures on twitter of the former deputy prime minister and the former education minister as well of the ousted government. this is a man who has yet to report to the ruling military council has ordered. he had emerged from hiding and was giving a talk at the foreign correspondents' club in bangkok. he was promptly arrested by the military. i believe we have pictures on the screen of the media scrum. this is evidence of the military tightening its grip either further and imposing what many thais believe to be a fairly draconian media restrictions as

well. expect more of the same. .bangkok market is consolidating, though. the military council has been getting down to some economic business. they have finally started to pay the rice farmers. remember these are guys who had pledged a lot of rice under the flawed subsidy scheme of the prior government and have not been paid. having said that, though, yes, it may help to boost rural consumption to a certain degree but it certainly won't offset the declines that we're seeing in tourists arrivals and private investment. elsewhere in india, we are seeing profit taking in the market. also a degree of concern about aaron jakely. yes, he is finance minister but he's holding a defense and corporate affairs portfolio, too, although this structure is likely to be temporary. nonetheless, the markets

jittery, down by almost 119 points. the big next risk event for the market will be the budget, which will be unveiled around late june, early july. big focus on fiscal consolidation. that's where we stand, back to you now. >> thanks so much, sri. great to catch up with you this morning. response it seems from gazprom's spokesperson to comments we had from the ukrainian prime minister earlier this morning, russia's spokesperson for gazprom saying they have no idea what they mean by saying they stole gas. gazprom must return 2.2 billion cubic meters of natural gas stolen due to the annexation. we have comments from nova tech in russia. we'll keep you abreast of any further comments coming from either the prime minister or gazprom and nova tech. astrazeneca in the red this morning after fizing confirms

it's thrown in the towel in its bid to take over the british drugs firm. following the failed bid, pfizer ceo ian read has hit back at the uk government. he criticized britain's complicated takeover rules for the missed opportunity. astrazeneca in response has welcomed pfizer's confirmed withdraw in a statement the chairman says the firm has an attractive growth prospect, a momentum as an independent company. elsewhere, shares trading significantly higher after press reports that they've rebuffed a 600 pound takeover bid from a u.s. rival. the board of the crown plaza and holiday inn operator met a few weeks ago to consider the offer but agreed it was too low to accept. according to analysts cited in the reports, the mystery bidder could be starwood or a

specialist investment fund. in other m&a news, siemens is readying an offer for alstom, according to a source cited by reuters. the offer would make siemens bid slightly higher than ge's but the cash component would actually be smaller. around half in fact of what the u.s. giant is offering. both siemens and alstom have declined to comment on the report. stephan is in paris. stephan, what is the reception likely to be to this potential offer? remember it's still rumors right now. the important thing is not about shareholders. it's about getting around the french government, isn't it? >> absolutely. if we know that siemens has the support or the unofficial support from the french economic minister, the company still needs to convince the shareholders but also convince that it's willing to make some efforts to get the support from the government. the bid would offer a slightly higher value than what general electric is offering for the

power you need for alstom. also as part of the offer, siemens would also exclude from the deal some businesses of alstom, including the nuclear power, the wind turbines and also the transmission and distribution unit. the proposal would suit the french government as you know might be reluctant to approve a foreign takeover for the nuclear activity of alstom. last but not least, the deal would take into account the 800 million euros to cover potential sanctions that alstom could face in the united states. all in all, the german company, which is due to make its formal offer tomorrow, wants to convince the government to give its blessing for that takeover. over to you. >> stephan, great to chat with you this morning. now, let's have a real focus in on what's going on in the m&a world. william johns me now in the studio.

i want to start first with the astrazeneca/pfizer. a bit of a surprise about this deal and the fact they acknowledged or said they're going to walk away now for at least a few months. what are your thoughts? >> good morning, julia. i think it was no surprise ultimately that pfizer has walked away. there's been extensive discussion over the course of the last two months or so. in these m&a deals, these are for the long term. this isn't this week, this month. >> more broadly about the market right now, can you give me a sense of what you're thinking? it seems to me there's been a structural shift in how these deals are being done. if we go back to 2007, it was the majority cash deals being down now. we're seeing a shift in terms of how they look to be financed. >> there's two things going on. clearly, there's a much greater sense of confidence in the market, more confidence these deals should and can get done.

each deal is different. there is more stock, we're seeing more cross-border transactions, more stock in these deals. there's also cash. i think we'll continue to see both cash and stock over the next months. >> what about the volumes? if we do look at the proportion now that have the stock element in them, it's not only about the rerating but it increases volume on the paper. >> absolutely. overall volumes are up, around 80% this year. m&a volumes in europe. a lot of that is funded by stocks. that's new equity, either being shep accepted by shareholders or raised to fund acquisitions. the market is ready to accept that. >> are we seeing that this time around? can we gauge sentiment and value being created here, about just what the market's take is on these dales?

>> ultimately the market is the judge of these transactions. stock price on the target can go up. if the bid is shareholders don't like the transaction, they will tend to market down. ultimately for a deal to work, a stock deal to work, both sets of shareholders have to like the transaction and believe it creates value. >> what about the fact that what we've seen has been in the pharmaceutical sector, the telecom secretatel telecom sector? >> u.s. m&a volumes have remained high through the crisis. european m&a volumes fell by around 50% peak to trough. we're seeing a recovery. it's in the core european industrial land escape against consumer, health care and industrials. >> it's what we've seen if we look at the equity markets over the last two to three years, let's say. we've managed to see a rally, particularly in europe. would you say some part of the

m&a volumes are about catch up? >> there's no question around that. it starts with the equity markets. we've sean a recovery in european equity markets. we've seen net inflows. there's no question there's been deal demand which has not been happening over the last two years and is now starting to come to the fore. >> intercontinental exchange made an announcement. they say the decision to scale back on price and allocation last week has probably killed the market for upcoming new issues. so is this surge in appetite for ipos really over? william? >> there's a question. i certainly don't think so. we had a robust environment in the first three or four months this year. ipos were being priced and were trading up. we have a different environment now. there's more caution. we've seen u.s. indices trade

down. high quality stocks continue to perform well. we think that high quality names are going to continue to perform well but it will be more selective. >> if we look at the u.s. example, seven ipos in the u.s. this month, just shy of half the companies listed. and month to date have priced below their range. the pop we see in the stocks is far reduced. is that, again, just about being more selective right now? >> i think so. they've been pricing at the bottom end of the range but within the range. there's been less of a pop which maybe means maybe the price is more the right one. it will be more selective and it's probably a more normal environment we'll see over the coming months. >> let's look at jd.com, for example, seems to be trading very well. we have alibaba on the horizon at some point. is the appetite, the mood, the

markets constructive for those kind of names to come to market do you think? >> yes, absolutely. we're seeing market record highs, net inflows into markets. and we see an extensive pipeline over the coming months. we think a lot of that will get done. >> how much will get done? >> i'm not too predicting the future. >> if you had to predict in terms of percentage? we've been talking about strong pipeline for the last few years. if you had to make a guesstimate about how many and what po proportion will come to market given the conditions right now and a more selective audience, it seems t. will be more selective. i would still expect to see the majority of things that are being brought to market getting done through to the end of the year. there may be delay but it will get done. >> they will get done. brilliant. william vereker, thank you.

we'll be heading to kiev for the latest, right after the break. i want to do something with this day. i want to build something. create something. i'm only one in seven billion, but i know i can make a difference. i'm just asking for someone who believes in me. for over 200 years, citi's job has been to believe in people and their ideas. wherever ideas come alive. wherever you are. the world's citi.

you're watching "worldwide exchange." these are your headlines. we can go our own way. astrazeneca welcomes pfizer's

decision to withdraw its takeover approach. while ihg soars on reports. no end in sight for the crisis in ukraine. a military operation tonights in donetsk as gas deals with russia turn sour. and blame the fine print. bank of america discovers a $4 billion accounting error after a fed rule change. ukraine's president-elect petro poroshenko says he won't negotiate with terrorists. this comes as the nation's interior minister has retaken control of the donetsk airport after slashes with russian separatists. steve cedric is in kiev. steve, we've had reports come across the wires about the gazprom negotiations.

where does this put us as far as the negotiations are concerned? can we still see them as a step forward or that they're even taking place? >> both the events in donetsk and this very open public dialogue between the russian and the ukrainian government say to us what we already knew, julia, what you knew from your time in the country as well. we may have a pretty successful presidential election. i say successful in terms of that we have a clear winner and it looked like a clean fight according to the osce who we talked to earlier on. we have a presidential election, a clear mandate, who appears to have legitimacy. that's with one obstacle. we'll hit road block after road block. it will be difficult for the country and the government to get over all of those. the next vicious fighting in the last 24 hours. we didn't have deaths on the day of the election on may 25th but ever since then, the fighting

has taken a huge death toll at the airport as first of all the people's republic of donetsk sought to claim the airport and the government forces of ukraine. you heard those interior ministry comments that they've claimed it back. i'm told it's a porous border in the east, whether it be person until, equipment, whether it can get over the border very easy as well. so no one should assume that this anti-terrorist operation the government calls it is going to be over anytime soon. in terms of negotiation with russia, it's almost a shame, isn't it? the comments, the ec commissioner for energy, he said, look, we're imminent getting a deal, then yatsenyuk, gazprom, everybody looked to douse those operations. it's part of a bigger deal. we've had a lot of our assets taken in crimea. we want some form of money back for that as well.

clearly, diplomacy needs to be let to take its course. poroshenko, of course, said he does want to speak to his russian counterpart in early june as well. yes, we've come a long way but clearly events in donetsk and negotiations, we have an enormous way to go. back to you. >> thank you, steve. we'll check back in with you later on in the show. now, still to come, we speak to one investor seeking returns in columbia, peru and paraguay. stay tuned. that's coming up next.

welcome back to "worldwide exchange." russian foreign minister sergey lavrov is currently holding a press conference with his turkish counterpart in moscow. you're looking at those pictures. that's a live shot of him. he's already said this morning that he's calling for an end to the violence in ukraine without delay. we've had been talking about the violence we've seen as far as donetsk airport is concerned. numerous people killed and injured while the ukrainian forces have been retaking that airport and the ukrainian government saying they now have that in control. this, of course, the russian

foreign minister saying he wants to see an end to the violence. peru's gdp grew 4.8% in the same period as last year. one of the world's biggest producers of gold, silver and copper has seen growth. making it a standout economy. we are joined by juan satori. they've been praised as being some of the rising stars of latin america. give me the crucial defenses between those two countries and mexico right now which i think investors as far as latin america are concerned. >> the origins of growth in these two countries are different. mexico followed the states.

columbia, peru, has followed china. what we have is an earlier stage. >> i think of oil and mining. is that where you are specifically investing or where else are the opportunities? >> what are the strategic advantages? peru is one of the biggest mining countries in the world. there's a big advantage there. depending on the stage of that growth, the opportunity may be later on, for example, infrastructure in peru or all that capital being invested into consumption or real estate or later stage opportunities. >> you said the magic word, the word consumption. what about getting involved as far as the retailing sector is concerned in these countries? i know you told me earlier you're not actually involved why not? >> we think the cycle is more attractive for earlier stage

have manies. look at chile, for example, there's more shopping centers per capita than the united states. in peru, columbia, there's a lot ever infrastructure, power generation opportunities before the capital flow. >> talk to me about paraguay and uruguay. what are you investing in there? >> we are now starting to invest much more in some of the new countries we see opening up for investment. one example is paraguay. it's in the middle of latin america. has the potential of mining for oil. it never was explored. there's potential for finding big things there, going early stage and the economy to grow at much faster rates. peru at 4.5%, parg guy, 13% gdp growth last year. >> how sustainable is this? >> sustainable as long as companies and foreign investment is designed the right way. an example is uruguay. we started five years ago with a small blueberry plantation in

uruguay. we started with $600 million. our investments in the companies allow the companies to generate sustainable growth. >> how do you get exposure to these things? you have to imagine it's about relationships on the ground. just understanding what the opportunities are there are the crucial barrier for many investors. >> it's not always easy. look at symptom exchanges. in uruguay there are four. in paraguay, less than ten. we can't approach it in the traditional way. the only way is private equity or hands-on, private investment, building company from scratch. >> talk to me about the returns we're talking about quickly. >> it depends on the type of assets. we can go from infrastructure returns. much higher than mature economies all the way to a culture that is a more defensive play that can generate 10% to 12% or mining oil where it

depends where we can make outstanding returns or don't. which is part of the risk of those investments. >> frontier markets. exceptional if you're willing to take the risk. juan sartari, great to talk to you. can comments from mario draghi put investors back on investor watch? we'll leave you with a look at how the futures are trading ahead of the open on wall street. stay with us. we needed 30 new hires for our call center. i'm spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast? go to ziprecruiter.com and post your job to over 30 of the web's leading job boards with a single click; then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free

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welcome to "worldwide exchange," i'm julia chatterley and these are your headlines from around the world. better off alone? shares in astrazeneca fall as pfizer withdraws its 70 billion pound bid. investors buy into ihg following a weekend report that a rusu.s. buyer has made a secr $6 billion offer for the hotel group. and russian's foreign minister calls for an end to the violence around the donetsk airport without delay. read the fine prints. reports say bank of america discovered it made a costly $4 billion accounting error when it found the fed changed the rules

for reporting capital. you're watching "worldwide exchange." bringing you business news from around the globe. if you're just tuning in, thanks for joining us on "worldwide exchange." quick check now on how the u.s. futures are trading ahead of the market open today. as you can see, gains across the board following on from friday. markets closed yesterday. the dow futures indicating higher, around 64 points now. the s&p 500 trading above that 1900 level for the first time ever, indicating a high right now of 7 points. similar story for the nasdaq. gains across the board there. we're seeing the european markets adding to yesterday's gains as you can see, the ftse 100 and the xetra dax over in germany adding around 0.5%. relatively unchanged for the french markets right now. continuing to focus on what's going on in the ukraine, we're seeing a bantering of words between the ukrainian government

saying they want to see gas returned, that the moscow stole when they annexed crime k eed c. we've had responses from gazprom saying they don't know what they're talking about. the view is any dialogue is good dialogue right now. how do you make money in these markets? let's listen in to what some have been telling us this morning. >> you have the pfizer blowup, you have the situation happening from ge. from an american standpoint, you start to think, what are we doing in europe? there's slow growth, a tremendous amount of expertise and talent. when we have situation where the government is getting in the way like they are in the uk -- >> we're in range bound in the ftse. if you put the ftse into dollars, it looks like the s&p. if you put the s&p into dollars,

it would look range bound. this currency impact has been massive from a macro economic per spektive. >> mthat's the reason people hae been dragged into war. this is a perfect opportunity to switch out of bonds and put more money back to work. european central bank president mario draghi reiterated the bank's willingness to employ unconventional measures to tackle low inflation. speaking at the central bank forum in portugal yesterday, draghi said policymakers must be watchful of the downward price spiral. annetta is in portugal. how are mario draghi's words going on there? >> it was as expected. among journalists, there were not a lot of surprise moments when listening to mario draghi.

but there is more detail. there's more cooperation among central banks, something madam lagarde was urging in her speech. i caught up with the head of the mexican central bank and asked him whether he is well prepared for potential timing of the rates in the united states. take a listen. >> so far, i think the fed has gone out of their way to asufficiea sufficieassure markets. i think that has helped them come down. in any case we're prepared with high reserves with fiscal and monetary policies. and at the same time, if you can project and you can show that your economy has strong

fundamentals and is going to be able to grow into the future, you're much better off. that has been a very important fact why mexico has been trying to look at a very important structure of reforms. we're very close to them being passed. >> i'm now joined by ed posen, the president of the peterson institute and of course the former boe lawmaker. can i say that? official. so my first question would be, it seems like the ecb rate cult is pretty much a done deal next week. are we going to hear something about easing of credit conditions? >> i think mario draghi and the team here are trying to set the foundation for more actively addressing the lack of small bids credit throughout southern europe and europe more broadly. that will require measures of

l certain things. >> is that conference helping to push that topic a little bit? >> i think it is. you can see peter and ben have done the conference. they are in addition to being the house intellectuals, they're pushing this idea of dealing directly with the credit problems. certainly i'm about to give remarks and mine will be focused on the reasons why it's rational for the ecb to go down this path. others have raised it in the conference. i feel this is useful ground work. >> let us talk also about the effect of a potential negative deposit rate. there are people saying it won't really do a lot positive. >> yes. i'm in that camp. it won't hurt. and it would be good because then the ecb is acknowledging with money that they are worried about the down side risks. it's not going to have a very big impact. it's going to be 25 basis

points. i don't think anybody feels they can go much lower than that. the impact will be limited. there's people who hope and president draghi mentioned this yesterday, it will have an exchange rate effect. even that, i don't think it will be huge exchange rate effect. it affects germany more than some of the other members of the uni union. i'm not that excited about the rate cut. >> what can dr. draghi do to get the rate lower? >> i don't think he can do much, nor should he for that matter. the euro area is broadly in balance with the rest of the world. it's about the exports inside the euro area that germany and the north were busy exporting capitals and goods to the south. the south has to pay that back. the other thing is the g7 has an agreement that the major economies don't directly talk down their exchange rates or

intervene in their exchange rates. japan is divided by that. the u.s. is divided by that. that's another reason they have to focus on domestic, qe, rather than exchange rate. >> let us also talk about the boe because you have insight. when is the boe going to hydrate in your opinion? >> the recovery is strong but nowhere near overheating. if i have to pick a guess, they will probably raise in february 2015, the last inflation report meeting before the election. >> adam, thank you so much for joining us. >> thanks for having me. >> julia, you see, the highlight of the day is still not here. it will be mario draghi's speech or armchair discussion, how they call it here. with that, back to you. >> thank you very much, annetta. we're looking out far that. coming up, what plans does tom cook have up his sleeve for

the next worldwide developer conference?

you're watching "worldwide exchange." welcome back to "worldwide exchange." these are your headlines. we can go our own way. astra welcomes pfizer's decision to withdraw its takeover approach while ihg soars on reports the hotel has rebuffed a

bid from a secret u.s. rival. dozens are killed in an ongoing military operation in donetsk. russian's foreign minister demands the country stop using force against its civilians. and blame the fine print. bank of america discovers a $4 billion accounting error after a fed rule change. now, apple wants to make the iphone the center of your life with plans to have the smartphone control everything under your roof. morgan brennan is at cnbc hq with more. i do feel like my phone controls too much of my life. quick, give us the details. >> brace yourself. there's going to be more. apple is hosting a worldwide developers conference in san francisco next week. it's been the site of many big product announcements over the years. apple will unveil a new smartphone software to turn your

iphone, ipad or an apple tv into a remote control for appliances and lights and security systems. users, for example, could set their lights to turn on automatically when they enter or set the alarm when they leave. the system would reportedly work like apple's made for iphone program. third party hardware could be connected. apple is expected to use the keynote address to emphasize all of the privacy protections built into the system. that's given concerns about company's collecting consumer data and government surveillance programs this could be a knock on google which has also jumped into the smartphone home market but has been criticized for its privacy policies. apple has been searching for new sources of revenue beyond the iphone and ipad. in the past year it launched car play, which lets drivers see iphone apps on the dashboard of

their vehicle and ibeacon. both use blue tooth technology to connect apple's ios software to other nearby devices. apple's entry into the market could smell bad news for some smart home startups that offer similar services but it could speed up adoption of smart home devices by consumers. back to you, julia. >> a case of watch this space. have a great day. let's take a look at today's other top stories. wording reportedly helped bank of america verify is made a $4 billion mistake. this has put plans to boost its dividend and buyback in jeopardy. "the wall street journal" says staffers suspected they miscalculated the bank's regulatory capital when they prepared the first quarter s.e.c. filing. u.s. authorities are reportedly broadening the chase for money hidden in swiss bank accounts. the head of the tax division

tells "the wall street journal" the u.s. expects to collect more evidence on accounts beyond the swiss border. they have traced money transferred to banks in italy, ireland, and the cayman islands. a "wall street journal" report says it's part of a pilot program designed to boost trading in shares of smaller companies. the so-called trade act rule would require trades for certain stocks to take place on exchanges and less private venues, including a major price advantage. coming up after the break, u.s. investors return after the memorial day holiday with a slew of economic data on the agenda. we're live from the floor of the emc in chicago.

to find out how you should be positioned.

russian foreign minister sergey lavrov is currently holding a press conference with his turkish counterpart in moscow. he's been across the wires making numerous comments, also saying that he demands that ukraine stop using military force against the civilian population. he's also said the threats of new western sanctions over ukraine are ridiculous right now. steve is in kiev to give us the latest on this. steve, what's your take here? it's not a new line as far as the concern over violence in the east but obviously that's stepped up again in the last 24 hours. >> yes. look, it's a protection issue. when does a freedom fighter between a terrorist and vice versa. i had this conversation with my fixer here.

how did you talk about the i.r.a. in the '80s and '90s. you're going to continue to get this different interpretation from the russian side and indeed from the western side as well. the hope is, of course, this can abate somewhat as well. i think the comments from mr. lavrov are interesting. the threat of those sanctions is not ridiculous. it's a real threat as well. i spoke to senator rob portman in kiev just this weekend. he said, look, the third wave of sanctions could be important to getting the russians to the table. i spoke to another person, she said thank you, america, we're looking forward to a third round of sanctions. many people believe more targeted sanctions against deliberate interests and indeed specific industries is very important indeed as well.

as painful as it may well be for the west and ukraine as well. the hope was of course now we have what is seen to be -- widely seen to be a legitimate president elect of ukraine. actually dialogue between russia and ukraine could start taking off a little bit better now and we could avert having more sanctions. that's the risk that diplomacy fails and sanctions are very much on the table. what i do want to say to viewers, we'll get a u.s. take on this. right at the top of u.s. programming we'll speak to jeffrey piatt, the u.s. ambassador to ukraine. >> thanks so much, steve. the markets continue to ignore perceived concerns about what this means as far as further diplomacy is concerned. let me give you a look at how the european markets are trading, relatively unchanged given the headlines we've seen out of ukraine in the last 20 to 30 minutes or so. gains across the board for the uk markets.

the italian market in particular adding to the 3.6 gains that we sought yesterday, too. let's give you a look at what's on today's agenda. at 9:00 a.m. we get the case-schiller hpi and at 10:00, consumer confidence and earnings for autozone out before the opening bill. gains across the board. higher by 62 points for the dow, the s&p 500 trading above that 1900 level, 7 points or so higher as far as these futures are indicating and the nasdaq, 16 points higher. also now joining me from chicago is scott shellodi. we have the s&p 500 trading at a record high. but a real focus as far as the

data is concerned on the economy. what's your take and what are you looking for this week? >> i think the big prize everybody has their eye on, what draghi may or may not do and then we have nonfarm payroll. we have a schizophrenic market on our hands. traders here will need to see two, three, four economic figures. today might be a great day to have that start to see good news or bad news in one direction. you've seen that money sneak into the equity markets. at the same time, the bond mark set telling us we have a lot to worry about here. we have some of those here as well. we have a rallying bond market at the same time we have a rallying stock market which has guys with their hands in their

pockets, not quite sure what to do. >> how do you take risk and make money? a schizophrenic market as you call it? >> i'm a big believer in the bond market. it's a bigger market in total. i think that's been the truth serum as of late. i know it doesn't seem like a good investment, give the government your money for ten years and get a 2.5 return on it. i think if you own calls or call spreads and something that's cheap for a bond market rally or rates going lower. with the gains that we've seen in the equity market we haven't seen growth or gdp really kind of come and catch up and support those equity prices. they're back to that rally because of maybe some accommodative mode coming around the corner. i would say if granny died today and gave you $10 million, i'd be hard pressed to pile into the stock market with it. i think in the short term we want to go for a rally in the bond market.

>> to offer more stimulus? >> i traded there for ten years. there are some talks that maybe he comes in stronger than expected. but i still think the delta or the chance that he gives us something disappointing is greater than overshooting the estimates here. i'm really worried about what we have happening in europe. we need europe, especially here in the states and asia to help get us out of our doldrums here. i think draghi is worried about that low inflation, longer issue that we have here as well. deflation is a like logical problem. i think that's what the biggest worry is right now. >> i would agree with you. have a great trading day. that's it for today's show. i'm julia chatterley. thanks for watching "worldwide exchange." "squawk box" coming right up.

welcome to "squawk box." pfizer dropping its bid for astrazeneca. and a billionaire chocolatemaker has declared victory in ukraine's presidential election. he tells cnbc his priority as president will be to restore peace to the country. and apple is reportedly said to unveil a new software platform that will let your iphone control household appliances and more. it is tuesday, may 27th, 2014 and "squawk box" begins right now.

good morning and welcome to "squawk box" right here on cnbc. i'm andrew ross sorkin along with joe kernen. michelle caruso-cabrera is here today, sitting in for becky quick. we have a lot of news to talk about. traders have four more sessions left in the month. that means plenty of talk this week about the so-called sell in may or go away theory or predictions of a june swoon. on friday, the s&p closed at 1900 for the very first time. take a look at equity futures at this hour. the dow looks like it will open up higher, nasdaq up as well. close to 17 points higher. the s&p 500 looking up with a green arrow close to 7 points higher. a couple of economic reports coming this morning. you should be paying attention to. at 8:30 a.m. eastern time, durable goods. also on the docket, the s&p case-schiller index. we have a lot to look forward to. in the meantime