good morning, everybody. welcome. you are now watching "worldwide exchange." i'm louisa bojesen. these are your headlines from around the world. a shock, profit warning sending shares s is in lufteha issue profit warning. and buying for the top job, oil ministerslining over the secretary general's next role at

opec. a secret candidate from nigeria refuses to admit she wants to be secretary general. >> i do not believe that countries actually lobby for that job. it is a consensus and consensus it will be. and uber extends an olive branch, offering to open up its platform to london black cabs now as they threaten to bring traffic chaos across major european cities. you're watching "worldwide exchange," brings you business news from around the globe. good morning, every. hello. welcome. yes, you're watching "worldwide exchange," very glad you're with us today. on today's show, we've got a packed two hours for you. his successor has not gone too far in the war against deflation. find out what else the former

ecb president told us in his exclusive interview. we'll be showing you that today. we head out to tokyo to get the details of toyota's latest recall as they admit to potentially defective air bags. find out what other carmakers could be up pacted by the same supplier. and questionable behavior is justified. we get the surprising results of surveys that show some of the world's top executives think unethical activity is okay if it helps businesses get through difficult times. more on that at 10:45 cet. shares s is in luftansa, t cite difficulties in both passenger and freight business as well. we are joined from frankfurt. annetta, this profit warning coming out of the blue. >> it is coming out of the blue

as what we were hearing from lufthansa over the course of this year. it sounded optimistic that they're well on track with their restructuring program and that also the revenue situation is okay-ish looking at the state of the industry. that explains this wild reaction of the shares. looking at what that profit warning really means, they're taking away almost 30% of their operating profit forecast for this year and it's almost halving it for 2015. it's a tremendous change in strategy. one could actually argue it's sort of kitchen sinking here because they have a new ceo since beginning of may. it's not a stranger to lufthansa. now he's on top of the company, who's planning on giving us more

detail in june when it comes to restructuring. with that, back to you. >> annetta, thank you very much for that. the militants seized control of the iraqi city of mosul. the white house pledged to help the largely shiite government in baghdad to push back against the sunni forces. mosul has a population of 2 million people and tens of thousands have fled since the fighting started. the city is situated near key oil fields which hold an estimated 24 billion barrels of proven resources. this happening as the opec meeting is kicking off in vienna. oil prices have been stable and many expect the output tarring tote remain unchanged, however, there could be internal wrangling for opec's top job. steve is in vienna once again. another year, another opec, steve. >> it's been many opecs and 30 million barrels a day has been the headline figure for the last

three years. they produce what they like around there and try and keep the old price stable with saudi arabia what is interesting compared to last meeting, we were worried about shell and new production coming from outside and inside opec which could send the price lower. now it is the opposite equation. interesting to see the iraqi tensions you just mentioned add to that. the fact that we haven't gotten a nuclear deal with iran yet. a temporary lifting of sanction on their oil may be an issue if they can get a full lifting of the sanctions. libya is producing a couple hundred thousand barrels. they can produce 1.6 million. the tension is to the upside in price. a lot of people in the industry are looking at $110 a barrel as potentially a breakout point if indeed we see more tensions ahead. a lot of question marks about the upside rather than downside,

bearing in mind as well, one of the big internationals lowering their global institutions. a lot of issues about the ability of opec to meet the comply. i'm looking over my shoulder now. i have a feeling that mr. niami is the oil minister of saudi, the king pin of the oil market, many believe. mr. niami -- hang on one second, louisa is the market well supplied by saudi? there you go. we got nothing. he's the gentleman at the front, the dou he's powerful, small in stature but enormous in terms of power. there are concerns that the roughly 9.5 to 10 million barrels a day, they'll have to go up to possibly 11 million barrels a day as the demand

continues to grow. now we have a media scrum in the next couple of minutes, louisa. i should probably get on and have a look that the one. the other big issue is the secretary general role. the libyan has been trueing to retire as secretary general. they keep getting him back. they can find a candidate. now it appears that the nigerian oil minister put her name in the frame but she denied it flatly as you heard from our headlines on "worldwide exchange." i'm going to try and get a word from mr. naimi inside and upstairs in the big media scrum. >> we'll be hearing a lot more from steve throughout the next many hours. here in europe, this is what we're looking at this morning in terms of european equity markets. stoxx europe 600 down by 0.3% at the moment. selling, we saw flattish close

taking place in last night's trade if you joined me for "closing bell" as well. the ftse mib over here just underperforming a little bit further, down by 0.8%, having been a slight outperformer in yesterday's close as well. and a couple of the corporate stories include the following because we've been looking at the shares and the troubled italian lender monte dei paschi di siena, suspended this morning after continued successive losses on the third day of the bank's 5 billion euro share sale. bmps opened in the red. the shares briefly re-opened within the last hour only to extend the fall to almost -- 21% as you can see. shares in valiourec, the company warned that core profit will be 10% lower in 2014 as customers,

including petrova off as well. airbus, off by 3.5% as investors react negatively by dubai airlines to cancel an order for some jets. it's not a financial bad news story either. speaking first to cnbc earlier, jeff asked the ceo about the cancellation. >> this is something we've very cognizant of, the need for capital deployment discipline. i've been in the airline industry for a long time. in essence, the one thing i've learn, the way to make money in the industry is to be very disciplined, particularly in terms of incremental capacity. i suspect other airlines are coming to a similar view, not to get carried away in terms of the global recovery. and to stay level headed. >> now, better news for the spanish retailer inditex.

investors are welcoming a better than anticipated set of first quarter numbers despite posting a drop in net profit. the retailer says it expects negative currency effects to lessen considerably by the end of the year. switching gears from equities over to the fixed income markets, again, we've been looking at the yields following closely. today we're seeing a little bit of selling and the gilt pushing that yield higher. italy seeing a sub3% yield. the u.s. treasury hanging on to 2.6%. the bund, 3%. the currency markets, fs markets, euro/dollar, 1.3537. relative unchanged from yesterday. the dollar/yen, 102. the aussie/dollar, 0.97 and the pound against the u.s. dollar, 1.67.

we go to sri jegarajah. talk us through what's been taking place on your side of the world. >> a little bit of consolidation in some of these markets. and some weakness but some resilience as well. the nikkei 225 settled now. we are up by about 75 points at the close. remember, that we saw three-month highs earlier on during the week. some give back yesterday. once again, some consolidation towards a close. we're looking at the automaker section. earlier on, toyota said it's extending a recall that it first announced back in 2013 to 650,000 further vehicles. this is down to a defective air bag. and nissan making comments on this area as well. we're watching the auto sector. elsewhere, no great slack shakes in the shanghai composite. the greater china markets will be in full focus this week as

they have been for the past week or two. on friday, we get a big day to deluge, industrial production, retail sales and fixed asset investment. amongst them, in my opinion, i think the retail sales will be the one -- the data point that investors will be gravitating upon. there's a long-term story about rebalancing towards the consumer in the chinese economy but at the same time, the short-to-medium term, the domestic economy has been sluggish. we will have an idea of how the consumer is faring towards the end of the week. elsewhere, the bond based sensex, give back there after, you scale fresh highs earlier on in the week. all these markets really in something of a holding pattern till we get leadership from the macro data from china. that's where we stand right now, louisa. back to you. >> see you in an hour's time, sri.

here in the studio i'm joined by james ferguson, founding partner at the macro strategy partnership. good morning. awake? >> just about. >> talk to me a little bit about what we're seeing at the moment and how you think the markets are performing and whether we should be dipping our feet in, whether we should be taking profits, waiting for volumes to pick up again? >> i think the most significant issue that we know is coming is the end of usqe and the tapering there of. the fed is starting to leak stories about how they might manage their balance sheet when that occurs. trying to track people's ideas and attention to the fact that treasury yields might go up. qe has already ended twice. qe 1 ended, qe 2 ended. it makes treasury yields go down, not out. it surprises me that they are responding by rising earlier

than one might have anticipated. usually the movements are closer to the timing of qe. we're way ahead of qe ending which is scheduled for around about this autumn, treasuries have quite a strong move. that's reverseing. everything is right with the world again. >> what target level should we be looking at for the u.s. tenure? >> well, you know, if we assume that it came from about 3% -- >> yes. >> if we assume we drift back up, we're about 2.65 or so at the moment. if we sort of drift back up, 2.7, 2.750, something like that, once the qe ends, depending on how long the question is, we have actually seen recently a strong spike in bank lending. if that continues, maybe the economy will pick up the slack. assuming that it doesn't and we just lose that impetus from qe and all else is fairly in

balance, the treasury yield could go down to 2.5 or 2.4. >> i'll jump in for a second. we're hearing that opec ministers are in agreement before the meeting to roll over the existing 30 million barrels per day output ceiling. that is according to reuters quoting venezuelaen sources. the oil ministers are in agreement to roll over this existing 30 million barrel per day output creeling that steve was talking about. it seems to be the magic number time and time again for the opec members. i'm also looking at a couple of other flashes on our wires from the iraqi oil minister talking about how the violence in mosul is not going to be spreading to the south of the country there are increasing worries with regards to what will happen in iraq and whether we could be looking at essentially a split of the country. into a north part and a south part as well. we're looking closely at iraq as

this opec meeting is taking place. just beware we're getting flashes through on our wires now. james, what do you think of oil, of commodities at the moment? >> oil is in an interesting situation. generally speaking, the recent news notwithstanding, the oil market is reasonably well supplied at the moment. and you know, all the pressure looks to be downwards on gas prices and coal is sort of leveling the mix. it all looks reasonably under control. but we have to remember there's very little ability to absorb shocks. mosul news shows if we were to lose iraq while libya is also out of commission we could have a difficult situation on our hands with saudi always famously able to fill in any gaps. we haven't had any data on saudi oil fields and capacity now for decades. so no one is really sure just how much they can satisfy.

what is the case, clearly, is that famous peak oil is not the concept we need to worry about. what's actually happening is we had a peak on onshore light sweet crude, easily accessible, easy to get your hands on the oil. as oil gets more and more expensive, even as you look at the shale story in the u.s., what that is is an enormous increase in the amount of money you have to throw at each field in order to get the oil out. oil's going to get more and more expensive in the long run. >> just because you find shale, doesn't mean you find oil. right? >> absolutely. >> you're with us for some time yet. keep your e-mails coming through, worldwide@cnbc.com or worldwi worldwide@cnbc.com. find us on twitter as well @louisa bojesen. coming up on the show, planning to catch a cab in paris

today? you might have a difficult time. protest against the app-based taxi service uber will likely see you move at a snail's pace. that story, next. show 'em the curve. ♪ it's beautiful. it's more than that... ...it's perfect. introducing curved ultra high definition television from samsung. that's keeping you from the healthcare you deserve. at humana, we believe if healthcare changes, if it becomes simpler... if frustration and paperwork decrease... if grandparents get to live at home instead of in a home... the gap begins to close. so let's simplify things. let's close the gap between people and care.

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good morning, everybody. welcome back. i'm louisa bojesen. uber has extended an olive branch to the london taxi industry by announcing a black cab option for the app. this as taxi drivers across europe protest what they're calling a lack of regulation of the app-base d service. in london, black cabbies will be convergen on trafalgar square. and in paris, the french drivers are planning what's being dubbed as escargot operations, a snail's pace journey through the city center. stephane is on the ground in paris and joins us now.

stephane we're anticipating disruption in service. >> there's perhaps less traffic behind me. taxi drivers are blocking the main access of the main airpt as of the french capital. they are driving at a slow pace towards the center of the capital. you can expect more than disruptions later in the day. what are they protesting against? uber as you stated. not exactly for the same reasons as in london. in london, it's the lack of regulation. in france, they call it unfair competition. taxi drivers have to pay a license to operate here. around 200,000 euros per year. that's compared to almost nothing from uber, they pay a registration fee every year, nothing compared to the price of the license. the government promised it would regulate the sector but it won't address the real problem, which is the lack of taxi in france. there are not enough taxi in the french capital. it's not usual on the weekend to

wait for up to one hour to get a taxi. but still, french people believe that the strike is the right thing to do even if they have to wait for a taxi, even if there will be significant disruption today. based on the survey that was conducted during the last taxi strike in february, 56% of french people think that the taxi drivers are doing the right thing, which after all is not really surprising in a country where the strike is probably part of the french dna. over to you. >> stephane, thank you. have you ever tried usen an app to find a car? >> no, i don't take so many cabs. it's much more convenient but when it rains. >> are you like a harley, stephane. >> no, much smaller than this. this morning, there's also a train strike in france plus the taxi strike.

it's quite difficult to travel through the french capital. when you travel on a motorbike, it's much easier. >> i'll keep your image of you on a harley alive. coming up later, jo bertram will be telling us about the olive branches being offered to london's black cabs. that's happening at 11:20 cet. let us no, do you use the taxi services, uber, halo or others? @louisa bojesen is the twitter address. find us on e-mail, worldwide@cnbc.com. of course read more about the uber revolt here in europe on cnbc.com as well. now be the cost of u.s. sanction breaches could hit france's biggest bank, bnp paribas by as much as $10 billion. the cost for settling the affair looks set to dwarf previous penalties for comparable offenses meted out a few years

ago to the likes of hsbc, ing and jpmorgan chase. james, i look down the line of the other banks that potentially could be looking at fines. deutsche bank is being mentioned. do you think we'll see more of this? >> yes, the essential implicit background to this story is that when the authorities in america stepped in and bailed out the banks in the heat of the crisis, they bailed out all banks. any international banks operating in the u.s. were given access to funds just as quickly as u.s. banks were. in fact, the press in the states subsequently has made a lot of the fact that it's actually international banks who were featuring most prominently in the top ten beneficiaries. what's happened in the states as well in the background is, as we've gone through the process of resolution, as the banks have gotten closer and closer to being fixed, they've been strong enough to withstand the state taking some of its money back. now instead of the perp walk and

prosecuting individuals, what's happening in the states is the banks have been encourage, persuaded or forced to pay large chunks of the money back, through the fine mechanism. u.s. banks were often fined for breaches of the mortgage-backed securities, et cetera. they often didn't actually put these securities together. we're looking for -- these are fines looking for a misdemeanor to hang themselves on. >> james, thank you very much. for being with us. appreciate it. james ferguson, joining us from the macro strategy partnership. still to come here on the show, as uk unemployment sits at a five-year low, has the country's jobs continued to recover? we'll be getting the latest reading and we'll be getting more analysis, next. we asked people a question,

how much money do you think you'll need when you retire? then we gave each person a ribbon to show how many years that amount might last. i was trying to, like, pull it a little further. [ woman ] got me to 70 years old. i'm going to have to rethink this thing. it's hard to imagine how much we'll need for a retirement that could last 30 years or more. so maybe we need to approach things differently, if we want to be ready for a longer retirement. ♪

you're watching "worldwide exchange," bringing you business news from around the globe. welcome back, everyone. a shock profit warning sent shares in lufthansa sharply lower as the german airline says this year's and next year's results will be hit by competition and recent strikes. investors are buying retail stocks, though.

inditec shrug iging off. and opec meets right now, this as wrangling over the top job hangs over the talks. >> i do not believe that countries actually lobby for that job. it is a consensus rule and consensus it will be. and uber extends an offive branch, the app offers to open up its platform to london black cabs as taxi strikes lobby to bring chaos across major european cities. welcome back, every. i'm just looking at some flashes that are hitting our wires on the uk data front. we're looking at a uk three-month april unemployment

rate. the lowest since november to january of 2009. minus 161,000 is the uk ilo three-month april unemployment figure. that's a 6.6% unemployment rate that we're looking at. we're looking at the may jobl s less claim at minus 24,000. we're looking at average earnings plus 0.9%. that was forecast to be 1.2%. so that's slightly lower than anticipated, the average earnings, march average earnings unchanged. but, again, the april unemployment rate, the lowest since the november to january period of 2009, a 6.6% unemployment rate is what we're looking at. let's talk about the uk economy as we just look at what sterling is doing against the green back.

marvin barth joins me now. we're looking at unemployment in the uk, 6.6%. we saw sterling just here over the past couple of sessions hitting an 18-month high. we've had positive data, the industrial output data, for example, on top of these figures. what do you make of it? >> these data are consistent with exactly what we've seen for the last several months. the uk economy is on fire. it is perhaps the best performing economy within the g-10. it's one ofs reasons sterling has continued to see new highs. and why we expect it to continue to be one of the strongest performing currencies within the g-10. it is interesting to note in those data while you do see this very strong trend of industrial production and activity as you noted from yesterday's data, the decline in the unemployment rate much faster than people expected.

a below consensus reading today. you do see the softer labor wage data there as well. which is constraining the upside pressure in inflation, which ultimately is the bank of england's mandate. you have this tension here between a strong economy and a lack of inflation pressure pushing the bank of england to hike rates as quickly as people expected. we do think that's going to help contain some of the strength of sterling despite the underlying strength in the economy. >> what are some of the targets we could be looking at? how much further upside could sterling have? >> well, we think it could get as high as 171 in the near term. we do see it descending back down to a 168 range over a three-to-six-month horizon as people begin to see a disappointment in the pace of rate hikes coming from the bank of england, due to the lack of

inflation pressure. and then on the opposite side of the atlantic, remember, currencies are always a relative value game here. we do see an acceleration in u.s. inflation. in fact we've just revised up our u.s. inflation forecast for cpi based on some of the adjustments to california's energy prices as well as rising gasoline prices. and those are the type of things that are going to push the fed forward a little bit earlier as james bullard was saying earlier this week. >> you're staying with us for the time being. very good thing. we'll come back and talk ecb and things like that in a couple of minute's time. if you're just joining us, this is what we're doing in the european markets. we're lower across the board today. we were called a couple of points down. that fits pretty well. the xetra dax below the 10,000 mark again. the bond markets, we've seen a trend of lower yields here over

the last couple of weeks, really. but we're seeing yields pointing higher now in most of the ten-year bonds at the moment. the italian yield a couple of points lower, not much, though. currency markets, sterling, we were talking about them a second ago there. euro/dollar notably, 1.3537. a pretty stable day of trade. the world bank has lowered its forecast for global growth this year, urging developing economies to ramp up the pace of reform. the bank expects emerging markets to grow by 4.8%, down from its january estimate of 5.3%. highly developed markets are forecast to rebound later on in the year. now, fifa president has been told he should step down from his role by european officials.

uefa executive committee member said he should not seek re-election next year because of corruption claims. the head of the splish fa criticized blatter's accusations that it was motivated by racism. construction work continues at the stadium which will host the opening world cup game on thursday. temporary stands have been built at the sao paulo arena to accommodate more fans, although they only passed safety tests last week. the match will be watched by 61,000 spectators and 1,500 journalists. will the new stadiums, though, which make up one-third of world cup spending generate further growth for brazil's economy? one economist said the boost from investment spending is baked in. he jones us here at the desk at about 8:15 cet. now, we're not finished yet.

these are the famous words uttered by mario draghi after he slashed interest rates and announced a new package of liquidity measures last week. will it be enough to combat the risks of deflation? we asked the former president of the bank. >> it's clear that the fed, the bank of japan and bank of england cannot fix all problems, of course. and it is extremely important that at the same time the ecb is sending strong messages to governments on sound management to the private sector on appropriate and sound fixing of all problems of the private sector, including the banks and it is something which is of extreme importance and also to clearly say that structural reforms are of the essence. that being said, it seems to me

that the decision which was taken, provided they are accompanied by such messages in particular in europe, of course, where structural reforms are absolutely of the essence but the decision taken by the central bank are justified. >> marvin barthis from barclays. trichet indicating that central banks can't be the only stop to go to. >> no, they can't. clearly, the authorities in europe do need to take further steps on structural reform. they also need to adjust bank regulations so that the ecb can actually successfully launch its promise program of purchasing asset-backed securities. remember that that was one of the highlights of the meeting but it's not one of the ones that you're going to see in the near term, simply because there is no such thing as an abs market or it certainly is a market that's infinitesimal in

europe, in part because banks are discouraged from creating it. the ecb is trying to change that. they think that is one of the appropriate channels to get funding to small and medium enterprises in the periphery where that credit hasn't gotten before. i think the big change in the meeting was one that we'd actually seen foreshadowed a couple weeks before in president draghi's speech in portugal, he's basically taking a whatever it takes attitude. they are going to defeat disinflation and deflation. that's why you're seeing the euro weaken there. >> let me get your thoughts on flashes that have come through here within the last couple of minutes with one of the ecb council members, he talks about how they need a more holistic approach to abs regulatory treatment, he says the european commission must identify in a few weeks which abss are high quality and liquid. the efforts are under way to improve transparency. he talks about how they could

streamline abs reporting requirements and the rating agencies could publish abs ratings absent of sovereign cap, provide more transparency on how ratings are devive viderived. it's a call for more openness. >> absolutely. you saw that at the meeting last week. president draghi clearly said, look, we are doing everything we can within our power right now, we're using all the tools we have, including by the way, quantitative easing, when you stop sterilizing the smp, you are in fact undertaking quantitative easing. and they're doing everything they can and they've said now the ball is in your court, european regulators. we need you to work with us, get this moving. >> so you're saying that the ecb hasn't failed. which measure should we be looking at to determine the ecb's success, though? >> ultimaultimately they'll be

measured by their mandate. that is what we'll be judging them by. if you look at break-even inflation swaps over the last month, particularly since the ecb signalled in may they were going to be taking action at their june meeting, you've seen an upturn in the two-year one year forward, three years forward, and even the five year, five-year forward break even swap rate there. all of those rates accelerated over the ecb meeting last week when they did effectively come out with much more than people had expected. to me, that's what shows that they really are winning the battle here. they ult the maly are convincing people they will raise inflation. remember, a key driver of inflation is expectations themselves. if they can win that battle, they're halfway through. >> i noted in your musings as well, marvin, you talk about as you've indicated that the rise

in the euro is a little bit puzzling, the rebound after the ecb meeting. isn't a lot of it just because it was priced in? we were anticipating this so much. so the drop in the euro against the dollar, for example, was quite substantial. we're anticipating that the ecb isn't hiking anything at any point in near future. >> i think there's a few different things going on there, louisa. one is indeed you had seen a significant amount of euro depreciation ahead of the meeting on the expectation that they would be easing. they clearly foreshadowed that at the may meeting and with their further rhetoric after the meeting. you also did see, however, they did surprise the market and you saw an immediate reaction in the euro. it did bounce back. we think a lot of that is related to options related activity. there was an incredible amount of option positions put on ahead of the meeting. you could see that in the

inversion of the volatility curve around euro/dollar there. if you look at the movement in the last two days, the euro has again started to come off here. i think people are starting to get the message that ultimately the ecb is going to induce more negative real rates and that is what is going to ultimately lead to a euro that's weaker across the board. >> marvin, thanks for being with us. have a good morning. get yourself a cup of tea, something like that. it might be tea time. >> thank you. >> from barclays. thank you. china is ramping up government spending in a bid to boost sluggish economic growth. fiscal spending during may surged close to 25% from a year ago to $206 billion. fiscal revenue, however, slowing to 7.2% during the period. the country's finance ministry blamed this tip on a blower rate of economic expansion as well as a decline in property sales. chinese e-commerce firm

alibaba is buying the showers of you see web that it doesn't already own. the deal emphasizes its push towards handheld devices. alibaba's rival, ten cent, currently dominates smartphone screens in china. alibaba is calling its buyout of wc webb the biggest merger in chinese internet history. in japan, the nation's biggest manufacturers are turning pessimistic about business conditions with the bsi standing at minus 13.9 in the march to june period. the previous reading is 12.5 in the previous quarter. they're expecting improvements in the month following july on expectations of a quick recovery from april sales tax hike. toyota motor is recalling about 650,000 vehicles in japan, expanding a recall that it first announced back in 2013.

we go to the nikkei for the story. good to see you. good morning. >> yes, hello there. toyota recalled an additional 2.3 million vehicles actually including those that were recalled overseas that involved faulty air bag that led a worldwide recall last year. the initial recall in april last year affected around 3 million vehicles that used the same air bag. today the japanese air bagmaker sent an additional warning to automakers that used their product saying more cars could be affected. that prompted toyota to record 650,000 cars in japan as well as 1.62 million overseas, including the tundra pickup truck. toyota said there had been one report of the defective air bag inflater causing the seat cover to burn. toyota recalled over 6 million cars in april due to other problems which was their second largest recall in terms of number affected cars.

automakers are trying to use the same component for a wide range of vehicles to cut costs. that's led to a single faulty component, causing a massive number of cars being recalled in recent years. that's all from nikkei business report. back to you. >> thank you very much for that. let's give you a look at what's on the agenda in asia. the reserve bank of new zealand tomorrow will come out with its policy decision. another rate hike is expected. that would make it the third straight hike in a row and leave the benchmark rate at 3.25%. we should get a rate decision from indonesia as well. in australia, watch for the jobs data from may, that's due out 11:30 sydney type. and the japanese machinery orders will be out at 8:50 in tokyo, local time. still to come here on "worldwide exchange," backhanders and brown envelopes, how widespread is global fraud? we'll be breaking down the numbers from an ernest and young survey. we'll be finding out.

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welcome back, everybody. i'm louisa bojesen. emirates airline has canceled its order for 70 of air embassy dulles group long-range jets. emirates placed the order for

the jets in 2007 with first delivery scheduled for 2019. the airline was the second largest customer for a-350 planes. earlier on the channel, the ceo of the carrier fly-b says a number of airlines are remaining cautious. >> we are cautious of this, the need for capital discipline. i've been in the airline industry for a long time. in essence with, the one thing i learned is to be disciplined in incremental capacity. i suspect other airlines are coming in with a similar view. >> if you ever wish you could fly business class but prefer to travel on budget, the u.s. low-cost carrier jetblue launched its new business class cabin. morgan brennan has been taking a look inside. >> we're inside one of jetblue's

airbus a-320 equipped with a premium service, mint. jetblue will begin using these planes between los angeles and new york this weekend and the company just gave us an in-flight simulation to test drive these swanky new amenities. they include 16 lie flat seats with a massage feature, gourmet goodies, even cappuccino. this is the first time jetblue has rolled out a second tier of service targeting the much sought after transcontinental business traveler. starting at $599, it's less expensive than bigger competitors like delta and united. >> they are the biggest markets in the country for premium products such as the mint experience. we feel the prices are extremely high and the products are relatively average right now. we felt there was a great opportunity for jetblue to come in and do what it does best, overserve the underserved. >> the key to success is

actually back here in the redesigned core which has been overhauled with thinner seats to pack more passengers without sacrificing leg room. this plane is 23 feet longer than the largest planes in jetblue's existing fleet. despite the extra space dedicated to mint, there's still nine more seats than before. jetblue says this plan costs the same amount to fly. that means higher margins and the promise of bigger profits. even if mint doesn't take off, jetblue will still turn a profit as long as it can sell these seats. back to you. europe's top tech entrepreneurs and venture capitalists were out in force at last night's europa awards. we asked what advice they would give to continental startups. take a listen. >> it takes up time. raising money, you have to tell a good story, but it takes

management time up. >> advice to startups trying to seek investors i think is really to be able to show they have a great team and what the product does, what kind of problem it actually solves. and also to meet as many as investors as possible to get the word out. >> just build a kick ass product. if you have a great product, that will get noticed and people will come to you. in that sense, money is global by its nature. >> it was interesting to get funding. really what it comes down to is making sure you camden straight the value you'll be bringing to the market and that there is a market. high-profile fraud cases continue to dominate headlines. it's not restricted to financial institutions. new information released suggests there may be persistent inappropriate conduct that cannot be eliminated. it also suggests that companies need to do more to address emerging threats like

cybercrime. david stobel is with us. tell us about this report and what the main findings of the survey were. >> it's the 14th survey. we do this quite often. for me, it's always interesting that the trend lines don't self-correct to a more positive basis. when you have 40% of the respondents saying that there's still prevalent corruption and bribery in many of the markets be, that's troubling. >> what type of unethical behavior are we looking at, apart from direct bribery? >> i think it depends by market. you have everything from cooking the books, core kick backs, re-allocation of assets, distribution practices and interesting enough, i found probably one of the more interesting on cybercrimes, the post-snowden environment, signer is now famous.

as opposed to focusing on state sponsored espionage, really for us the story about activism, organized crime and you know, individuals that just do breaches. >> and there seems to be under cybercrime, there seems to be a big divergence in the various markets. for example, i'm looking at the mark net singapore, different to what you're seeing in japan, for example. >> i think japan has very good cyberbreach technology that on the defensive side. so i think economies that are technology oriented tend to be better protected. i think a story that will be around for some time and the amount of work that we've seen in this business for us in the last 18 months has quadrupled. it's all about breach behavior. >> how much of this isn't being reported, though, as well? if you're a company and you're being hacked you might not report that. >> i think without being evasive, i think, you know, government bodies are very

interested in helping corporates protect intellectual properties. there's not a government in the world that isn't providing advice to the main corporates on how they can better protect intellectual property. >> the efforts to prevent things like this, there are efforts that are put in place, training mechanisms for businesses they can subscribe to. are businesses doing this? >> i think one of the findings was there probably could be more training in abac, anti-bribery and corruption. another area, there's not enough knowledge of how breaches are taking place. for instance, one of areas we're seeing across the board, not only from the big four but from a lot of the boutiques focus on alert mechanisms to allow corporates to understand what type of attack mechanisms are available. >> i see here also that more than one in ten execs reported that their company has experienced a significant fraud

in the last two years. >> yes. it's interesting. another population i found even more astounding was one in five ceos have been asked for -- to make bribes in order to maintain a business position. 6% of cfos have been asked to be aggressive in accounting treatment relative to what we could call cooking the books. if you look at those type of statistics with be there's still plenty of work to be done. >> david stulb, thank you very much. global forensics leader. and who will the next secretary general be? we'll hear plenty more from the scrum there in a second.

this is "worldwide exchange." investors are buying retail stocks, clothing giant inditec cite underlying results. oil ministers are set to leave output unchanged amid growing concerns about upside pressure and security issues in

iraq. and uber extending an olive branch, the app offering to open up its platform to london's black cabs as taxi strikes threaten to bring traffic chaos across major european cities. you're watching "worldwide exchange," bringing you business news from around the globe. welcome back, everyone. islamist militants have seized control of iraq's second largest city, mosul. the white house has pledged to help the largely shiite government in baghdad to push back against the sunni forces. mosul has a population of 2 million people. tens of thousands have fled since the fighting started. the city is situated near key oil fields which hold an estimated 24 billion barrels of proven resources. this taking place as the opec meeting kicks off in vienna. the saudi oil minister told

delegates there's no upside risk to crude prices for now. steve is in vienna. did you manage to get there and escape unharmed from the scrum? >> yes, the scrum is the public word of it, louisa. i did mention on your air a couple years ago, i got my knuckles wrapped. it's a strange phenomena, the media scrum we get here at opec. i think it's slightly masochi masochistic. the audi -- saudi oil minister is who i tried to talk to. they may need to go as high as 11 million. he's pretty relaxed about risks in the market. >> i don't think there's any risk right now. >> there's no risk to the upside? a lot of people are concerned about a breakout above 110 because of extra demand and the

extra call on opec in the second half, sir. everybody spake lates, sometimes that drives the price down. sometimes it drives it up. >> do you think iraq can continue to increase supply given the concerns of insurgency we're seeing in that country. >> ask the iraqi minister. he's here. >> louisa, as you said in your introduction, there are concerns about the upside risk. concerns that iraq may have plateaued. it's trying to get to 4 million barrels plus because they are seen as one of the producers with the greatest reserves in the middle east. the security issue has highlighted the concerns about security and about potential supply from the mid and south of the country. i spoke to the oil minister of iraq about those security issues. >> the midland and south area is very, very safe. the accident only in the north.

and the government today starting to take very strong actions. >> there are no threats to supply, which is 3.6 million barrels a day, there's no threat to current supply and exports from iraq? >> no, no, no, absolutely. >> he wants to be a producer in similar sign -- kind of size. the iranians of course have very delicate nuclear talks ahead. they want to increase production. he spoke to the oil minister as well about those issues. >> our capacity now is 3.8 but our production is below 8 because of the limitation -- illegal limitation against us. and we are trying to increase our output.

if the sanction will be lifted, very soon we can produce 500,000 barrels, increase our output and after some month, we can produce another 200,000 barrel and reach to 4 million barrel crude. >> how quickly do you think those sanctions are going to be lifted, sir? >> i don't know. it depends on the discussion between five plus one and iranian delegation. >> how do you think those discussions are going? >> how? >> how do you think those discussions are going? >> as i received a report, both sides should be patient. >> so that's a taste of what we've had from iran, iraq and saudi arabia as well. what about the effect of other suppliers in the market? a lot of people came into this year thinking shale was going to wipe out the oil price. yet here we are, still above

$108 a barrel. it is wiping out exports of opec members to the united states. nigeria has been badly affected. we talked to alison madueke, who is vying for secretary general here. >> we use the atlantic trade routes more than anybody else. it's affected us quite, quite negatively. we are, of course, looking towards india and china now and strengthening our relationships, our trade relationships with them. >> let's get to jason, president chief economist at prestige economics. 30 million barrels, $108 a barrel. it all looks so stable. in all of those stories, whether it's saudi, iran, iraq, nigeria, there are amazing substories, geopolitical ones at that. >> there's a lot of push and pull on the supply side. you have upside risks from disruption in iraq, you have upcoming talks with iran which pose some downside risks.

against that, you have a strong backdrop against outside growth. >> we know those iran talks are about sanctions and nuclear as well. there's a lot of pragmatists on both sides of the divide who see the problems in iraq and think we need that supply to calm things down. is that going to encourage talks? >> i don't think that's what's going to drive it. the geopolitical issue behind it is the nuclear side of the equation. i think the iranians have made since the beginning of the year genuine gestures to move in the right direction and i think they want to make progress. i think they want to get their oil back in the world market. if they can move in that direction, we'll see that oil come back which will have a short-term push downward in price. >> how worried should we be about the situation in iraq? >> it's been a problem. we've known for some time there is splintering risk. you could have disruptions

accompanying that. these risks are ever present. it's one of the risks that help keep prices supported despite the things like the shale revolution in the u.s. relatively slower growth we've seen in the last two years that's poised to accelerate now. >> $108 a barrel. relaxed in the pad dock for the last two years. is the pressure switching from the outside to the down side? >> i think it's a mixed outlook. if the iranian barrels come back we get a short blip down. we are looking at good growth in the u.s. and europe. globally we see policies in place for a number of months. it will gradually be removed from the u.s. we see new stimulus announced out of the ecb. you have stimulus out of japan. the consuming economy is growing. it will trickle through to other economies like china and emerging markets and that means we have probably three more years of growth before we see pull back in oil demand growth. >> we saw stability in the oil price long before we saw

stability in other asset classes, equities and so on. >> i don't necessarily think so. if anybody what you've seen is the quantitative easing out of the fed has helped to engender growth. it's also provided upward price pressure. commodities included. oil has been a bit more stable. that's because you've seen a solid supply site especially out of the u.s. this year our range has been 95 to 115 for brent. next year higher. >> i could drive a bus through 95, 115. what's the real price going to be. >> the 110 plus range through the end of the year. next year, our average price is going to be between 110 and 120. we have a 120 average. >> what's going to take us up there. >> it's a positive growth story. even if the iranian barrels come back, that's a buying opportunity. you're looking at accommodative

monetary policy out of the u.s., even out of the uk, even though the bank of england may pull the trigger by the end of the year and out of europe as well. that's going to be solid for growth and that's going to feed through the emerging markets where 87% of the demand growth will be really moving forward. >> very nice. do you think we're getting too old for the media scrum here at opec? >> not at all. we know how to put the elbows out at this point. >> we come in at 200 pounds each. we can handle it, can't we? >> that's right. louisa, we hand it back to you. >> steve, good stuff. thank you very much. a full morning already and it's not even noon. now we're just getting flashes somehow on our wires. i just want to update you that the greek central bank is proposing that the former finance minister stenoris is

going to be the new government. that's according to a statement coming out. we have that for you on screen as well. you can see that right there. the u.s. futures market, a couple points lower, coming off lofty highs that have been hit recently state side. we're seeing moderation by the looks of things in this session as we saw in yesterday's session as well. shares in lufthansa are trading sharply lower following the german airlines profit warning. the group lowered its operating result for this year to 1 billion euros, citing difficulties in both passenger and its freight business as well. and we are joined from frankfurt to talk about this, a very surprising profit warning from lufthansa. >> yes, it was a big surprise. thus we're seeing the big slump in shares. i was joining in to their

conference call where the cfo of the company was explaining the reason behind that surprise profit warning. it is pricing power, manly on the north american and also on the european businesses. so it is affecting, as i said, north america, europe and that mainly the premium classes such as the first in business class where they see a huge overhang in capacity there. going forward there needs to be structural reform and we'll be updated by the new ceo on those measures as soon as early july, july 9 and 10 they were saying on what the call and what they are planning. they are saying what they're seeing, not just one of weakness. it is here to stay. that's why they're lowering their 2015 operating profit

target alongside the 2014 one. it is mainly carriers, also gulf carriers, of course. and then homemade issues like the pilot strike which are a drag on operating profit for the airline. with that, i'm sending it back to you. >> annetta, thank you very much. back to our european markets. you can see they're all just slightly lower as indicated here. ftse off by 0.5% or so. the same goes for the other markets, the ftse mib underperforming just a tab. bond markets this morning, seeing a reversal of some of the recent trends we've been looking at. yields heading higher in the ten-year treasury. the bund yielding 10.4, the ten-year gilt, 2.7. we're seeing buying on the italian tenure. the currency markets relatively unscathed, relatively unmoved today. we're looking at a euro/dollar

rate, down just a tad. the euro against the green back. still to come here on the show, though, we take a tour through the mansion that's the final frontier for any superrich trekky. having the cloud allows us to rapid prototype a lot of ideas. being able to pay as we go is crucial for a start up. having to fork out a lot of money up front was risky. we can launch a feature really quick, and if the feature doesn't work, we haven't lost anything, and we can have something up and running in days. and this would not be possible without the cloud. we are now supporting over 25 million users each month.

you're watching "worldwide exchange."

hi, everybody. welcome back. these are your headlines today. a shock profit warning sending shares in german flagship airline lufthansa tumbling lower. as opec representatives gather in austria, iraq says tensions in the country won't disrupt supply. as taxi drivers strike across europe, uber says it will work with london's black cabs. now, what happens when a trekky becomes a multimillionaire? wouldn't you know it, he builds a mansion with a movie theater that's a complete replica of the captain's bridge on "star trek," of course. robert frank has taken a tour of the so-called trek mansion. >> reporter: plenty of mannings have home theaters but not many home theaters cost a million dollars and are replicas of the captain's bridge of the starship enterprise. secret lives of the super rich takes you inside the trekky mansion.

this is what happens when a trekky becomes a multimillionaire. we're talking wall-to-wall, hand-picked original movie pieces and leonard nimoy spock ears, well, they still have his hair stuck to them. this, i gather, would be the entrance to the theatre? >> yes. >> that is cool. it's just like the show. when they open up, it's that sound. >> we tried to make it as authentic as possible. >> this mansion has a lot of other features as well. it's 27,000 square feet, it has eight bedrooms, 16 bathrooms, a basketball court, a wine cellar, a gym, a pool and an arcade room with 60 games. the technology in this home alone is $2 million. the trekky mansion can be yours for a mere $35 million. spock ears not included. live long and prosper. back to you. >> if i had 35 million i'd be buying that for sure.

can you do that? i can. on the other hand? try it. i dare you. you'll all be trying it now. let's move on, because coming up on the show, planning on catching a cab in europe today? protest may have you struggling to get around easily. jo bertram, general manager of uber will join us. i'll have her do the trekky move as well. see you in a second.

hello, everybody. welcome back. u.s. futures, we're a couple hours away from the u.s. markets opening but it's never too early. the implied open being a couple points lower as you can see on the right. a similar open to what we were looking at yesterday for u.s. markets. the european markets this morning, speaking of the markets are all in negative territory, just down by a tad, having closed flattish to slightly lower yesterday. just looking at some of today's top earnings stories out of europe, into texas, posted a 7.3% drop in its net profit for the first quarter, the sharpest decline for five years. the czar owner said it was heavily impacted bit the strong euro. sales up by 5.3%.

inditex is up. in the year to the end of may, h & m added more than 370 new stores. emirates airline has canceled its order for 70 of airbus group's long-range jets. emirates placed the order for the jets in 2007 with first delivery schedule for 2019. the airline was the second largest customer for the a350 planes. earlier on the channel, the ceo of the carrier flybe says they were remaining cautious. >> the need for capital deployment discipline, this is something we're conscious of. i've been in the airline industry for a long time. the one thing i've learned is to be disciplined.

i suspect other airlines are coming to a similar view, not to get carried away in terms of the global recovery. and to stay level headed. >> and uber has extended an olive branch to the london taxi industry by announcing a black cab option for the app. this as taxi drive areas cross europe protest at what they're calling a lack of regulation on the app-based cab service. the u.s.-backed group will see demonstrations against its business model take various forms across the region. in london, black cabbies will be converging on trafalgar square, in berlin, drivers are set to meet in several locations at noon local time and in paris, the french drivers planning what's being dubbed as escargot operation, journeys at a snail's pace through the city. stephane is joining me. how is traffic? >> the traffic is fine but taxi

drivers on their way to the center of the city, you can expect major zrpgs disruptions, the fact that there's also rail transport disruption today. it's difficult in terms of traffic in paris. it will be difficult especially later in the afternoon. coming back to the strike for the taxi drivers, they're all fighting the same enemy, if we can say it that way, all protesting against uber. not exactly for the same reasons, though. in paris, uber is not planning to launch a regular taxi service but taxi drivers still believe they're facing an unfeign competition because to operate as a taxi driver in the french capital the need to pay your license, that costs around 200,000 euros. it's not the case for companies like uber. they only have to pay registration fee, 150 euros per vehicle per year. nothing compared to the cost of

the license. that's the reason why the taxi drivers are really upset and fighting this competition from private companies, especially the one from uber. french people although they will have to face a significant disruption today, seem to support the movement for the taxi driver. we done the have a survey for the strike today. but there was one for the last strike that took place in february, on 56% of french people at the time say that they were supporting the taxi drivers and they were -- they did understand why they were on strike. even if we have to bear the consequences of strike today in france, louisa, it seems that french people understand why the taxi drivers are on strike. perhaps it's because we are also -- it's also part of the french dna as i was telling you earlier. >> indeed. i don't think anybody would disagree with that, stephane. thank you very much. we'll talk soon again, later today. we'll be talking more about uber and about their plans, jobe

bertram will join us in the next 20, 30 minutes or so. stay with us. read more about the uber revolt here in europe on cnbc.com as pell. let us know, do you use these services, uber, halo, the taxi app services? find us on twitter @louisa bojesen or worldwide@cnbc.com. still to come on the show, the party is not over. find out which member of the tea party managed to kick out one of the most powerful men in congress. you're watching "worldwide exchange." i spent my entire childhood

seeing the world in reverse, and i loved every minute of it. but then you grow up and there's no going back. but it's okay, it's just a new kind of adventure. and really, who wants to look backwards when you can look forward?

hi, everybody. welcome. you're still watching "worldwide exchange." i'm louisa bojesen. these are your headlines from around the world. opec looks set to leave output unchanged as the iraqi oil minister tells cnbc that security concerns won't disrupt supply. >> the south area is very, very safe. there's no accident in this area. the accident only in the north and the government today starting to take very, very strong actions. a shock profit warning sending shares of lufthansa

sharply lower as the german airline says this year's and next year's results will be hit by competition in recent strikes. uber, the app offering to open up its platform as taxi strikes to threaten traffic chaos across major european cities. and a major upset in u.s. politics as senior republican representative is losing his seat in congress to a tea party challenger. you're watching "worldwide exchange," bringing you business news from around the globe. welcome back. thank you for tuning in. if you're just joining us now, this is what we're looking at in terms of the futures. we're just being called a tad lower across the board for u.s. indices. a couple hours away. but as i was saying, it's never too early. never too early. when it comes to european

markets, we've just been trading lower throughout the morning. we were called a couple points down. we're holding on to that story for the time being. the same happened in our asian markets overnight. we're settling in slightly in the red. shocking is the word being used on the front page of many u.s. papers today after a major election upset threatens to throw the future of the republican leadership in congress into disarray. seema mody joins us from the cnbc headquarters state side. what's going on? >> louisa, definitely a big story, one of the most powerful men in congress, the number two republican in the house of representatives is being kicked out. eric cantor lost his re-election bid to david brad, an economics professor ran on opposition to what he said was cantor's support for u.s. immigration

reform. that would result in amnesty for illegal immigrants. brad won by 11 press over cantor, the first primary setback for a senior congressional leader in several years. democrats tom daschle and tom foley lost their seats but to republicans. cantor told supporters they came up just short in his effort to seek an eighth term from his district. >> i know there's a lot of long faces here tonight and it's disappointing, sure. but i believe in this country. i believe there's opportunity around the next corner for all of us. so i look forward to continuing to fight with all of you for the things that we believe in for the conservative cause because those solutions of ours are the answer to the problems that so many people are facing today. >> bratt took a victory lap saying, quote, this is a miracle

from god that just happened. bratt had little backing for his run. he raise just $200,000 for his campaign while cantor spent more than $1 million in april and y may. they both know each other as they teach at the same school. cantor's defeat immediately throws the house republican leadership into disarray. he had been seen as among the top choices to succeed house speaker john boehner if he decides to step down, either after election day or early next year. gop lawmakers will likely spend the next five months jockeying for both positions, politico reports majority whip kevin mccarthy is almost certain to run for majority leader. he could be challenged by jeb hensarling of kathy mcmorris rogers.

louisa, definitely a big surprise and story we'll be watching slowly. back to you. >> seema, thank you very much. good to see you. uber has extended an olive branch to the london taxi industry by announcing a black cab option for the app. this as taxi drivers across europe, they're protesting what they're calling a lack of regulation of the app-based cab service. the u.s.-backed group will see demonstrations against this business model taking various forms across the region. in london, black cabbies will be converging on trafalgar square. in berlin they're set to meet at several locations at noon local time and in paris, they're having what's been called escargot operations, a slow pace of transportation through the city. with us, jo bertram. >> thank you. >> on this day, you are releasing a statement saying

you're welcome to join us to the black cabs. >> absolutely. uber is all about choice for the consumers and the drivers. our consumers have welcomed uber here in london. black taxis are an icon of london and we want to offer that option to our consumers as well. >> have you had indications of interest from black cabs? >> yes, we've had a huge amount of interest. we hope to be building up the scale of this product as quickly as we can. >> they're such an icon for london as you say yourself. and i know uber is popular but the cab drivers are arguing it's unfair to use an app to determine the price of a drive. of a ride essentially. they say only our taxi meters can do that. they're taking the case to court. >> in our view, the uber app on a driver's smartphone isn't a taxi meter. the private high laws were written in 1998 between smartphones were even invented.

tfl have shared their view. it's going to the high court. it seems ashamed to bring london to a stand still while undermining the legal process ongoing. >> how would it work? you have uber execs and the luxury cars as well. there would be an app called uber taxi? >> it's the same app. now on the right-hand side you see uber taxi. >> what's the commission the taxi drivers would have to give to you? >> we're charging a 5% commission for taxi drivers. >> they'd have to bring their rates down a lot. >> no, they'll use their meter and we just charge a commission for the booking and payment processing. >> excellent. very interesting. thank you very much. jo bertram, general manager for uk and ireland uber. ipos have brought to market in the u.s. are up in 2014.

can the trend continue? stay tuned. we'll talk more about that, too. there's this couple in sydney. worked hard. raised two kids. they've never been to moscow. but they sent money there. rented an apartment. all because, they have this 19-year-old daughter who loves to dance. in over 700 cities worldwide, products and services that make a citi client anywhere a citi client everywhere. that's keeping you from the healthcare you deserve. at humana, we believe if healthcare changes, if it becomes simpler... if frustration and paperwork decrease... if grandparents get to live at home instead of in a home... the gap begins to close. so let's simplify things. let's close the gap between people and care.

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geico motorcycle, see how much you could save. you're watching "worldwide exchange." hi be everyone. you are indeed. welcome back. i'm louisa bojesen. the chinese e-commerce firm alibaba is buying the shares of browser firm ucweb that it doesn't already own. it emphasizes its push towards

handheld devices. the rival is calling the buyout the biggest merger in internet history in china. to date this year, ipos brought to market in the u.s., they're up by more than 50% on 2013. the ipos that have been taken to market, it's a trend reflected worldwide. to talk more about this, i'm joined by yousef shuster. i'm joined by gareth mccarthy here in the studio. gareth, let's start with you. what's the general ipo market? what's it looking like at the moment and what are some of the main issues? >> i think where we're looking at at the moment is the sweet spot for execution in 2014, we have 40 deals live currently across europe in the uk. we have a functioning and vibrant market right now. >> there's a differentiation between what's taking place.

>> in both cases it's up 5% to 7% on average. you've seen a more sustained performance in europe. i think that's been stock specific where, in the uk, we're had a number of retail midcap stocks that have had a trickier performance in the shorter term. >> gareth, what do you think? what are you seeing? excuse me. yousef. >> yes, very strong momentum here, especially in the u.s., europe, it's coming back into the asia market as well as in china and hong kong. flash liquidities in the market in general, good performance in the ipos. great asset allocation played to be diversified basket of ipos. that's set to continue as long as generally the stock market is going to hang in there. >> what do you think of valuations at the moment, gareth, especially state side?

yousef. i keep doing this. yousef, what's going on with valuations? >> valuations are okay. also there's a big focus in the u.s. is on tech ipos, consumer plays, also on the energy ipos, the whole mlp space is proliferating right now and has been. valuations are okay. some more as in competitive for larger deals, it's more a seller's market for smaller deals. you'll see differences. there's no indications that you actually live in a bubble in terms of the ipos right now. >> gareth? >> i think we can replicate that in europe. the secondary market remains buoyant and robust. indices are hitting their highs. we have a number of deals coming to market. that's allowing investors maybe being at the margin more selective and, therefore, in

valuation, perhaps they've got more of the upper hand than where we were a few months ago. with the quality of the companies still coming, still strong, we see them commanding attractionive valuations. >> what do you think of the company pipe loans as well? are the pipe liens strong and where in particular are we seeing healthy pipelines? >> again, a bit of context, really. the ip market in europe opened in 2012. the folk kus was on yield and quality. the secondary market, we've seen a cyclical rotation. we've seen the breadth of companies coming to market by country broaden but also by sector, market cap as well. >> yes. yousef, before we let you go, the deal sizes that we're seeing, i mean, are they just going to continue to get bigger or are we going to see a leveling off? >> well, the deal sizes is across a broad range of companies. obviously there's a small biotech, midcap which raised

between 100 and $500 million. a lot of large caps will line up. they'll have a financial part of ge. alibaba is going to come in the 15 to $20 billion range. so it ranges all across sectors, all across market cap spectrums. as long as the markets are firm and solid, it should be a very good ipo market. >> yousef, thank you very much for being with us. yousef shuster shoin joining us live out of chicago. gareth mccarthy, head of equity syndicate at ubs. thank you as well. i want to mention breaking news that's just hitting our wires. the european commission said it has opened three in-depth investigations into tax decisions that are affecting apple, starbucks and fiat finance and trade.

they're doing that in ireland, the netherlands and luxe ombumb. we're getting this via reuters. corporate tax, whether this supplies with what we're seeing with regard to eu state aid rules this investigation has been open. the european commission opening these three in-depth investigations into tax decisions affecting apple, starbucks and fiat finance and trade and ireland, the netherlands and luxembourg. we will keep you abreast on developments on this story. now, iraq energy suppliers won't be disrupted by tensions in the country. stay tuned for more oil news flowing out from opec and that meeting is taking place in vienna. we'll be with you on the other end of the break.

welcome back, everyone. islamist militants have seized control of the iraqi city of mosul, the second largest city of iraq. the white house pledged to help the largely shiite government in baghdad to push back against the sunni forces. mosul has a population of around 2 million people and tens of thousands have fled since the fighting started. the city is situated near key oil fields in the north which holds an estimated 24 billion barrels of proven resources. this happening as the opec meeting is kicking off in vienna, the saudi oil minister has told delegates there's no upside risk to crude prices. steve is in vienna. he's been speaking to a whole bunch of delegates already. steve? >> let's finish off on the iraq conversation. it's absolutely right it's near big fields as kel, kirkuk and

surrounding reasons. they're not very productive at the moment. it's in the middle of the country, in the south of the country where they have the enormous exports, where the big iocs are getting the oil out of the ground. the iraqis are producing 3.5 million barrels a day. there's a big concern at the moment. the oil minister said that is not an issue in terms of current production. now moving on to other areas of concern, you heard it frommal naimi. >> i don't think there's risk right now. >> a lot of people are concerned about a breakout above 110 because of extra demand and call on opec in the second half, sir. >> you know the problem is, everybody speculates. and that drives the price up. sometimes drives it down. >> but how do you see the supply side, sir, panning out in iraq, sir, as well? do you think iraq can continue

to increase supply given concerns. >> ask the iraqi minister. he's here. >> interesting about his comments about speculators driving the price up and down. that was the problem in 2011, around that period where we saw the oil going from 3 a barrel on brent to $149 a barrel. we've seen steady prices for two years, opec has been averaging $108 plus for its oil over the last two years. there are concerns about supply going forward and saudi, which there were concerns you'd have to take oil off the table, perhaps he'll have to have a bigger call on its oil. it can produce over 10 million barrels a day. some estimates are saying it may have to go up to 11 million barrels a day in the second half and fulfill its role as a swing producer in order to guarantee the opec call, the opec demand of oil is satisfied on the international markets. one of the big factors is iran and what happens with sanctions they've had partial sanctions on

exporting oil. are we going to get an extension of that? how are the talks going and potentially how much more oil can the iranians put on the market? i spoke to the iranian oil minister about these issues, zanganeh. >> our production is below 8 because of the limitation, illegal limitation against us. we are trying to increase our output in this situation. and if the sanction would be lifted, very soon we can produce 500,000 barrel, increase our output and up to some months we can produce another 200,000 barrel and reach 4 million barrel crude. >> how quickly do you think those sanctions are going to be lift, sir? >> i don't know. it depends on the discussion

between the five plus one and iranian delegation. >> how do you think those discussions are going? >> how? >> how do you think those discussions are going? >> as i received the report, it's going ahead but both sides should be patient. >> the iranian oil minister, bijan zanganeh, there's a keen appetite with some, mainly the chinese, to push ahead. the chinese are keen to carrying on securing oil and gas supplies as we've seen with the recent russia deal as well. they'll keep this at 30 million barrels a day. there are problems for certain members. but not as a whole. we've been speaking to the nigerian oil minister and their production is still around 1.6, 1.7. they should get above 2 million to balance the books. they have problems, bearing in mind 80% of the revenues for the government come from the oil and

gas sector. the oil minister, alison madueke wants to be the next secretary general of opec. there are protesters here, because there are current concerns about nigeria, what has happened to the revenues from the nigerian national oil company. lots of individual country problems, especially for nigeria which is virtually exporting nothing to the states. lots of interesting individual issues we have, whether it's iraq, iran, nigeria. almost certainly we get a rolling over of that 30 million production level. back to you, louisa. >> steve, thank you very much again. steve joining us all day long out of vienna. i'll see you later for "closing bell." i just want to recap the breaking news we've had on the wires within the last couple of minutes, really. we have confirmation now that the eu is opening an in-depth probe into tax rulings on aprpl,

starbucks and fiat as well. from the european commission, the press release is stating that the commission is investigating the transfer pricing arrangements on corporate taxation of apple in ireland, starbucks in the netherlands and fiat finance and trade in luxembourg. that is going on. ireland incidentally following up after saying it's confident it has not breached state aid rules in the tax rule. this coming via reuters. ireland is saying it's confident it hasn't done anything wrong. we'll continue to follow this closely. it's a big case. they're focusing on whether decisions by tax authorities in these three countries with be whether they are -- the corporate tax being paid in these companies, they complied to the eu rules about tax in each of these countries. when it comes to the european markets today, we're looking at some slight negativity out there, not a lot, though, we're off by somewhere in the region of 1% or sub-1 percentage page

or so, we have u.s. futures also indicating a slightly lower open state side. we're just seeing a little bit of money coming off the table after we've had a couple of sessions where we've seen quite a bit of positivity. we finished with a flat wall street yesterday. we had asia consolidating close to record highs in the overnight session. this morning we've been dominated also by some slightly negative news in europe. we've had lufthansa's profit warning down to strikes and tough competition. we saw lufthansa falling 10%, we have inditex with its sharpest first quarter profit fall since 2009. sainzbury saw a second straight fall in its quartly underlying sales as well. we're wrapping things up here on "worldwide exchange." it's been a pleasure having you along. keep an eye on this case that's just been announced now, the eu is opening this probe in tax

rulings on apple, starbucks and the fiat unit. that's it for us. we leave you with a live shot of new york. see you tomorrow.

good morning and welcome to "squawk box." house majority leader eric cantor suffers a shocking defeat in a primary battle. we thought the tea party was over, didn't we? what does this mean for the future of the gop? the demise might have been greatly exaggerated. bank of america's multibillion dollar mortgage settlement is said to be deadlocked. target gets ready to face shareholders after a rough six months. it's wednesday, june 11th, 2014. xb can be beg "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc.

i'm becky quick along with joe kernen and andrew ross sorkin. eric cantor spent as much as 40 times more in their primary fight but in a long-shot campaign, dave brat beat the house majority leader. >> i know there's a lot of long faces here tonight. and it's disappointing, sure. but i believe in this country. i believe there's opportunity around the next corner for all of us. so i look forward to continuing to fight with all of you for the things that we believe in for the conservative cause because those solutions of ours are the answer to the problems that so many people are facing today. >> this is the first time that a house majority leader has lost his seat in a primary race. john harwood will be joining us in just a moment to discuss the implications. in corporate news this morning, bank of