a very warm welcome to "worldwide exchange." i'm wilfred frost. >> and i'm seema mody. >> shinzo abe confirms he will hold a snap election. european markets cautiously higher. investors await a reading on the zew. investors share in the green after a jump driven in profits

driven by the uk. the ceo tells cnbc asia why is still an area of growth. the bcb tells cnbc he would prefer to stay if possible. we still believe, as well, for us it's better than other stockes and other stocks is changing. unfortunately, this was not our decision. japanese prime minister shinzo abe reportedly told his party he will delay a tax hike and hold snap elections. this coming a day after japan's economy unexpectedly slips into recession. matthew beesley, head of global equities joins us in studio. it was the -- yesterday japan reporting that it is in recession.

the question is, what's next? does japan stay mired in recession or do these new policies that abe will potentially unveil help revive the economy? >> what's clear, it would have been bad. at least in our time, company investors, lots of japanese corporates. they've all been saying a second rise in consumption tax would be negative. so abe is listening to the economy, lisping to stock market, and he's reacting accordingly. at least that bad scenario has been averted. >> matthew, from the outside of investors, it seems that's not the time to call snap elections when you're in recession and on the face of it abe nomics is not working. yet he's still expected to win this. is that what investors need to see to see that he has a strong mandate implement in policies? >> yeah. i would say the glass is nearly still half full in erms the of

half empty. he has dramatically weakened. several japanese companies yesterday told us they liked the yen at 105. they love it at 1 15. so we shouldn't underestimate how much japanese corporate res really making hay with the weakly yen. you are saying wage inflation across japan, not significant, but reversing trends from previous years. there are some signs of a bottoming out, perhaps even a recovery in the japanese economy. clearly there's lots more to be done. it will give the opportunity to push through some more of these reforms. >> if the economy is many booing out, as you just pointed out, that that is what happens practice taking place, as an investor, where would you put money in japan? >> if abe does work, the yen is going to weaken further.

>> it's already weakened. >> it's great for so many japanese support ers. exports will remain a good place to stay invested. ultimately, the domestic economy will have to pop a space in that and the banks and retails tailers would be a great place to invest. >> okay. stick with us. we definitely want to discuss europe with you next. let's have a look at european markets. yesterday we eked out gains in europe. today, doing the same so far. there were a few comments coming out of the ecb that quantitative easing is still on the table. it wasn't enough for significant gains and it's not enough to

give significant gains in europe today. let's look at the stoxx 50, as well, doing slightly better. at the individual markets, you can see there is strength across the board, but none too pronounced in any of the individual markets. germany, up 0.6%. france 0.3% and italy 0.4%. let's look at bonds. yesterday i was saying there had been a little bit of yield compression. that unwound yesterday and it's held if you remember today. a little bit of profit taking in bonds across the board. a little bit risk on sentiment. a bit of profit taking in bonds. happens, as well, in germany. 0.79%. and the ten-year n uk, just below 2.11%. let's look at forex.

the dollar giving up a little bit of ground today. the yen is basically flawed. 0.87% for aussie/dollar. let's talk about what's happening in asia, center of our thoughts today with developments in japan. handsing over to slee jegarajah stanning by in singapore. >> it's over to you now, mr. abe. we've had a lot of political and policy noise over the past couple of days really suggesting that we are going to see a postponement of the says tax hike and we would be the wiser in about an hour's time when prime minister abe starts

speaking at that press conference. in the minds of a lot of investors, it looks as though it's going to be imminent. a big question in my mind is the duration, how long is the second stage of the sales tax hike from 8% to 10%, how long is that going to be deferred for? i understand it's going to be about 18 months so the motorcycles will be looking for that clarification. the other factor here is when is abe going to kick off that process? i'm learning those polls could take place in mid-december. so we need clarity on those two crucial issues. the nikkei closed at a two-week high. up by 2.2% in anticipation of further stimulus in the form of

a deferral of that sales tax hike. we will by taking that live and bringing you his comments as he speaks. ecb president mario draghi putting life into markets. >> the ecb has not been created in order to make sure the governments actually do the right things. we are aware of this. this is important for the effectiveness of our monetary policy. structural force make our monetary policy more effective, but we have a mandate. having said that, it might unveil a variety of assets.

>> some takes those comments as the ecb getting closer to quantitative easing. does that race the question whether this is the answer? >> it clearly did work in the u.s. if you correlate the s&p 500 and the expansion of the federal reserve balance sheet. so there is a limit now for european investors. do you believe in the ecb governor, that he is going to run to our rescue or do you listen to the macro data which has been difficult? as company focused investors, all we can do is focus on the companies where we can see some insight. where the expectations have been revised lower, we are looking

and finding companies where it seems to be bottoming. if there is some full scale qe from the ecb, you would think it would be a significant lift from this low point. >> earnings season so far in europe hasn't been the source that it has been in the u.s. surely the fundamentals having pnt up enough. >> it started to reverse and become a bit of a tailwind in the second quarter. we are lacking some pretty typical comparisons in terms of earnings. expectations were better management in corporate america than they were in corporate europe. we still have challenges ahead of us. in europe, you have to buy certain stocks or certain

sectors. you clearly have a multi speed europe right now. >> jpmorgan upgrading the eurozone due to a period of outperformance citing valuation do you think that is a role to get bullish? >> well, i do. earnings accelerated, but the stocks have not been rewarded for that. there is a very compelling argument for europe now. valuations of stocks reflect that. >> and the question is the weaker euro.

earnings so far this quarter haven't been amazing. >> japan's coalition partner has said he shares the view with abe that the economy situation is challenging and that he will consider a package to stimulate. one final quick question, if that is, in fact, down to strong supply rather than weak demand, certainly that's something to celebrate. >> the tax xoint of the only price paid for at the pump is a lot higher. it will benefit from the oil price and we should keep that in mind as we look forward to q4

earnings. >> thank you so much, matthew. coming up on the show, the nigerian government is reworking its budget to make way for lower oil prices. we speak to the country's agricultural minister live from laggos. and home depot earnings are set to hit the wire in the next hour. why one person thinks it could hit the retailer. coming up, all the details on the largest deal in north american sports history.

an action packed day here in europe. in around 15 minutes, we get ooub inflation figures for november. now at 11:00 cet, we get a reading on german business sentiment with a zew survey. let's go out to annette in frankfurt. >> for that rating of the zew,

we're actually expecting expectations riding again to reading of 0.5 points. so that is pointing actually at a mise recovery when it comes to those investors. the current condition, the subcomponent, is expected to decline further to 1.8 points. so probably what we are going to see from the zew index, but we remind everybody, it's a volatile index. the huge swings into negative territory, but it's always kind of a leading indicator when is comes to a pick up in growth. of course, growth here in germany was disappointingly low.

a big drag in that company was investment in capital goods. falling, pointing possibly at a pick up in growth in the fourth quarter. i also yesterday had a chance to catch up with the finance mip sister of germany ask him what needs to be done to get growth kick started here in germany. take a listen. >> we believe we have structural deficit necessary some areas. on the other hand, we have spun growth friendly consolidation of our budget, which means on one side we have tried to balance the budget, but on the other hand, we look if we can tell get more investment out of the budget, which means we do money in other positions.

. >> they fairley argue the rest of the world is blaming germany not to invest enough money, but also here in germany we have that argument going on between the opposition and actually the government. i also spoke to one member of the government who is the budgetary spokesperson of the greens. take a listen about what he had to say about spending. >> both in the public sector and the private sector. and it's not ohm true from the european perspective that germany as a country should do more. it's true from our own perspective. we should do more to repair our highways, our public buildings. therefore, it's important to

increase that rate. >> so we are waiting for the zew indicator to be released, which is going to happen roughly 40 minutes. that kaeter always has room for surprises. perhaps we are headed for a positive surprise this time. talking to here here on the ground, i got the feeling there might be a turn around in also the mood among investors and corporate ceos and there might be some change with more investment also here in germany, which would then eventually have a growth index and morale. moving on, the box force dictionary is out with its word for the year. it's vape, it's used as a verb.

the usage of the world has doubled in the past year. other contend eers. >> action performed via the internet. it's interesting to see how these words many times representative what society is going through, a new fad or a tuesday come, if you will. what do you think about this, is this nomcore clothes? >> no. i can that's standard. that's chassic. once day you'll learn perhaps how to be more fastballble. >> we want to hear from you. get in touch with us. do you think the word vapor is

the word of the year? join the conversation here on "worldwide exchange." get in touch by e-mail, worldwide@cnbc.com our via twitter. now, we also got some breaking news coming out regarding the premier league in england. the football league saying they're going to investigate how the media bids for those rides. british media regulators will invest that. quite an interesting developments there. there's been a huge amount of money paid for for the rights to broadcast the british premier league, which is the most expensive football league in the world to broadcast. they're going to investigate that bidding closer. >> and we also want to get you a look at what other data we will

bet getting over the next 15 to 30 minutes. coming up after the break, we find out if the bank of england could have the threat of disinflation on its hands. we're getting back to you in the next couple of minutes.

shinzo abe reportedly informs hit party leadership he will call a snap election. the japanese prime minister due to hold a press conference. investors await a key reading on the german bit sentiment with the qew survey. clearly, there's been a relative slowdown in china. growth is commently strong. so that is really what's driving our business. threatening to delist from a london skok exchange. but the group's ceo tells venezuela he would prefer to

stay if possible. >> we still believe it's better than other stocks and other stock exchanges. but efforts this was not our decision. uk inflation as well as the qezew investor sentiment survey. ahead of that, we're looking at markets moving higher. the xetra dax seen a gauge of 0.8%. yesterday some investor taking that as full blown zaunt tafb easing. that is one of the reasons we did see that rebound. a good gauge of stocks across the eurozone which is trading higher, up around 18 points. >> and seems ya, as you see, quite a lot of green in european market at the moment.

especially in germany, so all eyes on that. perhaps investors expecting a positive print. let's drive in some of the individual stocks. the markets not taking it positively. increasing the dividends per share, and off 2.5%. astrazeneca forecasts revenues by the year 2023 thanks to the strength of its pipeline. he believes the drugmaker's independence prospects are now seasoned stronger. nonetheless, overall, the market just shying off the shares this

morning, down 0.75%. prudential just in the green, its new business profits have jumped 17% year-to-date as the uk insurer says it is confident about its prospects for the rest of the year. the ceo told krpz earlier today that asia continued to be a strong south of growth. >> clearly, there's been a relative slowdown in china. it will be at least 5% gdp, so that is really what's driving our business because we collect savings at the middle class and there are more and more to invest in core markets. that is why we can still grow 15% and this time pointing the cycle in asia. >> and we are awaiting uk inflation data, both cpi data and ppi data. as you can see, sterling is just about flat on the day so far.

an expectation of this, it's at 1.565 against the dollar. cpi is expected to come in at 1.2%. of course, we had the bank of england's forecast last week which did forecast 1.2% for cpi and indeed, the first time forecasting wage growth at 1.3%. so we are expecting the today to see cpi inflation in and around that level. and if it is indeed at the level for wage growth we had predicted last week, then it will be the first time in a long time that inflation has been lower than wage inflation. of course, a positive indicator for the economy. coming through now, we have got uk october core cpi at 0.2% month on month. 1 .5% year on year. inflation came in a little bit higher than expected. it it was expected to be 1. 2% yearly, but it's come in at 1.2% monthly and 1.5% yearly. have we got the ppi data, as

well? >> yeah. if you look at the ppi price for october, a contraction of 0.4% on the year. so a dip in the ppi numbers. that was largely in line with the numbers. so a divergence when you take a look at cpi with inflation. sterling, trading slyly higher, although very flat on the day. up 0.1 is 0%. let's bring in helia ebrahimi. helia, what is your first reaction to these numbers? >> well, cpi is a bit higher. in august, 1.5%, that came down in september's reading. you were talking about the difference between wages and inflation.

remember, the bank of england was saying, look, even though we're missing, for 11 months we've missed that 2% target, it's not a big deal. low inflation is caused by super market wares and commodity prices. things like the deflationary pressures and oil. anded the, you can see it's slightly going up. remember wage inflation at 1.3% is only without bonuses and that really is a big difference. because although we have had a very strong growth in the economy in the uk, voters haven't been feeling it. that feel-good factor hasn't been there because they haven't been feeling it in their pockets. >> good morning to you. the cpi has come in at 1.5% as we just said year on year. so it is fractionally higher than the wage growth number. it is good we're seeing a bit more core inflation. >> well, i think inflation is

slightly to trend lower from here. what we're seeing i think this month is there was a big fall in petro prices last october and that's dropped out of the index, if you like, which has pushed up intlagz. what we're likely to see is the fall in oil prices, through to weaker petro prices. there are going to be probably no utility price rises this year. so that will drag a bit on inflation, too. understanding what happened today, inflation is likely to head down to 1.2% over the next month. andy heldane said yesterday he's watching expectations like a dove. it's that low near term inflation that is spooking them and has pushed back rate hikes. if we get any slight upticks, maybe less worried about the downside, that could change the bank of england's thinking.

>> just going to clarify a couple of the data points again. core cpi was 1.5% against expectation of 1.5% cpi itself coming in at 1.3%, fractionally ahead of expectations at 1.2%. >> as we keep an eye on these inflation numbers and what it means for the bank of flpd, we'll see an interest rate rise next year. will it be similar to what mark carney told us last week? there's been a lot of concern around heightened conditions. market share has fallen to 28.7%. we're looking at the joint market share rising to 8.4% in 12 weeks in the coming november 9th. that is according to kantar.

>> the reading the last time kantar figures were down, you can see they're down to 16.5% basically market share. and, again, you see the german discounters really press ahead. at the time, he's been brought on and they had that whole gap going on because they've given up their finance director early. >> at the same time, we're seeing wages and market share rise, right? >> that's exactly the trend we've been seeing. basically, the diversification of the retail market. on the one end, you've got the discounters who have done incredibly well. on the other hand, you have the top end of the market, people like -- have been storming ahead and that's the only place you're seeing growth. while in the last year you've seen hemorrhaging from tesco's market share, you've started to see that really affect sainsbury, as well, and it's

hurting now. >> and i want to come back to you now. there's so much data coming out. let's talk more about the inflation data. i suppose when we take a step back, yes, mark conferenceny was dovish last week, but we have got a bit of wage inflation and growth. why has sterling been weak against the dollar? you can see why the dollar has been strong against other currencies, but not so much against the pound. do you think the pound is a bit too weak? >> well, right now, of course, the policy discussion where the bank of england is heading is dovish. inflation is below the 2% target. core inflation is below the 2% target. when interest rates are stuck at zero, the bank of england will concentrate on low inflation. it can't cuts rates any further but it can hike them. so when inflation is low, we'll just wait it out. and that is why of course the

discussion right now is dovish for the bank of england. looking furthd forward, it seems to me some of the global risks right now in the uk has been overdone, particularly with david cameron yesterday talking about red lights with the global economy. i think it's more amber at most. the uk domestic economy continues to grow pretty strongly. once these oil price falls are into inflation and we start to get through next year with unemployment falling pretty quickly, the uk continues to grow pretty quickly, i think the debate could change rapidly back to when the first rate hike is coming. >> you would hope the debate could change. as you said, they're becoming incredibly dovish. what do you expect coming from the minutes tomorrow? are we going to see one person now voting for a rate hike? suddenly we've got people now expecting rates not to go up for almost until 2016. that's a mafs push out and very political. >> it's a funny position for those two members voting for

rate hikes to have put themselves in. in mid october, martin gave a speech which basically seemed to say he was discounting inflation. that motivated a rate hike. then just three, four weeks later, he seems to have signed up to an extremely dovish bank of england forecast. that has raised the chance hay has switched his vote during those three weeks. it should be a rapid turn around given the speech.gave. on balance, given what he has said publicly, i expect martin to continue voting for hikes. but that is not a view i hold with a lot of conviction. there is a decent chance given this dovish bank of england forecast that they will have changed their minds. >> absolutely. thank you very much. we just got further flashes out

of japan. these are flashes reported by reuters by prime minister abe saying he would continue to support the economy and private consumption is falling despite positive moves emerging in the economy. i'm not quite sure where they're coming from. his press conference is due to start at 10:10 london time. we will bring that if and when it happens. the dollar is strengthening off the back of these reports. the dollar is up 0.62% against the yen so far today. the nikkei has traded up so far today. it's up about 2.18% in and around where it's been for the last couple of hours. >> you've got to wonder what can really derail the u.s. dollar rally, wilfred, because you and i have been talking about this for so long that it continues to power ahead as we have due to the uncertain economic back drop, now the uncertainty with japan's economy, lots of countries here in recession, dealing with slowing growth.

has that made the u.s. dollar the best asset class right now? >> i think it's an argument for the strong dollar particularly against countries like japan and countries like the eurozone. but regions like the eurozone. i do just wonder with sterling. sterling has the green chutes of growth despite those arguments we just had from robert wood. not for the election and the uncertainty that brings to the uk. no doubt about it, structural arguments for a strong dollar continue. sterling/dollar, 1.5657. european auto sales kicked up a gear in october posting the strongest decree for the month since 2009. france was the laggard in the region with registration falling 3.8%. spain dead ahead of its neighbors for the second straight month with 21% growth in the last year. followed by germany with the more modest growth of 3.7%. claudia joins us from malan with the latest on those italian

figures. >> yes, well, as you can see from that chart, italy is performing better than before. we are beyond germany's level in terms of new car registrations. we saw sales in europe go up by 8.4%. that means the market share for fca, a 5.9% from 5.8%. for fiat, what does this mean? all of the markets did well for the fca group. 5.9% for italy. 19.5% increase in germany as well as in france and spain where the increase for fca was is strong efts, 27.1%. all of the brands of the fta group performed well with the best performers being honda and the a-segment cars that have about a 30% market share in europe. fiat really strong there. jeep being another strong performer in october. sales were up by 74%. 50% so far in 2014.

so fta poised to close the year even better, even though there were expectations from some brokers for them to do better. but this month of october is seen positive and remaining positive saying that they're keeping their target price of 11.4 for fta. the stock today is doing well on the market. it's the fifth best performer higher by 1.8%. remember fta has a lot of work to do. a spin-off could be the next big thing on their agenda. that would happen about a year from now to keep up with the five-year plan. 7 million in sales is what he is expecting to reach. >> claudia, thank you so much for that interesting read. i also want to bring your attention to some headlines. floating ruble needs time to adjust and fixing the ruble's rate would have led to bigger losses of gold and forex

reserves. of course, we've been putting a lot of attention on the slowing growth in russia's economy. it continues to depreciation against the u.s. dollar. i believe it's down just about 20% this year. it's been -- a comeback over the last koump gays given the commentary that's been coming out of the russian bank governor. right now, the russian bank governor saying he will intervene in the forex market if necessary making speculation more risky. and look at the dollar right now, trading down about 0.8% against the russian rouble. now, still to come on this show, the senate is set to vote on the controversial pipeline, but even if the bill make hes it to capitol hill, is it dead on arrival when it lands on the president's desk? you can bring back a lot of things

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big news in the commodity space. chocolate, barry calibat adding to concerns about cocoa shortages while demand is on the increase.

london cocoa, up about 26% over the past two years. let's give you a look at some of the other commodities. we've been talking about lower oil prices, what that has meant for consumers. take a look at nigh mix light crude. right now trading at $76 a barrel. these are year-to-date values here. gold, trading below 1200, a key technical level that analysts look at in respect is a report out there that india is looking to curb gold imports. that could have an impact on consumption demand from india. india is the largest consumer of gold worldwide. we're looking at gold trade down

about 0.7%. >> let's talk about oil. rita, the weakness we've seen year-to-date, is that largely down to supply rather than demand? >> i think it's about ate above both. demand fell quite sharply in q2. i think it was the combination just when libya had come back and saudi arabia hadn't come back on production and that's when demand slowed down. >> given the oil price has fallen, why haven't we seen a kickback in demand? >> i think we have seen that. even europe, they're looking a lot better. now it's very much focused on the overall demand. the numbers are looking better, for sure.

>> the recent number owes out of japan, how big of a concern is that for you going forward? >> it's because of nuclear restarts income year. so i'll demand in japan has been down almost half a million barrels a day. in any case, we are expecting japan to be down. >> and talk about that. how much of global supply of oil is, in fact, price elastic for short-term fluctuations? how many how much people can change their supply? >> nobody is really going to shop in current production. but i think especially u.s. production shale, it tends to be a lot more price sensitive than

your convention al but second half of next year, this h215, you could see demand pick up quickly and market tightening up. >> do you follow gold, as well? >> not really. not to the same extent you do energy markets. okay. then i'll withhold my gold question. rita, one final quick question, the november opec meeting, are we expecting any major changes there. >> the trickiest numbers we've had in year. saudi arabia is still talking about it's not going to be just us, we need some other people, as well. and i think the key is going to be the timing. do they phase it across a few

months? they know they need to do something. >> and will the saab saudis bear the brunt of it? >> yes. >> rita, thank you very much for joining us. moving on, the senate will vote whether to approve the keystone pipeline today. the pipeline will carry crude from canada to nebraska. the bill needs the key vote to pass and as of monday, it appears the backers are one vote short. what we expecting with the vote? >> right now, there are 59 votes which have been accounted for. they need at least 15 senators to come over. so it's a question of who that one vote would come from, if at all. the big focus on the moment is on the independent, angus king.

he's leaning towards voting against the bill, but he could make a last minute decision. this all come down to the support of mary landreaux. but, of course, i should mention her contender, republican bill cassidy, he sponsored this bill in the house. so whether or not even if she gets the 6 on votes, it's still yet to be seen and quite unlikely, i should say. >> this is going to be a massive intervention. >> absolutely. and president obama has given a nod to the proclimate forces saying he wants to see the ongoing state department review. even though the state department didn't say on two occasions now they don't see a significant impact for the climate taking the pipeline through this area. however, there's a lot of talk about whether he might voto it.

that's always a possibility. thank, nancy hellgrave. now, the ongoing drop on crude prices is starting to take a toll saying a decline will for us raised revenues. a gathering for the agrainnovate conference will reshape the sector. the nigerian minister for agricultural and rural development joins us now. er i suppose the main question is what exactly is on the agenda for this meeting today? how important is food security?

>> it is absolutely crucial. we have oil and gas, but everybody needs food. nigeria has a huge potential. we have 84 hectars of land. we want to be a global player. growth is to make sure the private sector helps us grow this sector significantly to be able to become one in the economy. so a grainnovate is the first to actually look at u.s. agricultural on a global stage.

the last years, we've been able to attract some 5.6 billion of investment internet for agricultural. it's part of our efforts to boost investment and production from the global equity fund. >> doctor, agricultural plays a big role in nigeria's economy. can you help us understand how ebola is impacting nigeria's economy right now and what the path forward is. >> well, actually, we don't have this problem at all with ebola. he nip it in the bud very quickly. but we sympathize and are working to help other countries like lie beer yeah, sierra leone and guinea. the economies of those countries, their gdp would go down by $384 million.

for us in nigeria, what we've done is we've been very, very responsi responsive. make sure everybody was streamlined. and we know nigeria today celebrated globally and i think, you know, that was a lot to get up to. >> we'll leave it there. thank you for your time. let's take a look at u.s. futures to see how stocks are trading in premarket. right now, the s&p 500 basically trading flat. the dow jones industrial indicating a higher move right now, up just about 10 points. and the nasdaq, which is up just about 3 points is coming after the nasdaq lost just about 17 points in yesterday's session. keep in mind the s&p tech index did hit a multi year high.

>> that is where the stoxx 600 is. it's almost exactly where the ftse 100 is, as well. up 0.5%. germany up 0.9%. we're about five minutes away from the zew economic sentiment data. investors expecting a decent enough print on that data coming in the next five minutes. germany just escapes recession last week, as well. france is up 0.6% and italy is up, too, as you can see. across the currency rate, the dollar strengthening against the yen, but otherwise weakening against most currencies. coming up on the show, the moment we've all been waiting for. the jap neeps prime minister is due to take the stage in about ten minutes time. will he call for a snap election? stay right here to find out.

welcome to "worldwide exchange." i'm wilfred frost. >> and i'm seema mody. shinzo abe will call a news conference in minutes from now. sglurpan marke aa aan european cautiously higher. the zew data in due any second. a new wave of mega mergers

on wall street see the s&p close at a record for the 40th time this year. the senate is due to vote on the keystone pipeline, but they may come up just short of a vote to pass the bill. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. german investor confidence, zew survey, 3.3 versus the indication in october of 3.2. so, again, the germ yeah zew survey coming in better than expected in the month of november, halting a 10-month decline, showing stabilization in german investor sentiment. you're seeing a reverse in the euro right now, which is trading at session highs, against the u.s. dollar, 1.2573. up about 0.6%.

so markets responding positively to that german november zew report. 11.5 versus a negative 3.6 in october. overall, a good report there, wilfred. >> coming in better than expected, as you see, the euro bouncing off the back of it, 1.2538 on the day. joining us now, steven from city fx. steven, i suppose interesting results there, presumably on the expectation that this means germany will continue its rhetoric against outright quantitative easing. >> well, it doesn't suggest that germany's pummeling into a huge downturn immediately. but, you know, the german data in general hasn't been terribly strong in recent months and this

comes after a string of very weak numbers. so i don't think it's going to actually change the german view that much. i think we'll have plenty on the euro in response, but then we'll settle back down to where it was before with the focus on the risks of quantitative easing and sovereign bond buying. >> steven, coming in at 11.5 against the 3.6 in october, a very big jump. of course, this is just a sentiment indicator of economists across germany. so how significant is this reading? >> i think what we have to see is whether it's sustained and whether it's backed up by data on the ground. certainly some of the other indications we have above the european economy suggests there is a significant reversal of the slump that we saw. it could be that some of the last month was exaggerate, but they still face the risk with lower oil prices of deflation.

and they still have all the economic problems that they've been facing. so i don't think this one number suggests either a turn around or it should be viewed as a suggestion that the policy focus either in germany or europe will change. >> steven, thanks very much for now. we'll be back with steven in just a couple minutes. >> i want to get you instant reaction to that zew report. we did show an uptick in german sentiment. the german markets up now triple digits on the day. we did see the markets rise ahead of ta number and take over after that better than expected sentiment report. the if it is presidents 100, showing a bit of green, up 0.5%. italy yoining suit in the green, 0.8% for france and in italy, we're seeing a gain of around 0.9%. so investors basically cheering this report on german sentiment.

let's take a u.s. at u.s. futures. the s&p 500 did hit a record high in yesterday's trade, also trading lower and the nasdaq, which has been seeing a little bit of volatility over the past couple of days, although some of the large caps like apple and yahoo! continue to move higher. the biotechs trading high on today's session. we'll have to see if good economic impact in europe does move higher in today anticipates trade. >> let's move on and look at bonds off the back of that ten-year. so the ten-year in germany has been just below the 0.89% handle today. that's where it is. the equity market hasn't made much change to the bond markets. let's move on to forex. the euro, as we were just

saying, has jumped off the back of that german data. up 0.5% on the day. the u.s. dollar has strengthened a little bit against the yen the other way, 116.9. for more details on why the yen is moving, let's join sri jegarajah in singapore for an update on asian markets. >> thanks for that, wilfred. this is about prime minister shinzo abe. he's due to speak at any moment now, holding a press conference. kaori enjoji is standing by in the japanese capital. what we need is confamily roomation of three things. is the sales tax hike going to be postponed? if so, for how long? the consensus opinion suggests it's going to be as long as 18 months. number two, when is the snap election going to be held? we are hearing around mid-december, december 14th is one date i have heard. number three, there's a lot of talk about measures to support the economy. does that mean a supplementary

budget to fund the stimulus package? we are hearing if the stimulus package is brought into the system that it could be, wilfred, between 2 and 3 trillion yen. prime minister shinzo abe is due to speak at any moment now. back to you. >> he has reportedly also told his party leadership that he will delay a tax hike and called a snap election. that snap election is due to be held on december the 14th. we will have confirmation when he starts to speak. these are live shots of the press conference. so the ecb president mario draghi breathing life into markets after hinting government bonds could still be an option.

let's listen in to what he says. >> we are aware of this. this is important for the effectiveness of our monetary policy. structural reforms make our monetary policy more effective, but we have a mandate. having said that, the other unconventional measures might entail a variety of assets, one of which is sovereign bonds. >> steven englander is still with us from citi. i want to get your reaction to those comments from mario draghi, steven, because he has been reassuring markets that he will do whatever it takes for quite some time now. why the sudden rebound in european markets after that comment? full born quantitative easing should be priced into these markets. >> i think they're beginning to see some of the pauk ed startin

to emerge. after the episode of a couple of weeks ago where there were a number of reports suggesting that he didn't have support within the council and it would be difficult for him to push it through, it looks as though sentiment is beginning to shift towards doing the sovereign bond purchases if it's needed. and i think that that is breathing life into european markets. >> let's touch on the yen, as well. it seems as though that itself is struggling for direction because it hit record lows, already. do you think it has further to go on the down side? >> we certainly do. >> he think the possibility of delaying the sales tax increase, even the politicians are

beginning to recognize that what they thought would be enough, just balance sheet expansion, i think the combination of the boj preparing additional stimulus and abe likely calling an additional election suggests he has his hand on every possible lever. 1.20 is definitely a possibility. >> steve, thank you for that. we're going to go out live to tokyo now where we are going to hear from prime minister shinzo abe who has reportedly said he would delay a tax hike and call a snap election. we're going to join kaori in tokyo now. >> dhanks a lot, will. we're waiting on prime minister shinzo abe to hold a news

conference to explain his reasoning why the delay in the consumption tax and calling a snap election on december the 14th. he's now entering the room right now appearing at the podium. this has been speculated for quite some time. let's listen in to what he has to say. he's coming back on the back of overseas trip, first to apec in beijing and to myanmar and coming to the to the very weak gdp numbers that we've all been talking about on monday .this, of course, showing the technical recession in japan. the press conference from shinzo abe will be starting momentarily. he will be given a statement followed by questions b for the press. [ speaking foreign language ].

>> shinzo abe explaining the consumption tax and he's saying he has been thinking long and hard ever since then whether or not he will go ahead from a further hike from 8% 2010%. the prime minister explaining the tax hike was senated in japan. and that these tax reforms were enabled receivable years ago and the consumption tax hike was a move to ensure the finances would be secure in japan to finance some of the social security burden for the japanese government.

spm speaking foreign language ] >> however, even if the government decides to raise taxes, and consumption stalls, it would be translate into higher tax income for the japanese government, so it would be a futile attempt. unfortunately, the japanese economy has not recovered as seen in the gdp figures just announced. i've heard the opinions of some 40 experts as to whether or not to raise the consumption tax even further. and i've also listened to the guide of many of my economic advisers and we have discussed this matter thoroughly over the next couple of days.

i have tape their opinions comprehensively, examined the need to exit inflation and to ensure that abe nomics, the policy itself, is on track and as a result i have decided not to raise the consumption tax to 10% next october and i have decided to delay a consumption tax hike for 18 months. however, i would like to reassure you that the third arrow of abe nomics will proceed as scheduled. critical to this will be employment and wages.

employment situation has improved the jobs outlook ratio is at its best level in 22 years. now increase 2% at the start of this year and this is the best case of wage increase in the last two years. corporate profits have increased. employment has widened. and wages have increased. and consumption increases. then the economy recovers. this economic cycle is about to begin. that is why i have priced so much importance on personal consumption. consumption is falling on a year

on year basis. the 3% hike in the consumption tax in april has acted as a heavyweight and offset a rise in consumption. that would depress personal consumption further and make it difficult to exit deflation. there is businesses within corporate japan have moved to raise wages.

so that japan's economy, its manufacturing economy will recover fully, more women can be incorporated into the workforce. we will create the situation where wages will continue to grow, not just this year, but the next fiscal year and the fiscal year after that. we will ensure the recovery is very broad based and once it is, the environment will warrant a further consumption tax hike. we will submit the next supplementary budget to the parliament session soon so that we can enact extra stimulus to

ensure japan embarks on economic recovery. >> given the economic conditions squaw pan faces now, i have decided to delay the consumption tax hike. but we will not return the clock on fiscal austerity. we need to ensure confidence in our -- in japan's economy. and we have the responsibility to ensure that we have the finance -- adequate finances necessary to cover for social issues. we will delay the consumption tax hike by 18 months and 18

months later, you may wonder whether or not we will extend the consumption tax hike again 18 months later. i will tell you clearly, now, we will not delay consumption tax again. in 18 months time from october of next year, we will enact the consumption tax hike. by embarking on the third arrow of abe nomics, structural reform, i am confident we can provide an economy that can weather a consumption tax hike in 18 months time.

we will embark on both economic reform and fiscal reform. those will go hand in happened. with we will enact legislation to make this possible in the form of a budget 2015. since i have made this very grave decision, i need to ask the public what they feel about this. i will dissolve parliament this week on the 21st. and i will postpone a consumption tax hike by 18

months. and by april 2017 i will most certainly raise the consumption tax. and i will ask the public to judge whether or not we should continue with the structural reforms. demand why we are dissolving parliament this week. by calling an election now, we will be able to enact a budget

for 2015 without delay. the ldp, my party along with our coalition partners, hold many feats within parliament. i'm aware that some people have said why are you calling elections? we may lose seats in this election. i am aware this is going to be a very difficult election. but our finances are very closely correlated with likelihood of the japanese public.

there are differing opinions on the structural reforms. and i have decided that i need to hear the voice of the japanese public as to whether or not we should go forward with these reforms. i know there's criticism and that criticism says abe-nomics has failed. but i asked these people, what is the alternative? i have not heard any detailed

alternatives. there is no time to stand still. this election will be whether or not the public feels that the reforms that we are proposing are the right path for japan and whether or not there is no alternative. when i first started this term, there was a lot of criticism towards tax reform.

but our mandate two years ago was to ensure japan's economy recovers strongly. that is why we have proceeded with the various reforms. employment has improved. things are just start to go move. an economic cycle is just beginning. we must not stop that cycle. look at these 15 years of deflation. we're finally on the brink of that, although we must not let that opportunity go.

we cannot return to those dark times. and better the lives of the japanese economy. the only path is economic recovery. prime minister shinzo abe outlining there at his address to the nation the reasons why he has decided to postpone the consumption tax hike by 18 months. that means april of 2017, also outlining his plans to dissolved partment on the 21st later on this week. he called for a snap election on december the 14th. these are all widely expected. especially after the gdp numbers early on this week showed japan was falling back into a technical recession.

some people have wondered why he needs to call a snap election. legally, he could postpone the consumption tax hike and not call a snap election. and aware of that criticism, he addressed that just now saying this referendum is a question to the japanese public as to whether or not they support his agenda of economic reform and whether or not they feel there is a better alternative to getting the japanese economy recovering. remember, the japanese prime minister, he took office two years ago, so technically he didn't have to call an election until 2016. there's been a lot of political analysts that we've spoken to today who have suggested that this election is more an election to solidify his power base within his open party because there are many people

within his party, which is very large, who oppose some of the reform agendas which have been propositioned by the prime minister and those close to him, including, for example, trade reform and agricultural reform, as well. he is delaying the consumption tax hike by 18 months and calling an election for december 14th. >> kaori, he mentioned that he felt he knew this would be a tough election, but he would not be calling for this vote unless he was very confident of actually whipping it. >> the opposition is in disarray. there is no viable opposition at this point. it is possible that they may lose some seats. it is possible that they may lose a super majority in parliament, which is two-thirds of the house. but i think it is difficult to imagine that the opposition is going to be a huge threat to the

liberal democratic party of this stage. >> he also pointed out salaries, wage increase, but at the same time, japan is still in recession. >> i've heard that the kadongen, one of the most powerful business lobbyist in japan has agreed to take on board a wage increase. and that this announcement will be made tomorrow. i think if this is the case, this would about a fairley seismic shift in the way they think. it incorporates many, many companies, like toyota, and if they decide to go ahead with an across the board wage hike, i think this will have a ripple effect through all the other small and peat yum term enterprises who have not benefitted from this recovery. >> thank you for your interpretation and for getting

us those headlines from prime minister shinzo abe calling for a snap election in december and also delaying that sales tax hike. we also are going to head into break and get you the latest on other stories. japanese prime minister shinzo abe delaying the sales tax hike. that sends the yen higher versus the dollar. >> u.s. futures are pointed to a mixed open as the s&p closed for the record 47 times this year. german business sentiment on the rebound. a longer than expected zew survey listing the euro and the dax at session highs. the u.s. senate is set to vote on the controversial keystone oil pipeline. they may come up with votes just short of what's needed to pass the bill.

welcome back to "worldwide exchange." here is a look at how futures are trading ahead of the open. yesterday we saw the dow and the s&p 500 end the day in positive territory. the s&p 500 closing at a record high, but not the same story for the nasdaq, which closed down by around 17 points. the s&p tech index hitting a

year high. in yesterday's trade, it will close lower. interestingly enough, we are in rally mode right now. the xetra dax, really, the outperformer right now, up 1% on that better than expected german investor confidence report. coming in higher than 11, which the index is up 96 points. how does the euro stoxx 50 respond? higher by around 24 points or 0.8%. we should oint out that the euro/dollar is at session highs on the back of that better than expected economic data. wilfred. >> seema, thanks very much. the biggest story so far today is that prime minister abe

has delayed the april tax increase. he said that the upcoming tax increase, he said the april tax increase was offsetting growth and that rising taxes, again, would stress japan's exit from deflation. he said he would dissolve parliament as soon as this friday, the 21st of november, and a snap election in japan will be held on the 21st of december. he did say that the delay in the tax hike was one off. it would only happen once. he's keen not to have investors lose confidence in japan's fiscal discipline. he did say he will resign if the coalition loses its majority, which it is not expected to do. we should know markets are responding to those comments

from abe. did yen recovery is back in positive territory. some encouraging statements for shinzo abe. abe nomics has been in place for quite some time right now. quantitative easing hasn't been the same yet. will that ultimately work? >> indeed, and he's asking for voter support for the tax and for abe nomics going forward. he wants four more years to carry it out. >> in our news, apple is falling out of favor with hedge funds now the most short of stock. meanwhile, energy is the sector of choice with a whopping $4.4 billion worth of buying. that's according to new research from s&p capital i.q. which

tracks the equity assets of the ten biggest stock picking hedge funds. pablo, a lot of interesting developments here from your research. why do you think tech is losing its favor among some of the hedge fund investors? >> first of all, the most practical commodities really is time. i don't want to get too philosophical this early in the morning, but all weeks of life and particularly in finance. what we've done here is created the hedge fund tracker to save time and value for our clients. by looking at thousands of filings, and as you rightly mentioned, that energy is the kind of top pick with 4.4 billion. and info tech is actually kind of at the bottom of that. it's surprising because alibaba had the amazing singles day of

nearly over 9 billion worth of sales in one specific date. this wasn't enough to prop up that sector when it came to the top ten pure hedge funds. what actually happens is that apple were down 1.3 billion with these hedge funds and i was speaking about china before, they're a language translation company. they were down nearly a billion, as well. >> why do you think there's so much interest in alibaba? is it the dream of the message that jack ma is delivering or is there just a lot of excitement and energy investing in e-commerce space? >> e-commerce is a lot about that. there's a lot in terms of the price expectations for alibaba and people are just plowing in there. what we're seeing is that, of course, the ipo in september, ipo is obviously very significant in the market. particularly when it comes to a huge growing market in china.

five of the hedge funds look straight look alibaba, they're in favor with these hedge funds. >> the top sector by quite some distance of energy, the hedge fund managers, at least, obviously thinking the oil price is only low temporarily. >> yeah. i don't know exactly what their assumptions are when it comes to the forecast of the oil prices. but, of course, this is picking up a lot of the consumer sentiment and picking up the energy, like, here. that's one of the main stocks that they were picking. so they're very favorable to that. now, in terms of the consumer discretionary, i don't know if you -- have you guys heard of a company called mohawk? >> i have, yes. >> right. so mohawk, nothing to do with hair products or anything like that, but it has to do with -- and they're kind of sath

development with them. they were 78 in the top 1 00 positions for these hedge funds. they actually moved to 17. >> we have separate research that shows that the average hedge fund is jrchl prg performing the markets this year. do you think that will see a lot of the hedge fund money to try and pay catch up and that could ultimately be a catalyst for the u.s. market? >> it could be. you know, it's very intricate when it comes to these hedge funds. there's the suggestion around 220. because of some of the performance. i think the devil is in the detail when it comes to these hedge funds.

icahn, for example, they have 25 positions. they don't turn around that often. but they have thousands of positions. >> interesting research. thank you for your time. >> head to our website to read more about s&p's capital iq. breaking news out of indonesia, the new president took office on october 20th and already on monday night, he hiked subsidized gasoline and diesel prices, which have been heavily subsidized for years. removing some of those subsidies is freezing up cash for hem to spend on his reform agenda. reaction to that, higher fuel prices could cause ibd neeshan central bank has moved quickly and raised 75 basis points to

7.75% today. that is the first rate hike since november 2013. moving on, carl icahn is bracing for a stock correction. the s&p is up more than 10% this year. interesting this one, seema. saying there might be a pullback over the next three to five years is hardly ground breaking. >> and he has had some cautious commentary over the past couple of weeks of whether this bull market can continue. other investors have caused on a resilient rebound if the market. you have to wonder what is driving this move to the upside and if we will see the santa claus rally that typically

happens after thanksgiving to christmas. will we actually see that? it's up for debate. >> one thing interesting about that hedge fund report, carl icahn, massive hedge funds. it's such a focused set of holdings across this whole hedge fund. i suppose he's suggesting irrelevant of where markets do, his picks can allow him to make money. coming up, a new way to get cash in a flash. details on the payments that will hit the market after the break. how could switchgrass in argentina, change engineering in dubai,

aluminum production in south africa, and the aerospace industry in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing.

crude oil on the move today. trading above $80 a barrel. it's resulted in energy stocks underperforming. in fact, the worst performing sector in yesterday's trade. some of the big loserses, nabors industries, down 2.35%.

and halliburton, traded down more than 10%. interestingly enough, some analysts say energy stocks are starting to look attractive. keep in mind, the energy sector is trading at 13 times earnings which is at a discount to the s&p 500. obviously, the halliburton move is m&a related. the move is down towards. as we just discussed, hedge funds have been buying in sector over the last few months. a new sector could soon allow money to send to each other as it is to send a photo of text message. >> good morning, wilfred. snapchat is launching a new mobile payment service called snap cash. square will store the debit card

information and process transactions. users can be a permanent record of the transfer within the app itself. the popular site has reportedly been valued at $10 billion following the recent amount of fund-raising and it's considered a growing threat to facebook and twitter. social payments are a promising tool for generating heavy knew. teenagers use snapchat every single day. peer to peer transfers could hit $5.2 billion this year. consumers could make 52 billion in mobile payments. facebook has made a move into the space. in june, the company hired the head of pay pal to run its messenger app business. facebook has created a buy button that let's users buy items they see shares on their

news feed. on analyst call earlier this year, mark zuckerberg said payments will be a part of the company's overall success helping people share with each other and interact with businesses. snapchat and square say snapcash is available to users who are 18 or older. wilfred, back to you. >> thank you very much. >> i just want to point out the tech sector has been on the move. the sixth straight session at a multi year high. it's up about 11% over the past one month, leading the way higher is yahoo!. that's the best performing stock in the tech s&p index so far this month. we should point out that twitter's co-founder biz stone is creating a new app which let's people create and share random thoughts posted. that is a first on cnbc. before we go to break, let's

remind you of our headlines. japanese prime minister shinzo abe serves tax hikes until april 17th and calls for a snap election, but insists abe nomic sess making progress. the german zew blows past specations, sending the euro and dax to record highs. the controversial keystone pipeline vote will be under way today in the senate as supporters search for one more vote.

welcome back. in the the last 20 minutes, we've heard from shinzo abe who delayed a tax increase as expected and called for snap electrics as expected. parliament will be dissolved as soon as this friday with elections held on december 21st.

the dollar was strengthening before he announced those measures. when he did announce it, the yen is now flat on the day at 116.7 thus far. abe is expected to win a reinforced mandate from his policy. he did say abe nomics was,ling. let's move on to europe yappan markets. mostly because of the zew survey of economic sentiment that came out of germany. that reading came in at 11.5 and minus 3.6 readings last month with germany leading the charge up 1.2%. soever, as you can see, that move, euro/dollar, off the back of that data.

u.s. futures not taking queues from the rally we're seeing. the dow jones industrial trading down around 1%. the tech heavy nasdaq which was down around 17 points in yesterday's trade, right now down just about 4 points. earnings continue to be a focal point for investors. home depot earnings at the top of this hour. inest havers will look for clues from the new ceo during the conference call on that outlook for u.s. housing. joining us now on the phone, david strasser, managing equity research from montgomery. let's talk about home depot. some say home improvement stocks are a good indicator. given the improving housing data, do you think home depot could deliver better-than-expected earnings? >> well, i think it looks like

they are. they have talked bullish about business being pretty good right now. they've had a woormer october, which tends to help them a bit. it looks likes it's going to be a pretty good quarter. i'm not sure the housing market data is necessarily getting much better. we've been through a bumpy year here with housing data, a lot of negative turnover numbers throughout the year. i'm not sure it's getting better. >> and how significant is crediting meneer's promotion? >> i think frank left home depot in a pretty good spot. i don't think he's going to do anything dramatic today. i don't think there's going to be a tremendous change. you don't want to break what's working. and my sense is it's going to be gradual and nothing dramatic.

>> gas prices are expected to help home retail. is that going to help home depot? >> i'd be more along the lines of walmart, target, the restaurant companies seem to get the biggest wooft boost right now. >> probably not home depot. what is your rating on it? >> it's neutral. i've been amazed at what valuations people are willing to pay for a stock and i think it comes down to where people are in housing. i think we're later along than what the market is telling you. >> david, thank you very much for joining us. we appreciate it, pleasure. >> that's all we've got time for today on "worldwide exchange." i'm wilfred frost. >> thanks so much for watching. i'm seema mody. "squawk box" is next. opportunities aren't always obvious.

sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

good morning morning, everybody. stokes in tokyo soaring on the news of a snap election. a billionaire investor is bracing for a major market sell-off. carl icahn is worried about what's so come in the next three years. ridesing prices, an arctic blast, it is tuesday, november 18th, 2014. "squawk box" begins right now.

good morning. and welcome to "squawk box" here on cnbc. i am joe kernen, actually, along with becky quick and andrew ross sorkin. it's a big day for youtube, apparently. the google owned site is launching its music subscription service will will compete with spotify, rhopsody and -- can you get taylor swift on -- >> keep reading. >> today's rollout is a private invite only test. where is my invite in the mail? focusing on youtube's heaviest music users. the company has signed deals with many record labels, but sorry, taylor swift fans, you won't find her songs on