good morning everyone. welcome to worldwide exchange. here are your headlines. chinese stocks suffer their worst one-day drop in over six years after the country's regulator cracks down. swiss stocks make a come back. julius among some of the best performers in europes after saying it -- the count down underway for the meeting between mario and chancellor merkel. behind the qe program. society general said it will

split the ceo and chairman roles. frederick keeps his job while vice president steps in as chairman. let's get out to one of our top stories today. chinese stocks suffered the worst drop many more than six years led by the country's three largest broke ages have been banned from opening new trading margins for three months. it follows a investigation into high risk activity. joining us live from beijing on the latest. >> hi. that's right. it is driven by a crack down on margin trading here. the country's regulators had issued a warning to 1 different

brokerages and they punished three of those firms. these are three major industry heavy weights here. and these companies now face a temporary ban for about three months on opening new margin accounts. the reason we saw it a lot of people are worried the move will dent the buying in stocks. the shanghai rally has been driven in large part to the margin trading that has been going on here. a lot of people have been flocking to the stock market and wanted to borrow money to buy stocks. in fact 11% of the stock trading accounts now are margin accounts, and the bank of america meryl lynch came up with an interesting statistic where they said the margin balance for shanghai stock market is now on par with the nysc. they said it took 13 years to get to that level.

shanghai only 17 months. it's really no wonder the argument is you would see more money taken out from the table by the country's regulators really trying to reign in what is seen as a riskier practice here of allowing investors some necessarily not so experienced to borrow money in order to buy stocks. >> thank you so much. we are seeing that market reaction the chinese index better than 7%. let's get market reaction as well as john manly chief equity strategies at wells fargo asset management. beijing, as pointed out, trying to shut down on margin trading. does it derail the market rally we've been seeing in china over the past couple of months? >> no. i don't think so. i also wouldn't say quite shutting it down. i think they're trying to reign

it into more regulated framework which is good. that part is positive. perhaps a little unfortunate timing after the turbulence in europe last week. >> what is a big concern with margin trading? >> it amplifies everything. the volatility. it amplifies the price sometimes. he's right, if it best be done quickly. i don't think there's bad timing. i saw in united states when they let it go uncheck with property investing. check it. and the stock market will go up. >> you think it's a one-time blip and bargain hunters will come in. >> no and yes. i don't think it's a one-time dip. i think bargain hunters will come in. i don't think they should change the path of stocks in companies. >> companies that have been trying to strengthen their position in china, do you think that's a strategy that will continue to be in play in 2015 in fact on friday reuters was

reporting that partnering with u.s. retailers and apple reportedly opening about five new china stores. they see china as a opportunity. >> china has been the market of the future for 150 years. i think it's close to coming true. how can you ignore it? how can you walk away from so many people and the improving economy. i go back to the fundamentals. invest in china. >> at the same time you can argue that the china market is moving on central bank intervention versus the fundamental data. growth slowing continues to be a big concern. >> center bank intervention is something we've got everywhere in the world. china is big. it's growing at 7%. the figures will tell us about gdp and therefore growth will continue and therefore interest in that country will continue. i'm encouraged by the activity of the central bank they're being on top of what is going right and what is going wrong.

>> could we see further easing this year? >> possible. but i think we need to see how the economy is doing at the moment. it doesn't look like it's massively contracting. it's slowing but pray not yet warranting more. >> it was interesting to see we saw a record net import in oil from china last year but despite that the oil market continues to move lower. do you think the market is not concerned as much about china being a buyer. they're focussed on russia and other emerging market? >> i think they're focussed on oil. there's more oil coming out of the united states. they can bankrupt the companies drilling now. i'm not saying it will happen. >> deflation has been a concern because the significant drop in the price of oil. let's focus back on europe. all eyes on the european central bank which is expected to announce a bond buying program on thursday. reports of a meeting have

fuelled speculation that the german chancellor was briefed on qe plans. taking a look how markets have been responding. the bond market has been seeing a significant amount of moves. just on friday we did see the u.s. tenure below 1.8%. we've been seeing u.s. treasury posting the biggest weekly rally. significant moves in the european bond market as well. many times seen as a safe haven we've been seeing yield con presentation there. and italian tenure at 1.7%. spanish tenure at 1.5%. so what are the banks predicting on thursday? rbs said 500 billion euros would be required to hit the 3 trillion balance sheet market. a program won't be introduced until march.

jpmorgan predicteds further qe after january. let's get our panel to respond or react to expect coming thursday and speculation at this point. it's not a question whether if he'll unveil bond buying. how much will it entail? >> i think it will happen. the question is a little bit at the moment with the greek election looming. whether they'll go all guns blazing at this point and given the history of the announcement and everything that is going on with the pressures from germany, i would be surprised if we get the big one this week. >> that's a great question. of course, the wild card in this is the greek election on january 25th. of course, perhaps because of that coming up mario doesn't want to unveil all the specifics behind the bond buying program. he'll wait and provide a broad plan but wait to provide the specific details. >> that's pretty much my expectations. i think markets who were suggesting after the smb move last week there was something

bigger coming than anticipated might be disappointed. >> if we don't get the specifics do you think the market will respond negative sflily? >> slightly. we'll get them when we need them. all central banks have the goal of keeping their economies fairly stable. it's required. it's going to have to happen. there are some goods that have to happen. i think they'll be disappointed but we're talking about 2 or 3%. and missing 2 or 3% moves the market it's not the worst thing. especially if you get the bigger moves. i think they're coming. when they come it will be significant. when it's significant it will move the markets. >> another challenge he'll have to deal with is figuring out which bonds to buy. there are reports that german officials struggling. what do you think that raises the qe? >> they'll be pushing money into the system. that's what matters. again, i think it matters on a

short term basis which bond they buy and my guess is they probably start off so slow and safely and move out from there. they have 0 respond to it. they're aware of the problem. that's the key point. i think the risk is limited by the awareness of the problem and the willingness to deal with it. >> german taxpayers don't want to foot the bill. perhaps it is will stop him from buying the bond to the countries. >> i'm not sure that's going to be the question. it will be the interesting point. are they going to be buying german government bonds or can they go a little bit further and actually really pump money into where it needs to be ie into corporate bonds, into banks, into reinflateing, really the system. getting the money quickly where it makes a difference. that will be very much watched. >> all right. gentlemen, stick with us.

this market panel continues. in the meantime as we've been telling you greece's main opposition is holding the lead in opinion polls just one week from a general election. in a new survey published yesterday it showed the parties leading over the ruling new democracy had widened slightly to 3.1%. the left wing party has been calling to an end of austerity. with the decision and the upcoming greek election dominateding the agenda this week here in new york we're asking you which is the bigger market maneuver. get in touch with us. we've a couple of tweets in. one says undoubtedly the nervous nervousness will be the bigger market mover. tweet us e-mail or find me on the bottom of the screen. what is a bigger market mover

the ecb or the greek election? >> i think potentially the ecb depending on what they say. i think everybody is expectationing the outcome in greece already. >> i agree. ditto. i think greece is small potatoes in the general scheme of things. not that it doesn't cause problems but it's the size of connecticut. it's not an enormous risk, i think, to the market. >> i think it's a great question to be had. you never know. give we've seen so much political uncertainty out of greece. you never know what will happen. >> i think it is now pretty much expected they will win and therefore it's not going to be a message of surprise. surprise is what moves market. the ecb, i think, has the bigger chance of surprising the markets. >> we'll see if you're right. in the meantime, let's get a market update. and after a mixed session over the past couple of days we are looking at european stocks

trading higher. 600 index trading at the multiyear high currently at 353. speculation continues ahead of the ecb meeting on thursday. as we were discussing with the market panel, the expectations is for mario to unveil a bond buying program. the question is how big will it be and will it include some of the countries that really need to see their economies revived? right now taking a look at the top stocks. i've been to the european markets and tell you where we're seeing the gains. the footsie italy a gain of 9/10 of a percent. tell you where we're seeing the winners and losers in terms of stocks. julius trading sharply higher as the private bank said it didn't suffer losses.

they successfully steered through last week's market volatility. you can see julius up better than 6 1/2%. balfour beaty has been awarded new krarvegts. they have been named as a sole contractor to a new u.k. wide civil engineering framework. up about 1.2%. unveiling a management shake up. the former president will step in as chairman and the joint ceo and chairman role will be split into two. stephan, let's get to you. i know, you're in paris following the story. tell us what drove this shake up. >> it will be effective in may after the next shareholders' meeting precisely on the 19th of

may. he's well known to the finance community. he used to be the member and vice president of the european central bank for six years between 2005 and 2011. this change in corporate governance was widely expected. a require applicable to the banks in europe. they used to have two different positions for chairman and ceo until the trading scandal that was in 2008 where the two positions were merged by the ceo at the time. they also announced a couple of changes a few change that's board of directors with the appointment of the head of -- some of the members will not be reconnected, as a result the board of directors will be

comprised of more than 90% of independent directors and it will have approximately 40% of women to comply with the french law on gender party in the board of directors. it's 50% of women. >> thank you so much. and let's switch focus to the tell come industry. shares trading high following a report from the sunday times that hutchinson is nearing a bid for the network that could be worth as much as 9 billion pounds. buy on speculation continues when looking at the tellcom industry. will they approve this deal? >> i think there's a lot of grounds to this. remember it was about to be bought by bt last year. in the end bt decided to buy e. the sector is in flux at the

moment. you're seeing lots of deals. that will continue to happen this year. we know telefonica has a high amount of debt. and lee cashings's group is trying to consolidate its kind of telecom asset. i think it's a deal that makes sense with the buyer and seller. the question is there a better deal to do something like italy where they earn assets or would this represent a better offer? they bought islands assets from telefonica last year. there's a lot of deals in the sector. >> absolutely. we're looking at the space and the stock up up just about 2%. thank you. coming up on the show as the rich and powerful gather a new report shows half of all global wealth is held by 1% of the population.

we'll speak to dr. judith. president of rockefeller foundation on this and more. volatileity eases. how it was national bank decision is impacting new zealand. and shares sell off more than 8% after swinging to a full year loss. the full story live from tokyo. uh, and i know my iq. okay. uh, and i know-uh-i know what blood type i have. oh, wow! uh huh, yeah. i don't know my credit score. you don't know your credit score? --i don't know my credit score. that's really important. i mean -- i don't know my credit score. don't you want to buy a house...like, ever? you should probably check out credit karma, it's free. credit? karma? free?...so, that's... how much? that's how much it's free. credit karma really free credit scores.

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tracking the story out of switzerland finance minister insists the economy can width stand the shock decision to scrap the national cap against the frank. a number is of international firms are reeling from the s&p sudden move over the weekend there were reporting suggesting that u.s.-based 830 million global fund was closed due to bad bets. the company declined to comment so far. ever rest still runs a number of

other funds. taking a look at other companies that have been impacted. they said it's considering all options including a sale of the group due to the exceptional volatility and extreme lack of liquidity caused by the s&p's unexpected move. it insists it is has not yet entered a formal insole vent si process. it's suggested that fxcm could be a potential buyer. it was forced to skufr a $3 had 00 million to secure losses suffered by clients sending the share price sharply lower last week. you can see down about 15%. the new zealand dollar hit record highs against the euro after the s&p surprised policy move and amid expectations they will unveil a bond buying program this thursday. speaking to cnbc earlier the prime minister of new zealand said the country's markets could withstand the volatility. >> it makes it a little bit more

difficult for our exporters. overall our economy is strong. we think we'll grow at about 3 3/4% every year. about 10% over the next three years. we are confident. >> still with us is men zeal as well as john manly. i want to get your thoughts of course, this is day three in response to what we got that surprise decision by the swiss national bank. do you think the sell-off is done when looking at swiss talks or do you think there could be further room to run? >> no. i think the sell-off is probably done. and, you know, it's interesting to see that the swiss minister thinks that the swiss industry will weather the storm without bigger problems. the number of friends that toll me they changed their holiday plans from going to switzerland to going somewhere else. >> because their trip got more expensive. >> exactly. so, you know, it's not just the industry. it's their tourism sector which has been suffering for a number

of years. so, you know, i don't think that's overall good news for the swiss. i would hope for them that this prediction of 110 is right. that would help a lot. >> yeah. i'm taking my first trip to the swiss al. s in march. i have to think about how much i'm going to spend given that the currency was 14% against higher against the euro. how are your clients in the u.s. reacting responding to the unexpected move by the swis national move to scrap that national currency peg? >> they're adjusting. some got caught more by surprise than others. there's going to be some disruptions but i think at the end of the day, it had to happen. because i'm fillphilosophically opposed to that. they create pressures. it's like tech tonic pressures that cause earthquakes. better to have a controlled shake then the whole thing get out of control. i think it's better it was done. get it over with. i think it is to a certain

degree a transfusion of strength from the swiss economy to the new zealand economy from the american economy into the european economy. currency is a great regulator. it tends to keep things even over a longer period of time. i don't get too upset about currency problems. i think they're limited in local nature. >> perhaps it was needed it was expensive to maintain the 120 peg by national bank. was the strategy announced to it so unexpectedly. there are companies that are dealing with the ramifications of that move. >> all is fair to a certain degree when it comes to this. they had to do it somehow. >> couldn't they have warned investors and said in the next four weeks. >> i'm not sure it could have been an enormous difference. i think it could have been more gently done. it had to be done and it's going to cause problems. >> any gentle announcement would have caused the same thing we've seen.

so many people were just banking on it therefore, would have immediately gotten out. i don't think that would have changed a lot. that's the conclusion they came to. they lost control of their monetary policy. they had to regain it. this was the only way to do it. they lost the game of chick within the markets and, you know that will probably have some preper cautions into the future. >> looking at a company they have over 200,000 clients. they had to enter insole vent si. they didn't hedge their bets. do you think that was just an unsafe trade all together? >> well, it was a risky trade, which they didn't think was risky. you could rely on the swiss national bank. that's where i'm saying things have changed now. people do not rely as much on what they said as they used to. >> somebody gave money. if somebody loses money somebody makes money on the trade. it's redistribution.

whoever was on the side of the trade. it's as simple as that. hedge funds on both sides. whoever was on the other side of the trade. somebody was hedging those people those people tend to profit. >> do you think the swiss bank many times seen as a safe haven trade is gold a big win ensure. >> gold has been up. there's no question money is moving toward gold. the swiss has something to do with it. i have a difficult time getting excited about gold. >> after two years it's beaten down. maybe this year will be the year where we see a turn around in the shiny metal. we're going to keep it there. leave it there. thank you for your time. i hope you enyou your here in london. give new york a hug for me. i miss it. still to come on "worldwide exchange." fresh fighting in eastern ukraine could prolong western

sanctions on russia. why moscow's growing pains could be worse than fear. that's coming up.

the chinese stocks suffer

the worst one day drop in over six years after the regulator cracks down on risky margin trading. swiss socks s stocks making a come back. it did not suffer any losses after the surprise move by the smb. the count down underway for ecb decision day. ramps up speculation that berlin is behind a qe program. and society general said it will split the ceo and chairman roles. fed rico keeps his job while former ecb board member steps in as chairman. and on this monday morning let's take a look how european markets are trading. of course the big question the mover this week will in fact be that ecb meeting on thursday. that meeting where mario is expected unveil a bond buying program. right now we're looking at markets higher across the board.

in fact, the euro stock 600 index is trading at the mull year high. gains for monday looking at european markets what does it mean for the bond market? we have seen a little bit of yield compression over the past couple of weeks as investors move out of equities and into bonds. right now looking at yields slightly slower than the 10-year bond which is seen as a safe haven trading at .45%. the tenure in italy 1.7%. let's go to the currency space where we're seeing moves there. on friday we did see the dollar hit a new multiyear high against the euro. the euro hitting 11-year low versus the dollar plunging about 18% from the high in may. the question is how much can the euro weaken against the dollar. something we'll get clarity to or on thursday in response to what mario unveils.

of course another big market mover has been russia. ukrainian troops have recaptured all area that lost to separatists. heavy fighting took place over the weekend for an intense battle for the airport. president putin is concerned over the escalation of hostility as ukraine's president has rejected a moscow-backed peace plan. the ruble has come back slowly. as you can see the russian ruble strengthening a bit in today's trade. oil prices continue to move to the downside. we're looking at wti crude trading at 47.95. the international gauge just below $50 a barrel. down about 1%. what is the outlook on russia? david hunter head of cross asset strategy joins us in studio. i want to start with russia and

broaden to other emerging markets. you think the meeting on thursday the ecb meeting could have ramification or impact on russia. tell us why. >> because the key factor that drives russia is really oil. initially it was the ukraine crisis. then oil became the main driver. we need to remember that the eurozone is the biggest oil importer in the world. it's not a coincidence that oil started to fall as european indicators weaken for the second half of last year. it's not the only factor but markets trade the marginal factors of whatever is changing. it drives the prices. and if you think that the ecb can be aggressive and helps stabilize oil prices then russia will see reduction in risk. you'll be in a better place to assess whether russia is surging or not. it means it will cover the shorts. russia will be a bad place but

we'll see short covering and that need to rally assets. >> the revooiflt in the eurozone economy that could be a result of what the ecb announces on thursday. one that had a limited effect on the russia economy given the sanctions? you're right. the sanctions limit the positive impact. in any case we're not talking about the oil price for russia. if the market reacts to what is new. the sanctions have been in place for awhile. we don't think the e.u. will remove them. certainly americans won't move them. but oil if it can stabilize would be the swing factor. it doesn't mean that russia will be in a better place. it means we'll see some short covering. >> it's a big if. we did see crude managing to end

the week in the black halting seven weeks of losses. jim is going short big oil. the question is is the comeback limited? could we potentially see lower oil prices going forward. what does it mean for russia's economy? >> if the oil prices continue to slide then russia will be in bigger trouble. i think for the time being the risk reward from that perspective in rush ha is weak. if we get the short squeeze i was talking about in the back of the ecb most investors will miss it. no one is in a position to buy it or because another decline in oil means likely russia will have to enforce controls. we got close to that point in december, and because of the weakness in the banking system they just cannot allow too much currency weakness from here. which means capital control which is means investors will be more negative on the country. >> all right. i want to get up to speed on

what has been the market mover coming up on thursday. ecb expected to set out plans for a sovereign bond buying program this week. are the bonds of nation like greece and spain set to be big beneficiaries? julia banking analyst at jpmorgan about the debate. >> believes too much focus on the pref i are and the asset inflation it might have. you have to remember germany is an export market and qe helps currency evaluation we've seen today. on top of that we have cash to be invested. the search for yield in germany is more likely. and that will help us in inflation of banks and generally asset inflation. >> looking for potential out performances we push through 2015 i guess you have to look for ones that leverage to the u.s. growth output to appreciating dollar to potentially higher u.s. rates. where should we look ahead? i guess one that stand out is --

so what are your thoughts here? >> on litigation first of all, you're right. it's material positive on asset inflation as well as u.s. dollar strengths. to give an idea 10% of appreciation of the u.s. dollar is around 3% on group earnings. we've seen a lot of new dollar appreciation already. in terms of fx litigation in particular. that's the biggest concern. we're more in the camp it will be better than expected. the consensus number is around 5 to 6 billion of potential litigation and they can take over $8 billion of litigation expenses without having an impact on the dividend payout on the capital levels and hence be relaxed about capital positioning and the litigation to come. >> who else? i know you like ubs. i want to come back to that

briefly anyone else you think gain from the ebs poe sure to the market? >> ubs. texas is one stock that has a big asset management operation in the u.s. very high sensitivity. the other one, as you mention is ubs credits. they have a big fixed income. and the last one i would mention is to -- >> low yields making dividends important here. >> value in ubs we see also value in bank. and that's a consensus going to 6% trading at roughly book value and the other is ing. they'll pay about 5% as the next year trade below tangible book value. >> you talk about potential outperformance. i look what happened with the recent equity raise we had.

we could have perhaps anticipated given a ratio that needed to raise capital right now. i think it raises questions about the so called comprehensive assessment if they have to come out and do something if they saw it. what about the likes? that's another one where there is a bit of caution over there. >> and that is one of the reason it's not in our preference. the capital ratio in ubs is over 13% and in credit about 10%. on top of that there's going to be a leverage debate in switzerland, which is going to start in march. and ubs is significantly less leverage. you don't seecrete credits to raise it. even for this year and that is not in the market expectations yet. >> of course, a significant amount of pressure on mario and his ability to really deliver

what the market is expecting. further qe is expected to pump cash into the banking system. keep interest rates low. is that enough to revive a eurozone economy? isn't structure reform needed as well? >> of course. at the end of the day we have to start somewhere. and there's a famous saying from ben bernanke with qe. the problem it doesn't work in theory and it works in practice. it points to the fact you may not see the direct impact as our economic models would suggest, there's a huge impact in confidence. it is seen as being forceful and taking leadership which is what is missing in europe now. >> how critical is the help of the financial sector? the banking system at this point, despite the program among other programs rolled out by the ecb to stimulate banks lending that hand been enough to push the banks to lend to consumers and small businesses which need those loans in order to grow and

expand. >> absolutely. it's critical. and of course there europe has been lagging behind the u.s. things are improving in terms of captainlization. you look at the banks getting more willing to lend as well. a huge lack of demand. that's where the confidence issue comes in. remember a year ago there was more confidence in europe. russia happened and a number of other things lead to weakening. it can get back to momentum had a year ago that is going to make a big difference. people may start on the margin to invest more. the eurozone will not grow at 3.5% like the u.s. if it can grow at 1 or 1.5% that's better than people expect. >> let's see a timeline. >> our own forecasts we're seeing this year 1.2%.

>> in 2015. >> yeah. >> you may say that's not very exciting. i think it's better than most people have in the back of their mind. we think that the growth pick up will start from the second quarter on the back of oil prices, more confidence, the weaker euro and the base effect from the russia. >> and i'm assuming that base scenario deflation, of course would not be seen as a threat then. >> yeah. it is the deflation is negative for confidence. people think it comes from as an economy. we need to -- and the big debate and the most celebrating debate now is how much is bad versus good. i would argue there's too much focus on the bad. and too little focus on the fact that the consumers got a massive tax cut. >> where and what will they spend it on. we'll see that over the next couple of months perhaps.

thank you for your time. now we focus on the big movers in asia. sharp is expected to report a net loss for the current fiscal year which ends on march 31st. we have the story live from tokyo. >> thank you. sharp had been expected to mark a profit of $260 million for 2014 but they reported today that the company will see a net loss of several hundred million dollars. the company sales will likely fall below the $25 billion originally forecasted. and operating profit could come to half of what was the previous physical year. sharp stock ended the day trading down nearly 9%. sharp has been struggling over the past few years and the company had made a strategic shift to focus on high speck liquid crystal displays.

emerging rival caught up create inevitable price competition eroding sharp's profits. it neetds to rework the business plan. a plan that had originally targeted a net profit of $700 million by physical year. new strategy could be difficult because just drastic restructuring will not likely help turn the company around. the disappointment in sharp's performance also shows how electronic makers both japanese and those of other countries may need to constantly create new markets to avoid getting stuck in the vicious cycle of cost competition. that's all. back to you. >> thank you so much for that report. i want to get you up to speed on the air asia flight. the crash that took place in december. trying to understand what the reason was. well, indonesia investigators say there is no evidence so far that terrorism caused air asia flight to crash. investigators have heard entire contents of cockpit voice recorder but tribed only half.

it's interesting to see what was said. the investigationers from indonesia said that a team hopes to transcribe the rest of what was found by the end of the week. the real of the preliminary report on january. people wanting to know what happened to the air asia flight. still to come retires beware. the hang over from the financial crisis could be here to stay. we unveil top tips to keep you financially fit for the long haul. that's coming up.

welcome back towover will be on thursday ecb mario expected unveil a bond buying program. that seems to be providing a little bit of a lift to equities now. we're looking at the ftse 100 up. the german market seeing a gain. and the italian markets holding on to the gains. let's focus on italy. the shares in the italian banks has been on the rise. that could change shareholder voting rules. let's get to claudia who joins us live from rome with the

latest. what are we talking about here? >> first of all, there are significant gains with the popular banks really obviously benefitting from what could happen if it does happen. now the idea is this group of banks the popular banks represent about 30% of the italian banking industry and what would change if the decree were to pasta is going to put within the investment compact, which is a set to pass by the tothto 20th of january the popular banks would no longer have one shareholder represented by one vote but closer to what the other 70% of italian banks are like and that is the votes would be representative of the amount of shares you hold. it makes some of these smaller shareholders weaker but it also does it makes them more likely to merge one within the other. what we're seeing this morning is getting a gains on the idea

that we may see some merges and acquisitions in the 30% of the banking sector in italy. he said too many banks and bankers not enough lending. with the investment compact has within it all sorts of moves to help sustain the italian economy. so today we're certainly getting a positive move on those banks and the other ones are following along with it. we'll be back. >> better than 12%. that's a big move for an italian bank. claudia, thank you for the report. switching focus from italy to france. one of the attackers in the charlie hebdo shooting has been buried in an unmarked grave. no relatives attended the funeral and the grave is unmarked to keep it from becoming a pilgrimage site for extremists. we are live in paris with more on the story. stephan? >> his brother was also buried before the weekend kouachi.

he was buried in the city that is 120 kilometers from paris. the grave is unmark eded. in the meantime this week's edition of the magazine charlie hebdo is facing a huge demand in france. 3 million copies were printed and sold out in a few hours last week. the magazine has been reprinted to reach 7 million copies. it's about 100 times the usual volumes for charlie hebdo. it doesn't mean all french people are supporting charlie hebdo. according to a opinion poll 42% of french people think that the cartoons of the prophet mohammed should not be published while 57% believe it should be published. we spoke to the editor in chief of charlie hebdo is rejecting

the accusations of throwing fuel on the fire. >> translator: we do not kill anyone. we should stop conflateing the murders on the victims. we must not place thinkers and artists in the same category of murders. we're not warriors. we only defend one thing. freedom. our freedom. secularism. freedom of conscience and democracy. >> over the weekend pope francis urged everyone not to provoke and not to insult other people's faith. charlie hebdo is rejecting the accusations and claims it's defending the freedom of speech as well as religion. >> thank you so much for bringing us up to speed. switching focus back to the u.s. u.s. president president obama is set to propose closeing loopholes for the super rich in the state of the union address tuesday night. he's also expected to target banks in the speech calling for

a fee from financial institutions with over $50 billion in assets. despite signs of economic recovery the effect of the crisis will be felt for many years to come with retires facing a financial hang over. that's according to a new report from hsbc on the future of retirement. joining us now is michael swietser head of sales and distribution group for wealth management. pleasure to have you here. interesting research. 45% of working-age people say that the cost of living today is increasing faster than their income but the u.s. and the eurozone right now are dealing with low inflation. some parts even deflation. what is keeping the cost of liing so high? >> sure. just a bit of context. we've been doing the survey for ten years. we've talked to 140,000 people around their attitude and belief around retirement. it makes it the largest study of its type in looking at people's

attitudes around retirement. this is really a perception that people have around the cost of living and what the future of the retirement might look like. one of the things that is key is that despite the fact that close to 70% of people feel like they'll run out of money or not have enough to live on day-to-day in retirement. 40% of the people today are not saving for retirement or significantly reduced their savings for retirement. and that is going to create a shortfall for millions of people as much as a fifth when they actually do get to retirement. >> you say your research indicates that the global economic downturn is making it harder for individuals to retire. what downturn are you referring to when we look at the u.s. growing better than 3% this year. the u.k. seeing projected to grow at the same rate this year. >> sure. as you mentioned in the opening it's about the financial hang over. >> is that the fundamentals? that can be both. what we found in the research is people haven't taken the time to

truly understand what they need for the future. as an example, people if retirement they say you can learn from those who go before you. almost 70% of people currently in retirement have told us that they didn't realize they had a shortfall until they were actually in retirement. and that's one of the critical issues we're trying to draw and raise with the level of awareness. >> what advise do you have for those planning to retire in the next five years. tell us for those in the millennial generation. should they plan for retirement? >> absolute my. and the answer is yes to both of those questions. if you think about planning for retirement. it's never too late to start saving. that's number one people have to recognize. we tell people that starting around or before the age of 30 is a great way to ensure you have better financial security in the future. one of the things that we tell people is take stock of where you're at and what you think you'll need in retirement to start to plan today. that's point number one. point number two, there are

always going to be challenges along the way. unexpected occurrences. having a written plan will help you better prepare for the unexpected consequences when they come up. thirdly, we think that getting professional advice is critical to that process. someone you can sit alongside that can educate you and that you trust to help you frame out the future are simple but practical steps that anybody can take to ensure a better retirement. >> that makes sense. especially willty seems like those i speak to in the baby boomer generation it creeps up on you and suddenly you're planning to retire in the next two years. if you don't have a plan in place it makes it tougher. >> absolutely. head of sales and distribution for growth wealth management. thank you for your time. and still to come "worldwide exchange" u.s. markets closed today but seeing gains across the board in europe.

after the country's regulator cracks down on risky margin trading. swiss stocks with a rebound? among the best performance in europes after saying it didn't suffer any losses after the s & b surprise. it ex shutting the 830 million global fund due to bad bets on the swiss franc. a countdown underway. a meet ramps up speculation that

berlin is perhaps behind the qe program. welcome to the show. let's take a look how u.s. markets performed on friday. today a national holiday in the u.s. we did see stellar gains on friday. the dow jones gaining better than 1%. the s&p 500 up about 1.3%. the nasdaq trading around 4600 about 1.4% halting five days of consecutive losses. but still falling short on the week. in terms of where we saw the gains utilities once again the best performing sector while energy stocks continue to move to the downside. much having to do with a sell out we're seeing in the oil

sector. we'll get to that in a second. let's take look at europe. we're up and trading. we're looking at markets higher except for the cac 40. take a look at the ftse up about eight points. right now we're looking at the cac 40 being the underperforming. trading flat on the day. we'll get to that in a second. the swiss index one of the biggest moves to the downside in 46 years after the swiss national bank scrapped the national bank of 10. we saw a lot of volatility. right now a little bit of a rebound for the swiss index which is trading higher by around 3.5%. but of course the big move in oil prices that has been a major point for investors. let's take a look how commodities are trading today. oil prices near the high of the day on friday managing to halt seven weeks of consecutive losses. we'll go on this side to give you an update how commodities

are trading today. we'll start with crude which is trading at 4785 down just about 1.7% as i was telling you oil prices were able to halt seven weeks of consecutive losses on friday. clearly the down trend continues when looking at oil. the international gauge trade brent crude just below 1.75%. shorting big oil. perhaps more pain for the oil complex. and taking a look at spot gold. because the swiss franc is seen as a safe haven for investors. once they made the decision to scrap the national peg we did see swiss franc, of course strengthen against the dollar in response. we did see the gold complex trade higher at a 12-week high in yesterday's trade. many times seen as a safe haven. because the volatility we saw yesterday some investors bought into spot gold. right now we're seeing it

retreat a little bit down about 3/10 of a percent. china has been a focus. shares in china's three largest tumbled after they were banned from opening new margin trading accounts for three months following a investigation into high risk margin trading. joining us live in beijing to help us get up to speed for what it means going forward. >> well we're seeing the authorities trying to take the speculation out of the market. they're cracking down on margin trading and what we're seeing is the country's regulators issued warnings to 12 brokerage firms. they punished three. now of those three they are a very big heavy weight in the industry. and those three now won't be able to sign on investors to new margin accounts for the next three months. a lot of people here have been seeing this as a way for the government to really manage some

of the leverage that is in the markets. and try to reign in some is perceived here as riskier behavior by allowing investors to borrow money in order to buy stocks. that has really been a driving. a lot of the multi -- rally in the shanghai come positive it and the debate going on there are a lot of people wondering whether or not the long-term gain from the move could actually outweigh the short term pain. by that, i mean, there are many people of course saying it's a good move on the part of the government because now it's professionalizing the markets and margin trading. it's going to make monetary policy much more effective. on the other hand there are several people who are very concerned about what the short term pain could be and that this won't just be a regular correction but it could lead to even steeper. >> okay. we'll see if that is the case. thank you so much for that

report. let's get market perspective and reaction from steven global chief strategy at citi private bank. i want to ask you is this a short term negative but a long-term positive? the government is cracking down on the risky process practice of investors borrowing money to buy stocks. that should be a good thing for markets? >> i think it might be the case. that proves to be true over a bit of time. you know, the china market has been in a lot of turmoil. what has been behind is the shanghai hong kong connect. the through train which is incentivized investors. so that's some of those shares are trading at record high premiums relative to the same shares traded in hong kong. and so it's been a heat up market. they're seeming to take steps there. it allows them the policy flexibility to focus on the chinese economy then when they

sort of settle down and tamper down on the risks that are taken in financial markets specifically. >> and of course central bank intervention. one of the reasons we saw that late rally in chinese stocks in 2014 best performing emerging market will be it be in 2015? that's the big question >>well, i think it's a difficult to pick which emerging market. it will be some frontier market that no one calls for that has a higher return than somewhere else. i think what is happening around the world is we're dividing up strength and weakness very much around petroleum. i returned from asia. we're doing a trip and it was interesting to see how many looked at the current period and compared it to the asia financial crisis in 1998. that might -- in some respects have similarities. it isn't in asia where the bulk of the economies are large net petroleum importers. in places like india, the largest economies, you'll see large benefits that haven't played out in the economies yet.

>> yeah. already the rbi announcing a surprise rate cut. a lot having to do with lower inflation in india and being predicated on the oil price. it's a boom for india, indonesia. >> india could have a trade surplus before long. it was a place with a large imbalance and there's the benefit from oil. but i would be careful what i mentioned. it is turmoil and pain. it is too simple to describe. this is a net benefit. there were just large gross costs. it's a source of tremendous stress for small number of producers in the world. highly concentrated problem. they have a 50% revenue decline and a wide spread but modest benefit for everyone else. >> that's the big debate. is it a net positive or net negative for different economies given the decline in oil prices. at this point it seems like it's going to continue. i know goldman sachs forecasting $44 a barrel by the

end of 2015. >> what is surprising i think we should focus on fundamentals are not dramatically different than when oil was $100 a barrel. we've had three years of double digit u.s. production growth that was going to be disruptive and displace others. we've known it for a long time. the timing of this the tremendous volatility has something to do with the u.s. dollar has to do with policy expectations for the federal reserve. these are catalysts. what opec has done is important. there are twice as many short positions in oil now at half the price as when we were at $100. >> have short positions. >> yes. there's more barrishness. >> i wonder if it's sentimentals driving investors to take the short side of the trade. >> if the fundamentals are bad how can the price recover? the downside limit to a price is zero if you were giving oil away from free. you could see a rebound.

we see signs in the oil market that financial deleveraging, you know, like during the asia financial crisis like during the great recession of '08 and '09 we saw tremendous declines in spot crude oil relative to the longer term price. these are the steamextreme you see. so we derisked oil a great deal. it's a interesting you hear it now rather than $100 and pointing out for a long time that oil supplies were surging in the united states for a long time. >> the supply demand equation will be a focus going forward looking at oil. let's switch focus to europe. it's a big week for europe. the european central bank this week is widely expected to announce a bond buying program on thursday. reports of a meeting between mario and angela merkel have fuelled execlation that the german chancellor was briefed on qe plans. the ecb tends to shift most of the risk on to the national central banks capping the amount of debt each can buy to 25%.

now it's not just about the ecb. greece also a point. greece's main opposition party is holding the lead in opinion polls with at nation one week away from a general election. in a new survey published yesterday the newspaper showed the party's lead over the democracy had widen slightly to 3.1%. the left wing party has been calling for an end to austerity and a renegotiation of greece's debt with the european partners. so with the ecb decision and the upcoming greek election dominating the agenda this week we're asking you which do you think will be the bigger market mover? if you want to join in on the conversation here on "worldwide exchange" get in touch with us. e-mail us tweet us my personal handle on the bottom of the screen. steven, i want your thoughts. >> the market mover is a little bit difficult to call.

it is going to be difficult for the european central bank to surprise the markets with something bigger that just achieves, you know a baa zoobazooka on the day of the decision. greece can be overrated as a source of problems for europe generally. the main issue here is even if greece were to aggravate all the responsibilities, which we don't expect on the victory, there's no one in their right mind in the rest of europe would follow along a path into financial isolation. we've seen tremendous cost from putting and repairing the eurozone in recent years. there have been huge benefits taking interest rates in places like italy from 9 to 1.5. what incentives would anyone have? i think the market has been wise in this case. isolating the particular issue to greece. >> they're not two unique events in that the ecb could delay the

specifics around the bond buying program because the political uncertainty out of greece. do you think that is one conclusion? >> the type of asset, what will depend on local, a credit rating for particular bonds. these unanswered questions. they'll focus on the larger eurozone inflation issue or deflation issue and strengthen the overall eurozone of whatever policy actions they take. that might lead someone out. >> significant amount of pressure on mario to unveil some type of bond buying program that will revive the eurozone question. will it be enough? will it be in addition to structure reform by various country leaders? something we'll have to keep our eye on. >> thank you. >> yeah. and we're going continue to keep an eye on ecb. what to expect ahead of the decision. the volatility eases in the wake of the swiss surprise. we get reaction from the prime minister of new keyzealand how the

s&p decision is impacting his country.

welcome back. here are the headlines. chinese stocks suffer the worst day in over six years after the country's regulator cracks down on risky margin trading. swiss stocks rebound but the ripple effect from the s&p hits

u.s.-based capital who shuts the main global funds. and all eyes on the ecb as investors await an announcement on qe this thursday. a number of international firms are reeling from the smb sudden move. u.s.-based everest capitals was closed due to bad -- on the swis franc. the company declined to comment so far. other companies that have been impacted considering all options including a sale of the group due to the exceptional volatility and extreme lack of liquidity caused by the move. however it insists it has not entered a formal insole vent si process. they were forced to secure a

$300 million loan to secure losses suffered by clients sending the share price sharply lower last week. down about 50%. meanwhile the new zealand dollars hit report highs against the euro after the surprised policy move. they'll unveil a bond buying program this thursday. however, speaking to cnbc earlier the prime minister of new zealand said the country's market could withstand the volatility. >> it makes it a little more difficult for our exporters but overall the economy is pretty strong. we think we'll grow about 3.25%. about 10% over the next three years. we're confident. >> all right. let's talk more about the fall out after that unexpected move by the swiss national bank. the finance minister said she expects the exchange rate to

settle down around 110 per euro. do you think that's a realistic target? >> i think the main issue here is making promises that weren't kept or can't be kept that encouraged leverage. that this sort of policy mistake of intervening in the marketplace and then changing the tune essentially caused a tremendous amount of volatility that was unnecessary that will come as a shock to the swiss economy. that the same corporate's in switzerland that the s & b would try to help are facing now tremendous uncertainty and the ability for policy makers to make promises about exchange rates is reduced when they take steps like this and intervene in the marketplace and reverse course. >> a stronger currency makes it tougher for the exporters or multinationals in switzerland. would you be buyers? >> it's a complicated story like

a few other countries in europe holland, for example you know, you have big multinationals with production around the world. the currency itself may not be entirely represented over the large markets. and, you know, i think the per in addition for investors is a strong currency is a offset for losses on nominal share prices from international investors. that's the main issue. we've been in a long range for currencies for years as policy makers made promises like the one we saw from the s & b. but it helped keep volatileity down and currency is in very tranquil ranges for a long period of time. now we're seeing policy around the world it's played out in bond markets. further to play out in currency markets. it's an important consideration for international investors now. it hadn't been before. >> i think as you were pointing out maybe that move was warranted. maybe the s & b had to scrap the

national peg. did they unveil it in the right way in the fact it was a surprise to the market? companies some of the fx brokerages dealing with significant losses. >> the issue as well if you want a currency that is informally pegged against the euro and you have easing steps out of the ecb you'll grow your balance sheet. that should be expected when you go into these sort of promises. >> it's a fascinating story. one of the big stories of 2015. we're still in january. >> many sort of black swans occurring in oil markets and exchange markets. if you look back to last year all the way to accept market prices drew a narrow range of possibilities in the marketplace. one out of 100 probabilities. nothing is that certain. and i think central banks, particularly the federal reserve with policy guidance the new tool in order to stimulate

economies helped keep the ranges narrow. this is a different world we need to see that in. >> certainly is. thank you for your time and market perspective. pleasure to have you on. and still to come on "worldwide exchange." the u.s. may be closed for business today but earning season kicks up in high gear tomorrow. we preview the biggest names set to report after the break.

u.s. investors will return from a long holiday after a busy day of headlines. morgan stanley steeling the limelight limelight. ibm and netflix are reporting. ebay take center stage. thursday starbucks among others. and friday get a gauge of the consumer with mcdonalds ge. stephen you're with us. last week not the best start to the earnings seasoning with the banks reporting. do you think things could change? >> i think we've been through this entire recovery with earnings beating estimates. and, you know, it is typically for the estimates to be cut so deep that we ultimately jump over them. you know, we will have the issues with energy-related earnings all year and unlike the economy, which benefits a lot of

these are overweight energy. they have larger share of energy in the estimates in the indexes than in terms of benefits in the oil price. that's why you can see a correlation. companies in the fourth quarter tend to try to get all of their costs and problems out of the way to clear the index for the coming year. exactly. and so the upside earning surprise we noticed for a dozen years have been biassed upwards. even accounting for the biases in the estimates in the way the analysts forecast the quarter. they tend to be stronger positive surprises in and less surprises in the fourth quarter. i think when we get into the first quarter earning season in the spring we're going to see that in american economic recoveries and very solid footing. and that for most companies we could have a 9% return we think, in u.s. equities where no increase in evaluation. >> when you look at earnings it's interesting to see how analysts are expecting a 16 rise in profitability for the health

care sector which has been on a massive run over the past one year. do you agree? >> well, i can't say when you look at full year earnings estimates. there tend to be upward biases which is different than the near term story. health care is defensive but has a secular growth characteristic. particularly global health care. that is something else. the u.s. is gotten lots of policy help. in the long run it's going to be an issue. government intervention in health care may have only started in the health care. globally this is something where huge numbers of consumers haven't had enough and they will. >> stephen of citi thank you very much for your time. as the rich and powerful gather. a new report shows half of all global wealth is held by 1% of the population. we'll speak to president of rockefeller foundation on this and more coming up.

chinese stocks suffer their worst one day drop in over six years after the country's regulator cracks down risky margin trades. swiss stocks make a come back. among the best performers in europe after saying it didn't suffer any losses by a surprise move by the s & b. it extends to u.s.-based everest capital

capitals. and the countdown is underway for the ecb decision a meeting between mario and german chancellor merkel ramps up speculation that berlin is behind a qe program. u.s. markets are closed today. let's get you a look how they closed on friday. because we did see stellar gains across the board. u.s. stocks staging a strong rally. halting five days of consecutive losses. but still falling short over the weekend. the s&p, dow, and nasdaq closed down for the third consecutive week. the euro hitting an 11-year low of 11495. the dollar plunging about 18% from the high in may. take a look how european markets

are responding to that right now. they are trading higher across the board. ahead of that ecb decision on thursday. the big question is what will mario unveil and will it be enough to revive the eurozone economy? right now we're looking at the euro stocks at 600 index at a seven-year high. gains across the board when looking at euro. but u.s. president president obama set to propose closing loopholes for the super rich in his state of the union address tuesday night. he's expected to target banks in the speech calling for a fee from financial institutions with over $50 billion in assets. the proposals are expected to raise $320 billion over the next decade according to the white house but likely to heighten tensions within the republican-led congress. now over half of the world's wealth will belong to just 1% of the population by next year. this according to the group's data released days ahead of the world economic forum.

the charity is hoping to bring the issue of growing wealth inequality to the attention of world leaders and billionaires who are gathering in switzerland later this week, but to get further reaction we have dr. judith rodin author of new book "the resilience dividends." we'll get to that in a second. i want to get your thoughts on the income inequality which continues to be a hot debate. >> yes, absolutely. of course income inequality is one of the great stresses that make cities and societies and people less resilient. at the rockefeller foundation we have two goals to create more inclusive economies and to build greater resilience. so we see the interconnection of these two in a very significant way. >> let's talk about your new book "the resilience dividend." i know you have it here. one of the major take away is building resilience is crucial to the success of a society. how does one build that?

how does a society promote that type of resilience? we think of in your last visitor stephen talked about black swans in the economy. building resilience really is capitalizing on the notion that black swans may not be the right term anymore. that crisis is the new normal. things aren't happening once every thousand years or once every hundred years. and that we can't predict what the next crisis will be. but somewhere around the world every week we see an economic shock or a cyber attack or a terrorist attack a violent storm. and all these things threaten not only the social fabric of our communities but threatening our economies. and in our globalized economies a shock in one place hits another. when bangkok flooded it took down several global supply chains. so we no longer have a contained economy in one place. >> building resilience.

social cohesion another thing. can they be applyied to financial markets. how to respond to the volatility if we get a significant market correction? >> absolutely. first, each business needs to have its on resilience plan. it needs to build in enough deversety and redundancy so it can bounce back. remember the case of lu lu lemon that lost a third of the market cap because the yoga pants were too sheer. they relied on one manufacturer in one place with one source of the fiber. so they couldn't recover quickly. so every business ought to be building in enough redundancy and diversity. the business ought to be thinking about where they're located. in looking to build an operation center in india choice puna because it was the most resill yept city of those competing. it had the best communications and transit and energy integration. so businesses need to be

attentive to that. and the third thing businesses can do is recognize there are all kinds of great new goods and services that can make places and businesses more resilient. you think about 3-d printing which creates more adaptability or big data analytics or the internet of things which allows sensing mechanisms. all of these are building resill sense capacity. i would argue they're going to be break-away businesses going forward for the future. >> and i also want to talk about your role at rockefeller foundation. you manage about $200 million in philanthropic contributions. what are you investing? ? >> people always. we're focussing on our beneficiaries. but to build more inclusive economies. we're focussing on creating digital jobs for youth in of a cap africa. we have a number of private sector partners working with us to make youth more employable in

the technology economies going forward. we're working on energy poverty in india, investing in many grid alternative energy companies that can rely on mobile towers as they're, quote, anchor tenant and with the compare capacity provide rural lekification to villagers without it. trying to use market based solutions as way of lifting people out of poverty. >> it's amazing work. it's great to hear from you dr. judith rodn. good look with your book. dr. judith rodin, thank you for your time. have fun. >> i will. still to come on "worldwide exchange." our top stories up and coming chinese is set to buy a 3% stake in king stock corporation. the ceo the founder and chairman of king soft the 67d million

deal will increase the voting rights in the software firm to nearly 30%. google entered into exclusive talks to buy a mobile payment company that could rival apple pay. that's according to reports which suggest soft card could be acquired for up to $100 million. soft card is currently lyly owned by at&t verizon. shares in google are down over 2% over the past three months. swiss stocks in rebound mode but volatility here to stay? we get expert analysis after the short break.

welcome back. we are just hearing from president francois of holland that expects the ecb to announce sovereign debt purchases this thursday at the governing council meeting. the expectations is for mario to unveil a bond buying program. there you go. ho land taking a look at the euro dollar trading at 11591. it was interesting to see on friday the euro breaking the 1.15 level. some of the experts we've been speaking to here expect the euro to weaken even further based on

what mario an drog gi inunveils on friday. the i want to get you up to date on flashes coming out of china. china premier said a pressure on economy this year expect downward pressure in the economy this year will be significant. the question is does it ramp up central bank intervention going forward? bev seen the central bank take action. one of the reasons we saw chinese shares rally. today it's not the case. chinese shares have been selling off three largest brokerages from china tumbled following a securities commission investigation into high risk margin trading. this ahead of tuesday's gdp report which is expected to show the world's second largest economy grew at the lowest space since early 2009. meanwhile another set of weak data for china's property market also it hitting sentiment. new home prices fell significantly in the month of december for a fourth straight month resulting in a sharper than expected downturn for 2014.

this despite government measures to boost the sector with lower interest rates and easier mortgage standard. we're going continue to keep an eye on chinese stocks which are underperforming right now. and on to the story out of switzerland. swits land's finance minister in insists the economy can withstand the shocked decision scrap the cap of to against the franc. she expects the exchange rate to settle around 1.10 per euro. one in five swiss industrial firms face a threat. julia caught up with banking analyst at jpmorgan and asked him which swiss banks are most vulnerable to the huge moves in the swiss franc? >> it's very heavily geared to the appreciation of the swis franc. to give you an idea every 10% appreciation of the swiss franc

is roughly negative 20% on the earnings. every 10% appreciation is 10% on the group earnings. what we've seen today in credit we would argue is more than prized in at the moment in the case of julius we think actually there's still a bit of downside risk. overall we see it coming slowly to an end of reprizing of these bank stocks. >> do you see value in ubs and the levels or given we could see volatility in the dollar exchange going forward? >> we see value in ubs in particular due to the high dividend expectations. we're expecting 10% in the year 2016. and we believe it's starting to become an interesting entry point. there will be volatility but we believe in ubs we have prized in the worst. we believe from our perspective

this would be an attractive buy. >> i want to talk to you more briefly about the broader impact of what we saw. we have seen the like of fx broker going into administration today. this concerns the likes of fxcm they may have to shorten their capital position. what ibt the e trading platforms within the major investment banks? they have done the same thing in the fast market environment. perhaps execution could happen whether they like it or not. what are you hearing about the impact it has? >> we have talked to some of the larger fxs. the feedback we're getting is no material losses so far. there could be some losses but we also have to remember that some of the volatility and the cross currencies as well as the volatility in the shares lead to higher trading volumes generally in other areas and helped revenues. we have heard that some banks have turned off their electronic platforms, but you also hear that some of the large fx houses were trading all the way through

without any material issues on their pnl. >> joining me now is ian head of european fx strategy at morgan stanley. the swiss franc has been seeing an unprecedented amount of volatility last week in response to the decision to scrap the 120 peg. where does it head from here? >> yes, i think it's now in a very interesting situation. particularly as the s & b has been looking at lot more trade weighted developments within the swiss franc. we believe that now they removed this flaw they will now have to replace this with a framework to provide some stability and to prevent the full impact of the appreciation. remember the reason why it was put into place in the first place was to try to provide swiss with some protection from the deflation their forces coming from the eurozone. particularly from inflows.

so without that flaw it does leave the swiss economy exposed to the deflation pressure at the time it's in place. we're seeing the cpi moving back further into negative territory. we believe that some firmer action by the s & b is likely. this could come in several forms and could be spread across more than one currency rather than just focussing on the injury row swiss. remember the s & b have talked about the dollar in their statements. so it could be some focus on dollar swiss which we believe is now in the position to start to stabilize and maybe even start to rebound once we see the dollar starting to regain some strength as well. so overall i think we've seen the initial shock coming through. now we're likely to see a little bit of stabilization taking place. >> do you think the move signals that the ecb is in fact going to unveil a bond buying program on

thursday? does the euro head even lower from here? >> certainly the market expectations for qe have increased following the s & b announcement. it seems to be that the reason why one of the reasons why they decided to act at this point is perhaps they did fear a flow coming from europe as a result of some ecb bond buying program forcing investors out of europe. maybe into other bond markets. all though i think that view may be slightly misplaced given if you're forced out of the area you're likely to head into another next area such as switzerland. you're more likely to head into a positive area such as the u.s. so i think this does raise the market expectations going into the ecb meeting this week. i think that itself also raises further risk around the

announcement. >> we'll get to the euro and the trade on the dollar at the end of the show. before we go. here are the headlines. chinese stocks suffer the worst day in over six years after the cub's regulator cracks down on risky margin trade. swiss stocks rebounding but the ripple effect hits everest capital which reportedly shut the main global fund. all eyes on the ecb as investors await an announcement on qe this thursday.

welcome back. all eyes this week on the european central bank which is widely expected to announce a bond buying program on thursday. reports of a meeting between mario and angela merkel lead some to speculate that the

german chancellor was briefed on his qe plans. the ecb intends to shift most of the risk on to the national central banks. capping the amount of debt each can buy to 25 percent. how should investors position themselves ahead of the ecb decision? well morgan stanley said a qe program won't be introduced until march and they put forth the following predictions. if the ecb disappoints they see the yen and the u.s. dollar rallying with a high yield g 10 bonds and emerging markets taking hit. if the ecb exceeds easing expectations the bank said the euro u.s. dollar could head toward party. joining us now is ian of morgan stanley. do you think bond purchases will take pressure off the countries to tackle bigger problems such as cutting deficits and bringing employment back up? >> this is certainly one of the arguments which is being put forward by some of the countries

but particularly in germany suggesting that by providing these continuous monetary support programs it takes some of the pressure off the countries to act on other reform processes on the fiscal on the structure front. that's one of the big discussion that points as well as the details. some of the more detailed discussions which are taking place with regards to the structure of any qe program which may be announced. >> when does a euro head toward party with the u.s. dollar. last time was in november of 2002. >> certainly. we've been looking at the possible qe programs which could be announced by the ecb and look to the various different scenarios and the impact that it could have on the euro. at best case we have announced -- we have an ecb announcing a constrained program

where by you have to take a lot of the legal and constitutional and political issues which leads the qe program being limited in size and scope. that's at best case. under that scenario we think the initial reaction could be one of disappointment with euro maybe initially rebounding before coming back under pressure and we would expect over the longer term the euro to head back toward 112. under an unconstrained program, a more aggressive program that the market is countrycurrently expecting the other issues which are likely to limit a program then we could see the euro coming under more pressure then we've been looking for. >> interesting. head to europe for a fun vacation if the euro continues to weaken. a boom for the u.s. consumer.

we'll leave it there. let's get an update on the europe. markets. last time we checked they were trading in positive territory. i want to bring you up to date on a story we're watching in the technology space. dow jones reporting that samsung is discussing potential use of blackberry technology in the samsung devices. dow jones reporting that the coceo of samsung electronics want to develop a partnership with blackberry but not necessarily buy the company. last week there was speculation that samsung was interested in acquiring the company blackberry. but both companies said they're not looking at that type of partnership. perhaps this is the type of partnership they're looking at to discuss a potential use of blackberry technology in the samsung devices. samsung has been dealing with heightened competition with the hikes of apple among others. interesting development here. we'll see how to helps samsung and shares in today's trade. back to the european markets they're trading in positive territory ahe of the european

central bank council meeting on thursday. the underperforming is france. cac 40 trading flat at the moment. the smi the swiss index seeing a little bit of a rebound after two days of big moves gaining about 3% after the swiss national bank scrapped that national peg of 120. something that has been in place for over three years. a look at the bond market. we have been seeing significant move in treasuries. treasury yields in the u.s. falling to multiyear lows with the 30-yield settleing at the new record low. last week u.s. treasuries posted the biggest weekly rally in a month amid concerns over global growth slowing down. right now we're looking at the german 10 year bond trading at .44%. yield compression in focus. a reminder of the busy week for u.s. earnings kicking off tomorrow. morgan stanley wrapping up u.s. bank earnings before the bell. ibm, american express,

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