hello, good morning, a very warm welcome. this is worldwide exchange. >> these are your headlines from around the world. >> a sell off in bonds and equities. a sea of red across european markets following an erratic session state side as the u.s. field curve steepens significant significantly. >> they jump on strong earnings results. >> turbulence ahead for easy jet. they post a first half profit but warn there may be challenges

in the rest of the year. the ceo tells cnbc lower fuel prices continue to help. >> we benefit from low oil because our cost space goes down but we're in a good position when oil prices go up. it means airlines are much more rational about the flights they fly so there's less capacity in the market. >> nepal is hit by another major earthquake. shockwaves are felt as far as new delhi. and coming up on the show a deflate gate verdict. the nfl cracks down on tom brady and the patriots but how tough was the penalty? stay right there to find out. also find out how much a picaso fetched at auction. we get to the bottom of who is

creating the demand for this art market. well google reveals how many driverless car versus been involved in accidents but who or what was behind the wheel? we're going to get down to it. >> let's get straight to markets. stock markets sell off in europe. we had a mixed day in asia but it's the on going sell off in sovereign debt once again sparking a sell off across the board in europe. you can see there red for european markets. the stoxx 600 is down 1.4%. the dax down 1.6. france down 1.5 and the ftse 100 down just over 1%. let's look at some of the biggest individual movers. earnings and takeover talk also driving stocks this morning.

topping the stoxx 600 after stronger results. up 10% and 7% respectively. on the down side they posted the biggest drop in four years after a disappointing earnings outlook. meanwhile, easy jet is down 8.2%. meanwhile they're higher after confirming preliminary talks for a merger that could be valued at 23 billion euros. the dutch food retailers cautioned discussions may not result in a deal. >> but let's come back to the bond markets and let's look at the source of the sell off we're seeing in the bond markets in europe and the u.s. and that was the steepening we saw in the u.s. curve yesterday. let's look at the 10-year yield. 13%. have a look at the 30 t-note yield that's above 3% for the first time this year. the reason huge supply from the government but also from the

private sector. we might be seeing concessions a head of that but once again that sell off in yesterday's trading session, that was triggered by the bunds. it happened again in the treasury market but now again today we're seeing it seep into the european bond markets again. we have this very negative feedback that's going on. we don't know the sources of the bond sell off. we know that two or three weeks ago the source was the bunds but what is it now? >> many were saying the german bund was a leading indicator. but this time around i'm not so sure. yesterday wall street stocks did end lower but we didn't reverse all the gains we saw on the back of that jobs report on friday. some say that in itself indicate there is is resilience in this market. >> i think also the magnitude with which european bond markets have moved and you look at where they are today to where they were three or four weeks ago

it's extraordinary. that's partly that there's inflationary pressures being seen but i think the size of these moves is astonishing. there was a lot of leverage and positions. a lot of people wouldn't have been long european bonds. it was the euro that started the tick up first of all and that spooked investors and they changed their positions quickly. >> we had an interesting guest on yesterday who talked about who the sellers were. he pointed out it was the japanese sellers. he said though too, there isn't a lot of selling pressure and there isn't a lot of option activity but worth noting once we see that coming in once we see the smart money moving in then this bond sell could become very very violent but for now seems to be some of the foreign investors. >> there could be a basic concession. there's three auctions this week. we have a three year note out

today, ten year and 30 year on thursday. >> the other interesting point to know here is this is sparked by european bonds that had been bit up the most in rekrentd weeks but u.k. and u.s. bonds faced similar moves and they hadn't been bid up to similar levels. i don't think we could say that u.s. and u.k. bonds are moved. that's not the driver here and clearly they hadn't been as compressed in the first place. >> we're now seeing the start of this big reflation trade. i think it's a lot of the repositioning of some of the excess positioning we have seen as a result of the qe trade. at the end of the day maybe it is all driven by bunds. >> but you don't want to fight the fed. you're in a way fighting the central bankers pushing yields lower when you take a look at

the long-term view and what they're doing with monetary policy. specifically here in europe. it remains to be seen as to whether this is a short-term blip or longer term correction in the bond market. >> let's pick up on european markets again. a quick summary of where we're looking at. all in the red. all more than 1%. the ftse just under 1%. germany and france under just 1.6%. let's look at rates because we've seen significant rally over the recent weeks in the euro. a lot of currencies against the u.s. dollar but the euro in particular. it's rallied nicely today. up .7%. about a month ago we were pointing toward the possibility of parity. that now seems a long way behind us. that's part of the unwinding of the same trade we've seen in the bond market. all of that have been based on european qe and markets moved a little too far.

aussie dollar strong today. the head of the australian budget is due any minute now. last year there was a lot of political fall out from the budget and he only recently just survived another leadership vote so interesting to watch that and sterling 15568. it started rallying the middle of april. was down as low as 146 off a hawkish set of bank of england minutes and is up over the resounding election results. we get the bank of england inflation report tomorrow. but currently at 15568. oil was volatile off the back of an opec report. it's holding up well today despite a goldman sachs report that suggests the rally we've seen so far in the last month or so in oil prices may then derail a longer term rebalancing in the oil markets. so interesting to discuss that further. but we're looking at 59.62 for wti. 65.40 for brent crude.

let's also check in on markets in asia. sri is standing by for us as ever in singapore. >> just on the back of that the rebound in the price of oil, some 50% will pose a major policy headache in this region. could create headline inflation later on this year. that could complicate monetary policy and the outlook and easing bias we've seen. let me just talk about the china market. despite the break up in yields in the global bond market that you have been referencing and also the grexit fears. but there's a degree of resilience as well. the highest in almost a week for the australian market just ahead of the federal budget that you're referring to and also the banks making a come back after a lousy week last week.

this is going to be an important week for china yet again. tomorrow fixed asset investment retail sales and also industrial output. they do come on the weaker side of expectations and vindicate this policy easing we have been seeing by the central bank in china. case and point, most recent example was the rate cut that came over the weekend. the third one in six months. there's more easing to come though in the pipeline to consolidate growth 7%. back to you now. >> thank you. a magnitude 7.4 earthquake strikes mount everest. people rushed on to the streets. this is weeks after people died from a earthquake. joining us is mark south. spokesperson from the red cross.

what exactly are you seeing on the ground? >> well as far as i can see everything is still standing. everything that was still standing from before. what we're seeing is a lot of people out on the streets. the last few days the after shocks started to come down. people were starting to return to some sort of normality but this has shaken people up all over again. >> any reports of causalities so far? >> so far i don't have that information. i mean it seems likely that buildings weakened by the earthquakes previously may have come down in this recent one. it wasn't quite as big as the big earthquake two weeks ago but it wasn't far off. so there will be lots of damaged buildings under threat from exactly this kind of earthquake while further out in the hill wes still have concerns about avalanches and landslides.

>> tell us exactly about the efforts that you the red cross and other institutions have taken since the big earthquake a number of weeks ago. how are the people dealing? have you been able to reach all the people in dire need of help? >> that's a big question. honestly, no we haven't been able to reach everybody yet. we have hundreds of thousands of people working to get immediate aid to everybody. that will continue. we have got thousands, tens of thousands that have gone out there. hundreds of thousands more in the pipeline that are coming and that's scaling up. so our aim is to reach everybody. after today's events there will be more people to reach. >> haven't people been warned

that more quakes could be coming? >> that's always a fear. i don't know. i don't know how lucky any of that is but certainly it's the fear in people's minds. it's always there. especially wp events like today. >> thank you for your time. mark south joining us on the phone. >> european finance ministers are arriving in brussels this morning continuing talks over a cash deal between athens. they paid 750 million euros a head of schedule. the u.k. chancellor arrived at his first euro group meeting since the surprise election victory. george osborne will be looking to steer talks toward britain's role in the eu including a

possibility of a grexit. >> we come here with a clear mandate to improve it and reform the eu so it creates jobs and increasing living standards for all of it's citizens. i don't think anyone is in any doubt we'll hold that referendum on the european union having conducted the negotiations. we go into the negotiations aiming to be constructive and engaged and resolute and firm. >> within the last hour the u.k. chancellor arrived at his first euro group meeting since the surprise election victory. aside from the grexit george osborne will be looking to steer talks toward britain's role in the eu including the possibility of a grexit. when you take a look at financial markets, markets are more focused on the potential grexit but there's the potential

of britain leaving the eu. >> you're right in terms of the scale of the issue but the timing is also crucial and yes we have at least a year according to your latest estimates before we start having to even think about the prospect of a british exits. what we need to look out between now and confirmed date for referendum is how those negotiations go. grexit and the risks surrounding greece are the bigger issue. >> julia, we had talk of course we know we're going to get a referendum on ab brexit. we might get one in greece. do you think that's likely? >> depending on how the negotiations go they're not backing down on the need to reform the pensions and labor market reform. these are their red lines.

if we have to see those adjusted it's going to come down to the greek government having to hold some kind of referendum or vote to justify the decision they're making and control the extreme left of the party. a great poll that was taken. 65% of greeks want to compromise with the euro zone. 57% say the government shouldn't compromise on labor market and pension reform. unfortunately they couldn't have it both ways. if they have to do a u-turn then it makes a referendum necessary. >> it's interesting on this point because they were elected on a clear mandate to hold firm against the european union but only got around 30% of the vote in that. when we see for whatever reason that the european union doesn't see ground to the european government and mandate. >> this is why a referendum is necessary. we are to push back on the policies that were enacted but

also to remain in the euro zone and comply with the deal or with at least what it takes to remain within the euro zone. at some point you can't have it both ways. cake and eat it. >> i want to bring in phillip shaw into that conversation. what very few people talk about phillip is the fact that greece's debt pile is unsustainable. down the road we do need a debt cut. >> it probably is unsustainable. the 180% of gdp. if you look at the deficit projections and growth projections it is possible to erode that slowly so you get down to 120% of gdp. i don't know about 2021 as the authorities suggested. it's possible. but don't forget also that the financing costs are low as well. that debt pile isn't quite as bad as it might seem under normal times but yes it's almost

insurmountable obstacles. you need a lot of growth and political winds to be growing in the right direction as well. >> we have a number of payments made and that's very reassuring but the big cash crunch that's coming in july and august do you think that greece once again will simply scrape by? it will find some cash somewhere? >> i think it probably will over the next few weeks. there's two issues with the big payments coming in july and august. they come to over 6.5 billion euros. one problem is that it's just an awful lot of cash to find and it's difficult to see which piggy bank they can raid to find that cash and the second bailout ends at the end of june and what we're talking about here is financing needs over the next few years and need for possible

third pail out as well. they can't point out dispersements or stop conversations on the third one yet. >> do you think the sharp reversal has anything to do with investors repricing their expectations of a greek deal coming together. >> no i don't. it's encouraging that we're not seeing a tangible amount of contagion between greek markets and other global markets. no, i think when we're rooklooking at the retracement in bond markets, i think the conversation was spot on. through february and march we were talking about why are markets rallying? this is ridiculous. german ten year bund yield reached below 5 basis points at one stage. what triggered the reversal is not clear. most people would agree bond

markets have become overextended earlier in the year. >> we have to leave it here. thank you for your time. chief exist. i want to thank julia for everything. still coming up on the show secretary of state john kerry arrives for high level talks with vladimir putin. we cross out to moscow next. we'll be back in two.

welcome back. want to bring you the latest on the latest earthquake in nepal. now according to wires three major landslides have been reported in nepal's region and at least 12 people were injured according to a district official who was quoted by reuters. the bodies were being brought out of buildings according to a un agency and buildings have collapsed in nepal after the quake and the injured are being brought to hospital. of course we'll keep you updated on the latest events out of nepal. >> now u.s. secretary of state john kerry landed in sochi for high level talks for russian

president vladimir putin. on the agenda is the conflict in ukraine as well as syria and iran. jeff joins us live from moscow. lots on the agenda and very crucial topics. >> yeah, absolutely. i think there are a couple of points to make here wilfred. one is that the state of relations right now between moscow and washington could be described as chilly at best and john kerry hasn't been in russia for at least two years. so i think that makes this trip interesting and remarkable. he will not only meet with the minister but he will of course speak with president putin and as you pointed out there's a number of key hotspots on the table, iran and the on going negotiations there. syria and the conflict and how to resolve it and of course how do we take some steps forward in the ukraine crisis because russia would like to see the end of the economic sanctions and

the west would like to see a peace agreement and political settlement that will stay. the other thing that's worth pointing out about this trip is that expeck takesationtations are being managed by both sides and pitched relatively low. the state department itself is only describing this as a method of keeping a channel of communications open to the senior russian leadership given that there are so many shared interests in hotspots around the world but this meeting wasn't on the agenda before friday and it has come very quickly together over the weekend. so i don't want to down play it too much because the fact that it's taking place in itself could mean there's something to be achieved here. back to you. >> do you think mr. kerry will want to get a feel from mr.

putin to how close russia is moving toward china? >> i'm not sure that this is a path that kerry will go down at this point. the russians used the relationship with china as a counter point with the declining relationship they have with a number of western governments. it fulfills a few propaganda angles for president putin but represents economic interests they can do long-term oil and gas deal with the chinese at a time when maybe other countries in the world are not going to take so much. i'll just say we have another thing on the agenda here today and i want to throw this into the mix for a minute. away from what's happening with kerry and president putin there will be a report released by the

friends of boris nemtsov, the murdered politician drafting his own report on russian troop activity in ukraine. that report is now going to be released by his allies today in just an hour or so's time. so we'll be interested in finding out what that has to say and whether that will force a response from the russian government on this ukraine story and whether, indeed it changes the tone of what happens in sochi at all. >> we'll be back later in the show. >> let's switch gears. the recent oil rally is premature according to goldman sacks that cut it's forecast but says that current prices are still expensive relative to fundamentals. they see a decline this year but expects production to return to growth in 2016. for the second quarter the investment bank predicts the market will be oversupplied by

1.9 million barrels per day. let's have a check on oil price currently. we're higher for brent and crude. wti crude higher by 0.6%. >> now the u.s. government has given conditional approval to drill in the arctic ocean this summer. that removes a major obstacle before the company can begin exploring for oil and natural gas in the region. shell must still get several other federal permits. they plan to invest $1 billion in the project in addition to the $6 billion it's already spent. taking a look at shares of shell you'll see that the chart -- no that's rds. we'll get a look after the chart later in the show. >> they denied earlier reports that the french oil giant signed an agreement with cuba. the french president sealed the deal during a trip to the communist run country on monday.

shares are down 9% over the last 12 months. in fact more than that now with today's declines. 10.6% down over 12 months. 1.7% down today. >> coming up on worldwide exchange apple ceo tim cook is looking to take apple pay to china. more on that story coming up after this break.

a sell off in bonds and equities? a sell off in bonds as the u.s. rate curve steepens. >> confirmed merger talks while they jump on strong earnings results. >> turbulence ahead for easy jet. they post a profit but warn there may be challenges in the rest of the year. lower fuel prices continue to help. >> easy jet benefits from low oil because our cost space goes down but we are also actually in a good position when oil prices go up because when oil prices go up it means that airlines are much more rational about the flights they fly. >> nepal is hit by another

earthquake. the 7.4 magnitude earthquake is felt as far as new delhi. >> quick look at european equity markets and they're rattled by the sell in the bond markets. let's see how we're fairing. the ftse 100 down by 1.3%. the dax off by almost 1.8%. wow, down triple digits. 214 points. the cac 40 off by 1.6%. we have the euro trading higher putting pressure on the stocks as well. in the bond markets, well this is the main culprit. we're seeing yields moving to the upside. the 10 year bund yield. it was back at .8% in yesterday's trade. we saw 13 point increase in yesterday's trading session. >> escalated fears around greece's debt situation is

weighing on investor sentiment and interestingly enough not today, the euro gaining ground against the u.s. dollar right now at 112 against the u.s. dollar. we saw oil prices move lower amid a report that they're predicting oil prices will stay below 100 dollars for the next ten years and could be as low as $40 in 2025. we did see wti crude trade lower but it held below a key support level. 59.66. brent crude at $65.46 up about half a point. >> let's get back to some u.k. data. pretty good news here. british industrial output grew at its fastest rate in six months in the month of march. that was after oil and gas extraction. there you go. maybe the economy is not as weak as everyone thought after the poor q-1 reading. sterling rising above 156.

at 15606. >> let's look at the biggest individual equity movers today in europe. you can see of course across the board we have red. some though moving more significantly than others. easy jet is off 7.7%. the lowest level in four years. that's after the airline reported pretax profits of 7 million pounds for the first half of the year but warned on challenges going forward. third quarter revenue could fall 4%. earlier on cnbc carolyn struck a more positive tone. >> very constructive discussions with all our shareholders and no dividend five years ago at all. we now have a 40% ordinary dividend and we made two special dividend payments so i think easy group are also actually quite happy with the returns they're getting. >> i'm not sure they're that happy with the returns they're getting because they're off

7.58%. >> deutsche is off 3% today. they're also in a dispute over plans to expand it's parcel division by hiring workers on lower pay. on the upside the ceo said he sees conditions improving in the euro zone. >> we do see a pick up in europe and, you know we can see that in our freight industries. our business has been strong for the last couple of years but we do see a pick up. it could be slow. >> it is up 7%. up 5.6%. it's at the top of the stoxx 600 after strong first quarter numbers. they're subsidiary also rallying after cost savings coming from its merger last year run ago head of target.

so two stocks doing very well but they are few and far between in europe here today. >> where should you put your money in european stocks? joining us to discuss is the global market strategist. pleasure to have you on worldwide exchange. >> european stock versus been outperforming this year but the love hasn't been spread equally. when do we see this rotation into domestically oriented stocks that generate most of their revenue here in the euro zone? >> you're going to start to see that because you can only look at the evaluations and say they're getting higher for what you would want to pay for them now. they're going to look around for the other opportunities. we still favor the cyclical area or testify economy. we're still looking at the financials. you see a lot of consolidation in the banking sector as well. in fact the financial sector hasn't really caught up with his prior peeks. as well as that you're looking at industrials and materials.

those things that are going to fit in with where the economy is going in the future. as the see the gdp reports come out this week you'll see that domestic demand consumption adding more to the growth and not just being about a trade. >> such a change in sentiment compared to a couple of months ago but taking a look at specific sectors you mention energy and the abrupt reversal. is it safe now to allocate money into this sector or would you still stay away? >> there's probably opportunities within the energy sector. it's about where about in the supply chain you try to attack it. the move in the oil price surprised many people and brought up inflation expectations. i will look at the oil price and say if the whole reason the oil price fell are they going to be happy with the recent pick up in oil price? are they going to start to increase production to drive it down. there's many oil producers in

the u.s. that will bring back production online at these prices. i think you might see the oil price dip again before the end of the year. before coming up again. i say this is a volatile market still. >> the renewed bond route we're seeing it's rallying european equity markets. does that keep you up at night? is that something that worries you over the longer term? or do you think this is something that investors need to get out of their system? >> it's a great illustration of the uncertainty that is in fixed income markets. the fact that when yields are so low and there's liquidity these things can happen. we saw it a couple of years ago and we're seeing it now. it just means that people are readjusting their expectations and they were looking at valuations and perhaps overstretched and just readjust to that. as soon as that oil price started to pick thaup fear of deflation really faded back and people were just readjusting on that. i think the reasons to see that

yields will still be capped is at a time when supply is still relatively low will keep yields kept across the rest of the year. >> we've seen u.s. and u.k. yields respond similarly. what are they reacting to? the same overall general global qe bubble bursting or because people are expecting rates to go up soon in the u.k. and u.s.? >> it's a rate expectation argument always whether it's september or further out for the u.s. where the debate is november or february for the u.s. people are debating they're going to come through through the next year. at the same time the long end of any bond curve is always international in focus. it's worried about what's happening on the international scheme and you're seeing the high correlations between bonds and u.s. treasure risk start to play out on the market. >> thank you for joining us. global market strategist at jp

morgan asset management. >> let's get back to the nepal story. a earthquake struck nepal with shockwaves felt as far away as new delhi. reuters is reporting witnesses said people rushed on to the streets of nepal's capital. this quake is mere weeks after more than 8,000 people died after a 7.8 magnitude earthquake and according to reuters we have seen some causalities on the streets and people being rushed to hospitals as well. >> now switching focus, some good news for japanese corporates as telecom kddi reports record earnings. let's get to the story live in tokyo. >> thank you, wilfred. kddi announced a record group offering profit of around $6 billion up by 12% on the year. it also marks a record high for the 14th consecutive year and the company expects to increase it's operating profit for fiscal

2015 by 11%. although revenue was up by only 6% they were able to increase profits by adding subscribers. also it succeeded in winning over customers by offering diskounlts for secondary gadgets such as tablets. the smartphone user is currently just above 50% which means it still has room for growth. a shift away from traditional mobile phones to smartphones is more profitable for carriers because smartphones eat more data translating into higher charges and raising average revenue per unit. now while kddi performed well the other average players were mediocre. soft bank locked a 28% increase. but this was thanks to its stake in alibaba and they were still struggling from the under underperformance in sprint. that's all. back to you. >> thank you very much. still to come on the show

driverless cars are have been touted as a game changer but a new report from google flags safety concerns. we'll tell you more with that story coming up after this break.

welcome back. apple ceo tim cook is looking to take apple pay to china. speaking with the news agency he is in talks with alibaba about bringing the service to the country. apple would be able to utilize alibaba's large network already in pay through it's financial affiliate and also said it could take off even faster in china than in the u.s. i know you're pretty excited about this story. >> i just think there's two larger stories taking place in china. first the slow down we talk about. how that's weighing on global growth and what the pboc is trying to do and then this digital revolution transforming the landscape and how that's resulted in many players like apple and others trying to get their foot in the door. take a look at earnings from apple. 71% jump in chinese revenue. that's astounding and on the other side we're talking about a slow down. there's a very interesting distinction between what's taking place in china. >> tim cook is very bullish on

apple pay in china. it hasn't done that well though so far in the u.s. and europe so perhaps it could be much more successful. >> apple hit a snag in terms of china and the roll out of am pay because the latest operating system didn't support the bank cards for union pay and that's one of the biggest card issuers in china. once they overcome this issue, really just a technical issue the demand is huge. in the first quarter apple sold more iphones in china than the u.s. for the first time. the potential is there once they overcome some of the issues. >> why would alibaba want to team up with apple? surely they want to create that type of technology in house and offer it to customers. they don't need to partner up with the likes of apple because they themselves are so large. >> they do already have alipay. it's not like it's them wanting

to partner with am in the u.s. as they expand into a region where they don't have such a big footprint but i wouldn't go against what they have dreamed up together. >> coming together. >> it's going to be a pretty strong offering. let's stick with tech. google says it's self-driving cars have been involved in about a dozen accidents over the past six years. in a blog post they describe all the crashes as minor with no injuries and that's after over 1.7 million miles of driving. accidents occurred when the car was driving itself and the worker was behind the wheel. they report four self-driving cars have been in accidents in california since september. the vehicles are being tested in california and nevada. >> sticking with tech which companies have earned the right to be called cnbc disrunptors. find out when the team will reveal the 2015 cnbc disruptor

list. it's always exciting. wilfred any big thoughts there? >> well in london the app that's taken me by storm is called deliveroo. it's not ground breaking in what it does. it just offers food delivery within half an hour from lot of restaurants that don't typically deliver. i don't know if there were other apps that existed before or weren't as efficient or whether this was a new one but i haven't hooked at home for about six months since it launched. >> that's terrible. >> the other one is a company called xero which offers accounting software at home for businesses and is a big threat to the likes of pwc and stuff but they're white labeling this product itself. >> you need a cooking app for home so you can learn to cook. >> what do you mean? maybe i'm an excellent cook. >> you haven't done it in six months. >> he's inspired by a lady

friend of some sort. >> yes why not. in the meantime we want to hear from you. who do you think should make the list? join the conversation on worldwide exchange. get in touch with us at worldwide@cnbc.com or reach us on our personal handles you can see on the screen. >> that's great that you stick to -- i think the three of us should come up with a list that focuses on europe because the innovation that is taking place here in europe and especially with governments from germany france among others trying to create these type of environments that fosters entrepreneurship through the use of accelerators there's something to be said about the type of innovation we're seeing from here. >> they can't compete with the u.s. firms. if we look at the biggest tech companies out there, going public, you barely see any european companies. >> it's changing though. >> off the cnbc disruptor list how many from the u.k.? >> spotify.

but out of the 50 maybe 10%. >> 10% outside the u.s. >> yeah. >> wow, i hope it's higher than that. i'm going to go for 25%. come on the u.k. >> so that's the bet. i'm the official mediator here. >> oh you can't sit on the fence. get involved. get involved. that's pathetic. >> so you'll cook for him on vice versa? the new cooking app. >> or you'll cook for both of us. >> okay. >> we should move this on. >> which companies do you think will be included? with do you think the geographical spread will be? that will be released on u.s. squawk box after this show. the cnbc new 50 disrunptor lead. the national football league is coming down hard on the patriots and tom brady. brady who was the super bowl mvp is being suspended for the first four games of the 2015 season. the pats are being fined $1 million and will lose 2 draft picks for what's being called

deflate gate. patriot's own calls the punishment too seevere. brady plans to appeal. i have to say if they're appeal wlg the decision was right or wrong was one thing but just appealing the severity of the punishment. to me if they're saying that they have indeed cheated then the punishment isn't severe enough. cheating is cheating in a big game and should be punished more severely. >> a agree with you. he's a three time winning mvp. he is a leader in the football world, has so many fans. kids that grew up idolizing him. he should play by the rules and really hone in on integrity and credibility. things like this really tell us that athletes need to play a bigger role in holding on to morals in a way. >> it's another big set back for the nfl which last year was hit by a number of high profile

cases which revolved around domestic abuse, child abuse, so just from a reputational standpoint it can't be good. >> patriots need to do soul searching because spy gate that happened a couple of years ago where they were banned for recording team practices and were caught. so there's a lot of soul searching needed to be done by patriots and their search. >> i still love how the suffix gate is added on to any scandal. >> we should have the wilf gate. >> i don't know the scandal. >> hopefully no one knows about wilf gate. >> a drill being drafted by richard shelby reportedly proposes several changes to the federal reserve system. the bill is expected to be unveiled later today. it would require the fomc to deliver a quarterly report on monetary policy to congress. it would also require janet yellen to stand in as vice chair of supervision, a position

created by the dodd frank financial reform law yet to be filled by the white house. >> it's seen as the first hurdle toward completing the multi-tier partnership. it is amid growing resistance from his own party and lobby groups that say the plan is a give away for big business. >> with china sitting out of the partnership some suggest the trade deal marks a pivot toward other asian trading partners. julia caught up with hank paulson and asked for his views on president obama's dealings with beijing. >> let me say two things i am by and large quite positive of the way the obama administration has handled the relationship with china. they have done a number of

positive things including this very historic climate change agreement. the one issue i have been critical about is asia infrastructure investment bank and i think the u.k. got it right. the u.s. got it wrong. that if you look at infrastructure investment china is the leader in the world right now. they do it out of the development bank than any of the multilateral banks. they were moving to set up a bank in asia focused on infrastructure. the right thing to do is what the u.k. has done and say listen we want to work with you to develop those standards and we want to join but it's not the right thing to pick a fight, particularly if you're going to lose. now i also am not one that says this is some huge watershed event. this is not a huge huge issue.

the press made it a bigger issue than it is. >> let's check in on european markets and we're seeing a lot of selling pressure today. this is as a result of bond sell off. but the ftse 100 off by 1.5% giving up many election inspired gains. the xetra dax down by 2.2% now. the cac 40 off by 1.9%. a slightly higher euro against the dollar. that's not helping european equity markets either. they're in talks and better than expected numbers from altice but that's not helping the european markets today. >> let's see how investors are positioning themselves. a premarket trade in the u.s. indicating a lower market open. 140 point move to the downside in premarket trade. we'll see how that changes as we head to the open on wall street. the nasdaq down about 38. >> what is driving this negativity in equity markets?

we all know it's been the bond market sell off we've seen in recent weeks and that continues today. yields hitting 10.32% on the ten year in the u.s. and germany we're at .68 and on the 10-year-old in the u.k. 2%. quick look as well. euro at 11254, and aussie dollar .795 against the u.s. dollar. >> is secrecy the key to another market tantrum? that's coming up after this break.

welcome everyone. you're watching worldwide exchange. >> here are your headlines from around the world. >> u.s. futures pointing lower after a choppy day on wall street after the u.s. yield curves steepeningss significantly. >> kerry meets with vladimir putin for the first time since the crisis in ukraine. >> nepal is hit by another major earthquake. shockwaves from the 7.3 magnitude quake are felt as far as new delhi.

i'm carolyn roth. still to come on the show, find out how much a picaso fetched at auction making it the most expensive painting ever to be sold. failing to make the trade with china, hank paulson tells us why the u.s. got it wrong on the asian infrastructure bank. plus google reveals how many of its driverless car versus beens have been involved in accidents but who or what was behind the wheel? >> and a down day in european markets seems to be bleeding through to european markets. futures indicating a day of red. the dow down 150 points in premarket trade. we're looking at a triple digit

decline on the east coast. the nasdaq and tech heavy index down about 3 points in premarket trade. interesting that we're seeing such a big move to the down side. at least here in premarket. we'll see how u.s. equity opens at 9:30 a.m. eastern. it's been the bond markets stealing the show. yields spiking. one investor says an increase in the fed funds rate is not negative because the economy is approving but at this point investors seem to be taking notes from the bond market in term of what we should expect from equity price movement in the coming days. take a look at the 2 year note the 3 year note as well as the tenure. the market is now focus on three auctions this week and whether the sell off will stabilize. the treasury auctions $24 billion in three year notes at 1:00 p.m. and then we get the 30 year notes on wednesday and thursday. taking a look at european bond markets that's a focus for

investors. also keeping an eye on the on going discussions taking place in brussels between finance ministers and the question is will we see a deal come together although i have to say the fact that greece paid that 750 million dollar payment early is perhaps an encouraging sign. >> maybe but it also tells you they always keep on finding some cash somewhere in very remote parts of the country and that angered a lot of municipalities but coming back to the bond markets you made an interesting point about the auction we're seeing this week. three major auctions. a lot of supply coming from the private market and we'll be watching those carefully to see what it really is because if it's weak well that may exacerbate the selling pressure in the bond markets further. let's come back to european markets. the dax close to session lows. off by 2.4%.

the ftse 100 well below that 7,000 level. 1.t% to the down side. giving up many of the gains we saw after the election outcome. so these markets spooked by the continued rise in bond yields. looking at the currency markets, the dollar is under a fair bit of pressure today. the euro spiking higher as a result of the higher yields. the euro dollar trading at 11257. not too far away from the high wes saw last week. the aussie dollar is higher by 0.9%. we're waiting for the budget and i want to show you what the commodity prices are doing. oil is higher. wti higher by 0.8%. brent crude rallying at 65.60 despite goldman coming out with the call saying the recent price rally is premature. i want to check in on how asia is trading overnight.

we saw the continued rally in shanghai but elsewhere pretty mixed. >> it is you're right. sentiment took a knock early on because of the back up in bond yields once again and the greek default and grexit fears still haunting the market but some markets are coping better than others. the shanghai composite up for the third straight session so basking in the after glow of the pollty action over the weekend and the rate cut. more rate cuts. more easing. more cuts could be on the cards. next big test comes tomorrow. we could get fixed asset investment and retail sales. so that could build the case for more action more policy easing and more cuts and that's where the markets are front running. i want to talk to you about the indian markets out performing.

down by almost 2.2% now. so extending the losses and that's really down to market perceptions that may be backsliding on these very important structural reforms. there's also volatility bothering the markets as well. that's where we stand right now. back to you. >> thank you for that. now the federal reserve should not give away too much information concerning it's next rate hike. that's the view of san francisco fed president jon williams. a voting member of the fomc. williams told cnbc the fed should avoid a repetition of 2004 when the rate hike was made clear in advance. >> my personal preference is that we don't have the most telegraphed policy decisions like we did in 2004. i believe the data dependence is what we should be doing. coming together every six weeks and discussing what the outlook looks like and what the right appropriate policy meetings are

and adjusting policy going forward. >> i don't know. do you think it's already been telegraphed too much? we hear so often from so many fed members about their latest thoughts that the market kind of does know. >> there seems to be a lot of noise coming from various fed officials. do you think the markets are overthinking fed policy? the u.s. can endure the rate hike? >> yeah we definitely overthink monetary policy divisions and any sound bite we always jump on and try to think of what that means. i think it comes down to data more than anything else and it will only come when we're ready for it but in terms of saying we shouldn't telegraph it too much that's already happening. >> it's clear what they want to do here. they want to resolve themselves from any responsibility when their call is wrong. they want to couch themselves. even though they don't what the data points are going to tell us in terms of when rates should be

hiked for the first time. there's nomah lishs intent of saying i'm favor of less -- we don't have a clue. that's what is going on. >> markets are still moving on monetary policy and the prospect of more or less and what that means for the state of the economy and companies that require that debt financing to require growth and expansion. >> latest when we get a rate rise. will we see something this year? >> sometime in late 2015. it was strong but not too strong. the goldilocks number. >> i have been saying a few months agatha we'd see june or september for sure. so i might be wrong on that. but i still think definitely this year. maybe not as soon as june or september. you should hang out with fisher. >> maybe i will. >> i'd love to hang out with you. >> let's get you a run down on what to watch this trading day.

the monthly federal budge statement is out. john williams is speaking about the economy in new york this afternoon. a day after he talked to steve. look for results from encana and zillow. microsoft ventures in france launched the 6th batch of start ups. the companies range from b2b marketing and each of the ten companies is looking to raise between 500,000 in the next 6 to 9 months. joining us is the start up lead at microsoft ventures in france. thank you for joining us here. i want to talk about the european tech landscape. i have been traveling to various tech conferences and trying to assess and understand what innovation is taking place across europe but there seems to be a transatlantic battle taking

place between silicon valley and what's happening in europe where some of the best entrepreneurs feel like they need to go to silicon valley in order to build their company. do you think that will change in the coming months as they put more money toward entrepreneurship. >> it's an interesting question. a lot of what we have been seeing in europe is very very promising. microsoft had a really strong commitment over the years to start ups. with microsoft ventures we have a stronger commitment to the companies in paris, berlin and london with the local programs that we have. in regards to the transatlantic battle i don't think we're going to continue to see it as in previous years. i think the european economy and the european start ups are becoming stronger and stronger so i think we have terrific examples showing us exactly what europe is capable of. >> you know the whiff of

exuberance is unmistakable when look agent the deals. are we witnessing that same type of enthusiasm when you're looking at technology in europe? >> yeah i think definitely. i know throughout europe and especially in some of the hubs where we're present we're seeing some companies valued at a billion plus. we've had several in france for example, several start ups that have hazed over 100 million in funding. these are new examples for the european economy that we haven't seen before. it's very promising. >> is that a bubble that we're in? specifically in the u.s. private funding markets? >> you know there's talk of a bubble. i think you don't know until you're out of it. so i'd like to just say this is actually the growth of the economy and where we're headed. >> cnbc is launching their list of the 50 biggest disrupters later on today. who do you think is the biggest disrun to out there. whether it's coming from europe

or the u.s.? >> the terms of the start up we have loads that are disrun tos. it depends on the impact that they're having on different services and different industries. for example one company that we worked with in france is a company that has really helped change how hotels are operating. instead of how they service rooms through pen and paper they're taking that digital and in less than a year they're working with several hundred hotels around the world. that's one example of someone changing a very traditional industry. we have tons of examples like this. so i think it's very difficult to just say there's one company that is going to be making a difference. >> i also want to get your thoughts about women in tech because that has been a big story as of late. it's a curious paradox because the average household. most of the women are making the big decisions on which products their families are buying but

the tech industry still facing a significant gender gap at its highest corporate leadership level. why do you think that is and what needs to be done to change this? >> i'm very positive on women in the tech space. we've seen the industry come a long way. we're now much more conscious of the issue than before. and i think we have seen a lot of initiatives trying to address the problem in a great way. through microsoft we have a program called youth spark which encompasses a lot of how we want to engage the future generations in working with technology and we have specifically addressed the issue of women in tech for future generations through an event that we call digigirls where we bring young girls in school to come and see the different career paths they can have working with tech. it's been very eye opening to see some of the cliches, some of the fears, some of the way that technology is presented to them in a way that doesn't really encourage them to come into the

industry and by gaining that consciousness and addressing the problem head on we're going to see a change and we're already starting to see a big change. >> good. roxanne thank you so much. >> before we head to break, let's have a quick look at european markets. a sea of red. the weakness has accelerated over the last half an hour or so. the stoxx 600 is down. the ftse 100 and cac 40 are both down 1.9 with germany leading the way down 1.35%.

welcome back. these are the headlines. the global market sell off accelerates what the dow called to open down in triple digits. nepal is hit by a 7.3 magnitude earthquake near mount everest and goldman sachs cuts it's forecast but says the recent rally is premature. >> john kerry landed for high level talks with vladimir putin. on the agenda is the conflict in ukraine as well as syria and iran. jeff joins us live with all the

latest. jeff. >> yeah, good morning. no great change from when i last spoke to you 40 minutes ago. we know that mr. kerry is on the ground. part of his agenda is a relatively simple wreath laying ceremony and then he will talk with the sovereign minister and then president putin. number of issues on the agenda syria. washington is keen that there be some movement that brings peace to that war torn country at this time. iran on going negotiations and washington would welcome support in that area from moscow and of course ukraine and while we've had a peace treaty in place there's been violations. over the weekend, president putin lashing out some what at the americans for their part

washington and european governments continue to insist that moscow needs to desist from helping the separatists and that would reduce the tensions. quite a busy agenda it would seem today at this meeting. the state department though as we went into the announcement of this taking place very keen to tamp down expectations and saying this is an opportunity to keep the dialogue open with moscow but perhaps just a reminder. it's been two years since john kerry was here and of course the timing is interesting. so let's not write this off completely. meanwhile, while this is taking place and president putin is out of town friends of the murdered opposition politician boris boris nemtsov is releasing it.

>> let's get back to markets in europe where there's been a route today. let's kick off with bond markets driving sentiment for financial assets across the globe in recent weeks and remains the same today. the ten year note elevated to 10.32%. the ten year german bund crossed into .704. the ten year gilt in the u.k. 2.015%. >> let's have a look at the scope of the sell off. ftse 100 off by 1.9% now. cac 40 down by almost 2%. we at session lows for the stoxx 600 overall. the fact that the euro is trading higher against the dollar today is not helping either. we did have a little news confirming it is in talks but

that is not propping up the market. >> let's take a look at u.s. futures. some what of a contagion effect taking place. premarket in the u.s. also suggesting another volatile day of trade. the dow down 150 points. we're just talking about premarket. and after seeing a bounce back on the back of the neutral jobs report on friday signifying or eluding to a lower open by 41 points. more coming up on the show. we'll also talk about the fine art of investing. record breaking prices at auction this week. how much do you think picaso's painting went for? stay tuned. can a business have a mind? a subconscious. a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit?

can a business have a soul? can a business be...alive?

welcome back. a record smashing auction at christies in new york city. it sold for $179 million making it the world's most expensive picture ever auctioned. buyers on the phone were bidding in million dollar increments with the painting finding a new home in 11 minutes. another achievement, it sold at $141 million. that's the highest price ever paid for a sculptor. let's talk more about what's happening in the art market with philly hoffman, the ceo of the

fine art fund. good morning to you. this is history in the making and we throw around the word bubble a lot when referring to silicon valley and start ups but when you're looking at these companies you can assess a value by looking at earnings and enterprise value but how do you test the economic efficiency of this market? >> i think what we're seeing is a huge amount of demand for really rare art. you could have bought this picture about 15 or 20 years ago for $30 million. today it sold for 179 million. so five times your money in 15 to 20 years. it's a very very strong market. people are making a lot of money at the very top end. it's not that easy at the bottom end but last night we saw an incredible atmosphere. people were bidding in increments a million dollars at a time taking it up to a new world record price. some say that's outrageously

high and is another work of art ever going to exceed that? i could see another work making 250 million at auction and probably in the next five years over $500 million. the chinese were bidding last night, asia. and the middle east all for a great picaso. >> significant prices seen in the last day or so. what about volume? are we going to have more of similarly high priced sales over the next couple of months? >> this week we're going to see probably the biggest sales i've ever seen in my 25 year career in the art market. we going to see about $2.5 billion of art sold in the next 48 hours. there's a blockbuster sale coming up on wednesday night which will break the billion dollar sale level at christie's. they're both estimated to make over $50 million each just for a relatively recent work and all

the billionaires and art collectors are all in town and looking to take home a trophy item and right now we're seeing the trophies in new york and there's going to be an extremely successful week. they're going to be making a lot of money out of it. >> what if you don't have the spare change for the big ticket items. can you still invest in an art fund and still participate in the move? >> yes, you can invest in art investments and art funds but it's a very tricky area to know what to buy and whatnot to buy. the blue chip end of the market is very interesting at the top end but on the bottom end if you're investing in young contemporary art it's quite risky. we bought one for $40,000 and sold it three years later thinking we were smart selling

it for 120,000. so one makes successes and failures but there's upsides and down sides. you'll see a lot of people that bought art ten years ago making considerable money but if you're looking to invest now i think there's a lot of new entrants into the market. we'll see the art market driven higher over the next five years because so few people have any art and so many people have got wealth, cash and they want to know where to put it and i think we're going to see a lot of that money coming into the art market in the billion to $5 million range of art works. >> all right. we'll leave it there. always interesting to discuss what's taking place in the art market. and let's get back to futures as we are pointing to a lower open. the dow down triple digit

welcome everyone. you're watching worldwide exchange. >> here are your headlines from around the world. >> the dow is called to open down triple digits as the u.s. yield curve steepens

significantly. >> a sea of red stretches into europe as the dax is leading the way south. >> a downgrade for oil. goldman sachs cuts it's forecast but says the recent price rally is premature. >> the nfl comes down hard on the new england patriots over deflate gate as tom brady looks ready to fight back. >> if you're just tuning in thank you for joining us on worldwide exchange. here's a look at how markets are fairing ahead of the u.s. open. the last six years we had a 200% gain in the s&p 500 but this year stocks had a tough time holding on to gains. we saw a big rally on the back of the jobs report. stocks ending lower and the sell off could continue. the dow indicating a move lower by 162 points. the nasdaq down 43 points in

premarket and s&p 500 also suggesting a alaer lower open. what are we seeing across the board? >> indiscriminate selling pressure. for the stoxx 600 we're just off the session lows but the dax off by more than 2.25. the cac 40 losing ground significantly. we had a little bit of mna news. better than expected earnings but that's failing to lift senment today. this is all in response to the spike that we're seeing in the yields. let's get to that right away. we're seeing a big intraday move in bund yields. currently sitting at 71 basis points. it hit 80 again yesterday. we're seeing quite a lot of volatility. 2.34%. that's the highest since last december. we saw the 30 year above 3%. >> let's have a look at the

yields as well. contagion is right. if we have a look at the u.s. yield curve we can see it raising up and steepening as well. the ten year 2.34 and the 30 year 3.1% and guys this is just moving sharply. i don't think it's as simple as reinflation nary expectations coming into the market and people are getting scared. a lot of red across the board today. >> a multitude of factors in play today. but i should point out if the ecb's quantitative easing program is to be successful then yields should be moving higher. perhaps we shouldn't see this as a negative in terms of market action going forward. >> but it's a flushing out of the extreme positions we've seen as a result of qe and the problem is seema and wilf is there's very few market makers out there in terms of the bond trading so as a result of the crack down into some of the prop trading there's a lot of

liquidity that evaporated. that's why you're seeing extreme moves. >> but it's surprising to see such extreme moves coming into also the u.k. and u.s. bond markets. >> why? >> they have never been bid down to the level of .05%. it's continental bond yields that had had the most extraordinary rally. yes there had been some contagion as well just because of yield spreads but i still think to see them sell off so much and to see it spread into equity markets as well that's quite worrying. this is just a general bubble across the world bursting rather than due to fundamental factors like inflationary pressures coming back in europe. >> as exciting as the u.s. bond market has been it pails in comparison to the german bund. it was an us precedented low of

0.05%. right now yields continue to spike. i wonder what the catalyst is. is it the u.s. bond market putting pressure on the european bond market or vice versa because two weeks ago it seemed like the german bund was the leading indicator. >> we want to know from you the viewers out there, do you think this is a buying opportunity? the spike in yields? do you take it as a reason to accumulate our holings and bonds or are you a seller as well? a divided senate will take up a procedural vote on the trade promotion authority later today. seen as the first step of approval of the transpacific partnership bill. president obama stepped up his fight which will cut them. that's amid growing resistance amid his own party and lobby yiss that say the deal is a give away for big business. joining us is a senior

associate. what are the sticking points here. >> obviously within the democratic party there's a memory of the introduction of china and impact on the u.s. economy and when it comes to economic issues the democratic party moved sharply to the left since 2008 and that will be an issue in the 2016 presidential election and the primary campaign to the extent there is one. all of the issues are now coming out and all at stake in the debate over ttp. >> so i guess it's all about obama wanting to include this in his legacy in his final term as a president so just walk us through the time line here. if this is not ratified by congress and by senate he will not be able to include it. >> the window is closing rapidly and even if the senate moves

today to go forward with debate you have a recess coming up on the 22nd so that window is closing pretty quickly. might be hard to get it done in the next ten days. so then the house has to take it up and the vote in the house looks like it will be extremely close and the later we get into the summer the harder it's going to be to get -- first you have to get a u.s. japan bilateral agreement done and then you have to get through some of the multilateral issues and you have outstanding issues with canada and then by the time you're getting to 2016 the idea that congress is going to take up rad fireworks kags -- ratification during a presidential election year is not realistic. we're getting to the point where the idea that the obama administration is going to seen this done and it will be part of the obama administration's legacy is starting to get fairly unrealistic. >> this whole thing, the whole tpp deal trying to do more

trade with pacific countries specifically in asia but china aren't included it in right? >> right. china voiced interest in joining down the road but you first have to get the deal done. >> great stuffment we have to leave it there. thank you for joining us. >> coming up on the show, deflate gate. they handout punishment for the patriots for messing with the rules of the game. >> elevated bond yields setting stocks lower. u.s. futures pointing to a lower open. the dow down 167 points in premarket trade. more on the market action and what to expect coming up on worldwide exchange. the network that monitors her health. the secure cloud services that store her genetic data

the servers and software on a mission to find the perfect match. and the mom who gets to hear her daughter's heart beat once again. we're helping organizations transform the way they work so they can transform the lives of the people they serve.

>> the recent oil rally is premature. that's according to goldman sachs which cut it's 2016 production forecast but said that current prices are still expensive relative to fundamentals. goldman sees a decline in nonopec output this year but expects u.s. production to return to growth in 2016. the investment bank predicts the market will be oversupplied by 1.9 million barrels a day. oil prices were volatile yesterday but were strong today in the face of the goldman sachs

report although that is is really because the u.s. dollar softened throughout today's trade. brent up 2%. wti up 1.7%. >> the u.s. government has given conditional approval to the the plan to drill in the arctic ocean this summer. that he removes an obstacle for the company to explore for oil and natural gas in the region. they must still get several other permits. they plan to invest $1 billion in the project in addition to the 6 billion it's already spread. let's take a look at shares of shell and how they're trading down 1.3%. but again we have seen a sustained move to the upside in oil prices. oil now up about 15% year to date but there's a lot of bears out there that caution that the rally is short lived. >> really interesting the wording of the goldman sachs bearish note because oil can't win either way at the moment. they say we view this rally as

derailing the necessary rebalancing and weak oil prices can lead to big supply and demand changes and as it's rahal lid over the next couple of months that makes the process much harder. >> one of the key levels people are watching is when the u.s. swing producer comes in. that was always saudi arabia but it's now the shale producer in the u.s. they will have an automatic trigger and they'll start producing that. so that seems to be the new ceiling for oil markets. >> i love to bring this back to the economy though because it has been lower oil prices that kept inflation well below the central bank target of 2% in the u.k. as well as the u.s. but given the rapid rise we have been seeing in oil prices when does this effect wear off and how is that when the fed and the mpc here will raise rates. >> it's a big factor and the central banks have been able to say, oh look we've got this

very weak inflation so we'll keep rates low. will they then switch their reasoning and say it's just because of oil prices? they seem to be airing on the side of caution. >> we should also be careful of the consumer because lower oil prices is lower gas prices. that's more money in the wallet for the consumer but given the dramatic change what does that mean for the consumer? they're not going to spend as much. there's something to be said about that. >> the rebound in the u.s. is never going to come if we see oil prices choking off any consumer recovery. we have to move on. we have breaking news from ukraine and moscow. moscow spent more than 53 billion roubles supplying a separatist movement in ukraine. this is according to a report by

a russian opposition group. that report came out today. >> moving on a week after report blamed members of the new england patriots and tom brady for their role in trying to gain an advantage in the afc championship game the nfl is coming down hard on the team and it's biggest star. let's get to landon with more on that story. >> the nfl took three months to issue a report on the deflate gate in which the new england patriots were accused of deliberately deflating footballs before the afc championship game in january. it took five days to handout punishment. they're fining the team and suspending tom brady. the report determined brady was generally aware they deflated the balls making them easier to throw. the pats beat the colts in that game 45-7 and went on to win the super bowl. the patriots are being fined $1 million and will lose a first

round draft pick next year and 4th round pick in 2017. brady is suspended for four games while two equipment staffers are suspended indefinitely. troy vincent says every player must be held accountable when they violate the rules. he also says the deflating of the balls probably began before the afc title game. bob costas weighed in on the nfl's punishment. >> it's a product of the behavior and brady's unwillingness to fully cooperate with the nfl which they resented but also the time frame in which it took place. the nfl has been under a lot of heat for player misbehavior, team misbehavior. it still creates a kind of atmosphere and there's been heat on commissioner roger goodell so the patriots and brady are victims of the atmosphere surrounding the league and of their own status. >> brady will miss the first four game of the 2015 season

including the primetime kick off game versus the pittsburgh steelers. his first game back week six against the colts. brady's ageneral calls the discipline ridiculous and says he will appeal. brady has three days to appeal the suspension to roger goodell. robert kraft said while he disagreed he would accept any discipline. but on monday he said it's too severe and brady has his unconditional support. this is the second time the patriots have been punished for violating rules. in 2007 they were fined for taping practices and trying to learn their play signals. as for the pats odds for winning another super bowl this season vegas has them 10-1. back to you. >> thank you for that. the first game back being the colts, how ironic is that? thank you so much. the headlines, the global market

sell off accelerate what is the dow called to open down in triple digits. a sea of red engulfed europe with the dax leading the way and goldman sachs cuts it's forecast but the recent rally is premature. we'll be back in two.

why do we do it? why do we spend every waking moment, thinking about people? why are we so committed to keeping you connected? why combine performance with a conscience? why innovate for a future without

accidents? why do any of it? why do all of it? because if it matters to you it's everything to us. the xc60 crossover. from volvo. lease the well equiped volvo xc60 today. visit your local volvo showroom for details. >> the two year note is at 0.64 and the 30 year above 3.1%. now the exact chain of causality is unclear but the german ten year also in the thick of it. it has crossed 0.7% today. also looking at the ten year

above 0.2%. the ten year at 2.35%. what is this meaning for equities? the continued sell off in the bonds rallying equity markets across the board. the ftse 100 off and xetra dax off session lows. cac 40 off by 1.7%. we had a couple of good earning results today but that's not helping to lift the markets. how are we shaping up for u.s. markets seema. >> the bond volatility. the volatility we're seeing in bonds seems to be weighing on u.s. markets. we did end lower in yesterday's trade and the sell off could continue. the dow imlying a lower open by 145 points. we're seeing big moves in the currency markets so let's talk to our global head of fx strategy. pleasure to have you on the show. we usually don't see stocks and bonds move in tandem but futures

are moving lower. help us understand what does this all mean for currencies? >> i think the currency market moves are difficult to understand on their own because it looks like a dollar sell off across the board and again given the way the yields are moving unclear why the dollar should be selling off against currencies. but i think what underlies this is perhaps this sense in the market that some of the deflation fears were overdone and the length of time in which central banks are going to keep providing the liquidity is going to be more of a backing up of yeels and it's reducing risk and since the position in the markets are still dollars. it's the dollar sell off that takes the hit. >> i wonder if this whole correction we've seen across

various different financial asset classes were sparked when we saw euro change direction from the 104 handle to start moving the other way. did that rise in the euro mark the end of the trade that had been driven by european qe? >> well the u.s. data and fed cooperated with that to be sure. it was the sense that the u.s. economy and fed might not deliver what had been built into that 104 price and as well the idea that maybe europe just wasn't as bad. at one point, you had rates negative in the german yield curve going up 8 or 9 years now. it's down to 4 years. there's a sense of maybe -- whatever they're trying to accomplish they may accomplish sooner rather than later. >> it's interesting that even you as a professional are scratching your heads as for the direction of the dollar pair this morning. the dollar indexes this morning

but i do wonder what do you think will be driving the dollar going forward. is it still yields or macro economic data? commodities? what is it. >> at the end of the day, since the beginning of q-2, the market has been looking for a theme with respect to macro moves and hasn't found it. in the with the incoming data the some what ambiguous payrolls number will get retail sales tomorrow. you know if it's in the middle of the range. i think the market will say, look we're talking about september when a height -- a lift off is on the radar screen why worry about that in may. there's no macrtheme out there. what we're seeing are flows and liquidity.

a lot of interest in china and chinese equity market. the plans of china to reform it's internal and external capital markets. i've noticed client interest shifting in that direction. >> interestingly enough we are looking at the euro vastly higher against the dollar at 112 despite escalated fears around greece's debt situation. a move in the currency market and volatility in the bond market and u.s. futures down 130 points on the dow. we'll leave it there. global head of g-10. >> coming up the u.s. squawk box team will reveal the 2015 disruptors list. >> thank you for watching. i'm wilfred frost. >> i'm carolyn roth. >> i'm seema mody. have a nice day. we'll see you tomorrow.

strong can heal from miles away. unite us for a common good. and turn a simple video into endless laughter. strong can take you... all the way to the summit. oh my! so cool! think what strong can do for you. can i play too? at&t's network has the nation's strongest 4g lte signal.

. u.s. equity futures are pointing to a sharply lower open on wall street. and breaking news, another deadly earthquake hits the already devastated area of nepal. this one a 7.3 magnitude quake and new this morning a picasso sells for $179 million at auction. that is a world record and a super star sacked. tom brady suspended without pay and the patriots fined a billion

dollars over what's commonly called deflate gate. i'm sure you know this already. it's tuesday, may 12th 2015 and squawk box begins right now. ♪ >> live from new york where business never sleeps this is squawk box. >> good morning and welcome to squawk box here on cnbc. becky has the day off today. the first pictures from nepal just coming into the newsroom. we have a 7.3 magnitude earthquake hitting earlier this morning, less than three weeks after a squak killed 8,000 people there. the epicenter was close to base camp and at least two other major tremors followed over the course of 30 minutes. two deaths are reported at this point. switching gears this morning we have breaking news on the global markets this morning. check out the futures right