with only 6 million euro in the black for 2012, down nearly 660 million euro and facing increased pressure, they sold the ukrainian subsidiary for a loss last summer. it also had 980 million euro in one-off charges. european shares gave up a bit of ground. conrad sends us this summary of monday's trade from the frankfurt stock to change. >> the profit warning really made the mood turned sour here at the exchange. adding to this war reports about weaker than expected factory orders in the united states. concerns about the eurozone resurfacing due to allegations of corruption against the spanish prime minister and growing uncertainty ahead of the parliamentary election in italy. many people here keep hoping that the dax can reach 8000 soon. that would bring a lot of earnings reports for several companies that could beat analyst expectations like the time where -- like daimler and if you engineering companies. >> closing today at 7638 for the day, a drop of under 2.5%. eurostoxx down 3.5%. the dow jones at this hour is down a little less than 1%. the euro is trading ended -- trading at $1.351

he pledged to keep a close eye on the economic impact of a strong euro. that pushed the currency slightly lower in trading. >> but he also said he expects the eurozone to return to growth later in 2013 after a weak start to the year. ecb has left eurozone interest rates unchanged at 0.75%. any decision by the ecb, even when to hold interest rates steady, is a sure-fire market mover. here is a report from the frankfurt stock exchange. >> the euro dollar exchange rates declined significantly while and after the ecb president spoke at his press conference here in frankfurt. draghi said that the key interest rate for the eurozone remains stable at 0.75%, but he also said one risk for the economy in the eurozone was the appreciation of the euro/dollar exchange rate, meaning it is getting tougher to export goods and services out of the eurozone if the euro gets too expensive. that is why he underlined several times that the monetary policy stance of the ecb remains accommodative. some investors now are betting on lower interest rates for the eurozone or other m

he is around 25 euros a month in rent. with a scholarship of just 60 euros a month, he needs to work part time to make ends meet. >> if you were, if you study, if you go to university, you do not have much time to stay in the room, so it is not very room. >> antoine and his roommate are going out for a game of soccer, but most of their fellow students have different plans. they preferred a party after nightfall. many clubs have opened up in the district, and more are opening all the time. people from all over bulgaria flock here to party, especially young men. drinks are cheap, and there are lots of female students. the party and continues until well into the early morning hours, and drug or alcohol- related incidents are on the rise. a short time ago, someone actually died. because the police cannot control the situation, there are now plans for a curfew. that would be a hard blow. not all the students come here to party. many work in the clubs and restaurants to pay for their studies. club owners give a more pragmatic re

euro stoxx down a bit less. in new york, the dow is down just barely -- 13,975. the euro is trading against the dollar at $1.3339. >> now, billionaire investor warren buffett wants to dip into the catch of business. he is set to buy perhaps the world's most famous maker of ketchup. that is heinz. >> shares in heinz rose sharply on the news, gaining 20% by the end of the day. the pittsburgh-based company sells 650 million bottles of tomato catsup a year as well as producing many other food brands. there is another megadeal in the making -- american airlines and u.s. airways say they want to join forces in creating the biggest airline in the world in terms of passengers. >> that move comes just one year after american airlines filed for bankruptcy. analysts say the merger is likely to trigger more consolidation of airlines in the u.s. >> first, it has to get pass congress, and a leading legislator has already asked if it could hurt consumers by cutting competition pam -- by cutting competition. >> the world largest airline could be created if a merger between u.s.

he is around 25 euros a month in rent. with a scholarship of just 60 euros a month, he needs to work part time to make ends meet. >> if you were, if you study, if you go to university, you do not have much time to stay in the room, so it is not very room. >> antoine and his roommate are going out for a game of soccer, but most of their fellow students have different plans. they preferred a party after nightfall. many clubs have opened up in the district, and more are opening all the time. people from all over bulgaria flock here to party, especially young men. drinks are cheap, and there are lots of female students. the party and continues until well into the early morning hours, and drug or alcohol- related incidents are on the rise. a short time ago, someone actually died. because the police cannot control the situation, there are now plans for a curfew. that would be a hard blow. not all the students come here to party. many work in the clubs and restaurants to pay for their studies. club owners give a more pragmatic re

in fact, they got a gain from the weak euro. that's pretty much hedged, as well, against the dollar. we'll be keen to ask him whether he's in the ecb camp letting the euro do what he does or he wants to see it better contained in the juncker camp. >> that's right. that's coming up. amr and us airways reportedly are hashing out the final details of their merger. it will create the world's biggest airline. and the "wall street journal" says the all stock transaction will be part of amr's reaction to take it out to bankruptcy. amr would get about 72% of the new company. us airways shares up 2.3% in frankfurt. >>> speaking of airlines, boeing is reportedly working on a battery redesign aimed at battery risks on its 787 dreamliner. the faa has given the company permission to make a special one-time test flight from texas to washington state. the ntsb says it's probably weeks away from completing its probe into the battery incident. boeing shares, which have suffered on news of this -- of the dreamliner, but not tremendously. you look

the euro stoxx 50 gain more. in new york, the dow is going up by about 0.3%. the bureau is now trading at one -- $1.3358, slightly down. >> talk about going against the mainstream -- the ceo of volkswagen says he wants to take a pay cut even though under the company's rules, his salary should be going up by millions. >> he told the german magazine that it is not possible to justify a pay package of 20 million euros to ordinary people. vw is about to enter into wage talks with production staff. in 2011, he was the highest paid ceo in germany. >> china is continuing to expand its role as the workshop of the world with, according to its own figures, exports growing 25% in january compared to the same time last year. that far exceeds expectations. >> and is healthy demand in the domestic market, too. imports rose 28% last month. analysts say some of the increase was because factories were quickly fulfilling orders before the lunar new year. we will have more on china and that lunar new year when we come back. >> not only that, we will go live to the berlinale talk

it's been shielded as a euro ply. but if we take the tail off risk off from europe, we take the risk off for the dollar and sterling is a bit of a focus. >> yes. what i would say is the compression of those tail risks in the eurozone, we think, is probably in its end game at the moment. and the market has moved from pricing of 50/50 risk of eurozone break-up to barely more than a 10% risk of the eurozone break-up now. i think one has to say those risk premium have compressed so much, so quickly in a straight line. that we probably are reaching the point where there isn't that much to go for on that. so the extent that that's been the negative driver for sterling, we probably at some point during the current quarter will reach the end of that game. >> i was just looking at the high tallan auctions we had this week. it seems as though we don't really care what happens with italian elections. we'll take it in our stride. >> i think yes, indeed. and one of the side effects of the ecb's omt which, of course, hasn't been us

. >> in a strong euro to a dead euro. six months to go, the question is is the euro going to survive? the euro is going to survive. if people today buy the euro, it's because the euro gains confidence from the people. but at the same time, it's not a good news if we are not able to answer the aggressive attitudes on the parts of the world. we must fight the currencies. we must enter into currency wars. but at the same time, we must be capable of define iing at the wd level and call on its approach in the long run trying to stabilize because of the currencies. and in order to have these currencies reflecting the fundamentals of our economies. we had this discussion today between us at the level euro group. we don't all agree on the solutions. we all agree on the questions and we will have to have that discussion in moscow in the g-20 by the end of the week. >> now, we know, of course, that often there is lip serviced played. we all want a strong currency. but then, of course, the policies are exactly the opposite. what do

but on the other hand you know a strong euro can be taken as a reflection of confidence in the region of recovery and it can boost confidence so there's a little bit of a kind of a mismatch i guess between what the politicians want which is you know i think it better europe better currency which would then maybe sustain better confidence in the region where the industrious and central bank are of course concerned that it will hamper growth so it is a concern either way and of course the whole issue of currencies in general around the world is now becoming the major talking point a major economic issue you know for all central banks and for all economies. without a majlis have a look and see what european markets did today you can see reacting to that disappointing data release a whole plethora of we've got half a percent down for the footsie there london for the dax in frankfurt over up a cent in negative territory want to also mention that we had a contraction for the japanese economy as well and there's now concerns about school lobel growth really being felt across the board must s

so the euro is the anti-yen. that implies that when we were seeing the yen coming under selling pressure, japanese investors, where are they currently investing? investors are investing in fixed income. in many cases, very little yields left so that actually means the peripheral of europe sticks out. you need to have some preconditions. the most important, the yen has to stay weak, but secondly we should not run into any politically motivated problem with the euro. that would be a killer for that type of trade. >> and on that note, the european commission today is due to release its winter economic forecast for gdp, inflation and employment. economic monetary affairs commissioner mali rhen will hold a conference. any major revisions won't be taken lightly by markets. hans, what are the red lines? >> both countries are at risk or undershoot on the fiscal side and there's very good reason for that. in spain, we have the ongoing problematics with little access to credit and in france, there's the impression that the

and i think there will be a euro.the question is what will it look like and what the membership will be. originally there was a big school of thought sank the euro should avenge his the northern tier of the membership. it should have taken in this so-called southern tier, countries that have problems. and the next year or two i think they will really see -- this idea complacency, and i've had some talks, he was good enough to buy my book last year and read it, and we discussed it. i was with him a month ago, and i think he's one of the more thoughtful people in the bureaucracy in brussels. and i think that when he starts talking about complacency, and i should say younger came out also and talked about his concern on the value of the euro, these are the the dollar, on exports. so i think we're very far from where a lot of members of the marketplace are, you know, the worst is over for europe, don't worry, it's just a matter of time. >> [inaudible] >> microphone. >> did everyone hear that question? >> to the uk make th

but on the other hand you know a strong euro can be taken as a reflection of confidence in the region of recovery and it can boost confidence so there's a little bit of a kind of a mismatch i guess between what the politicians want which is you know i think it better europe better currency which would then maybe sustain better come. prince in the region where the industrialists in the central bank are of course concerned that it will hamper growth so it is a concern either way and of course the whole issue of currencies in general around the world is now becoming the major talking point a major economic issue you know for all central banks and for all economies. well let's now see how the european markets reacted to those disappointing figures and as you can see it's probably not a surprise at all that we did have declines of the half a percent down over a percent negative territory for the dax in germany there is also contraction for the japanese economy as well really raising concerns about global growth these concerns really felt across the board including evolved to have a look at

euro stoxx 50 also suffering a setback, finishing all the way down to 640. on wall street this hour, the dow trading slightly to the downside. the euro weaker against the greenback, trading at a value of $1.3298. >> now to one of the biggest arms bazaars in the world. the international defence summit in of a doubt become so close tomorrow only weeks before the united nations needs to finalize a historic arms trade treaty. >> amnesty international warrants it would not even cover most of the weapons on display at the conference. in germany, there's been a public backlash over the sale of arms, especially to countries with a questionable human rights record. >> the largest arms fair in the region opened with a bang in the united arab emirates. it is hoped images like these will send a signal to the other side of the persian gulf where it rations -- relations with iran are strained. leaders are also worried about discontent within their own borders. >> of course we see the problems here. and the weapons industry has reacted. you will have a hard time finding an

the crisis of the euro is artificial it's a result of a us british plan to destroy the euro so that the dollar and the pound could live and it starts with a very you know well organized attack on european government bonds now i regard the euro is like a convoy suppose you're in the north atlantic in world war two if you stay together you can survive but if you drop out of the convoy you're going to be destroyed because they're not everywhere and today if you drop out of the euro suppose you're greece or italy what's going to happen is goldman sachs will come after you with credit default swaps and they'll drive your currency to the point where it's worth nothing you'll have hyperinflation if you're germany they'll do the opposite they'll drive it up into outer space so that you'll be you'll be deflated to death so i would say stay in the euro but now we ought to have a movement and i think greece is the leading edge of this force the european central bank to cough up trillions of euros of credit to rebuild the infrastructure of the continent starting a bubble with housing but then with

, i would say probably eu euro/yen. eye stallan bond yields are probably not priced in. the election risk is higher than we would expect euro/yen to come down to. >> it's difficult to find yields, the corporate bond so, you know, that's mostly very high percentage on the government. so it's quite like the russian government debt, as well. and the yield is pretty nicely for retail investors. >> the momentum is such that you have to buy this. this is not a sell the value. it's a buy the bid moment. people have just got conviction. you get involved. there are uncomfortable moments where if you try to look at fundamental valuations, of the earnings profile, you're not going to get too excited. you have to hold your nose, close your eyes and get involved. >> those are some of the thoughts already. still to come on our program, sterling is under pressure as the market digest the loss of britain's aaa traiting and the prospect of further quantitative easing the.we'll look at the latest price action and get some forecasts as we

. >> euro/dollar is just over 1.34. what is woiring is net exports, of course. >> germany's powerhouse. it's interesting, we've seen at morgan stanley, spain will allegedly be the new germany. we're going to ask one of his colleagues about those comments. just why he thinks it might be export in spain now that helps bail that country out. >> meanwhile, happy valentine's day. we'll be out to a highend forest to hear how big a day it is. >> and we'll head out to nestle. >> and we'll be back in moscow in the run up to this weekend's key meeting. >> and we'll get a sue from seoul as the bank of korea says the boj's expansionary policy posts uncertainties to the economy. >> italy is trading lower today but warned of a challenging 2013 to come. cherylin is at the nestle headquarters and joins us for more. i hb carolin. >> thank you, ross. you've got sales increasing by 2.2% to 92 billion swiss francs. net profit slightly lower than forecast, 8.6 billion swiss francs. that's the organic growth figure. now, investors have been

they pay 1000 euros a month for their cramped lodgings. that is reality for a lot of young italians. so it is no wonder that people here are fed up with politics. almost half of young people say they will not vote, at least not for the major parties. she tends to the left, but she does not feel at home with any party, really. >> none of them are interested in our everyday problems. all you hear from the politicians is empty talk. they have lost touch with the concerns of young people. >> like most young romans, she still lives at home. her father is proud of her university degree as a translator, but she earns her money as a waitress. >> when i was her age, i had a job and a child. we had everything we needed, but it is different today. i cannot just tell her to get married and start a family. >> father and daughter agree -- italy needs more reforms, but without taking money out of the pockets of families. >> mario monti did in just a year which should have been done in italy a long time ago, but it was too much. it has broken our backs ec

and doing something to undermine the euro. so the big risk for the euro now is if the governments stop talking to the ecb on this matter, there's not a policy in any way, that's what could undermine. if anything volatility will pick up. we're seeing it in options markets already. >> we have a meeting with the incoming governor at the bank of england. talk it where sterling i should say may be headed. so we've been -- you know, 1.56 lately. do you expect more wasteful spendingening here? how vulnerable -- more weakening here? how vulnerable is the currency? >> we expect a move lower. probably it will hit 1.50 soon. euro/sterling higher is a trade i like more. could get well above current levels, maybe 90 is achievable in euro/sterling. the risk for the short term could be a slight correction in europe/sterling. a lot of people have put on short sterling trades already. the expectation is for mark carney to come out in favor of gdp targeting, something as aggressive as what the u.s. or japan is doing, if not more aggressive. if

zone so help me talk about the return of the euro crisis italy's shaky elections and ongoing unrest against government corruption elsewhere in europe i'm joined by author investigative journalist oh thank you so much so webster let's start with the candidates of this election berlusconi essentially is booted out of office his party is pulling in second place i mean he's a pretty controversial guy here preside over a pretty bad period financial crisis is the fact that he's the only n.t.l. stared candidate the fact that he's so popular still. i think. the thing about berlusconi is. he was the prime minister he's been prime minister longer than anybody else and post with italian history and he is an anti-war candidate his recent campaign was stopped for. closures on homes stop foreclosures on factories and equipment lower raise the lowest pensions and roll back a very oppressive property tax the i.m.u. that. have imposed the thing about berlusconi that attracts hostility from washington and london is close personal relation with blood in your putin and the fact that this is been conque

so that's 76 billion. 36 billion euros -- 76 billion euros, and whether i say it in a french accent ora belgian one, it stays exactly the same. [laughter] >> translator: so there's a problem. and it might be odd for me as a liberal to ask you as a president and a socialist to say, no. please say, no. let's say no together, no to an irresponsible framework. no to a framework which simply isn't up to the job of meeting the challenges that we face. that's what's at stake on friday. and finally let me come back to the question of mali. you heard, i'm sure, the round of applause when you talk about the decision that you'd taken. it's just not on that a jihadi regime should take power, but let me talk about another tragedy. syria. we've had two years of horror, tens of thousands of deaths, hundreds of thousands of displaced persons and refugees, and every year -- so every day that we let go by without helping the insurgents is going eventually to help the islamists. because it's the jihadis who might well end up winning. that's why i beg you, mr. president, we can talk about that perhaps on

so that has been a source of strength for the euro.the case of the fed, they have maintained that they're going to press on with this, these easy money policies for quite some time until we see signs of a firmer recovery taking hold. so that's the main thing i think investors are looking at balance sheets and there is easing pressure on ecb. david: japan is the focus of attention for g20 leaders in moscow right now. what will happen with the yen as a result of what the japanese are doing? >> that's the key thing. i think the main issue with the japanese currency the fact it has fallen so fast, so rapidly. that is the main concern. it is not so much the exchange rates. policymakers are okay with that level. it is within its traditional long-run average but the fact that the yen has fallen some 20% since late last year, that is the concern of the does it lead to other countries doing the same thing? so, that has, creates a lot of uncertainty and a lot of potential knock-on effects. we'll see what the g20 leaders say about the yen and whe

in the euro zone. that they. regard it as being somebody else's fault what we're seeing with the euro currency is a kind of relief rally because essentially so far the german european central bank axis has managed to hold the single currency together but the difficulty is that just doesn't suit economies like france or indeed to flee or many others because essentially they've spent the post-war period always using their currency of something they would try and devalue it will in order to sell more goods overseas so there is an issue that the currency is to a degree hurting these economies but the problem is those economies are complete not to amass in the first place ten percent of the economy doesn't ultimately change. the fundamental structural problem which is the french economy it's slow rhotic it's disorganized the government is the major economic actor nearly fifty seven percent of the economy is the french government that's where the problem lies don't blame a puny little rise in the currency it's got noth

what can you tell us about the euro? it's fallen a bit of draghi's comments. >> that was a big focus after his comments. let's look at the pairings starting with the euro/yen. 125.43-46. don't forget it was around 127 levels on wednesday. so the euro there losing a little bit of ground against the yen. let's switch to dollar/yen. 93.64-67. that's still off the levels on wednesday when it was trading above 94 at one point. we are getting key data out of china later today such as cpi figures for january. that's going to be vital for japanese investors as the lunar new year holidays kick off in china. so we won't see more market directing moves from china. but that will be a focus for this morning. back to you. >> thanks for the report. ramin mellegard. >> tokyo is not the only asian market open this hour. i will leave you with a check on those. >>> authorities in the solomon islands are sending emergency teams and relief supplies to help residents in the archipelago. a magnitude 8.0 earthquake rattled the south pacific on

more than half of the italians voted for the euro-sceptic populist. one of them, they will have to deal with in the next government that will be formed. >> nina, thank you for the update from brussels. the outcome of the italian elections has been weighing heavily on financial markets. our correspondent from frankfurt stock exchange has more on the ups and downs of the day. >> anything but an easy and steady start to the week. election results in italy for providing rate relief for the traders here and looked as though burlesconi would not be having any influence on policy in the future, but as new results came in, it looked doubtful that he could be excluded from having a say in how the country would be governed. the people here at the stock market do want a stable government than they do want reform-oriented policy, and they do want financial pressure from the markets in terms of italy to be reduced in the near future. now, with this result, things do look to dampen. the share prices at the end of the day no longer as good as they were in the beginn

i think there would be a euro. the question is what it would look like and what the will be because originally there was a big school of thought saying the euro judge should have been something of the of one month ago off of go -- i should say he came out also in talks about his concern on the value of the euro visa the the dollar,. exports, so i think we are very far from where a lot of members of the marketplace are, that the worst is over for europe, don't worry. it is just a matter of time. >> allayed decision. >> did everyone here that? at think you -- >> to the u.k. meet the right decision in being a member? >> well, the prime minister at the time certainly think so. and as you know, karen osborn is the guarantor of his. so you can argue that back-and-forth at this particular point in time. the question this, if you had a referendum in the uk today, which you're not going to have for another couple of years, will with the vote be? most think it would be tough pull out if there is not some sort of restructurin

a sturdy cuts across many countries in the euro zone and we haven't really seen any benefit from that the benefit has been on the fiscal position at a budget level but not in terms of economic growth but you know this slump has extended to countries that haven't suffered austerity cuts of for example germany the region's biggest economy has also reported much slower growth than had been expected and yet you know that's a strong economy strong balance sheet didn't suffer from many any cuts what we're actually seeing is that you know the problems on the edge of europe in the mediterranean are of that stature are undermining confidence last year and this is what drag i guess is hoping to say the confidence is picking up but no doubt about it last year the concern about problems in mediterranean countries in ireland has had an impact on confidence and that has reduced investment spending by companies and consumption by consumers so that needs to change the need to prevent that loss of confidence from deepening because that is what will drive the euro zone economy much worse and another fr

but euro/dollar has been falling a little bit. we're going to watch this and see whether it takes european markets with them. bond space is still steady. >> and a first on cnbc will be joined by the irish prmt enda kenny live from dublin. >>> welcome back to "worldwide exchange." i'm kelly evans. >> and i'm ross westgate. >> the white house and congress are talking, but not to each other. the day before billions of dollars in automatic budge cuts are set to take effect. >>> france government confirms its wants kuroda to lead the next central bank chief. >>> spain gdp down more than initially expected as the most troubled lender hosts the country's biggest ever corporate loss. >>> and the eu is going to cap bonuses at the level of salaries as early as next year. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. >> all right. if you're just joining us stateside, welcome to the start of your global trading day. plenty to get through today. we're waiting for an interview with the iri

canadian dollar is next and the euro, as well. draghi has obviously been speaking this morning saying currency chatter is inappropriate. inflation is not a policy target. it's important for growth. but if they wanted to do anything to weaken the euro, what policy actions could they actually take? >> well, i mean, on paper, they have not options. they can cut interest rates and they could, of course, embark on quantity tative easing, not omt, but buying bonds across europe. but to strike us at likely prospects at this point when talking about the recovery moving to a more stabilization stage. the euro would strike us as an obvious safety buzz. it would rise to currency weakness elsewhere. i think that will be a problem for europe and it's one that they're trying to mitigate now and one they're trying to talk down now it seems from draghi's comments. >> and the german finance minister saying exchange rates should be market oriented. so it looks like the euro will remain least active. i also want to pick up on comments we had from th

the ceo of this engineering firm has an annual salary of 100,000 euros.s the president of swiss employers association, he is doing everying he can to fight t initiative. >> we are struggling with a strong swiss franc. it is expensive here, and it would be a big disadvantage for the country if we suddenly had the world's most rigid company law. >> in a huge, flashy campaign that has cost more than 6 million euros, business associations are doing everything to convince citizens that the initiative would be bad for all employees in switzerland, not only executives at the top. tv commercials and posters are warning of the country's downfall. they've even gone so far as paying students to criticize him in internet forums, but they deny any wrongdoing. >> we are not buying these votes. the swiss cannot be bought. that has been seen in the past as well. it takes a lot to raise awareness. >> the other member of the team is his loyal sidekick, secretary, press officer, and campaign manager all in one. they only have a modest budget of 300,000 euros, but their argu

euro/dollar has been at -- sorry, euro/yen, 124.54.oth sides aren't too far away from the 30-month peak. 1.2771 was the euro/yen 4-month peak. you were talking, francesco, about the devaluement. how does that net out on dollar and the yen? >> well, in both cases, i would be expecting a devaluation of both currencies, especially the currencies with the supply. >> the euro, for example? >> and like productive assets, you know, like real assets, commodities. >> so we're going to see more money pushing into commodity prices? >> yes, i would say so in the medium term. and at the moment, i would think that the federal reserve is the most concerned into timing, into the shape and intervention. we know that there diminishing returns from the central bank activities. so they're committed to a big push in 2013. they're going to bring out 85 billion a month. >> how about diminishing returns, why don't they do something else sthp. >> well, they know this is their chance. 2013, 2015, they're marginal impact is going to be even lower than it is toda

the european union that lose their jobs every day this is creating a human tire crisis inside the euro zone. some of been driven to increasingly desperate measures due to the ongoing crisis across the continent a frenchman committed suicide by setting himself on fire on the job center in the city of north forty three year old had been refused unemployment benefits in the country which is suffering its highest jobless rate for thirteen years. has the details but said it reports that he had actually set a letter to some journalists saying that he was going to do this this week so the police had said that they had set of surveillance outside that employment agency but they didn't manage to see him he was already on fire they said he had entered through a side street and therefore this tragedy had happened now the man did this after finding out that he is no longer eligible for those unemployment benefits and this is not the first time it has happened in france in august we know that a fifty year old jobless man had done the same and this is a worrying sign for france for a country that ha

is not going to be a euro zone but italy has no only operated and safety coalition since the end of world war two really why should another one be any more problematic well i think the difficulty right now and you're absolutely correct there have been multiple coalitions in italian history since the end of the second world war but as of this moment actually the divisions between the politicians are huge and you've got essentially mr berlusconi mr green you know they are absolutely cannot abide by each of each other i mean grillo himself is ultimately the berlusconi counted it and the same time you've got both sonny who's the man who just edge to victory in the lower house of parliament by three or four tenths of a percentage point from mr berlusconi who's got avenged of league a soft left in italian terms reasonably hard left compared to the united states of america munday it as it were but a very shaky want to move forward and ultimately also was part of this you go finally the mr monti the technocrat to the first time he went to the polls was well offense and chile a huge failure

euro/yen has had one of the biggest moves. and in response, i think we'll see response from the european policymakers. and we will make our decision of a stronger euro on that. so what i think you'll see is the world right now is divided into the known versus the unknown policy, the known policy being the feds doing qe that we already know. the ecb slippinging its balance sheet. the unknowns are the japaneses, the rba, the bank of england. you were speaking about earlier in the intro about the pound going off and gilt are selling off and the yields are going higher. those are all unknowns. and in the unknowns, the policy is rebounding in weaker currency. >> michael, what is your target on dollar/yen? where is yen going to go? we're finding it hard to get above 94.5. >> it will continue to move higher. at the end of the year, we'll be well above 100. >> again, i think it's a reverse engineer problem. i think in order to get to 2% yen inge tlagz, they're going to have to continue to push weakness. >> now some news out of prada,

there's an upgrand that going to hold profit at the euro.>> obviously, some people want draghi to cut rates in part to weaken the currency. now maybe he won't have to if merely talking it down. >> exactly right. he hinted towards that in today's speech. that euro weakness is starting to precipitate not inflation, but deflation. that would take care of any interest rate policy. >> good to see you. of course, you can catch more currency trading tomorrow and every friday night. money in motion only here on cnbc. coming up at the half, you tweet it, we trade it. we have four plays on four stocks, so you can make your next move. >>> linked in, one of the hottest social media stocks, reporting earnings overnight. should you buy? ahead of those numbers. josh the bull. simon the bear. time is on the clock. josh, you're first. >> why would you want to bet against the company that's literally on a rampage, a financial rampage is the way it's been phrased. every quarter since they've become public, they've beaten earnings, and they'll report tonight, f

we saw euro/yen trade higher. periphery yields sell off.elds trade higher, given a lot of support to the euro taking us up to 1.37. as we are at a point where we are questioning where the strong euro will impact the ecb's inflation expectation as well as what will happen with exports and growth and european union. i think we can see the euro start to come under pressure going forward. >> yeah. is there any real reason not that the euros needed it frankly, to stay high. or at least to the levels it has pushed lately? >> in the short term, i think, as long a yields for the euro remain supportive. i think if we see data in the u.s. turn and i also think it is based on what happens to risk sentiment as a whole. >> yeah. >> yesterday's fomc minutes spooked the market a little bit. we saw emerging markets sell off aggressively today. investors wore long emerging markets versus the dollar. if you see a reversal of those positions, i think that would add pressure to dollar buying and push the euro lower. but if that does not persist, i think we cou