Hello, this is todays worldwide exchange, im ross westgate. Im kelly evans. These are your headlines from around the world. Shares of stocks fall after the french bank swings to an alltime low. The ceo says hes optimistic. Im confident we will show a further market share gain. Heineken shares pop after the giant raises its outlook. And peugeot rolls out its recovery plan. And the first 30year bond in years. The test of Market Sentiment ahead of the election. And president obama uses his state of the union speech to urge congress to end the battle over the budget and Work Together to boost the u. S. Economy and help the middle class. Together we have cleared away the rubble of crisis. We can say with renewed confidence that the state of our union is strong. There we go. Who doesnt love to kick off a wednesday morning with the iea Monthly Oil Report . They have lowered their Oil Demand Growth expectations on weaker gdp forecasts. Demand growth, 840,000 barrels a day in 2013. Theyve cut the forecast for opec crude to 29. 8 Million Barrels a day. They say oil supply will hit a 12month low in january. Can we show crude and look at the reaction there . Well take a look in one second. What else are they saying in this report . They say the nonopec supply will be rising. Opec supply will be falling. Nonopec supply is rising, one Million Barrels a day this year. Then they talk about Iran Oil Production hovering below the lowest in 30 years. New sanctions could see further declines in iranian output. They say the sanctions are costing around 40 billion in export revenues over the last year. Wow. Not a huge reaction there in the oil price, brent up. 1,. 2 , same for nymex. Interesting because were going to at the top of the next hour hear more about the Global Outlook for demand from fon and icc. Gasoline has spiked a little bit. They are saying that they cut their refinery throughput forecast in the First Quarter because of a falling u. S. Refining capacity. This has been a huge story. When people talk with the u. S. Selfsufficiency story, theres been a bottleneck in over fine capacity. This is something the president glanced at in his state of the Union Address. Its one thing to have new technology to get it out of the ground. If you cant refine it and get it to market there you go. Well keep our eyes on that, as well. You mentioned the president. Thats one of the things well be talking about. Also on todays program, currency war and currency confusion. Thats all led to a wild ride for the japanese yen. In moscow, the worlds finance ministers due to battle it out. Well find out when china becomes investable from the top experts in chinese Financial Markets in 20 minutes time. Well speak to the founder of the cambridge satchel as the British Bag Company opens a new store in Central London at 10 45 cet. The secretary of general of the International Chamber of commerce in paris. A first on cnbc at clesk cet, 10 00 london time. Then a call on comcast shares after the now 100 owner of this company, theyve announced theyre buying the rest of nbcuniversal in a 16 billion deal. And i still want to say, i feel very comfortable about this. I feel very im sure you feel happy. Good for everybody. They like us. G. E. Stock was up i didnt like that g. E. Stock was up, then i saw the reaction of comcast, all right, theyre up, too. You, me, fantastic. Were very happy, brian. Have to say that are you pained to say that i should say . I dont know. Im paid, though. Dont know if im paid to say that, but i am paid. Right. Have i done enough on that now . Yes. Societe generale swung to a loss on the back of eurozone weakness and one of charges. Coming in below expectations, the bank racked up a quarterly net loss of 476 million euros. On top of that, frances numbertwo listed bank had goodwill writedowns of 292 million mostly on new edge. They have pledged to cut costs with a new ceo heading a revamped structure. What does the man at the top make of the numbers . Whilst Retail Banking took a hit in terms of cbi, Societe Generales ceo is confident about the outlook. Cib is if you wish for me in 2012 a great achievement. Weve restructured. Weve refocused, as ive said weve finished deleveraging. Im confident that in 2014 we will show that we will make further market share gain. And this is what is at stake. I dont expect necessarily the market to be that dynamic overall. But i think that Societe Generale can gain market share in its businesses. We have an organization which is ready, fully able to capture, again, new clients and new business. What about the retail activity in france . It was a bit weaker in the Fourth Quarter. Is it because of the increasing cost of risk . Weve seen as expected in the Fourth Quarter an increase of the cost of risk. There is a seasonality effect. As weve said also, the deterioration of the Macro Economic situation. The cost of risk relates to mid sized corporations. Its not individual clients. Yes, weve deseen a deteriorati in france. Societe needs two billion euro to bring its core capital ratio at 9 under basal three. Will the bank need capital injection . Definitely no. This Fourth Quarter shows further enhancement of 40 basis points of our core tier one, and secondly in our account, we clearly definitely show that we will be basal free in terms of capital and liquidity at year end, its a given. Do you think the Market Sentiment is reflecting the economic reality in europe . I think the market situation reflects the fact that the extreme scenarios, the dislocation of the euro, is really now very far. So no one is expecting a miracle, i think, on the economy. Its more, again, extreme scenarios, the fears are behind us. And valuation of equities still appear to be reasonable, i would say, versus other categories of assets. Do you feel like french political leaders that the europe is too high . I think for, of course, europe is to have a currency which would not be overvalued because yes, what we expect Going Forward is more investments in order to export more. Thanks to all the efforts made on competitive not. If, again, all these efforts are destroyed because there is a currency war and the euro is suffering in particular, that would be the torment to europe. Hopefully the euro should stay at something reasonable versus the dollars and other currencies. And president obama used his state of the Union Address to challenge a divided congress to make government work for the many. The president touched on a wide range of issues including gun control and immigration. His hourlong speech focused mainly on the economy. Hes backing higher taxes on the wealthy, more spending on infrastructure, and manufacturing jobs. The president also proposed hiking the u. S. Minimum wage to 9 an hour, tying it to the cost of living increase. He also urged lawmakers to resolve the budget battle that will result in billions of dollars in automatic spending cuts on march 1. Lets set Party Interest aside and work to pass a budget that replaces reckless cuts with smart savings and Wise Investments in our future. Lets do it without the brinksmanship that stresses consumers and scares off investors. The greatest nation on earth [ applause ] the greatest nation on earth cannot keep conducting its business by drifting from one manufactured crisis to the next. [ applause ] we cant do it. And on Foreign Policy, the president says hell withdraw about half the u. S. Troops in afghanistan within the next year. Also warned north korea about its Nuclear Weapon program. He said there will be talks with the e. U. About reaching a transatlantic trade agreement. And marco rubio gave the republican response and criticized obamas programs and proposals as more unnecessary deficit spending. Joining us for more, head of european g10 fx bank of America Merrill lynch. Welcome. Good morning. Want to Start Talking about europe, about cypress where he got back from. First the u. S. Dollar, whats happening with the potential fiscal talks. How concerned are you, what does it moon for trading the currency . The u. S. Dollar has weakened so far this year because of the overall market risk move that we have seen. Positive of surprises in the u. S. At the global level. And looking forward, we were bullish on the u. S. Dollar because we see a Market Correction as the u. S. Tightens fiscal policy substantially this year. How severe of a correction might that we believe for the rest of the year the euro dollar will be closer to 1. 30 or below, 1. 35. Really . Also last week we believe in the way theres a ceiling on the strength of the euro warning that a fefbent strengthening fervent strengthing will affect inflation in the eurozone and projections are well below the 2 target. Thats a fascinating point. Were going leave it here for now. Plenty of news to get to. I want to pick up on that point especially about the euro in a second. Youre see being a. 2 move it the upside in the currency pair today. Yeah. Italy. One of the key things is italy offering buyers a 30year bund for the First Time Since 2011. A partial test of how Foreign Investors are responding to this Months National election. And whilst yields are forecast to rise and its expected to enjoy healthy demand for the paper coupled with a threeyear auction, italy looking to raise a total of 6. 75 billionures that doesnt make sense. Thats right. I have problem reading. A couple of Different Things going on. Leak at the 30 years, doing this, 5. 13 . Those are levels to keep an eye on ahead of the market reaction. This should complete italys attempt to raise something in the range of 18 of its funding this early, taking advantage of somewhat better Market Conditions. Certainly ahead of the italian elections, too, trying to make sure that any potential market disruptions dont necessarily boost its borrowing costs. This at a time when the italian state getting back toward running a Budget Surplus at some point, ross. Absolutely. Meanwhile a focus for equity markets, slightly weighted to the upside on the Dow Jones Stock 600. Not by much, less than six to four. Gains for european equity. Some losses, as well. Dragging things down in terms of the bank. To the ftse, reclaimed the 6,300 level, down 1,300. The xetera dax up. 5 . Ibex and cac is flat. Theres upside despite the loss, as well. Keep an eye on italian yields as we go toward that auction. A concession, spanish yields lower at 5. 25 . Spreads narrowing. On the currency markets where we saw the euro dollar was trading, 1. 3426. We got down to 1. 35 a couple of days ago. Wild swing in dollar yen depending on comments coming out and around the g20 and g7. Some thoughts that the g7 had been relaxed about the policy and didnt see it as a way to weaken the yen. Others theying thats not the saying thats not the case. The recent high, 94. 46 is where we hit on monday. Aussie dollar firm at 1. 0345. And sterling dollar, Inflation Report at 10 30 london time. Well bring you up to speed. Back after the chinese me to youre from singapore. Nice to see you. Most asian borses ended higher while market remained close for the australian lunar holiday. The fx 200 closed above the 500 level for the first nightmare 2. 5 years. Strong data showed Consumer Confidence at the highest level in more than two years. Commonwealth bank of australia gained 2. 4 today after the countrys largest lender posted a higher cash profit and raised its dividend. Japanese stocks ended lower by 1 as the yen has weakened against the greenback. This after the 2kg7s excessiv concern over moves. Mitsubishi materials slipped over 7 after cutting its annual operating profit outlook. Forecasting poor demand for materials used in cars and batteries. Meanwhile, olympus eased nearly 3 after cutting its earnings forecast on sluggish sales of digital cameras. Daiichi Life Insurance rose after Goldman Sachs selected the firm as its top pick. Elsewhere, south koreas kospi finished higher by 1. 5 led by strong gains in automakers, Technology Shares, and stocks. The sensex gaining a modest. 2 . This helped by bargain hunting in blue chip names. Back to you. All right. Catch you later in the program. For now, thank you. Still to to come, the g7 trying to get out in front of fears. More from the g20 summit in moscow as soon as we come back. To grow, we have to boost our social media visibility. More likes. More tweets. So, beginning today, my son brock and his whole team will be our new senior social media strategists. Any questions . Since we make radiator valves wouldnt it be better if we just let fedex help us to expand to new markets . Hmm gotta admit thats better than a few likes. I dont have the door code. Whos that . He won a contest online to be ceo for the day. How am i supposed to run a business here without an office . [ male announcer ] fast, reliable deliveries worldwide. Fedex. To deposit checks from anywhere. [ wind howling ] easier than actually going to the bank. Mobile check deposit. Easier banking. Standard at citibank. Okay. [ male announcer ] with citibanks popmoney, dan can easily send money by email right from his citibank account. Nice job ben. [ male announcer ] next up, the gutters. Citibank popmoney. Easier banking. Standard at citibank. Welcome back to worldwide exchange. Its been a volatile 24 hours for the yen amid confusion about a g7 statement in change in the forex market. There were concerns over the yen as they saw a tacit approval of the reflationary policies. Leaders are expected to take up the currency debate during talks in moscow. The dollar yen currently giving up. 1 , down toward the 93 level from over 95 or close to it, i should say, we saw earlier. Steve sedgwick is our man in moscow this week. Hes covering the g20 talks. Steve, i imagine yen is front and center there. In the halls, what are officials saying . And just how much did they mess up the rhetoric when it came to telling the market whats happening with regard to these currencies . Yeah. I think its really an issue. I think the g20 feels blind sided by this. I was speaking to the deputy finance minister of russia earlier on. He was like, well, why now, we thought they were going to make the statement, they were going to make it . N russia as part of the talks. Theres a mass confusion within the g7 about what they were trying to achieve. Maybe the markets got it right. Actually that everybody is concerned about the competitiveness. At the moment the russians especially is been actually losing out in these currency wars so to speak since july. Have been rallying the ruble against the dollar, rallying again the yen heavily, as well. Theyre as concerned as anyone about the competitive advantage from the devaluation of these currencies, as well, gained by the japanese and others. Face it, as jim oneil points out in one commentary, the americans have been doing this for 30 years. Its rich to turn around and say anyone cant do. It mr. Carney, currently of the bank of canada, soon to be bank of england, said we need forceful representation at the g20 to solve issues. Whats interesting is not to lose track of some of the more important agenda issues from the russians, as well. And like the mexicans before them, the french before them, and obviously various g20 chairs before that, theyre looking at fundamental issues growth, stability, jobs, energy, Financial Markets. One of the key issues thats been discussed here, one of the socalled sherpa meetings ahead of the official meeting friday and saturday is about finance, it where are the financial flows and key for finance for infrastructure especially in areas such as asia, as well, which of course is part of the emerging powers. The other g13 so to speak. With that in mind, imf senior economist for asia pacific joins us. I know youre not here to talk go20 specifically or currency wars. Ill put that on the table. You are here to talk about infrastructure flows which is absolutely key to a lot of emerging economies in asia, as well. Whats the message that youre hearing . Whats the message youre giving . I think theres an issue in a lot of countries that there are large infrastructure gaps. We see it in advanced economies and in emerging markets of the theres an issue of where funds are going to come from to address gaps. Theyre questions related to how the funds will be sourced and how they will be intermediated into infrastructure flows and the kind of projects that were investing in with good projects and how theyll support growth in the future. Post 1997 1998, were looking at money out. Youre looking at longterm solutions to infrastructure possibly from the likes of sovereign wealth. Thats true. We found in the past that the kind of investment that goes into infrastructure, Foreign Direct Investment in these longterm projects is associated with Financial Stability and a reduced probability of stress in Banking Systems and financial crises. This is the kind of investment the countries generally want to encourage in terms of stability and in terms of enhancing growth. I think thats the focus. The accusation is bridges to nowhere. You have stimulus, kensan responses, and projects that they dont necessarily have demanddriven incentive. This is all about supply side. The point you made off camera is that may be the case for developed western economies, but certainly not the case in emerging and in asia specifically. And cyclical factors are playing in a lot of countries. But there are underlying needs in all countries. You see that in many places around the world. There are certainly structural reasons why you would want to invest in infrastructure even in advanced economies today. What about china, india . These countries, people have tried to invest a lot of money previously. For international investors, its unclear the returns theyll get from the projects. They want a return, dont they . Of course, returns are going to be high. I think in general youll see higher returns in Infrastructure Projects in emerging markets than you might in an advanced economy where the baseline for growth is lower. Whats the message from the imf on these projects, and increasing these infrastructure flows. How are you going to get it done . I not the funds concern is about the stability of the domestic Financial System and that governments are not taking on undue risk. We would focus on ensuring that any Infrastructure Project that involves either the private sector or Public Sector is designed in such a way that risks are transparently laid out and you dont have problems in the banks or government. To the extent that risks are concentrated in the Financial System or government, that these risks are laid out in a transparent way and we know how large they are. Very basic question from me. Seems a lot of things were talking about are exporting Nations Building up huge trade surpluses while they run fairly balanced budgets in many cases. Why do they need the international flows . Not all emerging markets are running large current account surpluses. There are quite a few in deficit. In these cases, there is a need for capital inflows. They are the kind of inflows that you would like, longterm fdi flows that are enhancing. Nice to see you. Youre here to talk about the g g20. A lady hare to talk about the role of imf in capital flows, christine lagarb, well speak to her later in the week and bring the interviewer to viewers on monday. Ross, back to you. How long are threw for, steve . It seems im here for a very long time. Luckily, ross, i miss valentines day. Yeah. Thats the ploy, wasnt it . That was the speaky ploy. Like that. Sneaky ploy. Like that. It does mean youre off the hook. Ill give my producer a big hug. You mind if we dont air that . Thats okay. No. Hes a bearlike gentleman, i wouldnt advise airing that. Exactly. Steve, catch you later. Thanks for that. As steve says, currencies very much the focus. Ironically the g7, g20 is complaining about excessive moves in the currencies. Their comments have caused excessive moves in the end. Its confusing markets even more. Yeah. I think the confusion is between Monetary Policy and other policy. Theyre two Different Things. Nobody can argue with the need with the bank to reduce the inflation in which the country has been very a very long time. However, often extending it by authorities has taking the currency down without underlying supportive monetary policies. This has worked, so other countries will be attempted to do the same will be tempted to do the same thing. Are you saying japan isnt going to reduce Monetary Policy further, theyre not going to pump more money into the economy . It truth is that they have failed to meet the 1 inflation target. Theres a question whether theyll be able to meet the 2 target. We have to wait for the new government to take over i know. But if they set the new targets and say this is where we are aiming policy, that is real, that is isnt it . That is a target, the markets should react to. Up to an extent you can argue that the target has weakened the yen. But the they were mentioned at specific levels on the yen given the impression that they are supporting it. And by setting the inflation target without explaining how theyll meet the target is not enough to bring the yen at the level where it is today. Heres the other thing its depreciated 20 against the greenback since november. At 94, is the yen the yens not overvalued, is it . Its not misaligned. Exactly. It was way too strong, the yen was far too strong for the economy. Absolutely. I mean, when you look at the equilibrium estimates at this point you can say that the yen is slightly undervalued. But not misaligned. The problem is the way it has weakened was not really because of underlying policies. It was it strengthened because of underlying policies in economics either. The bank of japan has not really changed in policy. They have announced and committed to a target. By themselves, the policies are not enough to meet the target yet. Yeah. I would argue the yen strengthened pause it was the default risk currency. Wasnt anything from anyway, ill let you go. Thank you very much for joining us from bank of america, merrill lynch. Peugeot insists the road to recovery is in sight after reporting the worst loss in history. Is the french carmaker beyond repair . Well discuss when we come back. In headlines from around the world, shares of stock gen fall, swinging to a worst than expected loss in q4. The ceo tells cnbc hes optimistic. Im confident that in 2014 we will show that there will be further market share gain. Heineken shares pop after the beer giant raises its outlook. Peugeot rules out a recovery plan. The first 30year bond in nearly 20 years. Theres sentiment about the forthcoming election. And the president urges economies to Work Together and help the middle class. Together we have cleared away the rubble of crisis. We can say with renewed confidence that the state of our union is strong. European equities down interest the trading day, mixed. Down 1 in the ftse, above the 6,300 which we got to yesterday. Ibex up. 25 . Spanish behind yield have continued to decline. Take a look ahead of the italian auction thats were waiting for in a little bit. Lower yields for both spain and italy. In fact, were 5. 24 , 4. 44 respectively. Take a look at gilts, moving higher, bunds are, too. Were seeing a risk rotation if were referring to it that way where supportive flows to the periphery and away from the core today. 1 167. 25 6. 75 billion euros of debt 30 year for the first time in two years. 2011. Yeah. Well keep an eye on that. Those results are coming through after in 40 minutes or so. On the currency markets the yens been on a swing. The dollar yen, 93. 30. Weaker on the day stronger on the day, the yen, the dollar weak against the yen. Remember 94. 46 was that may, 2010, high which we hit on monday during the u. S. Session. Euro dollar firm up over 1. 3477, and well keep our eyes on the pound. Weve got Inflation Report. The quarterly Inflation Report coming out today. We expect them to raise target and lower growth forecasts. Then do nothing about it. We know the pounds been weak. We know its been after kind of going back toward that 160 level, weakening substantially. A big structural problem in the u. K. Economy that means higher inflation than the states or eurozone. We import a lot of things. I love that youre saying were, this is good. I mean youre see . Freudian slip. The sprosz work process the process is working. And washington deals with the ongoing budget battle. Speaking on cnbcs street signs, blankfein said the low Energy Market and the strong market rebound are reasons to be bullish. We have had a lot of problems. We havent chewed through all of them. We havent even chewed through all or part of them. But weve chewed through a lot of it. You know something, nobody sounds a gun or blows a whistle when things have gotten better. Sentiment is lagging. Its still slow. But i think the market as a whole, no one individual, is looking ahead and said with these advantages, i think that we could be on the threshold of a bull market. Blankfein says while therell are opportunity for growth in the u. S. , there are sill risks in europe saying the euro is making it more difficult to ease Monetary Policy. When you hear the ceo saying were on the threshold of a bull market yeah. Are you suggesting that i dont know. What kind of signal sell that . How strong a signal . Jamie dimon has baseball the voice and face of the Banking Industry of wall street to some extent. When you hear Lloyd Blankfein talk about his assessment of things, does it does it attract the same attention, carry the same gravitas i dont know. Not the same face. Hes cut the beard. Like davos, it wasnt a psychological thing. He said it just didnt want to use the razor anymore. He used to have a beard a long time ago. Do you feel more bearish because you have a beard . You look like a bear. Obviously the ceo of a Goldman Sachs or jpmorgan or whatever is going to say, you know, these are reasons to be optimistic. Conditions are looking up, et cetera. You know, still concerned about weakness in europe, fine. But im not sure thats telling us a lot that we didnt already know. No. Heres news were all very happy about. Comcast taking full control of nbcuniversal buying the venture in a deal coming two years sooner than planned. In addition, comcast will spend 1. 4 billion in real estate for the floors nbc uses at 30 rock. And kelly yes, cnbcs headquarters in new jersey. Right. Comcast boosting its dividend by 20 and will buy back 2 billion in stock. G. E. Will speed up its buyback to 10 billion. On fast money, they said the timing was right to do the deal now. Weve had a really good couple years. We think the future were long term, steady, patient. Ultimately, we want to own it 100 . We work on projects like symphony which we, with between the Cable Division we work with between the Cable Division and nbcuniversal. Comcast reported Fourth Quarter earnings up 6 . Both stocks up after hours, kelly. Thats the interesting thing. Up 7 and 2 . Will people feel more relaxed now in the u. S. , you know obviously the company was 51 owned by comcast. The studios were still owned by g. E. D. That make for i dont think that entered much into the daily. Yeah. Lets do the actual overlord it is interesting to see landlord. Overlord i meant overlords. But so the buildings including that cnbc headquarters which is actually a huge complex. Its just extraordinary to see. All the cameras and lights. It yeah, worth a pretty penny, as weve learned. Kelly does do tours for a modest fee. Right. A fullyear net loss of just over five beingures for peugeot. Revenues at its Automated Division were down 10 . Our analyst from ubs joins us for more. Phillip, clearly in need of major restructuring. We think were getting one, but the french government said theyre not going buy a stake. How is this going to work . I think the question is still open. Capitalists are trigger on capital at peugeot will be will the whether the e. U. Goes further in approving to the lords of the banks. So far they have done a small guarante guarantee, temporary. And if there is confirmation, the issue may make on the agenda. Okay. Dont listen to what i say, look at what i do then. What would be the preferred plan for persia . What for peugeot . What would your plan do . They are writing on the asset base, refocusing on the smaller business. They will no doubt reduce their losses. I think theyll become profitable again. What is not resolved yet is the issue of scale. This industry requires more and more scale. As you focus on customer you lose scale. They need to continue in parallel to get the synergies theyre talking about with g. M. Because g. M. Is in the same situation in europe. Youve got a number of subscale players. At least peugeot and g. M. Have something to work on. If they execute well, they create some longevity. If they fail to execute, then we, as one of the ceos said a few years ago famously, you cant cut cost, youre going to prosperity. Theres got to be more than just cost cutting. Thats in place. How easy is it going to be for peugeot and g. M. To see Work Together and scale up together . Its not easy at all. The costs are different. The engineering approaches are different, et cetera. You need typically for Something Like this to succeed, you need very, very strong management. And thats the question mark, we know theyre subject to reelection this year. We need to see what happens on the g. M. Side. You typically need very strong leadership to get people to Work Together and understand that the common purpose is a question of survival. Finally, just how much risk is there in shares or even for bondholders . Any time youre talking about a Company Involved working with the government, you know, nationalization being raised is an issue. You know, whats an nor to do . I was interesting an investor to do . I was interested to see peugeot shares jumping on news from the french government. Not typically the reaction you would expect. Whats clear is peugeot will not go away in near term. Solutions will be found for continuity. If if the government has to step in as a shareholder, its probably because the Financial Markets dont want to do that job. But that depends on the outlook. So i dont think the french government wants to own peugeot. Theyll just theyre just there as investor of last resort to make sure the business doesnt go away. To be fair, the few carmakers that have disappeared in europe had shrunk to near oblivion before that. Peugeot is still way too big to be in the category. Peugeot is there will be solutions. Logically you probably want to own the bonds more than the equity because you dont know exactly what will happen to the equity. But certainly will longevity or presence of the business for for a while is assured, i think. You answered my question on whether that was a restructuring play or not, on the debt not the equity. Phillip, thanks for that, from ubs. Shares of tata motors in india up 2. 2 . Sales of its Jaguar Landrover unit were up 32 last month. Jlr statements suggest revenues were up in all major markets. China had the strongest growth with a 74 surge in january from a year ago. Tata said total vehicle sales were less upbeat, down 16 , declining for the third month in a row. And shares in american barrick gold are trading down, 8. 5 . This after the Mining Company reported fullyear earnings down 39 last year. That was worse than analysts expected. Whats it mean . Joining us is metals and mining analyst at citi. John, how important are these earnings for barrick gold . They are important because the problems of 2012 are continuing into 2013. The companys difficulties with the available of power in tanzania and theyre about to use diesel power in one of their mines which pushed costs up to 1,000 an ounce. During a strike in 2012, part of the equipment froze up and jammed up. It will take a few months in 2013 to fix up. So the company has guided down significantly for 2013 compared to what analysts were expecting. Is that a play where you look then at rivals and see them benefiting, or is it pretty much a warning sign for everyone operating in this space . No. I think most of this is very company specific. Barrick operates at guidance, cost of above 1,000 an ounce for 2013. Most of the u. K. Gold is at 750, 800 an ounce. And barrick cost shot up sharply in the past few years. Again, company and country specific because of the issues theyve faced with the power. Theyve also faced social issues around one of their mines where they were there were fatality some time ago. Theyre having difficulty relocating families around the mine which is going to hamper plans on that mine, as well. They have problems on three key mines. And with the move, this 8. 5 decline, shares down 23 over the past few months. At what point do they start to offer any value . We need to adjust our outlook following the numbers and guidance today. Clearly there will be low expectations. We have to review that. We see the company as having difficulty Going Forward. They at one stage, at the ipo a few years ago, they were looking to produce a million ounces, close to a million ounces. Theyre not going to reach that. And one of the roots to that was a new project which really is open to question given the level of power, availability in tanzania. They will have to reconsider that. They have announced theyll have a full review of operations. If they decide to close one of the mines. It will make the goal ever tougher. John, thanks for joining us. Thank you very much. Thank you. Shares in heineken are up after posting better than fullyear profits. Speaking first on cnbc, the ceo, jeanfrancois fight europe is no longer a core concern of heineken amid growing Investment Opportunities in emerging markets. The lack of importance for us in europe is declining. We have been investing over the last new years to increase our footprint in latin america, in asia, as well as in africa. So the importance of europe is declining. Still, its important to us. So far it is a very cashgenerating business. As you fight, europe is under pressure as you fight, europe is under pressure from the tax man on one side, from the recession from the other side. That is a great quote. Super under pressure from the tax man on one side, from the recession on the other side. I mean, hes looking at opportunities in africa. How much when use were in davos, how much africa talk was there . Quite a lot. Quite a lot of people saying the next 30 years belong to africa. Interesting. Bear in mind china, india, brazil if you look at the dynamics of africa, its certainly not you could look at areas where they their have been market development. They have so many supply side structure. If you look at whats happening in the north and the west part of the continent, its hard to really find why in is going on so strong i think they alleyoop look, the things about the resource and the national bunds has been there. The one ping that is changing is one thing that is changing is governance in a big way. If that changes, for once the global flows will develop it. You go into mozambique, this Huge Development going on in reserves, Nigeria International aid, people have been arguing for years, its not clear that thats done so much to help africa. Will be interesting to see now if not about that. If direct investment direct investment because governance has changed is the game changer. Exactly. Maybe well have to go there and find out. Tripoli south africa perhaps. South africa, we could do. I mean we have to go elsewhere. Okay. Japans biggest beermaker has raised a glass in 2012 after posting record high profits. We have more from the nikkei on that from tokyo. Reporter hi, ross. Japans biggest beermaker, asahi group holdings, reported a record high net profit for 2012. They made 614 million for the justended fiscal year, up 3. 8 on the previous year. The results were boosted by recent m as including 1. 2 billion deal to buy domestic Beverage Company in october last year. Asahi benefitted from its new subsidiaries in Southeast Asia as the beermaker continue to expand its foundation overseas. Increased sales of an alcoholfree beerlike beverage and japanese tea helped boost its revenue. Asahi released officials for the current fiscal year today. Its predicting a 15 rise in net profit to 703 million with a 9 growth in sales. The tokyobased brewer also said it would buy back up to 20 million of its own shares. The dividend would be 43 yen per share this fiscal year, up 50 yen on the previous year. With this new dividend, asahis dividend payout ratio could be above 30 . Back to you, ross. Okay. Thank you. Thats the latest from tokyo. In india, the trade picture is still looking gloomy. The latest data show the trade deficit for the country rising to 20 billion in january. Imports jumped 6 . Export were up slightly, 0. 8 as you see. Analysts say the trade gap is adding pressure to indias current account deficit. Leaving the central bank little room to further ease Monetary Policy to spur growth. And india will cancel a deal to buy a dozen helicopters from italys company. They will blacklist the firm if bribery allegations are found to be true. The defense minister said the Central Bureau of investigation is looking into the matter. He promised to punish those found of wrongdoing. Comments came after the ceo was arrested for allegedly paying bribes to seal a deal to sell its helicopters to the indian air force. And lets give you a look at whats on the agenda in asia tomorrow. A big day for central banks. The bank of japan and korea will unveil their Monetary Policy decisions. Australias earnings season full throttle. Rio tinto and westfarmers due to report. And nippon rologis reit will make a 1 billion offer. Not typical ipos. A barometer to watch. Still to come, one of kellys favorites. This will be a great one. Well speak to the founder of a handbag startup thats gone from the Kitchen Table to Top Department stores. Stay tuned. Banana joes, meshs top dog look at your face. No, i cant. The afins pinscher. Its this. Can we show there. Thank you. Is that the i dont think thats it. There it is. Its the little black dog. Thats thats it. Won best in show at the Westminster Dog Show in new york last night. Apparently its i know nothing. The first time his breed has taken top honors. Banana joes owners thats not it, neither is that, has entered twice before but never made it out of the toy group. Right. What do you mean by the toy group . I believe toysized dog group. They go in different stages. One dog from the tie toy the toy group, one from the retriever group. Whatever the dog people now are shaking their heads at how little we know. They basically chooses one of each breed or class. They compete for one winner. We have crufts. Crufts. The most prestigious dog show in europe. Whats the one with the big show like in the movie babe, where they you know, they herd the sheep . Is that a different thing . Anyway. With the success of banana joe thats just a sheep dog trial. Sheep dog trial. Yes. Very different from crufts. We want ton what sets your dog apart from the rest of the pack. Send in photos to us at worldwide exchange. Email us or tweet us. Feel free to offer some more detail on how the whole process works. Can we get a still one final still image. No, cutter still i see. Thats not it. There it is. There it is. All right. Fine. A tease. A shaggy dog story. The u. K. Clothing republic reporting, a chain acquired in 2010 by private equity group tpg will appoint ernst and young as its administrator. A different story for the cambridge satchel company. The bag company was launched on a Kitchen Table with 600 pounds. Now its products are stocked by retail giants like herods and blacking dales. The bloomingdales. The Company Opens today in covenant garden. Joining us, ceo of cambridge. Youre opening a store, why . Today apparently. It must be done. Yeah. Weve been working mainly on line. We were getting lots and lots of emails from people saying were coming to the u. K. , where cooane find a type of bag. There are 126 variants of what we do, colors and sizes. Well we have fantastic stores, herods and right in the center of london, theres though where where people could see the whole range. We thought this is a Good Business model. You successfully started the company with just 600 pounds, never taking on debt. No. When you look at opening a store at a time when so many are closing, still looks like a good prospect . It does. Its me and my mom. We always look at worst possible case before we go into anything. And so before we sign that lease, we think, what is the worst possible case if it didnt succeed. What would we lose. Weve never gone interest special gone into something feeling we couldnt survive it. Are you apparently using savings if you dont sell bags . Yeah. Its done really well. We did a popup at the location before christmas, went phenomenally well. Wow, you dont sell the worst is youre stuck in a twoyear lease and have to pay the staff, right . Exactly. I mean, thats the worst case scenario. Thats the worst case scenario. Thats the scenario you always have to take. Right. Youre saying, im yes, we will cover that. Fascinating. Yes. Thats how youve run the business from day one. Absolutely. A relatively new company. Youre a Great Success story for an entrepreneur. Sitting at a Kitchen Table, looking at how to get your daughter into a school where she wouldnt be bullied. Thats right. I needed to make school fees. Thats the kind of drive that you need if youre going to get oomph behind yourself and get out of the kitchen. How did you find, then, going from the idea of the satchel to starting to sell the products and thinking it how i market them, how i get them to market, how do i create the buzz . Did that just happen organically or did you have to learn a lot of stuff . I not thats why google chose i think thats why google chose us for the ad. It was literally everything we did was through the internet. So we were on there trying to write every Magazine Editor and every lifestyle editor, every blogger, saying these are pictures of our bags. We havent got enough to send you all free bags and try and encourage you to say nice things about us. These are the pictures of the bags. And if you like them, please give us a mention. What was the best moment for you over the last couple of years . Best moment was when my mum and i were asked to see Samantha Cameron in ten downing street. My mother was named as one of red magazines redhot women of the year. She said, im in my 70s. Came later maybe than i wanted, but at least it turned up. Fantastic. Have you got a trigonometry set in there and a dog biscuit. Thanks for coming by. The cambridge satchel company. Plenty for to come on the state of the Union Address. Welcome back to worldwide exchange. Im kelly evans. Im ross westgate. Heres are the headlines president obamas state of the union speech used to urge congress to end the bad over the budget and work to battle over the budget and Work Together to boost the economy and middle class. Together we have cleared the rubble of crisis. We can say with renewed confidence that the state of our union is strong. Italy offers investors the first 30year bond in years. A test of Market Sentiment ahead of the election. Shares in stock gen fall after the bank swings to a worse than expected Fourth Quarter loss and sees its cfo leave. The ceo tells cnbc hes optimistic. Im confident that in 2014 we will show that we will make further market share gains. Heineken stocks in the green after the giant raise its outlook. A solid performance in africa and the americas behind the move. We know that we have had for several years a growth problem in the u. S. That has been addressed. Weve turned the corner. The heineken brand is growing again. Our mexican portfolio is growing. Were in good shape in the u. S. Going forward. And were waiting for the latest from germanys etho institute and International Chamber of commerce. Their release offering a view on the World Economic climb. We have eurozone industrial output, up. 7 on the month minus 2. 4 on the year. So the World Economic climate improving in the First Quarter of 2013, as well, after two consecutive years of decline. The index ticking up to 94. 1 compared to 82. 4 in the final quarter of last year. According to the survey, the jump was driven by an increase in expert optimism for the sixmonth outlook. Secretary general at the International Chamber of commerce joins us for more. Thank you very much indeed for joining us. What do we take away from this . Clearly the jump in optimism is important. How sustainable is it . I think its its one has to be extremely cautious. I think thats what the report concludes, cautious opted mitchell. I would say optimism. I would say after several years of a fairly negative response from the 1,200 economists that we survey every quarter id say, you know, mirroring the cautious attitude of business, as well, its very nice for economists to be cautiously optimistic. What we all need is for business to be optimistic. We at the International Chamber of commerce, we have the largest Business Network in the world. About six Million Companies in 120 countries that are members of the network of icc. And they are basically mostly small and medium size enterprises. What they have in common is their engagement in the World Economy through trade and so forth. And certainly, you know, this lack of confidence that they have been feeling over the last several years has been one of the dampeners of the World Economy. A lot of them sitting on their money, sitting on their expansion plans, investment plans because the risk has been just too high, the volatility in the World Economy much too great. So this cautious optimism that were seeing emerge is something very welcome. And i think very good harbinger of developments for 2013. After a year in 2012 when business was not feeling too great about the prospects. Is it going to lead, do you believe, to any greater investments, investmentled growth . I think that thats certainly the promise. And were already seeing it. I mean, even in places that have had dire difficulties like spain, we see just this week that with the basically them tackling their circumstances, becoming a little more competitive in terms of labor practices and so forth, that we get Companies Like nissan and others saying theyre ready to invest in new plants. This is a drastic change from even six months ago for spain and for its neighbors when the prospect looked pretty dim. And so suddenly youre getting this regain of confidence thats addressed if real money. I think that thats when we look at even the message of the state of the union speech by president obama and the basically returning to a discussion it the possibilities for more discussion about opening the possibilities for more regions through the transpacific partnership, all of this, you know, feeds this mood of confidence in business, and i think is whats going to be making it possible for business to put in place its investment plans. Yeah. So well have to see where we go. Look, theres been so much talk, as well, around the g20, g7 about currencies and their impact and volatility. How much of an issue is that from where you sit at the moment . Because business gets on and deals with whatever the environment is. Yeah. I think, you know, its these are currents that go through the World Economy. And weve had fears of currency wars recurrently over the last couple of years. I mean, the real problem is, again, going back to this lack of confidence. You know, economies dont run on money. They run on confidence. On the assumption that basically, you know, that conditions will improve, that governments will put into place collectively or individually measures which permit that kind of improvement. And there hasnt been much sign of that over the last year. And i think the changes in governments, the elections and so forth in the u. S. , in china and so forth, you know, have in a sense have had an effect on that. Everyone waiting to see whats going to happen. I really fear now that there are beginning to be i really hear now that there are beginning to be positive accelerators of confidence and, therefore, business activity. Were seeing it in some of the economic regions in asia, for instance. Very recovery which is very good in terms of economic performance, gdp per year, et cetera. Were seeing it even in europe where yeah. You know, we finally had the Central European bank saying what everyone in business has been waiting to hear. And id say, you know, business in malaysia, indonesia, not just in europe, have been waiting to hear for a couple of years now that the European Union will do whatever is necessary to save the euro. No one has dared say that, clearly, until the president of the central bank in this last couple of months. Yeah. Okay. Good to see you. Thank you very much for joining us with your report. Secretary general at the International Chamber of commerce from paris. We have comments from the pope, the first Public Comment since the resignation decision. He said he prayed hard and examined his conscience. He told the faithful hes aware of the gravity of the situation and is aware of diminishing physical strength. Hes certain the church will sustain him with prayer. Hes thanked all for love and prayers and asked for continuing prayers for him and the church. The pope speaking publicly for the first time post the decision to resign. Kelly . And ross, against that backdrop, lets look at futures. The dow industrial average, the rest looking to add about ten points at the open. The nasdaq in focus. Tech has been a weak spot. Its weakness has been weighing on Market Sentiment and on indices more broadly. To the sneeftse, small gain, 0. The nikkei weighing on sentiment the yen has been strengthening. The index got hit on the back as a result. European markets, again, have been mixed this morning. The ftse down about. 4 . The xetera dax slightly higher. Its weaker for the cac this morning. And well be keeping an eye on the french banks. Also some of the swiss banks. The s p talking about a need for extra Capital Buffers to protect against the mortgage sector there. And ibex 35 is rebounding up. 3 today. Yeah. For the bond market, big focus, of course, imminently is this italian auction. Weve gone up 6. 75 billion of btps to be auctioned. 3. 5 billion on a three year. Italian ten years lower at 4. 45. 1. 50 billion and 130. 30. The first since may, 2011, that weve had longer dated debt in ifra italy from that amount, as well. Yields will rise a little, around 8. 15 with the yield we got in midjanuary. Spanish yields are lower again, 5. 25 . And in the u. K. , yields higher, 2. 14 . Looking ahead to the quarterly Inflation Report. That from the bank of england comes out at around 20 minutes or so. Well get the snaps on that. So thats are we stand now on the debt markets. As far as currency markets, a volatile session for the ten in. Weakening and then strengthening coming out around comments in the g7 and g20 now. 93. 28. Slightly weaker, away from that may, 2010, high. The euro dollar firmer, 134. 70. Thats where we stand in europe. Lets bring you up to speed with the asian session. Before we get into the u. S. , we have more after the Chinese New Year holiday. Yeah, nice to see you again. Its a largely green day for asian borses. Ahn an shares had a strong finish. The fx 200 closed above the 5,000 level for the first time in 4. 5 years. Local stocks were boosted by positive earnings and strong data showing Consumer Confidence at the highest level in more than two years. Commonwealth bank of australia gained 2. 4 today after the countrys largest lender posted a higher cash profit and raised its dividend. But japanese stocks ended lower by 1 amid a currency kenzie and the g7 tensions and the 2k37 voicing concern about the yen. Analysts twha analysts warn that markets will stay volatile. Olympus eased a nearly 3 after cutting its fullyear earnings forecast on sluggish sales of digital cameras. But daiichi Life Insurance rose 3. 5 after Goldman Sachs lifted the firm listed the firm as its top pick. Elsewhere, korea, the kospi finished higher by 1. 5 led by strong gains. Automakers, Technology Shares and financial stocks. The sensex gained. 25 . This helped by bargain hunting in some blue chip names. Meanwhile, the hong kong markets will only return to trade tomorrow. Most remaining closed until the end of the week. Back to you. Thank you very much indeed for that. Thats the last out of asia. Turning to the u. S. , president obama used his state of the Union Address last night to challenge a divided congress to make government work for the many. The president touched on a wide range of issues. Cnbc has more from capitol hill. Reporter good morning. In the first state of the Union Address of his second term as president , barack obama tonight said that it is the task of our generation to reignite the engine of the american middle class that drives the u. S. Economy. He returned again and again to economic themes throughout the course of this address including a call for an increase in the minimum wage. A lot of other items in here for businesses to chew on in the day after including mentions ensuring of jobs, talking about app apple, bringing back mcintosh. Namechecking, a host of Companies Including ibm, ford, and caterpillar among others. Of course, a lot of this speech talked about social issues, immigration, gun control and the like. Again and again, the president returned to the theme of the economy saying weve got to do everything that we can to create jobs. He was followed, of course, by marco rubio, the republican senator from florida, who a lot of people view as a potential 2016 president ial candidate on the republican side. Two men at very different stages of their political careers. Rubio delivering a different vision, saying Economic Growth doesnt come from washington. So guys, a lot here to chew over on the day after. Back to you. Reporting from washington. Heres a look at companies that were namechecked in the state of the Union Address last night. A lot of the big ones president obama talked about bringing operations and people back on shore. Not necessarily seeing major reaction in frankfurt trade to that. But 3d systems, something. The president did talk about 3d printing when it comes to innovation and technology. Interestingly, shares down 2. 3 . 3d printing is amazing. Will change our lives. Are you saying that because no, i generally think it is absolutely amazing. We ought to get one of those printers on set and have someone show us they think it will be able to redo organs. I know. Creepy. This is where i get creeped out. Well take a break. Still to come, italy testing the debt markets for the first time in nearly two years. A 30year bond auction trying to raise 6. 75 billion in total. The results as soon as we come back. [ male announcer ] any technology not moving forward is moving backward. [ engine turns over, tires squeal ] and youll find advanced Safety Technology like an available headsup display on the 2013 lexus gs. Theres no going back. Were waiting for the results of the italian bond auction. Christian ahead of the bank. Thanks for joining you. Are markets fairly relaxed going into the auction about the election . Were getting it now dont answer that. Well come back to you in a second. Italy sold 1. 34 billion. These are index linkers that were getting shy of what they were hoping sorry, the floating rates. Weve got 1. 4 billion of those. And can i get im not so interested in the floating rates. Looking for the 30 year. The long bond there the threeyear as well. Sorry, were waiting for the bte results over the floating rate. As you were, my friend. Thank you. Sorry, were waiting for the results from the btp. Look, are investors relaxed now about the election . Markets are certainly not relaxed about the elections. Yields have been climbing lately. Seems that markets are less worried about catastrophic breakdown of relations in the g7 with the Exchange Rate communique we had yesterday. So i think overall its a bit risk again. But the elections are weighing sentiment. The last polls on friday showed the center left clearly in the lead. Isnt that sort of the favored result . That would be the favored result. But if you extrapolate the trend that weve had over january with the catchup and grillo, the fivestar movement showing stronger in the polls. If you extrapolate that trend for the next two weeks until next weekend when they have the elections, berlusconi might win. I think thats something that, of course, you have to price in at least as a sizable risk. And we see that yields, for instance, tenyear yields, have been pretty much climbing in parallel with berlusconis share in the vote. So there is an impact. But its still fairly sanguine. People dont think that berlusconi wins. Even if he wins that he would stick with most of the reforms of the government. Down from 1. 39 from 2. 12. You know, they didnt quite sell all of the range that was planned of that 1 billion to 1. 5 billion. 1. 4. Your reaction . Well, it seems that markets are taking a bit all of these problems that weve had in italy, a bit in their stride. Weve also had Industrial Production data which at least on the face of it looks slightly better finish the eurozone. We could be heading into better for the eurozone. We could be heading into a better economic period. Also for italy. So its a bit of a mixed picture. I think what supports is the ecb, what it supports is also the global economy. But i think there is nervousness about the italian elections. I dont think anybody really wants to commit too much ahead of these elections. Okay. Christian, stay with us as we wait for the results from the three and 30year paper. I keep calling them linkers. Theyre floating rate debt. Christian shultz will return with us. Well take a break. I said link, i meant floater. I planted it plant the seed. President obama vows to jumpstart the economy in his state of the Union Address. Societe generale slides after profits miss forecasts. G20 policymakers tackle fears of a global currency war meeting in moscow. To grow, we have to boost our social media visibility. More likes. More tweets. So, beginning today, my son brock and his whole team will be our new senior social media strategists. Any questions . Since we make radiator valves wouldnt it be better if we just let fedex help us to expand to new markets . Hmm gotta admit thats better than a few likes. I dont have the door code. Whos that . He won a contest online to be ceo for the day. How am i supposed to run a business here without an office . [ male announcer ] fast, reliable deliveries worldwide. Fedex. There. I said it. They dont have pictures of my kids. They dont have my yoga mat. And still, i feel at home. Could it be the flat screen tv . The not so mini fridge . The different free dinner almost every weeknight . Or maybe, its all of the above. And all the rest. Am i home . Nope. But it almost feels that way. Homewood suites by hilton. Be at home. Reminds me of our network before cdw virtualized it. How . Cdw and hp networking implemented a Virtual Application Network that reduces the time to deploy cloud applications from months to minutes. With fewer bottlenecks like this. Finally. Charles client golf. Aim for the lake. Really . Right. We are just waiting for the results of the italian auction. Looking to raise 3. 3 billion threes, one billion of one year, 15 and 30 year. We havent had results out. As soon as they come out, we will get to it. Beforehand, though, were going to go over to steve whos at the g20 to talk currencies. The yens had a volatile session. Ill apologize in advance because when we get the result, i will interrupt you. For now its all yours. By all means interrupt me. Im used to jeff kgeoff cutmore. Lets talk about whats going on here. At the center of the debate going into this g20 meeting on friday and saturday is of course talk of currency war. The ecb at the center as is the bund is bank. Theyve said theres too many people trying to talk down currencies. This is a huge issue. The bundes bank has a longterm agenda about macro stability, about missing markets, how to replace what are missing markets and create more stability and less volatility. Weve w that in mind, delighted to see director of the Financial StabilityDepartment Joins us at the bundes bank. Thank you very much for joining us. With all the talk of currency wars, perhaps we lose track of the need for a longer term architecture which will give us Financial Stability. Give us your templates for the longer term picture. I will give you my personal opinion. I think it is important to think not only in terms of emergency measures now build up a sustained and longterm, stable newark texture. One important element of this is to overcome missing markets, to build local currency bond market in emerging market countries. And developing countries. This has got a lot of highlevel political support. Its not so glamorous, but it is important. What is the reason why our head of state supporting this g20 framework. The commission is the first question is markets supporting or hindering, sorry, hindering the real imbalance. The Financial Markets have to support an effective Exchange Rate. We have a lot of cabinet flow, savings from emerging Market Conditions due to missing markets into, say, United States. Its difficult, as mr. Bernanke said, that this all this caused difficulties for the transmission offer, Monetary Policy through the long term interest rate. The second point this is a very important point. For me, the most important is local currency bond markets, they contribute to reduced currency and maturity mismatches. That means the emerging countries now are even more to lend long term in domestic currency. So they are less about an interest Exchange Rate. A third point, also on the g20 agenda, local currency bond market is a very important precondition for the sequencing of capital accounts. So just china has published the pboc has just published a roadmap on its internet web site. And the local currency bond markets of course play a very Important Role for the sequencing of accounts. Would that take away the ire, take away some of the oscillation and the currency market war debate if indeed we have local currency markets . Do you think this is an effective tool for taking away some broader concerns which are grabbing so many headlines . I think overcoming the missing markets is a longterm challenge. And of course make Exchange Mechanism more effective. Here in russia, theres another important aspect. The longterm finance. Im going on interrupt you there. Thank you very much indeed for your time. Weve just had those italian bond market results. The key local bond market, as well. Thank you very much for laying out the longer term action texture architecture. Director at the financial stable department of the bundes bank, as well. And lets get the key italian bond auction results with ross. Thank you very much for that. Lets concentrate on the three year first of all. Theyve sold just about the maximum target, 3. 449 billion. Looking for 3. 5. The yield, 2. 3 , 1. 8 in january. So were back to the levels that we saw in december. Theyve sold 863 million of the 15 year, laid bit lighter than we might have thought. Looking for about a billion on that. The yield on that 4. 55 , it has come down versus 4. 75 in december. And the bid to cover 1. 59 versus 1. 98. And the 2040, the 30 year, theyve sold, theyve sold 888 million. 5. 07. Lets add that up. 3. 5. 8. 5. 8. 8. 5,. 8,. 8, and 1. 75 in floating notes. Whats the total . 16 1. 6, 4 point seven. Yeah. Were up to about the total amount there targeting of 6. 75, what im getting. Looks high. Yeah. Christian, right, ill recap. Yields on the threeyear money 2. 3 . 1. 85 in january. A bid to cover, 1. 37 versus 1. 45. They sold 860 million of the 15 year and about 888 of the 30 year. What do you make of that . Well, i think given the circumstances, that look like a pretty solid result to me. Given that we have these elections in 1. 5 weeks time. Given that the trends are that this could be a close election. I think its thesy ae y t are solid results. The bid to cover ratios between 1. 3 and 1. 5. Pretty much what weve had over the last months. So i think pretty solid. Actually almost surprisingly solid if you think about all the discussions we had last week about berlusconi. Nevertheless, all the bid to covers below two. Is that significant in the case of the threeyear bid to cover under 1. 4 . Well, that might be a little bit of tension showing up there. As i said, it would be surprising if so close to the elections we wouldnt have at least a little bit of caution on the side of investors. But overall, still i would say this is solid. We have to keep in mind that in italy the ratios are lower than, for instance, in spain where we are used to these 2, 2. 5, 3 leverage of the bid to cover rat ratio. Christian shultz sticking there with us for the preview and the reaction as we wait for that to drip out. Senior economist at berenberg bank, thank you very much. Thank you. Right. Meanwhile, bank of england me mervin king set to deliver an update. And still to, come full analysis of president obamas state of the Union Address. And jack lew goes to capitol hill for a grilling from the Senate Finance committee. Plenty more to come. The bank of england governor mefb inking due to deliver the quarterly Inflation Report mervyn king due to deliver the quarterly Inflation Report. I have the original report from february, 1993. That report was born in challenging times. When i presented the report in february, 1993, unemployment had just reached its peak of three million. Although we didnt know it at the time, a recovery was underway. 20 years later, after a financial crisis and deep recession, unemployment is again much too high. And output is still below its level of five years ago. There is cause for optimism. Today, too, a recovery is in sight. Although output has been broadly flat for the past two years, that masks a more encouraging underlying picture. The bulk of the economy, primarily manufacturing and services, actually grew at the steady if rather unspectacular rate of 1. 2 over 2012. Similar to the headline growth rate of 1. 5 in the United States and considerably stronger than the consensus expectations for growth in both japan and the euro area. The weakness in large part reflects sharp falls in construction that are unlikely to be repeated in 2013. The u. K. Economy is, therefore, set for a recovery. That isnt to say that the road ahead will be smooth. This hasnt been a normal recession, and it wont be a normal recovery. Our economy faces big challenges, stemming from an abrupt and substantial reassessment of future economic prospects triggered by the financial crisis. Downward revisions to households and businesses, expectations of future incomes, and an increase in uncertainty have reduced private demand at home. Heightened uncertainty about the solvency of bank has led to a reduction in the supply of credit. The same factors acting abroad have resulted in fallen demand for our exports. Those are the faces that have shaped the economic landscape since 2008 and continue to shape the outlook in this Inflation Report. The committees overall judgment about the outlook for Fourth Quarter gdp growth is summarized in chart one on page six of the report. As usual its based on the assumptions the bank rate follows a path implied by market Interest Rates and that the size of the asset repurchase programs remains at 375 billion pounds. Growth is likely to be weak in the near term, but further out a continued easing in domestic Credit Conditions supported by the banks Asset Purchase Program and the funding for lending scheme together with the stronger global backdrop underpin a slow but steady recovery in output. Inflation was remained under the target and remained at january in 2. 7 . Increases in University Tuition fees and Domestic Energy bills largely reflecting administrative decisions rather than Market Forces have added to inflation recently. These and other administered and regulated prices contributed around 1 point to inflation at the end of last year, more than double the historical average. They are likely to push up on inflation over much of the forecast period making the challenge of bringing inflation back to 2 more difficult. Okay. The committees best judgment for the outlike for cpi inflation is summarized on chart three in page seven of the report, based the same assumptions it Monetary Policy as chart one. Inflation is likely to rise flower in the near term and more in the near term and reflecting sterlings recent depreciation and persistent contribution from administered and regulated prices. Thats mervyn king, governor of the bank of england. Well stay with that. Interesting, basically ad milting that outputs going admitteding that outputs going to stay weak and sterling low declining this is interesting here. 150 156, he came out and said we are clearly on the path to recovery despite the weak output. Theres a cause for optimism. Recoverys in sight. Flat output on more encouraging underlying picture. I think the trouble is he talks about inflation being stubbornly strong. Theres talk about how gdp will be back to trend for several years. So there may be a sense for despite all of this, that the bank of england is still expected to be in basically accommodative stance. Yes. But the the tone of that was they wouldnt be necessarily doing any more than theyre currently doing. Bear in mind that he wont be here come the summer. I think the most something thing here is hmervyn king, different from previous quarterly reports. He laude out and gave an a laid out and gave an assessment wherever we are with the economy now. It was an optimistic tone. Im actually wondering whether some people have compared the difference between him and kareny is that king has been overly pessimistic, has not talked directly to the man on the street. That appeared to me to be talking directly to the man on the street and saying, chum, things are going to be all right. And or hey, chum, heres a broader sense of where we are. You might be tempted to think the above target inflation had tighter policy but he says they will continue to look through above target inflation. So i think trying to lay the broader case to, as you say, the public as to why theyre not thats thats interesting. I think thats in reaction to carney. Carney talked about you need to talk direct. And hes optimistic talking direct i think theres i dont know. Im putting it out there. Im wondering as it seems theres Something Different with mervyn king. Is it maybe hes coming to the end of his term, feeling sentimental. Speaking of sentiment, president obama used his state of the Union Address to challenge a divide congress to make government work for the many last night. The president touched on a wide range of issues including gun control and immigration. The hourlong speech focused mainly on the economy. Hes backing higher taxes on the wealthy and more spending on infrastructure and manufacturing jobs. The president also proposed hiking the u. S. Minimum wage to 9 an hour. Tying it to the cost of living increase. He urged lawmakers to resolve the budget battle that will result in billions of dollars in automatic spending cuts come march 1. Lets set Party Interests aside and work to pass a budget that replaces reckless cuts with smart savings and Wise Investments in our future. Lets do it without the brinksmanship that stresses consumers and scares off investors. The greatest nation on earth the greatest nation on earth cannot keep conducting its business by drifting from one manufactured crisis to the next. [ applause ] we cant do it. On. On Foreign Policy the president says he will withdraw half of the u. S. Troops through the year and warned north korea about the Nuclear Weapons program. He talked about a transatlantic trade agreement. A spokesman for germany is saying there will be a framework for tafta in place by july. Joining us now for more, principal of at strategy international. Good morning, your initial reaction to the state of the Union Address. Well, outside of the gun control part which was emotional, and i thought the only time that the president really related to the american public, i thought it was a complete snooze fest. It was very boring. I would have hoped that after winning reelection the president would come out and try to soar the country thats in a mid lynn recovery. You saw gdp retreat. He went through a laundry list of typical liberal programs without talking about how hes going to pay for them. If anybody really believes that all these programs are not going to cost a dime, theyre all going to be effectively deficit free, then ive got ive got candy for you. Thats not going to happen. I was disappointed in the speech. Very disappointed. What did you think about the response from marco rubio . I thought senator rubio did a very good job. He was a good face for what the post 2012 gop should be. Bigger tent republican party. A party that attracts legal immigrants, that has a stance on illegal immigration and deciding that issue. And a party that doesnt shut off anybody from within itself. I thought he did a very good job. He also did a good job contrasting the president s points by giving things away for free versus mark rubio talking about working for things and pulling yourself up by the bootstraps like his family has done. So i thought it was a very good performance by senator rubio compared to some of the other responses, it was even better. The general comments that both the president and marco rubio laid out were not that surprising. It was at party lines. Did you hear anything to suggest, for example, prospects have gotten to the nittygritty here, of a deal going into the sequester, march 1. The continuing resolution that needs to be passed by the end of the month . Amid the laundry list discussion and kind of soaring rhetoric. What about the practicalities of avoiding the fiscal hit . Theres going to be a deal. I think weve seen this time and time again throughout the presidency. The president actually himself drives the situation to the brink. He really take part of the brinksmanship that he talked against then a deal gets done. Hopefully we see a budget in place, something that hasnt happened in over three years under the president s leadership. I have confidence that a deal is going to be in place and were not going to go over the fiscal cliff. I think if it were going to do so it would have happened in december. The fact that did not shows its not going to happen now. President obamas choice, Tim Geithners replacement, jack lew, has a hearing before the Senate Finance committee at 10 00 a. M. Eastern. Hell amy face questions about his tenure at citigroup amid the financial crisis. Republicans will grill him about an investment in a kay splands Venture CapitalCayman IslandsVenture Capital fund. Lew, former chief of staff and budget director, expected to be easily confirmed, though. Or is he, boris . He is going to be confirmed. He is qualified to be treasury secretary. What youre seeing here is the other side of the coin of the social and class warfare the president has taken on since becoming president. Actually the location where that Cayman Islands fund was headquartered was called a tax scam by the president. Youre seeing that he went after people who have any money offshore. I think all of us know that most fund or at least a large majority of those funds have some sort of headquarters or location offshore. Youre seeing that come back in the president s face. There is a measure of hypocrisy there. Thats whats going to be outlined in the hearings. Bottom line, twice director of the omb, jack lew is qualified to be treasury secretary. He will be confirmed. But we should look and see deeper beyond this and talk about why is there social and class warfare rhetoric coming from the democrats, and is it necessary . I think the situation shows that its absolutely not. And theyre going back in their faces. Never afraid to make his views. Boris epstein there joining us, again, Political Columnist for usnews. Com. Thank you very much. Comcast purchases the rest of nbc well ahead of schedule. Snapping up the iconic 30 rock headquarters, as well. Yep. Well discuss the surprise deal when we come back. [ engine turns over ] [ male announcer ] we created the luxury crossover and kept turning the page, writing the next chapter for the rx and lexus. This is the pursuit of perfection. Im glad we got cdw and cisco to design our data center. Yeah, the cisco ucsc series server, with the intel xeon processors, help us scale smoothly, like a perfect golf swing. How was it before . Clunky and full of unnecessary impediments. Like charles swing. I heard that. All stations come over to mithis is for real this time. Step seven point two one two. Verify and lock. Command is locked. Five seconds. Three, two, one. Standing by for capture. The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. Welcome back. Comcast is taking full control of us, nbcuniversal, buying the rest of g. E. s stake in the joint venture for 16. 7 billion. The deal is two years sooner than planned. In addition, comcast will spend 1. 4 billion on real estate. That includes the floors nbc uses at 30 rock and cnbcs headquarters in new jersey. Comcast is boosting its dividend by 20 and will buy back 2 billion in stock. G. E. Will speed up its buyback to 10 million. On fast money, Brian Roberts says the timing was right to make the deal. Weve had a good couple of years, and we think the future were long term, steady, patient. Ultimately we wanted to own 100 . We wanted to act as one company. We work on projects like sim foni which we work between the Cable Division and nbc. And within all of the various Properties Within nbc universal. Big news for us big news for us. Were happy, were very were happy shares of both companies. Win win for everybody. Tremendous. Is that ever possible . Sometimes it is. Still to come, Lloyd Blankfein delivered his state of the union speech to cnbc. Why does he think the u. S. Is on the verge of a bull market . Stay tuned. A remirnd of whats on the agenda in the United States. Inport prices out at 8 30 eastern. At 10 00 a. M. , December Business inventories. We hear about the economy and Monetary Policy at around 11 00 a. M. And in his own state of the Union Address, Goldman Sachs james blankfein talks about washington dealing with the ongoing budget battle. Speaking on street signs, he cited low Interest Rates and a Strong Energy situation that can drive jobs and a Housing Market rebound as reasons to be bullish. We have had a lot of problems. We havent chewed through all of them. We havent even chewed through all of part of them. Weve chewed through a lot of it, and you know, nobody sounds a gun or blows a whistle when things have gotten better. Sentiment is lagging. Its still slow. But i think the market as a whole, no one in individual, but the market as a whole is looking ahead and said with these advantages, i think the we could be on the threshold of a bull market. On that note, were joined now by founder and ceo. Do you agree . I do agree. I just have one thing that i do not like about this current rally. Its that the nasdaq 100 still lags. And i deny the fact that yesterday the financials, industrials participated in new highs for the year with the s pment usually when you s p. Usually when you see the divergence among the indices and sectors in the s p, a lot of times that says that in the short term we could be looking at sideways action, a pullback. I agree on the big picture. The longterm investor, the market looks very good. Talk about whats happening. Its been a lagger, apple has a lot to do with that. What is the broader signal that youre taking . To me you look at the nasdaq. Toward the end of last year, you leak at the charts in the nasdaq you look at the charts in the nasdaq 100. The sfuchs what the future is what i follow. We know that apple is a downer to that. But google has been a big upside and should be helped with the nasdaq. The way the action has been within the nasdaq has not been performing like the dollar and s p. And as traders, we like to see everybody going together. You know, its you want to see everybody come to the party on the rallies. When theyre buying financials these days, and when theyre buying industrials, they dont seem to be wanting to buy technology. When they are buying technology with industrials and financials, the rallies are strong. You know, were getting, you know, farther legs up on the rallies. We wanted to ask you, too, about shares of comcast, g. E. On news of this deal. When you look at the chart, do you like what you see . Both responded to the upside in trade after hours. I can tell you that when i looked at the chart, whats something about the comcast chart yesterday was theyve been in a selloff off the recent high. They were getting to the average of 58. 21 and are daily around 38. As they were dipping, getting close to the moving average, they held and rallied into the close. Then sure enough, you get good news from headlines at the end of the day. Any time headlines work with holding with technicals is when you get the strongest moves. To me, that chart looks bullish. Okay. Well leave it there. Founder and ceo of emoney executives joining us from naples, florida. Not to be confused with naples, italy. Which naples, florida, is also nice. Westminster dog show took place last night. Why should your dog be best in show . Jeff tweeted a picture of his baby. Phillip tweeted a photo and said he should have been best in show, too. John tweeted that his afghan hound has what it takes. Shes a champion bloodline inported from canada. Thats it for todays show. Well leave you with a shaky dog story. Squawk box next. ] ive been training all year for the big race in chicago, but i can only afford one trip. And i just found out my best friend is getting married in l. A. Theres no way im missing that. Then i heard about hotwire and i realized i could actually afford both trips. See, when really nice hotels have unsold rooms, they use hotwire to fill them. So i got my fourstar hotels for halfprice men hotwire hotwire. Com announcer saig on car rentals too, from 12. 95 a day