europe's ailing economies after pumping ltro money in a the financial system. and we'll speak to the ceo of standard bank first on cnbc as africa's biggest lender by assets sees four-year profits rise by 23%. that's coming up in 30 minutes. a very good morning. you are watching cnbc's "worldwide exchange" with christine tan. i'm ross westgate. jackie will join us later from the united states. greece has seen a strong take-up of its bond swap offer. according to a greek government official speaking to reuters, the pace has been pretty good and the percentage of bondholders agreeing is what they describe as very high. private bondholders have until 2100 cet tonight to sign up for the debt swap that aims to wipe around 75% of the value of their holdings. reports suggest that so is far half of the country's creditors have agreed to participate. the government has 75% of bondholders to take part. it will announce the results at 7:00 cet tomorrow morning, that's 6:00 gmt. the commission has urged private bo bondholders warning the alternative would be much worse. olli rehn says it's an init dispensable element to assure the future stability of greece and the euro area as a whole. julian, chief u.s. economist at barclays capital, joins us are for the first hour of the program. there's sort of an expectation in the markets right now, a higher expectation we'll get over sort of the minimum thresholds and then it will be down to whether we sort of are going to have a collective action clause and whether that attracts cbs. how do you think it will play out? >> it doesn't look like a cac will be triggered and that will constitute a credit event, so that will be a whole new territory that we'll be in because to avoid that really you are talking about more than 90% participation which doesn't seem so is likely. it does seem likely we'll get to the 66% tlsh hold which is really crucial for giving the greek government any opportunity to deploy collective action clauses and, therefore, compel any investors not subscribing into the terms of the arrangement. >> should we fear a trigger or not? it's a question i've spent a long time wondering whether that's a good or a bad thing. >> that's right. well, the c it ds market exists. it's a big market. why not use it actually? if you try to avoid it in some te technical way, that actually could be very damaging for the market and that, in turn, can have other consequences because people will then try to find ways of increasing their insurance throughout the he mechanism. if that's being determined by the relevant committee, so be it. at least in terms of net exposure, the numbers don't seem to be so high. we'll see some higher growth numbers around there. a lot of people shouldn't hedge really. and what's more i think the markets had ample time really to anticipate and to discount this really. but, i mean, you're right. it is something we haven't had before, a developed market, sovereign cds credit event. so if it were to happen here, we just have is to be careful. it's certainly a reason for markets right now and of course many other factors. >> julian, high, this is christine. if we get a good result today, what's there to tell us there won't be a third bailout for greece? >> i think a third bailout for greece is actually going to have to be the case really. of course we're only just discuss i discussing here the second bailout but, you know, when you look at those projections that the troika has come up with, it's really on quite optimistic grounds they get to be government debt to gdp ratio declining 120% by the year 2020 and then by the year 2030 stalling to around 100%. but, you know, these were enormous numbers and i know a lot of investors out there wouldn't really want to put their toes back in a market unless that ratio is more than 50% or 60%. so that implies this is going to be a many year process. it's going to take a very long time. much longer, really, than just the second is program is going to be capable for and probably, i think, as well it's likely the public sector is going to have to have write-downs on its debt because the numbers are just so vast and when you consider that we're talking here about a haircut of 53% applied 0 to the 200 billion euros of debt that is is held by the private sector, despite that, still we're talking about very adverse projections for greek public debt to g dp over the course of the years because of the economic weakness it can still only get the ratio down from last year where it was probably about 170% or close to 170% down to 120% by the year 2020. >> yeah. christine, how has asia performed today? >> well, asian markets, of course, watching what's happening over in greece, optimistic we will get some is support from private equity, private creditors, that's lifting sentiment across the region higher. the shanghai composite is up 1.1%. the hang seng up 1.3%. overall what we're thtsing is there's a rumor apparently in the market today that the pboc might actually cut its rrr. it's a rumor, by the way, i must stress, that's lifting hashgts in greater china higher because of that. taiwan weighted index is up 1%. the kospi up 0.9%. the bok kept rates unchanged 3.25%. this particular market pushing higher and botch the key 2000 level. risk appetite coming back into this market in a big way. we have data, though, the economy shrank less than expected. data showed a larger than expected deficit. markets largely ignoring the weak data. australian market up 0.7%. in line with increased risk appetite. marginal gains there, 0.3% higher. ross, what does your heat map say? is it following ours? >> it is. mostly green. one hour into trade here in europe so after three days of losseses with stocks yesterday we continue with a slightly more upward tone today for european stocks. we're down about 1.3% before the play for the ftse 100. today we're up two-thirds. xetra dax up three-quarters. the ftse mib up over half a percent. a solid outperform er in paris n the back of their reports, so the stock is currently up over 9%. as far as bond markets are concerned, there's plenty to focus on. no change really expected. ten-year bund yields, we keep our eye on italy. a key test of the metrics. 4.8%. bank of england not expected to do very much today. more quantitative easing until may. ten-year gilt and treasuries as we look ahead to the employment report currently trading down below 2%. we'll keep our eyes on the sterling dollar. we had seen the yen weaker after that record current account deficit. dollar yen up to 81.44. the yen weak across the board. euro/dollar still in the range today with 1.3171 handle and brent still above $124 a barrel. nymex is $106.63. of course besides greece we're keeping our eyes, again, on the ecb and its monthly meeting. mario draghi expect ed to downplay any notions of a third bounce of liquidity as well as a signal the current interest rate of 1% is appropriate for now. they may not think so in countries like spain, portugal and italy. the second ltro, of course, all banks take up just under 530 billion yeuros in cheap loans. the result has been, as you might expect, a significant rise in overnight deposits which hit a record $827 billion on monday. still over $800 billion this morning so as yet those funds aren't being used for anything. meanwhile, the bank's balance sheet at the ecb has ballooned to over 3 trillion euros. silvia is at her post outside ecb headquarters in frankfurt. silvia, that balance sheet is a greater proportion of yeurozone gdp than the balance sheet of either the fed or the japanese central bank. how worried are people like mr. weidman about that? >> reporter: one could say why is the ecb still being criticized for not qe. they've qe'd enough as far as their own style of qe is concerned. and we all know what the position of weidman from the bank but from other brick countries like brazil with all of this mopey in the markets. that's a dangerous game indeed and what weidman has said is we have to be careful. we have to worry about how we get this money out of the market again. and i don't think he's very alone in that. he's maybe more outspoken. he plays the usual role. but i think the ecb is well aware of that, too. i'm very surprised that the markets are expecting another three-year ltro and another and another. the ecb made it quite clear from the word go, these are the two, three-year ltros you're going to see. that doesn't mean we're going to see another one but not anytime in the near future. and that's what politicians acknowledge, too. the german finance minister only said yesterday at a conference in italy they've bought us time, the ecb has bought us time, now it's time for us to do our job. >> silvia, stay with us. let's bring julian back in. what is the job thousand? you look at m-1 data in the last six months in greece down nearly 13%. 9% portugal, 8% in it lay. the latest data out of the likes of spain shows there will be contractions, 2.2% in spain. should the ecb be doing more for those countries? >> well, my view all along is they have to cut interest rates so why not cut interest rates at this stage? it might just take a little bit of the pressure off the euro which is still on the overvalued side and really the way out for the peripheral countries is clearly here really by exports. now that's already happening. the export growth has been quite good out of spain and, in fact, out of portugal as well as we've seen some recovery in greece exports here. but you really need, i think, to supercharge the export sectors in southern europe to enable them. the kind of fiscal consolidation you are talking about in these countries is still extreme and intense. for example, in italy 3% gdp fiscal consolidation is what the government plans just for this year. in spain not exactly clear after friday's announcement what it plans. probably something still of the order of 4% gdp, fiscal c consolidation. these are very, very large numbers. portugal about 5% of gdp. to help the countries get through this when their unemployment rates are surging, they really need, i think, to have a weaker euro. they can cut rates more. as well the ecb has to be ready to react to the program. really it isn't doing -- of course, at the moment, there's still the impact of the ltros really to be fact touring in here. clearly if you look it at the impact of the ltros, spanish banks bought 23 billion euros of debt in december and negating january. now the total financing needs of the spanish software for this year about 90 billion euros. so already just within two months -- and the italian banks bought over 20 billion euros in january. so this has certainly helped a lot, and i think you need to see interest the ecb perspective what's going to be happening as we go further forward. there probably will be more to come from this. >> silvia? >> reporter: well, julian, can the ecb do something to make sure that some of this money ends up in the so-called real economy? at the moment we clearly have a situation where the banks still sit on the money. either park it as the ecb or themselves but don't get it out into the economy and to some extent don't even get it out to each other that can become a problem with the economy stabilizing and fuel needed for mid-sized companies. >> this is, of course, the key question, silvia. the ecb wants that to happen. it wants had money to go out there and be used by banks to lend to corporations. but let's face it, if the banks are borrowing from the ecb they're borrowing at a variable interest rate and having to submit collateral from the ecb and there's a significant haircut being applied. so it's not so obvious that banks are going to take that money and then lend it out for five-year loans to the nonfinancial corporate sector. there's a much more important sector here, i think. a lot of the contraction in bank lending is really, i think, still being driven by demand and concern about the economic environment coming from the nonfinancial corporate sector. if you look even at spain now but particularly if you look at the uk and you look at germany, as i'm sure you are aware that there were huge surpluses now developing particularly this the uk, nonfinancial corporate sector. so they have the cash but they're not actually investing it right now because of the uncertain economic outlook. >> you talk about the bank of england. with the ecb, the ecb press conference we'll take and you talk about the bank of england expected to keep rates steady today at half a percent. there will still be questions about whether it will expand its asset purchase program in may qe, in other words. this week we had extraordinary news that halifax and other mortgage lend eers, as the bankf england extends its qe program, mortgage rates are going up. we have record petrol prices. we still have very high energy prices generally, food prices. the bank is hoping that the pressure will ease on the consumer. it's not going to happen if mortgage rates are going up, variable rates. >> it's a good argument, isn't it, for the bank of england keeping rates low for a very long time. it's been very interesting how so far in the uk though you have international standards at very high levels of household debt. at the same time the npo rates for households have been nonperforming loan rates have been quite low and that's been because, of course, most mortgages are based on short side interest rates and those interest rates are extremely low. so if they do start to rise, the gearing impact can really be quite significant. so the bank of england has to do all it can to keep interest rates low for a very long period of time. >> that's what banks are saying is since that went, the cost of funding has gone up regardless and why they're putting up mortgage rates. >> well, i mean, suddenly if the process were to continue, the bank might have to start contemplating additional measures, yes. but at the same time a lot will depend on the general financial environment where, of course, generally confidence has been improving. >> julian, stick around. christine, what's coming up? plenty, ross. you and i know coming up next we have shares of deutsche post watching their shares closely. they see sales and operating profit edging up this year. details after the break. welcome back. well, japan's increasing dependency on crude imports has swung its current account to a record $5.4 billion deficit this january. the world's third largest economy has been relying on overseas energy supplies because of nuclear power shut down following last year's quake and tsunami. japan has revised its fourth quarter upwards as companies ramp up spending thanks to a reconstruction lead surge in demand. julian, let me get your take on this. what's your outlook on japan? this is coming at a bad time, of course. crude prices are up at a time when the economy is trying to recover. >> well, that's right. i don't think it's all bad news, you though, for japan. if you look at some of the recent survey indications, particularly the ones that the government publishes, it looks like production in japan will be growing around 5.5% not annualized just in the first quarter of this year. so i think what we've seen in japan, of course, was the enormous impact of the earthquake but then there was a secondary hit to the economy that came about from the thai floods which dampened down things in q4 and in q1 quite a strong rebound coming through particularly in the auto sector as production gets back after the thai floods. things are looking more positive on the economic side. indeed, our own economists in tokyo have just today revised up their forecasts for g itgdp. although, you're right, it was a large deficit we had, remember, this is not an adjusted number. clearly japan is actually getting some growth still coming through on the export side and particularly the industrial sector recovers and this should come through into some stronger consumer sentiment data. >> julian, it's interesting because we have the strong yen still in play. so hopefully that would kind of offset the high energy costs. is that the right thinking here? >> yeah, that's right. although japan is still effectively in a deflationary environment here and there will be a lot of pressure, i think, on the bank of japan to be doing more. i would have thought it could well be in a position to be intervening further in foreign exchange markets but it doesn't really have a lot of appetite to be doing that right now. overall, i think, as i say, the economy is in a gradual recovery phase here, but suddenly what is going to matter a lot for japan is what happens in china going further forward and there, of course, are more uncertainties around. on balance it looks like there will be a gradual slowdown, a rebalancing of the economy more towards consumption away from investment. that in turn will have implications for which companies are poised to do relatively better as we go forward in the next few years. >> interesting to know. jew julian, thank you. the eads one of the top performers upbeat after strong demand are for jetliners. the aerodefense giant saw profits up 612 million euros which beat expectations. the firm has tubled its dividend and expects growth in sales and profits this year. up 8.5%. deutsche post sees sales in profits edging up. that as the group saw full-year figures fall short of expectations. patricia has the market reaction in frankfurt. hi, patricia. >> reporter: hi, ross. the market is at the moment focusing on the positive part of the message, i.e., raising dividends above that expectation. the outlook for 2012 was more in line with what the market did look for. so despite the stock rising about 20% over the last three months is still up about 3%, 3.2% round about for the shares. so we have the ceo mr. apple on the show earlier on deutsche post and i asked him about the challenges going forward in 2012. this was his answer. >> what is important is that we remain focused on helping our customers to improve their supply chain and then we see plenty of opportunities to grow our business. as i said there are no signals of a recession. >> reporter: well, we asked him also about the gdp down grade in terms of the forecast by china. he isn't worried about that whatsoever. so all in all they seem to be very good positioned to struggle with any kind of head winds going toward. the market is convinced about that one. and if you look, also, at what analysts had to say. raising price target to 17 euros a share, keeping a buy rating and also credit suisse of over 15 euros, 65, rate that go as outperform, trading at 1332. so as far as those two broker comments are concerned we still have upside moment for deutsche post. >> all right. thanks for that, patricia. more to come from frankfurt later. julian, we were going to talk about this later, but brazil cut rates more than most expected, 75 basis points. what does that tell us about the global economy which has weighed on investor fears this week. >> in a way i would view this as a bit of a positive. brazil does have a lot of scope to be lowering rates. they are still very, very high. at the same time i think we need more stimulus in the global economy really as growth transitions. china is going to be slowing down a little bit this year and is rebalancing more to foe can cuss on domestic consumption and that means things like education and health care. so it's going to be harder for some global exporters in that environment, ones producing commodities. demand growth from china is likely to be slowing in this situation. so it's important that other countries where they have room can generate demand and, by the way, germany should be in a position to be cutting taxes. it should really cut taxes significantly next year to boost consumes. the