Ship. And the spanish jobless rate falls in may. Its the fourth month of declines but 4 Million People are still unemployed. Inflation numbers are due in, which are key for the ecb. Youre watching Worldwide Exchange, bringing you Business News from around the globe. Hello and a warm welcome to todays edition of Worldwide Exchange. Its the first or second trading day of the month of june. And as we start today, the u. S. President barack obama has arrived in warsaw. Poland is his first stop on a fourday tour of europe. Today hes taking part in a celebration to mark 25 years since poland emerged from the communist bloc. The white house has said u. S. Will hold up poland as an example in ukraine. He will also meet the new president of the ukraine. Now, while that is going on, the Gas Companies of ukraine and russia are considering a repayment plan for kievs outstanding bill. If signed, this deal would also guarantee europes supply until 2015. Meanwhile, fighting between Ukrainian Government forces and promoscow separatists in the east of ukraine continues. Kiev says at least five people were killed in the clashes. Russias called an emergency meeting at the United Nations and called for a stop to the violence, a move which has angered ukrainian officials. The very fact that there the resolution on ukraine is tabled by Russian Federation is cynical and immoral. A country that has recently occupied a part of the territory of ukraine, a country sponsored terrorism and unrest in the eastern regions of ukraine now offers a settlement plan. Joining us with his strategy views is brian singer, head of the dynamic allocation Strategy Team at william bear and company. Thanks for joining us this morning from frankfurt. Its hard for normal investors to price in geopolitical risks because theres so many unknowns. How do you even begin to think about that or can you . Yes, when we think of geopolitical risk, the first thing to remember, its a tool we use in a broader fundamental framework. We try to understand what things are fundamentally worth and invest accordingly. Unlike most of the cold war period which was geopolitically stable, we have a geopolitically unstable environment. In this environment, we have to use game theory so understand the negotiations of leaders and how they might use their powers in the negotiation and how that might influence financial markets. Thats very important today, for example, in europe with the european parliamentary elections just having passed, now the ecb making decisions later this week. Yes, are those more important to you now than events in ukraine . You talk about obviously were negotiating in ukraine, theres a cause of risk of mood ahead of the elections. Do we think theres a stable path out . Well, the ukraine has been interesting and its unfortunate sometimes that players have to play with the hands that theyre dealt. And in this environment, we perceive that in the course of the negotiations Vladimir Putin has been dealt going into this a fairly strong hand. But that probably hasnt been the primary influence on the european parliamentary elections. The primary influence on the european parliamentary elections have been the austerity, the influence of austerity and the influence of low inflation and in some instances in the peripheral countries disinflation that have led to more radical populous parties winning, different parties in greece. That changes the dynamic as we go forward with respect to how each of the countries will act in the negotiation. Germany is likely to be a little bit more accommodative in the negotiations as we go forward. And the European Central bank will oddly enough ill use the same term, will also be accommodative but in a monetary sense as we go forward. These will be powerful supporters of spanish equities, italian equities and from our perspective will undermine the strength of the euro. Its what led us to take a large short position in the euro and very large long positions in italian and spanish equities. Hang on a second. If things are going to look better for italy and spain, isnt that going to mean more people buying italian and spanish debt and the flows support the euro . Its interesting, when you do think about the broader perspective of debt and equity in the peripheral countries, it is the case in spain, for example, that the Financial Sector is a large sector. That will ben from what we believe is happening at the European Central bank and the stance draghi will take in expanding Balance Sheet as we go forward. Yields have declined in spain and italy. It actually provides a unique opportunity to take compensated risk but also minimize risk as well, by going long in the equity markets in these countries but potentially going short in their debt markets. The reason is, the equity markets are priced below fundamental val use but the debt markets are actually relatively expensive in those countries and they provide a way of hedging, if you go long the equity markets and short the debt, being positioned on the right side of the fundamentals but at the same time taking a position that can reduce the overall Systematic Risk that comes from those exposures. Its a very unique situation that you have an opportunity to do that in the current environment, especially as we look at the negotiations across the eurozone between germany, italy and spain and the potential easing Going Forward, not fully priced in in our mind by the European Central bank. Interesting stuff, brian. Youre basically saying the spread convergence has run its course for now. Stay there. Well come back to you. Weve had numbers out of italy as well. Weve been talking about that. Italian april Unemployment Rate flat at 12. 6 on the month. Youth Unemployment Rate has risen to 43. 3 in april. And the Unemployment Rate up to 13 the 6 versus 12. 8 in the First Quarter of 2013. The First QuarterUnemployment Rate in italy. The president speaking dune after touchen do unin poland. Lets listen in briefly to some of those opening comments. It is a commitment that is particularly important at this moment in time. We just had a chance to meet some Outstanding Service members, both americans and pols who serve and train here together. Theyre part of the backbone of an alliance and part of the long history as mr. President alluded to of pols and american soldiers Standing Shoulder to shoulder for freedom. Were grateful for your service. Given the situation in ukraine right now, weve increased our american presence. Weve begun rotating Additional Air troops and f16 aircraft into poland. This is going to help our forces train together. Its going to help our forces support nato air missions. Its also part of natos stepped up presence across central and Eastern Europe. I look forward to announcing some additional steps later today. So president , it is great to be here. I want to thank you for welcoming me. Assen froms and allies, we stand together united, together forever. Thank you so much. That is the president of the United States beginning his fourday tour of europe. As i say, hell be speaking to the new president of ukraine a little bit earlier. European equities are softer today. Decliners currently outpacing advancers by 63 on the Dow Jones Stoxx 600. The ftse was up 20 points, the dax up 11. This morning, ftse 100 down. Off 0. 2 for the xetra dax. The cac current is fairly flat. Keep our eyes on treasury yields, 2. 42 was the 11month low yield on the tenyear last thursday. Were up to 2. 53 . That did support the dollar. Well come on to that. His italian yields back below 3 as you can see, interesting what brian was saying about that short italian debt, go long of the equity market. Well come back to him in a few moments. On the currency markets, the fact that treasury yields have risen has given a boost. Euro dollar on the 1. 36 level. We got down to that during the session yesterday. Not far away from 3 1 2 month lows of 1. 3586. Inflation coming out later. Gemmen annual inflation looks to be weakest in years in may. And dollar yen, 102. 32 is where we stand. Well keep our eyes on sterling, 1. 6765. Another big jump in house prices which well come back to fairly shortly with nationwide. Thats where we stand right now as far as europe is concerned. Weve had the hsbc pmi out of china today. Lets get reaction to that. Sri is in singapore. Whats it telling us . Its hinting the stabilization, risks still remore, especially the iron ore prices. Telling us all is not well in the chinese economy entirely. Eunice will have more on that conversation about that data point. I want to talk about the Japanese Equities session. The nikkei. Japans Health Ministry has completed a review of the pension system. This is seen as a step forward of the Government Pension Investment Fund, the worlds large e largest Government Pension Investment Fund at 1. 26 trillion. This figure of 20 allocation versus 12 currently is being mentioned. In fact, the head of the Investment Committee said the 20 allocation isnt too high. It really looks as though the pension fund, the Government Pension Fund is allaying the ground work here. It would require a big change in mindset for the funds to deploy more assets with, more of its assets into the equities market. But the Abe Administration certainly seems to be trying to push them in that direction. If that does happen, that could be quite a big leg up. It could mean that the equities markets get quite a big kicker as a result of that. Were waiting for material evidence of that and some finalization from the gpi. Elsewhere, broadly mix, the bond based sensex liked the news that the rbi was on hold. And theres also movement to unlock the credit taps there in india as well. The market up by almost 200 points. Elsewhere, the s p asx on the defensive. The reserve bank of australia as widely expected kept rates unchanged at 2. 5 . But glenn stephens, the governor still trying to lean heavily on the aussie dollar that he thinks is too top heavy. Thats where we stand in the asian session. Sri, thank you very much for that. Well come back to you. As sri was saying, chinas manufacturers turning in a better performance in four months in may. Its still in contraction mode. This pmi number delayed of course for a day. Because the holiday yesterday was lower than the flash. 49. 4, the flash was 49. 7. What is behind that figure . Eunice has more details for us from beijing. Hi, eunice. Nice to see you. Interesting here, whats this telling us about the export sector and the domestic part of the economy . Well, the reason why there was that difference was because of the stocking figures and the inventory. Overall, people find these numbers rather encouraging. The economic the economy, a lot of people believe, is starting to stabilize, though it is still in a fragile state. In terms of that hsbc pmi, everybody was focused on it. Its a private number, a key gauge of the Manufacturing Sector. And it came in at 49. 4, which is an indication that the Manufacturing Sector is improving although it is still contracting. Much of the strength we saw in that figure was from external demand. There was a good pickup in the export orders, the new orders, all looked pretty good. But what wasnt so encouraging was domestically, people are still very concerned about the property sector. We see a lot of weakness, some falling prices. Late last week so people are very concerned because the property sector is such an important engine for the economy here. Now, Going Forward, a lot of economists still are concerned how the government is going to be hit, able to hit its annual growth target. Because of that, even though there were some people who were encouraged by the fact that there were mini stimulus measures which a lot of people said probably kicked in the over the past couple of months, theres still a general belief that the government is going to have to come in with even more targeted stimulus measures in order to prove up the economy. Ross . Well see what happens. Were worried about how were worried about the Housing Market. There are interesting comments out from the efo of china last week, eunice, saying it could be like the titanic. Well, thats yes, there is a lot of fear right now in terms of the pricing numbers swell the sales. A lot of people have been very concerned about the overall Property Market because it is such a key driver. It drives the commodity markets, construction and even in the services pmi we saw weakness in the construction sector for those jobs. So a lot of people are watching very carefully what happens with real estate because it does have a lot of ramifications for the rest of the worlds markets. Ross . Financial sector in particular. Thanks for that, eunice, always good to see you out of beijing. Well be talking about the Housing Market in the uk still to come. Also, what does apple have in store for consumers as it unveils new software at its annual developers conference. Moscow is being crowned the most congested city in the world. Well be joined by navigation gadget firm tomtom to find out which other cities are worse for traffic and more importantly, how to avoid it. As the nba playoff heats up, well take a look at the lucrative business of sneakers. Trainers, sports shoes, stay tuned to find out what brand still rules the court within basketball. If thats not enough, the latest poll on Scottish Independence shows a swing to the yes camp, cant Prime MinisterDavid Camerons latest pledges move the dial back . Well analyze key figures, next. Youre watching Worldwide Exchange. Frances foreign minister has weighed into the u. S. Investigation into lender bnp paribas saying a potential 10 billion fine would be unreasonable. Speaking to french television, lauren fabio said any fine should be proportionate and reasonable. He encouraged the u. S. To deal with the issue along with French Authority hes and not act unilater unilaterally. The french president Francois Hollande is set to come face to face with president obama on friday. Mexican authorities have reportedly widened their investigation into alleged accounting fraud at bantumx. A judge set a 6. 2 million bail for the ceo of the old firm. They say the Company Secured financing by using fake documents. Citigroup stock in frankfurt, down 0. 7 . And bill gross seems that he just cant catch a break. Morningstar says the total return fund from pimco posted 4. 3 billion in outflows in may which is the 13th straight month of investor withdrawals. For what has been the worlds biggest fund. They beat 7 of its peers and marked its best performance since january. Its seen nearly 60 billion in outflows in last year. Analysts chalk that up to weak performance, saying the fallout with pimcos former ceo hasnt helped matters. British foreign minister David Cameron promised to increase the spending powers of the Scottish Government if voters reject independence in septembers referendum. The conservative party says the parliament could ab countabbe a for some 0 of scotlands purse. The camp is making gains, it now suggests 36 of those polled ba backing independence. Polling expert john curtis, professor of politics joins us on set with helia brahimi. Lets kick off with you, professor. That poll we created hasnt moved an awful lot. That poll was not terribly surprising. The previous poll by that polling organization, the back end of february, was unusually low in terms of levels of support for yes. And we look at this poll and take out the dont knows. Then you get a clear idea of what these polls point to. Its pointing toward a 40 yes vote. Thats pretty much in line with the recent ratings of the other pollsters that are relatively pessimistic. There is, however, another group of pollsters, servation, panelbased, icm, which are coming in with much higher figures, typically around the 45 mark. No one at the moment is saying the yes vote will win. Weve had 56 opinion polls since february, since we agreed the wording of the referendum, question on the ballot paper. Only one ever puts yes ahead. Ethical questions were raised about that poll. At the moment, its, therefore, a case of the no camp, not mucking it up. Exactly. I think thats always been the case. Also, fending off the campaign. The truth is during the winter, the no side did show signs of mucking it up in the sense that if we go back to position before christmas, before the publication, the Scottish Government, the polls were showing quite clearly on average a 32 majority in favor of staying in the united ring dom. That has narrowed. Is there a problem that every time the worst thing they can do is send anybody from westminster to go up to scotland . The view is, i dont want somebody from westminste