Transcripts For CNBC Worldwide Exchange 20140603

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 Quarter Unemployment 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 Minister David 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 westminster telling me what to do. That certainly doesnt help. The intervention in the middle of february saying that an independent scotland could not share the pound did nothing to move the numbers. In fact helped to move the situation to where we currently seem to be at on average, around 57 no vote, 43 yes. Still a fairly healthy lead for the no side. Can i ask you, we went up to scotland. When we asked people in the street, there was a big difference between people id say, over 50, who had made up their mind. The demographic that was younger didnt seem, a to care or b, to know what their decision was going to be. Do you see a difference between age population . The big difference is essentially between those over 60 and the rest of the population. Those over 60 are essentially the people who became adults before the Scottish National party in scotland became a significant player are certainly much more likely to be no voters than people who are younger. In truth, the biggest gap is between men and women. In that poll that came out last night, amongst men, the position is literally 50 50. Amongst women, its 21 against. At the moment, it is women who seem to be more conciliatory. More risk adverse. Interesting. The consequences of independence are uncertain. Theres been a persistent gap. That gap at the moment certainly stands between the yes side and any strong prospect of them being able to win. Were 15 weeks with go, theres a suggestion that westminster may offer divo max kind of powers. What is the key issue . Is it currency in oil. The key issue is whether or not people think independence would make scotland economically prosperous . It is true that one of the ways in which the no side tried as it were to reduce the attraction of independence and to say you can have the best of both worlds is by offering plans of increasingly the taxation powers and the responsibility of the scottish parliaments. The problem is, however, the version that the conservists came up with is the third version. Theres the labor version, the democrat version and the conservative version. To some degree theres a question as to whether or not theres a credibility on the no side about their ability to deliver. I think in truth at the end if there is a no vote, if its a narrow no vote, theyll feel forced to deliver. If theres a large no majority, it might begin to go on the back burner. It will be a decision essentially for the next uk government after the general election in 2015. They keep giving more power to scotland. The more powers you give away, the bigger the question becomes. The more the question becomes an issue, undoubtedly. There was a Government Commission which came up with an idea trying to deal with this which seasonally said in those bills which are primarily english, we have a, an indicative vote. At the moment, curiously, no sign of that happening. Certainly if the labor party wins the 2015 election. Theyre not going to do it because they mostly have scottish mps. On that final point, on the general election, is that more likely to be a Hung Parliament, do you think . Its become to look more like a Hung Parliament recently. Opinions in the labor polls has narrowed. That said, we do have to remember that the 2015 election will be fought are favorable to labor. Therefore, anything very much in the way of the lead in the opinion polls is in fact likely to produce an overall majority. We need to find the opinion polls with relatively small conservative leads before we are very firmly in Hung Parliament territory. Thank you for joining us. Professor john curtis. Helia, stick around. Well talk about the uk Housing Market. Still to come, Indias Central Bank keeps its lending rates on hold. It is putting pressure on modis government to kick start the economy. man speaking chinese youre watching Worldwide Exchange, bringing you Business News from around the globe. The headlines from around the globe, touchdown in poland. President obama arrives in warsaw for day one of his european tour. Hes due to meet with the new president of the ukraine. Jobs picture in italy worsens. Youth unemployment hits a new high. The spanish jobless rate is down in may. Thats the fourth month of declines. 4. 5 Million People are still without the job. British house prices jump again in may. George osborne has been told to reign in his scheme by the european commission. And the french government weighs into the bnp paribas probe. A potential 10 billion u. S. Fine would be unreasonable, some say. We have data out of the uk, Construction Activity cooling a little bit in may. This is the pmi number, down to a sevenmonth low of 60. It was 60. 8 in april. It is worth pointing out, though, 60 is still a very strong expansionary number. You cant keep expanding in an ever faster rate. Yes, it has cooled. 60 is still a fairly strong number. Sterling against the dollar at 1. 760, slightly weak. We peaked just as that number came out. As far as european equities are concerned were an hour and a half into the trading day. Somewhat mixed performance for europe. Down about a third of a percent for the ftse. A quarter percent for the xetra dax. Tenth for the cac current. The ftse mib off a quarter. 11month low last thursday on the tenyear. Treasury yields are now yielding 2. 54 . Italian yields are back to being sub3 . Interesting comments out from brian singer earlier from william bear and company, saying the trade would be to go long and short the government debt. On the currency markets, the dollar index is up at the best levels for about a full month. This is on the back of the yields rising a little bit. Euro dollar is around 1. 36. One wonders whether everything is priced in as far as the ecb actions are concerned on thursday. Italys youth Unemployment Rate is up at 43. 3 in april, the highest level since records began over 30 years ago. The nations overall Unemployment Rate held steady at 12. 6 for the month. The spanish jobs rate on the other hand was down in may, the fourth month of decline, although still 4. 5 Million People are without a job. It fell 2. 3 , 2. 39 on mott, done by nearly 112,000. And stephane is in madrid with the latest. Unlike in italy, stephan, the jobs numbers are going the right way. Its a bit of a mountain to climb. And its seasonal effect probably. Spring and summer are traditionally good periods for job creation in spain. Its only seasonal, ross. It doesnt address the core problem of the spanish labor market. The Unemployment Rate which is released only every quarter was at 25. 9 in the First Quarter of this year, up from 25. 7 in the fourth quarter. The Prime Minister outlined at the end of last week, a plan to boost the economic recovery and to address the problem of the labor market, is planning to lower the Corporate Tax rate to 25 , giving Spanish Companies some breathing space to create more jobs and also planning to invest 6. 3 billion euros in the economy, including 3. 6 billion in the public sector. That should boost the activity and at the end of of the day create some jobs. We are not there yet, according to the information. The spanish Unemployment Rate would be at 25. 5 at the end of this year and 24 at the end of next year. Thats the economy, stephane. Meanwhile, we spoke about this yesterday. Juan carlos is stepping down, advocating in favor of someone. They have to change the constitution. How long is this going to take . And what is the reaction there in madrid . So, the process should take between three to six weeks according to a royal specialist here in spain. Because the spanish constitution, which is only 40 years old, doesnt have low regarding abdiication. Weve seen protest in the streets, mainly in the regions of catalonia. This is not surprising. There are two regions, theyve always had a difficult relationship with the central state in spain and with a king, in particular. Extreme left Political Parties are call for nationwide referendum to decide whether or not to keep the monarchy. But its unlikely to take place, ross, at least in the short term because the two main Political Parties, which are the conservative undersocialist party are both supporting the crown of spain and also we have to take into account that the new king, the future king of spain, the prince phillippe has quite good popularity. 66 of spanish people have a good opinion of him. Thats according to the last opinion poll made in january of this year. Thats to compare to 41 with juan carlos, the king who abdicated yesterday. Yes. Maybe its a good thing. Different families, some do abdiication, some dont. Thats big news out of spain. May be a good thing to make way for the next generation, stephane. Good to see you. Every week, cnbc is asking you to talk the trend by taking part in our online poll. This week, were asking what action is the ecb going to take . Is it going to introduce negative rates, launch an asset purchase program, ltro, could it lay out a path for qe or do absolutely nothing . Head to tradepoll. Cnbc. Com or traderpoll. The uk grocery market share is down 3. 1 in the 12 weeks to may 25th. As a result that is knocking tesco stock as you might expect. Off 1. 1 . Aldis market share up nearly 36 in the 12 weeks to may 25th. Now, that might be coming off a fairly low base, helia. Nevertheless aldi was growing 30 odd percent in that region in the first 12 weeks after christmas as well. Youve seen that continued growth by the german discounters. Eating into the big supermarkets here in the uk. Tesco affected. What was morrisons . I havent seen morrisons. Its clearly a grocer in the uk thats been struggling. Weve seen reductions in prices. People have been speculating about a price war. Thats because not only do we like more bargains in our grocers but actually the culture of shopping seems to have changed in the uk. The market share up 22 . Again, those are big numbers. They are coming off its the base they are coming off. Its the tiny market share they used to have, but their rate of growth in the last six months has been phenomenal and really does pose a threat. The overall market share for all of the supermarkets isnt growing. Really, the fuel for oxygen is a decline in tescos, decline in morrisons. Interesting that sainsbury is up. But the stock is still down. It might be of the competitive threat they might get from aldi. People know more of what theyre getting from sainsbury. They are going to be seeing a huge change, the chief executive of the last decade stepping down, maybe making it more difficult for his successor. Thats the word im looking for. Successor. Successor is the one we want. Lets move on from groceries and talk about the Housing Market. An executive has been told to rein in. He called on mr. Osborne to deploy appropriate measures against rising house prices, also suggesting a tax hike. Thats nice of them to dictate what british policies should be. We dont like getting thats a lib dem policy. I think that theres been a lot of concern about help to buy. Remember, last week we had the figures from help to buy. It showed that a small proportion of the market is made up of help to buy. Whether there is a confidence effect, certainly even if you look at the nationwide data, its very low level houses, a quarter of them are under 125,000 pounds. Thats much less than the worries people are talking about. However, if you look at the nationwide prices, this increase which is 11. 1 on the year, 0. 7 for the month of may, represents surpasses even the 2007 peak. Its the 13th monthly increase. This is massive. Even if you strip out london, which a lot of people have said, look, the problem is london. Its racing ahead 18 . And yes, london is growing twice as fast as the rest of the uk. But even if you strip it out, the uk without london is still growing at 8. 2 . 8. 2 . And without the southeast its growing at 7 . Thats still above the historical average of 6 . So house Price Inflation is there across the uk and the uk really run away. Remember we have the fpc this month. Is there a different between whether theyve run away or not. Robert gardner, chief economist at nationwide says it has been off since january. We saw a fall in approvals. Much bigger than expected. I would suggest we need two or three more months of looking at the impact of the mmr before we make more decisions about policy. I think youre absolutely right. We dont know if this slight slowdown weve seen month on month, youre right, the mortgage approvals, that of course doesnt affect cash buyers in london. Thats slowed for every month since january. We dont know if the mmr is a blip. People at banks are retraining for these very complex roles. And thats the reason that weve seen mortgage approvals slow down. It could be is it a fundamental change in the underwriting rules of banks . If theres a fundamental change in the underwriting rules of banks, and theyre tougher, that means youll de facto at a certain end of the market will approve less mortgages. I think youre right. We have the fpc meeting this month. Thats when were expecting the bank of england to possibly introduce other macro prudential tools to calm down the Housing Market. Remember, we have a supply problem in the uk. And that is not going to go away with any of these tinkers. Get your bulldozer out. Hel helia, good to see you as always. Thank you for that. The reserve bank of governor, kept the Interest Rate at 8 . They did take steps to increase the availability of credit. Thanks very much for joining us. Sort of as expected, is the heavy lifting going to have to come from the Modi Government . I dont know if he can hear us. Its ross in london. Can you hear me sitting there in hong kong . Yes, hi, i can hear you. Good. I was just wondering, no move from the rbi. Does the heavy lifting for the economy now have to come from the new Modi Government . So i think theres a lot of expectations right now force the new government sort of good form. I think this is first policy. In my opinion, i think theyve done a good job. They maintain in other policies. They create a little bit of room for credit growth which i think is more symbolic at this point in time. Because the credit growth is right now not great. So its more a symbolic move. I think they will leave it to the inflation data Going Forward. According acco according to that, theyve done a great job of balancing, giving a way forward as well as leaving an opening for credit growth. Gdp data shows growth unchanged at 4. 6 . This is an economy that needs a kick start. But i mean, i just question that the siene tlal bank can do anything when its got stubbornly high inflation. Yes, i think currently inflation is very high. I think Going Forward well have to see how the government takes action in terms of getting the Economic Growth, what kind of policy formation they place. So i think there will be a coordinated approach between fiscal and Monetary Policy. I think the next budget due in the july first week, i think will be key, we will see a way forward, a vision document of the government which will come about, how they approach the fiscal deficits. What they will put out in the budget, what kind of spending they are planning. All those things will be very important Going Forward. I do feel Inflationary Pressure will come down, given the men the to the bring down the food prices. If the inflation tends to come down, i think it will pave the way for growth forward. I think it will have to be in my opinion, a coordinated approach between our government as well as the ibi to kick start the Economic Growth in the country, both driven by the spending as well as, i think, monetary easing. Well see what happens. Thanks for joining us. Australias bank meanwhile central bank kept its cash rate steady at a record low of 2. 5 . Its the ninth straight month the rbi has kept rates on hold there. The decision comes aday ahead of the countrys First Quarter gdp numbers expected to show the fastest pace of growth in almost two years at 3. 3 . The aussie dollar today slightly firmer. Its flat, really, again the u. S. Dallas, 92. 83. Still to come on the show, dont take that sneaky side road to work unless you want to be late that is. Tomtom says long cuts in fact adding to the length of our car journeys. Well explain why, next. [ female announcer ] theres a gap out there. Thats keeping you from the healthcare you deserve. At humana, we believe if healthcare changes, if it becomes simpler. If frustration and paperwork decrease. If grandparents get to live at home instead of in a home. The gap begins to close. So lets simplify things. Lets close the gap between people and care. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. At a special site for tv viewers; show em the curve. Its beautiful. Its more than that. Its perfect. Introducing curved Ultra High Definition Television youre watching Worldwide Exchange. If youre not in a hurry to get to your next destination, take a short cut. Trying to avoid con investigation, tomtom says, can add 50 more travel time to journeys. Moscow and istanbul have topped the list of the most congested cities. In those particular places you want to get walking. Joining us is nick kohn, a traffic expert at the navigation Device Company tomtom. Thanks for joining us. Top ten cities, moscow, istanbul, rio, mexico, and number six is palermo, eight rome, nine los angeles, ten dublin. No london in the top ten. Weve spent years worrying about congestion in london. We were worried about the olympics which worked beautifully, no congestion at all. It srps s it srps urprises me that london not in the top ten. The tomtom data shows they experience twothirds extra travel time. If you have a half hour commute in london, it will end up being a 50minute commute instead. It is serious. London hasnt had the explosion of more cars on the road that cities like moscow and instan bu istanbul has had. Car ownership, is that one reason. That is one reason. What we see in the data is in a lot of the cities we analyze, there are alternative routes that are not as congested. People are sticking to their usual morning commute. Its interesting what you say about spending more time in jams in secondary roads. Short cuts work when youre the only one doing it. But when you get a jam on a secondary road, that it ten times worse. If you take i do this. I take my short cut. If theres suddenly another ten cars on that short cut, you are stuck and theres nowhere to go. A real short cut depends on the actual moment and place. Yes. I wonder what would happen to congestion levels if everyone used realtime traffic information. Those short cuts would all be real and wed be using the network in a much smarter way. Can you tell me, would you be able to tell me if i have a that i would use favorly but at different times, will you tell me today is not worth taking that . How would you know theres a jam of 15 cars on this little side street that i should avoid it. We do know. Wed tell you that minute whether its a good idea or not to take that other route. Thats the tomtom data that goes into all this analysis. And what it also shows is that if you look at cumulative all this lost travel time in london, for example, people are losing the equivalent of ten working days per year. Stuck in traffic . Yes. You can imagine what people might be able to do with that time, what businesses could do if they saved that cost. I suppose its a difference. A lot of people sit with their headless phones and make conversations while they do it. Its not all bad. Its good news for radio stations and their advertisers, right . And listeners. We need to support the media. Let me tell you. Theres a lot more cyclists in london as well. Something fell off. A lot more cyclists in london which must be an impact. You say to come to grips with congestion, you need integration between those who manage Sidewalk Networks and other networks. If were all using the same realtime traffic information. It was a good coordinate instead of a competitive conflict between drivers and authorities in terms of what schemes to apply and whats more integrated, i think that we can make big strides. I think that we probably cannot eliminate all congestion but we could make a big impact. That would be nice. Good to see you. Thank you very much. Nick kohn, global Traffic Congestion expert at tomtom. How do you get around. I bicycle to work. You are one of those. When i say one of those, i dont mean it in a derogatory against, at all. Dont go through the red lights. No, no, no. When i drive i use realtime traffic to avoid the jams. Staying with traffic, automakers report their u. S. Sales numbers for may. The forecast rose 7 from a year ago to a seasonally adjusted rate of 16. 1 million vehicles. Chrysler nissan expected to continue their sales search. Gm has seen rising between 5 and 7 , further evidence for the recall crisis isnt impacting sales. Well get more on this in the second hour of the program. Also still to come, could siri be the new how . Apple takes aim at the home at its annual developers conference. The next round of Worldwide Exchange coming up. Heres a good one seattle. What did geico say the mariner . We could save you a boatload foghorn sounds loudly whats seattles favorite noise . The puget sound foghorn sounds loudly all right, never mind doesnt matter. This is a classic. What does an alien seamstress sew with . A space needle foghorn sounds loudly continuously oh come off it captain geico. Fifteen minutes could save you fifteen percent or more on car insurance. This is Worldwide Exchange, im ross westgate. Your headlines from around the globe. Touchdown in poland. President obama stands by his allies as he arrives in warsaw for day one of his european tour. Im starting the visit here because our commitment to polands security as well as the security of our allies in central and Eastern Europe is a cornerstone of our own security. And it is sacrosanct. Bill gross continues to have money problems. New data shows investors keep pulling cash out of the pimco chiefs total return fund. The french government weighs into the bnp paribas probe. A potential 10 billion fine would be unreasonable. And the jobs picture in italy worsens. Youth unemployment hits a new high in april. The spanish rate has fallen in may. That is the fourth month of decline. 4. 5 Million People are still without a job. Welcome to todays show. If the ecb needed a nudge to do something on thursday, it just got it with the latest inflation print out of the eurozone. The may cpi estimate is coming up at 4. 5 . It was 0. 7 in april it was forecast at 0. 7 as well. The ecb has a ceiling or a target rate of 2 . This taking the euro dollar down. Its a question of how much could be priced in effectively for europe. Most people thought they would act anyway or do something in terms of negative deposit rates. The latest annual inflation rate 0. 0. 5 . The jobless rate did tick down. It was 11ment 8 in march. Jobless rate is at 11. 8 , jobless numbers down 76,000 in april. Frankly Unemployment Rate of 11. 7 is still rather high and still a fairly near the record high. Euro dollar is not doing an awful lot on the back of that. Lets get some Immediate Reaction to that inflation number with charles dumar, chief economist at lumbar research. I think the real question is, is it a problem . Because its fine to say we want fast growth because we have high debts in club med. And with fast growth you can get the denominator down. On the other hand when you have very high debts and you get fast growth, youre liable to have a higher Interest Rate which would threaten you. So as a matter of fact, they drift into deflation is quite convenient for the whole of the eurozone because it keeps the Interest Rates down. It makes the government bonds attractive. At this rate of inflation, though, charles, surely we can do an awful lot higher of growth before we worry about putting Interest Rates up. Youre perfectly right. Were looking already at a situation which is, to some extent, splitting up. Youve got these elections at which it turned out that people are not too keen on proeuropean policies and proeuropean behavior that thwarts their own interest. So already in spain over the weekend we had an announced Stimulus Program. Will the Spanish Government deficit is 7. 1 of gdp with the Stimulus Program which will clearly breach the fiscal compact that will get higher. And the whole thing depends upon the germans being willing to underpin the spanish credit. So theres quite a lot of fragile stuff in there. And anything that tends to head us towards lower Interest Rates, which, of course, an underpowered economy does, will tend to help. Thats how japan survived for the last ten years, is they couldnt possibly have survived their debt ratios if it werent for the fact that with deflation they were able to get away with the very, very low interest payments. I think the euro is drifting into the same problem, so they wont do much. Is europe going to experience is europe therefore entering a japanese style deflation period . Is it in one . I think theres high risk of that, yes. The japanese Interest Rates in nominal terms went down to low levels first. It was subsequently they shifted into deflation and then stayed there. From around 1999 to around a year ago. They still are in deflation on a domestic base i. I wouldnt be at all surprised if the eurozone actually finds it almost impossible to yank its way out of this. What should the ecb then do . Its not a Monetary Policy problem. Its a problem with too much debt. Theres no point in the ecb launching qe at some point . They can do some qe. And you know, that might be marginally helpful. What im driving at is that its not a Monetary Policy. Its a structural problem. The problem is chiefly too much debt. When you have too much debt, you have to devalue, deflate and default, the three ds we call it. Theyre not allowed to devalue and theyre not allowed to default. The whole onus falls on deflation. Thats the whole problem with the eurozone and what were seeing in the elections is the problems of the euro are being very destructive of the eu, which is an altogether more rationale construction with the free market. Yes. And the problem is, even in france where they are anticlose to integration, that means more protectionism, not more open markets, more competition, it means more protection. Everything is drifting against the Single Market and free trade in the interest of protecting this euro system. Charles, stay there. Well come back to you. Good to have you on this morning. The latest inflation for the eurozone, the annual rate has come in at 0. 5 . There was a consensus that it would stay at 0. 7. Some had said it would fall down to that. That obviously ramping up more pressure on policymakers in europe. Every week, cnbc as well is asking you to talk the trend by taking part in an online poll. What action do you think the ecb will take this week . Will it introduce negative rates, introduce an asset purchase program, ltro or do nothing . On twitter using traderpoll. Or go to traderpoll. Cnbc. Com. Thats where we are with eurozone inflation. Right now ahead of the u. S. Opening today, futures are indicating we all move higher, not by much for the dow. The dow yesterday up 0. 2 , up 24 points. Right now it is called higher by around about 15 points. The s p 500 is called lower by a point after being up 0. 1 yesterday and the nasdaq at the moment is called fairly flat, lower by a point. It slipped slightly during mondays trade. European equities have been down during the session, off 0. 3 for the ftse 100. The ftse mib down a third. Treasury yields have continued to edge higher. Were yielding 2. 54 on the tenyear. Last thursday, we were down 11month low of 2. 42 . But those higher bond yields have helped out the u. S. Dollar, the dollar index up near fourmonth highs. The euro dollar unmoved by the inflation number which would suggest perhaps whatever the ecb will do on thursday, it is also priced in for currency players. Some of the other stories were playing today or watching, bill gross cant get a break. Morning star says Pimcos Total Return Fund posted 4. 3 billion in outflows in may, the 13th straight month of investor withdrawals for the worlds Biggest Bond Fund. The outflows continue despite the funds 1. 25 gain for the month which beat 79 of its peers and marked its best performance since january. Its seen nearly 60 billion in outflows over the past year. Analysts chalk that up to weak performance, saying the public falling out with former pimco senior mohammed elerian hasnt helped either. They say a potential 10 billion fine would be unreasonable. Speaking to french television, fabias encouraged the u. S. To deal with the issue along with french authorities and not act unilaterally. President Francois Hollande will come facetoface with the u. S. President barack obama on friday for the dday anniversary commemorati commemorations. Mexican authorities have reportedly widened their investigation into alleged accounting fraud at banamex. They were dealing with ocea oceanagraphia. In february, citi disclosed it lost up to 400 million on loans that banamex made, saying the Company Secured financing by using fake documents. Citigroup is down 0. 6 in frankfu frankfurt. And two u. S. Republican lawmakers have reportedly opened probes into whether a Treasury Department office tasked with policing Money Laundering may have violated federal hiring rules. Reuters says it includes regulations over giving military veterans preference for government jobs. Two congressmen are looking into the matter. Grassley reportedly plans to object to president obamas nomination of a senior treasury official to be deputy secretary until his questions are answered. Well take a short break. Still to come on Worldwide Exchange, well recap some of the leading stories of the day. Also coming up, well get into auto sales today. What are they going to tell us . Particularly gm as well. More to come. Show em the curve. Its beautiful. Its more than that. Its perfect. Introducing curved Ultra High Definition Television from samsung. Youre watching Worldwide Exchange. Recap of the headlines, obama lands in europe where he will meet the new president of ukraine. France calls the 10 billion fine unreasonable. And pimcos ceo sees 30 months of outflows. Here in europe, new figures show Hard Discount retailers increasing their uk market share at the expense of more established names. Aldi up 35. 9 for the period. Britains biggest retailer, tesco, saw its share of the market contract over 3 . And morrisons even more, it slipped nearly 4 in terms of market share. Moving state side, s p has put new jersey on notice, warning it could downgrade the garden state for the second time this year. Due to a growing budget imbalance and underfunded public pensions. S p cut the states rating to 8 plus in april with moodys and fitch following soon after. That puts new jersey amongst the three lowest rated u. S. States along with california and illinois. S p will make its decision following the outcome of state budget talks this summer. Governor Chris Christie plans to slash pension contributions after having to cut revenue projections by 2. 7 billion through fiscal 2015. Automakers report their u. S. Sales numbers for may to date. Analyst forecast sales rise around 7 from a year ago to a seasonally adjusted selling rate of 16. 1 million vehicles. The deal has benefited from an extra weekend in may. Chrysler and nissan are expected to continue their sales search. Gm is seen rising between 5 and 7 , further evidence that the companys recall crisis isnt impacting sales. Similar increases are expected for toyota, while ford, honda and hyundai should post modest gains. On the agenda today, in the United States, april factory orders are out at 10 00 a. M. Eastern, their forecast to rise 7 . The Kansas City Fed president , esther george. And look for earnings from Dollar General from the opening bell. Charles, you talk about the disinflationary trap were in in europe. Weve seen it in japan. I know youve spoken before about china has its own debt issues that it has to deal with. How does this relate back to the impact on the United States and policy there . And Economic Growth . Of the worlds biggest economy . Well, in short term, by which i mean at least a year, its really quite helpful. The chinese have a significant surplus which has to go somewhere. The europeans, because what little growth there is, is to a great extent still exportled, have a 400 billion surplus which has to go somewhere. The japanese offering there, investors and promising them 2 inflation, the huge flow of private savings are liable to be going abroad. All of this money basically, it doesnt want to pile into the deficit emerging markets anymore. So its piling into the anglo saxon. Weve seen the pound very high. It creates a lot of output pressure on the dollar. Its creating downward pressure on u. S. Bond yields. Thats the underlying explanation of why were in this conundrum. The bar is set pretty low for stock markets. And so the money flows out into real assets and its pretty bullish. Is that going to thats going to continue for, you think that fundamental to are this year, for sure, yes. And the wealth effect has pushed the likely rate of personal saving in the United States way below the actual level at the moment. There will be a tendency for Savings Rates to come down in the household sector which you know, people may deplore if theyre feeling moralistic. It represents demand growth. It isnt so bad from the u. S. Standpoint, we are bullish about the u. S. Economy and stock market and even relatively about the bonds. So you know, its kind of a virtuous circle they have going over there. Its quite interesting. The profits are quite strong. Youve got unit labor costs rising on a sort of underlying basis at about a half to threequarter of 1 . Core inflation is more like 1. 25 . That means Profit Margins are being improved because material costs are falling. So the structural improvement of Profit Margins has not stopped. On top of that you have probably better than trend growth which means that Capacity Utilization goes up and thats good for profits. One way or another you can see quite lively profits. The u. S. Is in a comfortable spot. Its in a very sweet spot at the moment, i think, yes. On that note, charles, well leave it. Chief economist at lumbar street research. Still to come as the nba finals are set to tip off this week, we look at which sneakermakers could see some slam dunk returns. Our name your price tool helps jamie, youve got a Little Something on the back of your shoe, there. [alarm beeping] price tag. Danger price tag alert. Oh, hey, guys. Price tag alert. Is this normal . Well, progressives a price tag free zone. We let you tell us what you want to pay, and we help you find options to fit your budget. Where are they taking him . I dont know. This seems excessive decontaminations in progress. I dont want to tell you guys your job, but. Policies without the price tags. Now, thats progressive. U. S. Futures this morning indicating a mixed start for u. S. Equities after the gains we saw yesterday for the s p 500 and the dow. The s p down 3 points, the dow called up 14. It was up 24 yesterday. The nasdaq was down a little bit in mondays session. It is called lower at the start of the moment by 9 points. If you dont look at what futures are doing, keep your eyes on basketball. The miami heat are gearing up to face the San Antonio Spurs in an nba final for the second time in as many years. Its the fourth time in a row that the heat has made it to the championship final, two of which were with tentime nba allstar and twotime mvp lebron james. Hes also got new versions of his line of sneakers called lebron 11 coming out this month with nike. Can the sportswear maker ever repeat the success of air jordan . Thanks very much indeed for joining us. The air jordans are still being sold in quite good quantities as i understand it. What does lebron james have to do to compete on the sportswear market . Well be the lebron shoes are doing quite well but nothing seems to compare with the air jordan shoes. There was a recent launch of a jordan shoe a couple weeks ago and they sold, according to sports scan info around 260,000 pairs the first day between the mens and the kids sizes. Its quite extraordinary whats going on right now. And the distribution of the product, if its lebron or kobe or k. D. Or the jordan shoes, the distribution is being managed exceptionally well by nike. Sales of jordan basketball shoes with price points around 100 or above up 35 in april. Clearly price isnt i dont know, 100 seems quite expensive but no one is being put off. Its more like 170 and its just a its capturing more and more peoples imagination and as one of my industry contacts said the other day, a lot of people in their 20s and 30s now who couldnt afford to buy these shoes when they were younger can afford to buy them. And you know, you see the lines outside the stores. Theres just a great deal of blogging and instagraming and facebook and all that, leading up to the launches of all these various shoes. They create an extreme amount of excitement. And it looks like its going to go on for quite some time. What percentage of total footwear sales are going on sports shoes are going on, nike and jordan shoes . Well, i mean nike in general, if you take out some of the big masses of the branded shoes, walmart and so on, probably macks up 50 to 60 of overall sports shoes. And about 90 of the basketball shoes. Wow. Thats heavy duty. Thats heavy duty market share. Who is benefitting from selling these besides obviously nike and mr. Jordan and lebron james . Well, we think the biggest beneficiary is foot locker. Theyve seen just extraordinary numbers of late. And we think theyre benefiting, as well as in europe were hearing that the basketball business is beginning to mean something as well. So both in the United States and in europe, that business is really exceptional these days. By the way, whos going to win, the heat, your money is on the heat to win . You know, im a new yorker. The knicks im a knicks fan which is well, ill just leave it at that. It doesnt work all the time. Im just going to hope for a good series. I dont want to be bored. Okay. All right. Sometimes its painful being a sports fan. I get that. Good to see you, sam. Thanks for joining us. Thank you. Before we head to break, we may have the answer to the age old question of nike versus nike from someone who should know the answer. Artist ben martin and peter sent a letter to ask him to circle the correct pronunciation. He circled nike. It is nike, in case anybody was ever wondering. Well take a short break. President obama is proposing a 1 billion fund for european security. He start a fourday tour of europe. Also still to come as the asco Cancer Research meeting comes to a close, what are the key takeaway s for investors . [ male announcer ] whether it takes 200,000 parts, 800,000 hours of supercomputing time, 3 million lines of code, 40,000 sets of eyes, or a million sleepless nights. Whether its building the worlds most advanced satellite, the space station, or the next leap in unmanned systems. At boeing, one thing never changes. Our passion to make it real. Our passion to make it real. Over 1. 2 billion eyeballs are on us during the two weeks at wimbledon. True tennis fans want to know whats happening, they dont want to just see whats happening, they want to know and understand why its happening. Anybody can just put data up, but we want to get a reaction, make it far more interactive. We rely on the cloud to provide that immersive digital capability. Youre watching Worldwide Exchange, im ross westgate. Headlines from around the globe. Touchdown in poland. President obama stands by his allies as he arrives in warsaw for day one of his european visit. Im starting the visit here because our commitment to poland security as well as the security of our allies and central and Eastern Europe is a corner stone of our own security and it is sacrosanct. Bill gross continues to have money problems. New data shows investors keep pulling cash out of the pimco chiefs total return fund. Eurozone inflation falls back down to its record low of 0. 5 in may, putting more pressure on the ecb to take action at thursdays meeting. And the french government weighed in the bnp paribas probe, the countrys foreign minister says a potential 10 billion fine would be unreasonable. Youre watching Worldwide Exchange, bringing you Business News from around the globe. And a warm welcome to you if youve just joined us in north america, welcome to the start of your Global Trading day. President obama is in poland, to start a fourday tour of europe. Hes proposed a 1 billion fund for european security. Poland is the first stop on this fourday visit. Hes going to take part in celebrations to mark 25 years since poland emerged from the communist bloc, the white house has also said the u. S. President will hold up poland as an example for ukraine because whilst hes in poland, president obama will meet the new president of ukraine. That trip is under way. U. S. Futures meanwhile indicating a mixed start after gains yesterday for the dow and s p, dow up 0. 2 . Dow futures suggest we are going to open higher this morning by around about 15 points. The s p which was up just 0. 1 by the close of play yesterday was currently say point below fair value. The nasdaq this morning its about three points below fair value. The nasdaq is ten points below fair value. European equity markets have been down during most of the session. Ftse off a third today. Construction activities weaker but still very high according to the pmis. And the big news has been the inflation number out of the eurozone in the last half hour. The print coming in at 0. 5 . There was a consensus of 0. 67. Whats interesting is the euro dallas action fairly muted which suggests that we maybe have priced into that cross rate everything that the ecb is already going to do. The cac current is down 0. 1 . The ftse mib down 0. 3 . Youth unemployment continuing to rise. Thats where we stand ahead of the u. S. Open. The second trading day of june, heres a recap of some of the thoughts weve had out of guests today on cnbc. Theres a belief that the fed will come to the rescue on each own every data released, showing any degree of weakness. I think that will continue. Its a relationship thats been in place for a long time. That really is one of the challenges facing the Federal Reserve to try and break this relationship. Were in a situation where markets are following the line of least resistance. Markets dont like uncertainty. We have a reasonable degree of policy uncertainty. We know theyre going to get looser, we know that the fed is doing it in a controlled and forecastable way. And that element of certainty, i this i, will back markets Going Forward. I have a big suspicion well see far less than people expect at thursdays ecb meeting. And the reason for that is, draghi has very few weapons he can actually use. If you notice his qe, that will persuade people to buy more european sovereign bonds which means that well buy euros to buy sovereign bonds, therefore, keeping the euro strong. The only thing he can do to help europe is to cut the euro. The American Society of clinical oncologists wrap up their annual Cancer Research meeting in chicago today. Analysts are in agreement the hottest topic has been immunotherapy. The meeting show case advances being made in immunotherapies being made in bladder cancer, among others. In a market that could approach 35 billion. Also seeing an update from astrazeneca, since it turned down the almost 120 billion bid from pfizer, showing data in Ovarian Cancer which looked very good, also in lung cancer and also some advances coming in leukemia from kms like pharmacyclics and others which gained in trading yesterday. We spoke with the fdas head of c oncology who has attended 34 straight asco conferences. This is what he told us. We have better drugs, a better understanding of the disease. Were moving away from the traditional drugs, mechanisms of actions were poorly understood to drugs that have a much better understanding of how the drugs work, how they interact with the disease. And that gives us better drugs. Drugs that give higher response rates, drugs that are better are more efficacious, potentially less toxic also. A lot of the conference behind us. Still one more day to go. We can see more stocks moving and more data coming out. Back to you guys. Thats the latest from chicago. Joining us is an analyst at data monitor health care. Good to see you. Thanks for joining us. Whats your view of whats coming out of thissiers conference . Were talking immunotherapy. Is that big growth area . Is that where you basically try to get the body to fight back against cancer. Thats right. I think the big news at the conference again this year is immunotherapy, the inhibitors, which immunotherapy is designed to boost the immune system to fight against cancer. These drugs came to prominence at last years conference. Its kind of the same news. They seem to be incredibly effective across a wide range of tumor types and also with very little side effects. It might be disappointing to investors the fact that there is no clear frontrunner in the race yet in terms of pd1 development. What is exciting is the fact that were seeing new indications such as bladder cancer, head and neck cancer and some of the data presented on these very positive. And what the message is, is really the clinical and commercial potential of these drugs is seemingly growing. And we just kind of have to wait for later phase data. Are we in the trial stage, in the Development Stage of the immunotherapy drugs . Actually, the Companies Involved which are big pharma. So merck and astrazeneca, roche, they all have drugs in phase three trials, the most advanced of which is mercks. They are in phase three trials for melanoma. Really these are getting closer to the market, yes. You mentioned astrazeneca. At the end of the day there was a bid, a bid that wasnt from pfizer. Astrazeneca said, look, we should stand alone. The argument against pfizer is because we have a pipeline, we dont want to be damaged. We think its valuable. Is the initial stuff out of asco suggest that maybe that was the right call . I think so. I think astrazeneca have shown enough at asco, certainly in their oncology pipeline that its reasons for saying and possibly pfizer undervalued its pipeline, possibly its adding weight to this argument from the data. We have very positive results, a bit of a surprise in Ovarian Cancer. The company has already filed for registration for that therapy on its own. Now we have a combination therapy where both drugs are astrazenecas. It seems to be almost twice as effective and maybe caters for other patients as well. Thats very positive. Astrazeneca also involved with the medi476 drug in the pd1 race. We have a big result in nonsmall cell lung cancer. It seems that in a race with clovis oncology, whose drug in 1686 and astrazenecas drug azd9291, these drugs are similarly effective. The data at asco is showing that maybe astrazeneca is winning out on the tolerability of things. Joseph, early days but interesting announcements. Thanks for joining us. Analyst at data monitor health care. Still to come, bill grosss money problems, why investors continue to pull cash from people kos pimcos bond funds even as performance is starting to improve. Youre watching Worldwide Exchange. A recap of the headlines. Obama lands in europe where hell met the new president of ukraine. France calls bnps potential 10 billion fine unreasonable. And pimco feels the pinch as they see the 13th month of outflows. Our apologies for that. Pimco, money flows in, money flows out. New data from morningstar shows the worlds Biggest Bond Fund continues to see cash heading out the door. Bertha coombs is at cnbc in the states with more details on this, bertha. Sometimes you think performance helps but in this case it doesnt. No. Well, no. The marve mans for so lo perf long. There have been negative headlines and returns. Morning star says Pimcos Total Return Fund, the socalled bond king runs posted 4. 3 billion in outflows in may. Thats the 13th straight month of investor withdrawals for the Worlds Largest bond fund. Its seen nearly 60 billion in outflows over that period. The fund had 229 billion in assets as of the end of may. Thats down if a peak of about 293 billion in just april of last year. The outflows continue despite the fund gaining 1. 25 for the month, which beats 79 of its peers. It likely benefitted from the rally in bond prices on weak u. S. Economic data and signs the fed will keep rates low even longer. The total return fund for the year, however, is just up 3. 3 . That trails more than threequarters of its peers. Analysts say outflows began on weak performance leading to a decline in 2013, marking the funds worst year in two decades. Last week, pimco rehired former Portfolio Manager and top bond analyst Paul Mcculley in the companys latest management change. So where are investors putting their cash to work these days . Morning star says double line capital, saw 666 million in net inflows last month. The fourth straight month of new cash for that firm. Most of that money went into that companys flag ship total return bond fund which happens to be a direct competitor with pimco. The double line fund rose 1. 1 in may, beating more than half of its peers underperforming pimco but longer term or at least most recently had better performance. The public falling out certainly has not helped, not good pr. But i think for a lot of investors its really been the underperformance for so long thats caused bill gross some problems. Not turning around anytime soon for them. Good to see you. Thanks so much indeed for that. Have a good day there. Frances foreign minister meanwhile has been weighing into the u. S. Investigation into lender bnp paribas saying a potential 10 billion fine would be unreasonable. Speaking to french television, lauren fabias encouraged the u. S. To deal with the issue along with french authorities and not act unilaterally. The french president Francois Hollande will be meeting the u. S. President barack obama on friday at the dday anniversary commemorations. Goldman sachs is parentally on the quest for facts. The moves are part of a mandate. They say the push into more lending wont involve a big retail presence and there are no plans for goldman branches. And on to tech, apple has taken aim at the connected homes and mobile Health Care Markets at its annual developers conference. Josh lipton has this report. Reporter its a familiar sight, lanes of people gathering early, hoping to get a glimpse of apples latest product. It wasnt the latest iphone orrite pad that got these apple fans revved up, the tech titan intstead introducing its latest mac operating system, yosemite. They set off on a path that took them ultimately to a place that embodies the beauty and power of os10. We discovered os10 yosemite. The goal, make an Apple Ecosystem thats more integrating, allowing your apple devices to communicate with each other seamlessly, some this apple exec displayed for this crowd. On stage from his mac computer. Its craig here. How are you doing . This is dre. The other big announcement, new mobile operating systems, ios 8 and new programs for developer that will let programmers create apps aimed at home animation. The news didnt go over well with investors. Many analysts says apples success is built on its devices. Software is a key component to the stickiness of the Apple Ecosystem. While most analyst agrees that those Software Announcements wont be enough to send customers flocking to apple stores, some think todays headlines could be a signal of a much bigger announcement later this year. I think all this is whetting the appetite for the main entree, the iphone 6. They can expect the latest Software Packages to be available this fall. That liens up with their line of newest devices. Apples problem pipe loan was the best hed seen in 20 years, said eddy cue. Thats a time frame that includes the ipod, iphone, ipad and itunes. No wonder apple investors are looking forward to seeing what apple can churn out next. Josh lipton, cnbc, san francisco. Thats the latest. Still to come, is the u. S. Auto industry standing on the shoulders of the big three once again . Well be behind the wheel, next. We needed 30 new hires for our call center. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. At a special site for tv viewers; i want to do something i want to build something. Create something. Im only one in seven billion, but i know i can make a difference. Im just asking for someone who believes in me. For over 200 years, citis job has been to believe in people and their ideas. Wherever ideas come alive. Wherever you are. The worlds citi. Sfx sounds of marching band and crowd cheering sfx sounds of marching band and crowd cheering so, im walking down the street, sfx sounds of marching band and crowd cheering just you know walking, x sounds of marching band and crowd cheering and i found myself honoring americas troops. De ich is actually ite fitting because ico has been servingng band and crowd cheering and i found myself e military for over 75 years. Aawh no, look, i know this is about the troops and not about me. Right, but i dont look like that. Who can i write a letter to about this . Geico. Fifteen minutes could save you fifteen percent or more on car insurance. European equities ahead of the u. S. Open today have been weaker, down about 0. 3 for the ftse 100, the xetra dax also a similar amount. The ftse mib down 0. 5 . Eurozone inflation has fallen back to match 0. 5 for the month of may. That compares to aprils reading of 0. 7 . The core number has fallen from 1 to 0. 7 , matching the record low for the core number in march. The data putting more pressure on the ecb to take action at thursdays Monetary Policy meeting. Interesting thing is, the euro since that number has come out, if anything, is slightly stronger. Currency plays may not believe well get anything more than what is already priced in. The picture wasnt so rosie in italy, there youth unemployment is now at 4 . The highest level since records began. That all plays into u. S. Futures this morning. After gains yesterday, the dow is called slightly higher again this morning by around 15 points. The s p 500 is called lower by 4 points and the nasdaq at the moment is currently called lower by around 12, 13 points. Memorial day could see a memorial day boost could see todays auto Sales Numbers jump 7 to over 1. 5 million vehicles in may, General Motors is set to be the main beneficiary with strong sales expected to affect a recall crisis. Thanks for joining us. Lets kick off with gm first of all. Are they working their way through the recall crisis . They are. We still may see more recalls ahead and that situation is still playing out. As you mention so far, we think the market share in the u. S. Hasnt seen noticeable drop jop. We think ma may results should look pretty good. Its something we have to monitor each month Going Forward, particularly as a recall saga plays out. So far, their Sales Numbers have looked pretty good and really importantly, their pricing in the u. S. We believe has remained strong, at least the first half of may. Certainly was a strong month for them in april as well. Whats pricing like for the other two . For forward and chrysler . I think overall u. S. Pricing is hoeing pretty well. Months ago there was a lot of concern about inventory given the poor weather in january and february. Theres been a lot of concern about the yen. So pricing was a major concern for investors going into 2014. Its actually held up pretty well. Mainly due to the large pickup truck segment and suvs in the u. S. Where we think theres pentup demand. It supports the point that weve been making, 16 million is low in the context of historical recoveries. We see pentup demand. There are some segments under pressure in small and midsize cars. Its not a perfect environment but think overall the pricing violate in the u. S. Is holding up probably better than people thought just a few months ago. Whos the chief winner here . I think anybody exposed to pickup trucks, you know, we think gm should have a good month for market share this month and we think a lot of the pentup demand is in pickup trucks. Any supplier exposed there is what we like. Good to see you. Auto analyst at citi investment. Thats it for todays edition of Worldwide Exchange. Coming up next, squawk box. Whatever happens, we hope you have a profitable day. Show em the curve. Its beautiful. Its more than that. Its perfect. Introducing curved Ultra High Definition Television good morning and welcome to squawk box. No new gadgets from apple but tim cook is getting tough with the iphone competition. Seattle approves a hike in the minimum wage to 15 an hour. And more records for the dow and the s p but will the upcoming jobs report in the ecb decision rock the boat . It is tuesday, its already june 3rd, 2014. Going to be a long, like 9 00, its going to be light outside, pretty soon. Squawk box begins right now. Rock the boat dont rock the boat baby rock the boat dont tip the boat over rock the boat dont rock the boat baby good morning, everybody. Welcome to squawk box here on cbs news. Im becky quick along with joe kernen and andrew ross sorkin. The sun is up. It has been for a long time. I think since around 4 30. Lets start things out with the market. Another day of record closes for the dow industrials. It was the Second Lowest volume session of the year. Take a look at the futures this morning. Youll see red arrows at least at this point. It looks like the dow would open down by 24 points, s p futures down by just over 3. 5 points and the nasdaq down by just over 11 points. We continue to watch gold. Gold falling for a sixth straight session. Its longest losing street since last august. You can see this morning, it was up by 2. 40, 1,246. 40 an ounce. It is a relatively quiet day on the economic front. We get april factory orders at 10 00 eastern. May auto sales throughout the day. We have China Economic news, the pm