fire. >> any other government minister? >> no. >> it almost worked out okay. we're back for day two. >> back by popular demand. >> parental support has been amazing. thrilled to have you back. ross is out for the rest of the week. we have policemen of news. >> loads. let's give you a rundown. we'll be examining the latest data out of china. we have a senior chinese economist who will be joining us. he said there's no further rate cuts. >> judges will consider whether the german president can okay legislation governing europe's bailout fund. >> research in motion will have a meeting in ontario. how can they face tough competition. >> and warsaw wins the prize for having the worst traffic problems in europe. find out what other cities are grappling with. just before noon central european show before the end of the show. >> if it's just before noon central european time just before 11:00 our time. right? >> also finally we will hone in on norway after the government forces oil workers to settle their pension dispute clearing the way for production to continue. >> eu finance ministers are arriving in brussels and expected to approve a lifeline for spain. they agreed to make 30 million euros to the country's bank. they will continue to discuss other details of the deal. caroline has more now on this from brussels? . this a game changer for spain? >> we knew that this was going to be a basic outline. the final approval will be given later in july, probably july 20th. the loans to the spanish finance sector could be 100 billion euros. he's confident the spanish bank bailout can be reached shortly. interest rates on the spanish bank will be low and no macro economic conditions attached to it. the money for the spanish banks will first come from the efss, the temporary bailout fund. but then the support will be transferred to esm once that's operational. without the seniority status over private bond holders and this is a very important technical detail to keep in mind. of course that wasn't all with regards to spain. the big news came yesterday actually broke during your show yesterday. spain was giving additional breathing time to reach its deficit targets, the 2012 deficit targets was raised by one percentage point and the country has one additional year to reach that crucial threshold of 3% gdp that's because the recession is deeper than expected and some people are saying look it may not be the last time that the debt line will be extended. back to you. >> caroline, i think you are spot on. we're joined by our guest host, nick karn. nick, welcome. so are you being opportunistic in buying into spanish government debt? >> no, i don't think that's quite right, that's quite right yet because for all the reshuffling of the pack and we've seen a bit more of that, but the basic facts remain which is the euro experiment is the biggest credit bubble of all. there are enormous loss jim bedded in that system and the discussion is on who will bear that loss. in these different frame works of whether it's the ecb or a different bailout fund and who will guarantee what that's what it comes down to. the choices are that either it's a lot of austerity for the indebted countries, stretching out as far as the eye can see as they diverse resources into servicing debts or represents loss to the credit countries however you organize it there's no getting away that it's going to be one or the other. >> we must be near the bottom. the european authority seems to be beginning slowly to get their act together, so there must be value for investors to get somewhere around these levels if this is not the absolute bottom must be close. >> i'm not so sure about that. if you cast your mind back since the crisis has been sort of intense we've gone through these periods of remission from time to time where it's looked as if things become so serious but it's going for the thing in the direction of some kind of a debt mutualization which for whatever reason is what the market would like to see. but we've seen those periods of remission be followed by an onset of an acute crisis again and not so very long ago we were looking at iltr o's as the fix for this. >> i wonder then if that leaves europe as a place to be avoid. where do you see opportunity? >> my feeling on the euroland thing and we've discussed this several times on this show in the last couple of years is that i've felt it's very unrewarding to stand around in the battlefield and try to anticipate what the end game is because the only thing that i think is, you know, for sure is that however it ends it will be very, very bitterly fault and we're into a new episode of that in a moment. it's not, none of the outcomes are popular. none of the outcomes seem particularly likely. only certainty is to be bitterly disputed. >> does that mean you're avoiding europe all together? you run a big fund. your job is to figure out where opportunity is. is there opportunity created here or are you just sticking to other parts? >> you know, i think as a broad generalization europe is to avoid not for new reason but for the same reasons that we've had these episodes of kind of acute pain fold by remission fold by another period of acute pain. i think if i was going to look at anything in europe, most optionality in some of the banks is my feeling where on a model through scenario you get 10% a year. >> the fudge that we know. >> the fudge. just generally speaking this environment of a slow and growing economy we're seeing china descending at some kind of a rate. if you group your broad strategies as kind of mean reversion, momentum or carry type strategy, i think we're in a carry type environment. if you can just be paid for things to kind of hang in there kind of thing i think that's still the preferred strategy rather than looking for very distressed things which may go up a lot or trends which may drive on the direction they are going. >> well get more thoughts on nick coming up on the hour. nick carn. stay with us. alcoa reports a second quarter net loss as their revenues fell 10%. the aluminum maker adjusted results which was reported after the "closing bell" in the u.s. last night still managed to slightly beat forecasts. ceo says lower metal price is as a result of the global economic slow down. he expects aluminum prices to rub due to a global supply deficit later on this year. alcoa shares were roughly flat after hours in trading and in frankfurt they are pointed up a little bit this morning. >> indeed. slashing their second quarter outlook the chip maker saw disappointing sales in china and europe. aren't md fell more than 10% after hours down by 11.4% right now in frankfurt. nick carn is still with us. founder of carn advisors. the earnings season then, alcoa has reported. what do you think we'll find out from what businesses are telling us this time around because we must remember companies are still out there making stuff and selling it reasonably effectively. >> indeed. typically as you know companies are not the best lead indicator of things. they tend to tell you what's going on at the moment which is kind of fair enough. i've tended to find it unrewarding to expect companies to give one an insight, specific insight into the kind of the next wiggle in the macro environment. i think what we're definitely seeing at the moment and we saw in the australian mining company yesterday is definite signs of a kind of a slow down in the kind of macro environment which is kind of confirmation from what this sort of more traditional, high level leading indicators have been telling us for some time. we're definitely seeing confirmation of that from company reports, whether that's weak commodity prices, weaker demand in china. >> what you are expecting from what ceos will tell us from the outlook, the numbers may not tell us much what will happen next the way ceos are trying to manage expectations does? >> yes. you know, as you've rightly said the big price of the share price in the short term, however the bad news is providing the news isn't as bad as people expected. what you'll see is they are very cautious not their own financial condition it's usually about how the consumer is behaving which in this deleveraging environment is not new news but hasn't gone away. >> thanks for that. so the bank of england has rejected suggestions he tried to manipulate libor. paul tucker told the parliamentary committee that neither he nor his colleagues at the bank were aware of any rate fixing. he challenged the conversation about barclays libor rates. >> does that note of october 2008 accurately reflect the conversation with him that you've had? >> not completely. >> why don't we do it in stages. is there anything in there that's wrong? >> i think what it doesn't capture -- >> okay. we'll come to that. is there anything in there that's wrong in >> i think the last sentence gives the wrong impression, yes. >> barclays chairman will face a grilling by that same committee. the uk treasury select committee this morning starting in just about an hour's time about 11:00 central european time and we'll bring you that testimony live. >> let's take a look around the markets. quick snapshot what's going on in the equity markets. stoxx 600, a quick glimpse of the equity matters which is down very marginally. let's call it flat. roughly a number of stocks gaining and declining so far today. around the region this is how the picture is shaping up. ftse 100 is down a point. marginally higher for the cac. let's move on and look around a little bit more detail at some individual stocks. asml up over 9%. it's a company that makes chip manufacturing machinery and it has had an injection of cash from intel. they are going to spend over $4 billion for 15% stake in the company. that will help to fund research and development into the next generation of chip making technology. so the stock reacted very positively there. this is an interesting one to look at, vestas, down .4%. opened on a very positive note. the world's biggest wind turbine make terrify stock has been hammered as a slump in demand has hurt this company. there has been reports that the chinese business has been interested in acquiring the company, that business came out today and denied those reports. the stock has been very volatile. very interesting to watch for developments because this has been cited as a take over target. and marks and spencer came out, sales down by .8%. very bad weather in london. it has hurt sales particularly in women's wear. pretty much in line with expectations but also telling us they are having more management changes in the business too. the head of the nonfood business is leaving the company. her role which is a crucial one to the outlook for this business will be taken over by the head of the food business. more turn around coming for that company. let's get on to what's going on in the bond markets. very low yields as we come to expect in germany, also the uk. 10 year bund 1.3% right now. in spain still hovering around the 7% level. still very dangerously high yields on these spanish debt, we've been talk about the spanish bailout. just to say that 6.97% is where we stand on the spannish debt. italian debt, 6.3% roughly. on to the commodity markets where we have a couple of things we were highlight towing in yesterday's session. in the oil markets in particular, we're watching this norwegian strike threat. that had particularly driven up brent to over $100 a barrel. currently nymex is trading down. brent is down by 1.7%. definitely below that $100 level, 98.62 is where we stand. overnight we had word the norwegian government stepped in to the competent they forced them to settle with the norwegian oil workers, disputing pension and conditions. a threat of an out and out cutoff in norway has disappeared. that's taken out southeast heat. china's crude imports for june down to the lowest rate this year versus a record high in may. the month on month figure down 12%. makes an impact on the oil price there. also, we are seeing a bit of easing from record highs that we in the grain complex as well. just think to the weather we've had over the past few weeks in the states, very hot, dry weather which has had a negative impact on the crops over there. so that had sent wheat, corn, soy beans very high but we've had a bit of a respite, wheat down by 1.6%, corn down 1.8%. tomorrow we'll have the crop report coming out from the states as well. so let's move on. show you what's going on across asia. little bit of a mixed picture. some spots of green. higher for the sensex. green in various places. jakarta composite up. shanghai losing some ground. let's go to tracey chang. good morning to you becky. asian markets tumble for the second straight session this week as china's trade data is struggling with slowing demand at home. china's main stock composite hit a six month loss. second quarter reporting season approaches investors concerns over corporate profitability alsoawayed on the sentiment. the hang seng tried hard to stay in positive trade but ended flat. growth sectors were the biggest drag. shares of phone maker dropped to its lowest level in more than three years on concern of its first half earnings. and oil refiners saw loss hurt by news beijing will lower prices of diesel and gas tomorrow. and investors were spooked. stocks fell for the fourth straight session closing down .4%. in south korea kospi is down on heavy foreign selling. australian shares finished lower as well with the china growth resource sector suffering the biggest loss and we'll have more on those china trade numbers coming up with our guest out of hong kong. let's quickly check on the india sensex. bucking the trend gaining .6%. back to you. tracey chang, thanks for that report. apple lost a uk high court case against samsung with the judge saying consumers won't confuse samsung's tap let with the apple as it wasn't as cool. is that legitimate. how do you define cool? is at any time old saying you know it when you see it. if you want to join the conversation, get in touch with us. e-mail us at world world or tweet us @cnbcwex. >> still to come do you think the traffic on your morning commute is bad? find out if you live in one of europe's most congested cities when we speak to an expert in less than 30 minutes time. don't go away, we'll be right back. >> >> welcome back. china's trade surplus widens in june as exports and import gross. tracey chang has more details. >> what's really alarm is how fast import growth dwindled rose 6% from a year earlier much less than expected 13% rise. officials said falling commodity prices played a role but weaker domestic demand a crucial support was the real reason. export growth higher spelled trouble. exports to the eu fell in the first half as the united states replaced europe as china's largest export market. but analysts say the u.s. economic recovery is not solid meaning demand for chinese goods will also likely be very unstable. the vice commerce minister has a more optimistic view for china's trade. he expects trade numbers to be much better in the second half of this year. some economists are also playing down costs for panic since those trade numbers are still better than those that we saw during a financial crisis so they say a multitrillion run program is still not needed at this point. back to you. >> let's get out now to the senior economist, dariu darius kowalczyk. how much concern does the growth raise in your mind about domestic demand? >> the weakness in imports is somewhat worrying but i wouldn't overdramatize it. commodity imports grinds to a halt. it's down from 20% last month. so it shows that infrastructure spending slowed in china and that is weighing on infrastructure growth. perhaps exporters seeing weak export orders which we know from manufacturing pmi survey basically reduced demand for foreign components that normally they would use to then manufacture higher exports. so it's not just the domestic demand that's weak, anticipation of foreign demand is not so good. in fact in seasonally adjusted terms imports were much better, up in double digits. i wouldn't be too concerned. china did slow in q2 but we believe it will recover in the second half the year. >> dariusz, i was wonder there were various stories about how reliable chinese economic statistics are and i know it's a hard economy to follow. the "new york times" had an article about the reliability of electricity consumption and i wonder what your take is on this given we have this debate on what sort of shape china's economy should take between broadly to the right and the left there? >> sure. i think that by and large the data should be fine. and there's many ways to confirm that the economy continues to grow. electricity usage, for example, is still rising. not rising as fast as the whole economy probably because it's the heavy industry that slowed the most, which is related to the decline in commodity imports. but traveling in china very often and, you know, talking to the businessman and bankers, my feeling is that growth is, yes, slower. three year low probably. but it's still solid and based on the kind of figures that's been announced i'm confident growth will rise in the second half the year even if you do not precisely trust the data, i can still say that this is an economy that's growing at a healthy clip. >> we'll leave it there. still to come on this show, blackberry maker research in motion is set to face angry shareholders later. find out what's irking investors if that's not clear. that's next. t. . welcome back to the show. thanks for staying with us. eurozone finance ministers agree to meet spain's most urgent needs. but they continue to haggle over other details of the bailout. >> alcoa begins earnings season in the u.s. with a set of mixed results as the company posts a net loss but still beats forecast and expects a rebound in aluminum prices. >> chinese imports fall in june, based on beijings trade service. outgoing barclays chairman marcus agius will face lawmakers in an hour's time one day after paul tucker comes under fire. >> did they ask you -- >> no, no. >> or any other government minister? >> no. thanks very much for sticking with us on the show. you're watching "worldwide exchange". the ftse 100 is up just shy of .2%. small decline for the german markets. up for the cac and ibex. just about a quarter of a percent higher for the spanish markets as well. >> let's look at spain's bond markets. back below 7%, 6.94% is the yield. italy sitting on that 6% level pap bit of relief after the widening we saw yesterday. meanwhile gilt and bunds benefiting with the yields rising a little bit there as a result of investors, perhaps becoming a bit more comfortable with risk. let's take a look at what noyer. the ecb stands ready took within the framework of its mandate. ready to act is the language they choose to use. >> what's interesting to me is he's commenting on economies across the eurozone. he says france which is a country that investors are increasingly focused on france must respect the deficit reduction commitments and france remains incapable of creating jobs something which may be true but the french will not appreciate. he also talks about the need to separate or sideline purely speculative banking activities and course with regards to the relief funds that are being debated here throughout the eurozone he says it's urgent to make them put temporary and permanent fully operational as soon as possible. >> let's just look at sterling. had a little bit of data here in the uk which is pushing sterling higher, rising to a session high in the past few moments over 155.30. gilt slipping too after uk manufacturing data came in stronger than expected. seeing that spike coming through. at the moment the data