Mostly green arrows across wall street today as we near the 1500 mark on the s p 500. And a 0. 1 contraction is expected for the German Economy in the Fourth Quarter. Those figures will be out in just under 30 minutes. The governors of the banks of italy trade in siena. And imfs Christine Legarde tells us that Central Bank Stimulus is still needed. We have the central bank on the one hand which have done quite a lot, which have been the fireman, in a way. And you have the policymakers on the other hand particularly in the eurozone who have made some progress and need to keep the momentum. Now, any minute now, were expecting the results from germanys ifo institute. January Business Climate index survey is expected to rise to a reading of 103 from 102. 4 in december. This, of course, follows an increase in expectations in the dew survey earlier this week. Weve seen an increase in the pmi surveys for germany over the last couple of months. As the German Economy particularly looking to climb out of its contraction in the Fourth Quarter, were waiting on the ifo senior va to tell us whether sentiment broadly speaking is picking up in line with that development. Now here were getting the survey. It would thou be ifo expectations index, this on reuters. Its higher than expected, 100. 5 versus 99. The Overall Index looks like it came in at 104. 2 versus the consensus of 103. So stronger than expected. It rose in january, Current Conditions 108 versus the expectations of 107. Euro dollar is about 1 higher on the back of that news. The ifo institute, Current Conditions, 108. Headline index, 104. 2 versus 103. Ross, what do you make of it . Well, you can see whats going on with the euro there, 134. Lets get more from finland. Good to see you, alex. Thanks indeed for joining us. The defense here that were no longer in crisis fighting mode, the question as we look at data in germany, the question is whether weve made a fundamental turn, a fundamental change and whether things are temporary. I certainly hope weve made a fundamental turn. If this crisis is 100 steps, id say we are about 60 steps down the road. Now, really, we have the fundamental institutional things in place. So that has calmed down the markets. What we now need is political stability. I think the italian election is one thing and the second thing we need in europe more than anything else is yeah. We thought stabilizing the crisis in terms of the bond spreads playing out was hard. Getting growth into europe looks to be an almost impossible challenge. Unemployment rate for spain, 26 . Really weak pmi out of france, as well, yesterday. We need several things. One is structural austerity at home. Through austerity, i believe you can get growth. Secondly, we need to continue liberalizing the market. Thirdly, we need more world trade. But we should be looking at a foreseeable furp, or Slower Growth in europe than russia, china or the United States. Lets talk about austerity. Austerity when youre part of a single currency, if youre in the uk and youre looking at austerity, you can let your currency weaken, you can control central bank money. Cant really do that in europe. And the imf has admitted the multiply they got totally wrong in countries with bailouts. Yeah. I think thats the tough part of having a common currency in variable states. Id love to see the euro be weaker because then it would drive our exports and we would get Economic Growth. But cutting expenditure and trying to stimulate the economy through reform. Whats expenditure . In the uk, we have investment spending, which is cutting off your nose to spite your face. The problem is, of course, you have a Monetary Union, but you dont have a Financial Union yet. That means on the financial side, on the fiscal side, on the economic side, youre going to have to do those reforms at home. No one else can help you. Are we going to have full Monetary Union at some point . Is that the future . Is that where were going or not . I think integration in one area leads to pressure to integrate in another one. But i do believe that the European Union will always be much more than an international organization, but at the same time, less than a state. I do think that the next step in european integration is strengthening the euro, in other words, having more Economic Policy coordination, but well never have a fully below economic you say you support what David Cameron was saying. So what would you say, though, if britain says, look, we joined what we thought was a Common Market. We dont want to be told have rulings handed down by the European Court all the time and all the red tape for business. If they dont get a repeal for that stuff, where would you stand . First of all, i think the whole idea that the European Union is only a Common Market is a fallacy. Its simply wrong. The European Union is a Political Union which uses economic instruments. What i like about cameron is the economic instruments which he suggests. Its less red tape, more Single Markets, more competitiveness. Thats the side that we need to work on and i think thats going to be the idealogical battle in europe in the next couple of years. How much support is that do you think . Theres a lot of support for those guys who have good economies. The netherlands. Id argue germany, as well, you saw the reaction of Angela Merkel on this issue. Countries such as denmark, sweden, who all believe in a Social Security system. The mood in davos is getting so good that he thinks he might have time to go crosscountry s skiing. Hes a fellow friend of mine, ill probably take him crosscountry skiing together. Things are not that good, are they . Things are not that fantastic, but i would still argue that things are a hell of a lot better than they were five months ago. Alex, thank you so much. All right. Weve been speaking to Christine Legarde this morning. Lets recap. Its doing better than other European Countries. That is it has been extremely firm in its message to European Partners about structural measures, about a steady path of consolidation within the membership. But also, an equally strong message about, you know, we are all members and we will stay members and we will do what it takes. You know, clearly, the discussions that weve had, you know, troika partners with the european members was comforting in that sense. As far as greece was concerned. There was a clear indication that the eurozone was there to stay, but the euro was a common good and that they were prepared to shoulder the effort of members under good discipline and rules as is typical of a german approach. But the economy of germany is, you know, clearly doing better. Not brilliantly, but none of the eurozone members is doing brilliantly. Just another great interview here from davos, kelly. Ross, great stuff. I was fascinated to hear finlands finance minister talking about preferring to see the euro trade lower. But if anything, its higher on the back of the stronger ifo Sentiment Survey that has germanys dax hitting its highest level since january 2008. Its up 0. 9 . 7818 is the level there. We know even as u. S. Indexes have been here multi year highs, the xetra dax adding almost 30 last year. You a better than expected data out of germany despite a steep contraction in the Fourth Quarter, that index continues to test multi year highs. Not the case for monte depasci. The italian bank has been suspended from trade. They were indicated up. I believe it was 7. 5 . They were down almost 22 in the last few trading sessions. The issues surrounding scandal at the bank are now threatening many, including mario draghi. He served as head of the bank at the time. Italian Prime Minister mario monti has signaled he is willing to discuss the issue is parliament. Ross. Yeah. Of course, we were speaking to the govern of the bank of italy about this, as well, this morning. He was saying, look, we didnt drop the ball over derivative trade. This is he said we shouldnt have any concerns about the stability of this particular bank. The situation was known and under careful consideration for a long time. As a matter of fact, we have been pulling the liquidity conditions of the bank and in the eba analysis and the need for further capitalization, we clearly doubt that there was a need of further capitalization and the bank was not able to provide and then the issue of the loan. So this is the process that we are considering. All right. Thats governor of the bank of italy. Also, coming up on todays program, mario draghi is speaking here in davos in around about 20 minutes. Dont go anywhere. Coming up from davos, in the meantime, though, i want to give you a check on Market Action on this friday as we basically wrap up, get close to wrapping up the month of january. The stoxx europe 600 is looking up about 0. 2 . Its mostly advancers. About a three to two ratio against decliners this morning. European markets, we want to take a closer look at the bourses. We want to focus, of course, on the xetra dax. This up almost 1 , at its highest level since 2008. Almost fiveyear highs for this index. The cac 40, the ibex are adding about 0. 3 today. The ftse 100 is up about 0. 1 . Well find out short will i just how strong the uk economy was at the end of the year after Third Quarter help by the olympics, the concern is that economy instead contracted in the Fourth Quarter, maybe looking at Something Like a triple dip recession. Too soon to go that far, but that may account for some of its underperformance this morning. Bond rates, lets take a look there. Whats interesting is were seeing this trade lifting the peripheral. The spain, ten years are rallying almost to 4 in this case. Extraordinary, 4. 08 . Were not far from going sub4 for italy. It was, what, 12 months ago that we were above 7 . Its amazing just what a rally weve seen here in this debt. Tenyear for spain, 5. 16 . This is why youre starting to see this question as to whether the rally has gone too far. Lets take a look at forex because a lot of major move in this space. The dollar yen, up about 0. 5 . 90. This is the level. Of course, theres two things going on here. Yen weakness, which has helped the nikkei. The aussie dollar, firmer. Sterling is rallying against the dollar. The euro is up 0. 4 . 1. 3430 is the level there after that stronger ifo data out of germany. Now, mention the dollar yen, mention whats going on with the nikkei, but let get plenty more on whats been happening along with some warnings on the strength of gloeg Global Demand coming from the likes of samsung. Will i sixuan has plenty more from singapore. Thank you, kelly. Lets start with japan. That market yet begin took center stage in asia. December cpi came in at minus 0. 2 piling more pressure on the boj to beat deflation and eventually meet that 2 inflation target. The boj jumped nearly 3 and its up for the 11th straight week. Thats the longest winning streak in about 42 years. The japanese yen weakened to a fresh 2 1 2 year low against the green back. Thats fueled a strong rally in exporter stocks. Shares in china gave back strong gains earlier ending down by 0. 5 . Chinese stocks led losses of prot taking after north korea warned us more rocket launches and a nuclear test. The weakness in the mainland dragged the hang seng lower by just a touch. China mobile shares slipped for the fifth straight sessions. Elsewhere, south korea shares pulled back for the Third Straight session, down almost 1 today. Suppliers, they continued to tumble. Samsung electronics lost 2. 5 despite record earnings. It also announced a cautious cap ex plan for the First Time Since the Global Financial crisis. Meanwhile, kia motor fell almost 5 today, to a more than twoyee low after the rising won took a bite out of its profits. The asx 200 managed to extend its winning streak boosted by upbeat data and Strong Production reports. Indias sensex is now still in action, trading higher by about 0. 8 . On that note, lets get back to ross. Okay. Sixuan, thanks for that. Good to see you. Well catch you a little bit later. More to come here on Worldwide Exchange from davos. Well be joined with mike brown. Well get right to him when we come back. As we can see the focus for the economy in davos, we can see mining and commodity experts. They think theyre pretty optimistic for whats to come this year. Here is a recap. Im actually a little bit more optimistic that 2013 will see us recovering and, therefore, we take the view that the oil prices for 2013 and that will actually not slow down the growth. As we can see, things coming back. Im confident that the gold price will continue to go towards 1,800. Considering that given any other uncertainties and certainties about, for example, the yen, the new bank of japan policy on inflation targeting, there are a number of very attractive investment assets. Despite the Global Economic downturn, 100, 110 has been pretty stable. Most of the screens project around the 80 level, 8el 0 to 90, i would say. And governments in the region Oil Producing governments tend to budget at that sort of level. Natural gas, of course, a much bigger variation and the u. S. Has become competitive in petrochemical and other sectors because of the shale gas revolution. And of the thats on commodities. Mike brown, impacted deeply by what happens with the Mining Industry in south africa. Weve seen a lot of fallout from the platinum mine disruptions. Youre exposed there. How are you measuring that . How is that going to affect you . Certainly it has a large effect on the country as a whole. There is now dialogue taking place between business, government and labor to try and resolve those issues. More directly in terms of our bank, clearly we have a large minerals business. But im very pleased to say that weve had no direct exposure today. Are you going to have to increase provisions at all for bad debts . No, i dont believe that our provisions will increase as a direct result of this at all. Okay. But what happens if it continues . This is going to drag the economy down, as well. It has that wider economic impact, as you say. Yes. Certainly if it does continue for a long period of time, it will continue into account growth. But i think we are more positive than that. I think the dialogue will produce a sensible camp and business and governments are now firmly behind the National Development plan. So im a little bit more positive than that. Its good to hear. The rand is down for four years against the dollar. How is it to cope with that . It doesnt affect our business directly. Clearly theres a knock on effect on Interest Rates if the rand stays at these levels and the rand is likely to be higher for longer. If you look across the range of economicic indicators, the rand is weaker and some of the shorter term indices are doing. The longterm Confidence Index is up. Equity markets are up quite strongly and the bond market has, in fact, xwrfd over the last couple of months. Manufacturing was off, 15 of the economy. That was contracted in the last set of numbers i was looking at. Thats a way for the Mining Sector, as well. Its still quite a bit of drag. Absolutely. The Mining Sector feeds the economic sector. So our outlook would be for the economy in 2012 to have groan at around 275 and expect a similar number in 2013. What do you do in business to navigate whats going on at the moment . So its tricky. I think the key to running any business right now is agility. There isnt a lot of forward activity internationally or domestically. Perhaps more confidence now in the first months of the year. But its trying to make sure that your business is both resilient and agile to deal with whatever circumstances arise. We had a guest on earlier this week who says the next 30 would be would be affluent. Is south africa, do you think, going to lose its share of the pie . I think the overall pie is going to grow and maybe we might lose in percentage terms because it is a more advanced economy and therefore is likely to grow at lower rates, but with africa, the opportunity is to participate as the gateway into the growth rates in the rest of africa. And what about you expanding further into the rest of the continent . We have obviously a strong business in south africa. We have businesses in namibia, mumbai and zimbabwe. He think it has enormous potential. As more and more South African clients do best in the rest of africa, clearly we refer them to echo bank and weve been able to provide them with some support for their growth ambitions and have the option to acquire 20 . Are you getting a sense from international times, as well, for those looking to invest in africa that the one thing the three parts of the thing theres always been resource. The one thing is governance. Do you get a sense how people think that is changing for the better . Yeah, definitely. On average, its changin