Subdued and Legal Expenses are likely to weigh. And spending cuts will be broad and permanent. The Italian Foreign minister tells World Leaders and policymaker as they gather in washington for the Imf World Bank meeting. Youre watching Worldwide Exchange, bringing you Business News from around the globe. Very good warm welcome to you on the last Worldwide Exchange of the week. We kick off with the latest from the iea, the International Energy agency and their monthly report for march. Crude prices were rangebound in march with supply outages in the middle east, north africa and Russia Ukraine tensions. The forecast of Global Demand growth to be trim to 1. 3 Million Barrels a day. Global supplies to 1. 2 Million Barrels a day. March led by steeply lower opec output. Crude supplies plum emed to 29. 62 Million Barrels a day. Those are the highlights. As expected, oecd oil stocks after depleting at an alarming rate in 2013 have shifted gears. Lets get reaction to that. Joining us is Neil Atkinson from informer. Morning, ross. Those are the highlights. Yes. Im not wholly surprised by any of that. I will take issue with you that Oil Stocks Fell alarmingly in 2013. Thats what they say. Thats what they say. Yes, they do. Oil stocks are reasonably within comfortable levels in terms of longterm average. We are in a period where our Northern Hemisphere winter has ended. Peak winter demand is fading. Were going into refinery maintenance which you suggested, which is normal for this time of year. We have reasonably ample supply. Opec country is producing less. Theres plenty of supply growth. On the other hand we have still sluggish demand around the world. So i think the prices are rangebound as they have been for most of the year and theyre likely to stay that way. As they have been the last two years. Four years in a row. The brent price for 2014 as a whole, my forecast is its going to hover somewhere around 108 to 110 a barrel. Its excursions up or down from that figure are not likely to be interesting. Why do you think oil prices have been so incredibly steady . Well, weve had unspectacular growth in global oil demand. Even china which of course for most of the first decade of the new century was growing by leaps and bounds in terms of oil demand. Weve seen to some extent a leveling off of the rate of growth in oil demand in china and other developing countries. Peak oil demand was reached in the United States and some European Countries ten years ago. The oil demand front is not exciting. You dont think well have Peak Oil Demand for the world. Some people forecasting 2020 we might hit Peak Oil Demand. It was Peak Oil Supply a few years ago. We are talking about the potential of Peak Oil Demand. As countries like china move further along the Development Curve as car ownership levels rise to saturation points in china and as economies start to move away toward low carbon sources of energy, all the pressures are there to adapt the old phrase about the stone age didnt end because we ran out of stones. Were not going to run out of from the sound of it. Shake your money said it many years ago. You talk about a low cover, noncarbon alternatives. Fascinating report in the telegraph. Solar is getting to the point where we have to stand up and produce electricity. The cost of the panels has come down dramatically in recent years. The big driving factor that in the end will lead to higher rates of takeup for Nonconventional Energy sources. Its better technology, less reliance on subsidies than we might otherwise have expected. Good to see you, neil. Thank you, ross. Neil atkinson joining us from informer. Meanwhile, quite a heavy selloff state side in stocks at the end of session yesterday. It has fed through into this european session, were just over an hour and five minutes into the trading day. Decline is outpacing advancers at the moment on the Dow Jones Stock 600 by more than 91 as you can see. The ftse yesterday was up 6 points. But the dow down 1. 6 , the s p off 2 , the nasdaq off 3 . The biggest drop for the tech stock index in 2 1 2 years. This is where we stand this morning as a result, the ftse down a percent, along with the xetra dax, the cac current off as well as the ftse mib. The yield at the moment 2. 65 , 30year treasuries had a really good bid auction, in fact, the lowest auction yields for 30year u. S. Treasury in about ten months. 13 billion. That yield dropping 6 basis points. Tenyear gilt is down. We have been down to 101. 32. Euro dollar, 137. We have been up to 13 during the course of the session. The nikkei is down to its lowest level for six months. For more on that session, heres this man, sri. Hello there, ross. The currency markets as you said play the part in this pronounced weakness on the nikkei. Down by 2. 4 right now. This means that the nikkei is on track for its worst its sharpest weekly drop since march 2011. Just to set the context for you, remember what happened in march 2011. It was the triple disaster, the tsunami and the Nuclear Crisis as well. So that sets the context for you. It wasnt just the currency that imperiled the nikkei. It was also the very weak lead, the tumble that we got on the u. S. Markets. In the only that, there are a couple stock specific stories i wanted to talk about, including fast retailing. The index heavyweight and the consumer clothing staple. That stock got hit hard, ross, down by well over 8 after they cut their fullyear operating profit and remember, as i said, it was an index heavyweight. That took the nikkei lower as well. Staying with japan, i wanted to bring you up to speed at whats been happening at sony. They just warned at its vio pcs in february. Its urged customers to stop using them. The stock was weaker but not sharply lower. Lets get to china because the markets weak but they seem to be taking the selloff elsewhere in the market in their stride. The focus is on the data. The focus is also on the prospects of further stimulus action from the pboc. There seems to be some policy caution from the chinese central bank. The vice governor said the government and central bank should be cautious with stimulus since, in his words, it tends to be less efficient than Market Forces in of the booing growth. Perhaps theres an element of diminishing returns here, the Chinese Government and the pbc are cognizant of what happened in the postcrisis era. They dont want to create excessive leverage in the system of course. We have lending data from china over the weekend. We have a big q1 data midweek wednesday, q1 gdp, retail sales, fai and industrial output. So continued risk events really coming from this side of the World Next Week to look forward to. Yes, absolutely. Sri, for now, thank you. Well catch you later in the program. Joining us with his thoughts, tim harris, ceo of harris castleen to. Pretty horrible day for u. S. Equities but we had a good day earlier in the week after the minutes. So your thoughts . How do you define the ruins on this. Volatilitvolatility. On the upside, the first time this year, in the last couple of weeks we had seen mutual fund flows resuming in emerging Market Equities in a positive fashion. Yesterday, what do we see . The greek bond sale coming through at a pretty extraordinary success. Perhaps if theres anything, its a throwoff in the market, that might be it. Or overexuberance. That was a relatively small sale in the great scheme of things, 3 billion to 4 billion. The fact people were knocking on the door still tells you theres a lot of cash outside. 20 billion bid for that. Yes, absolutely. If you look at european bond auction, these level of hopes, when people want it, the people come. My point is, there are contradictory offers there in terms of risk appetite. The u. S. Is all about valuation and the volatility is about risk appetite. And what was the source over the last few days. Whats been seeding the selloff has been nasdaq, the tech, the biotech, social media. These are stocks which trade nasdaqs average p e is 30 something. The u. S. P e is 16. Thats one of the most forwardlooking p es today. Were looking at a gdp number coming out of about 3 as we get on to calmer waters this year. We havent had calm waters for quite some time in the u. S. I cant really pull out the fact that the growth story is crumbling in the u. S. Its about valuation and risk appetite. I wanted to maybe the geopolitical situations around the world is it going to underpin valuations in the s p . In the long run you buy equities. And i havent set that wholeheartedly and consistently for quite some time. In the long run when i see the u. S. Earnings story go from 105 on the s p to 117 to 125, to 135 over the next four, five years, that makes me feel good. S there a rising tide of earnings and cash flows which will underpin the markets. Theres a quiet confidence when you say that, which i quite like. Plenty more on the program. Its water resistant. It has a fingerprint scanner and heart rate monitor. Im not talking about my director. Its samsungs latest phone. Will it get investors hearts racing . Were at the launch of the s5 to get our finger on the pulse. We also speaked to an athensbased economy who says its too early for greece to have returned to the markets. And its time to recalculate nigeria, thats the line from our frontier Market Strategist who joins us at 10 50 cet. She says there will be an extraordinarily reevaluation of the size of their economy. Also, well be in jacksonville, florida, crowd funding will fundamentally change how startups find success. And at 10 30 cet, well preview the u. S. Bank earnings with the director of research at sax. He expects material improvement in the sectors volatility. All that and more still to come. Beautiful day in baltimore where most people probably know that geico could save them money on car insurance, right . You see the thing is geico, well, could help them save on boat insurance too. Hey okay. Im ready to come in now. Hello . Im trying my best. Seriously, im. Im serious. Request to come ashore. Geico. Saving people money on more than just car insurance. Youre watching Worldwide Exchange. Youre watching cnbcs Worldwide Exchange. Earnings season kicked off in earnest when jpmorgan posts its numbers before the bell. Jaymon dimon described this quarter as nerveracking. Analysts believe the bank could start to move past its legal problems. Wells fargo follows soon after. Investors begin to get a sense of some of the key themes impacting lenders state side, despite trading up year to date, the possible slowdown in Consumer Lending could have hit profits. Theres the potential for a bounce in shares after the price tumbled last month. Following its failure of the feds capital stress test. They couldnt raise dividends that they wanted to. Bank of america reports on wednesday after benefiting recently from costcutting measures while Goldman Sachs and Morgan Stanley will close out the week. The focus likely to be on Investment Banking and wealth management. Tim still with us. What are you going to look for for these guys . From the banks . Yes. Theyre moving on. I think theres quite a mix. You look at bank of america, citi, jp, their retail banks, commercial banks as much as Investment Banking. If you are having a u. S. Economy which is growing at a growth of 3, nominal 5 to 6, these banks ben bit from that. That is a powerful force. I think they are increasingly cash positive now. I think their abilities to grow their dividends is as good now as its been any time since the crisis. Financials from a cyclicality point of view, the financial cyclicals are looking interestingly placed now. I think thats one of the sectors wed be most exposed to. What about european banks have been the leverage, to play on the recovery and the play on the eurozone holding together. Yes. Were now going to go through aqa, asset quality reviews and possibly more selectively, one or two of the banks still having to prove their Balance Sheet worth. I think theyre through the worst. A lot of the Balance Sheet rebuilding has been done in europe. We are looking for draghi to support this into the economy as we go forward. You remember with the uk experience when the bank of england was putting money, funding for lending in. A lot of the banks have been rebuilding Balance Sheets. Its still the really early days of the recovery of the eurozone. The banks are less valuing the opportunity set in europe than the case ive just made in the u. S. What weve seen in the First Quarter of the year so far is cyclicality rules, construction sector, the automotive sector around the top. Whos in there with them . The banks. The banks still have something to offer them. Tim, stay there for a second. News out. They expect to offer a letter of intent for its event for the next few days. The target is staking a 49 with a total investment of around 500 million euros. Then they will target 2,000 job cuts and a restructuring of debt. Imf Christine Lagarde says quantitative easing is just a matter of time. Lagarde said she was encouraged by recent comments by mario draghi to step in to keep the economic recovery on track and fight off the threat of deflation. Its a risk because its a threat against growth. Its a threat against jobs. And it makes the servicing of debt quite heavy. So we are very encouraged to see that the ecb has acknowledged that risk and is prepared to take every appropriate measures to fight against it. Central banks policymakers gather in washington for the imf meeting they expressed concern to cnbc about the deflation risk in europe. If you look at europe as a whole, the growth rate has stayed modest. The risk of deflation is something that has a lot of people concerned. And you know, the answers lie in, i this i, policy decisions that could be taken. Thats actually the good news. There are solutions that would help. I understand where the challenge is but the fact is that europe has come back from the edge. Im actually more bullish about europe. Over the medium term than some others, simply because the fact is it has enormous capacity. I think the point is pretty easy and mario draghi made this point pretty clear in his last press conference. We do believe that the deflationary risks are pretty limited. So we portray an outlack for the inflation rates that expect a gradual recovery and this recovery will also be reflected in gradually rising inflation rates. Some of the thoughts about that. Tim . Will we get qe from the ecb at some point . I think so. Its a path well traveled now. After draghi did whatever it took to save the eurozone, the euro, i think we now move on. This deflation issue i think is clear and present. Weve seen the japanese example. Weve seen historic examples. We dont want to go there. We saw what the Federal Reserve had to do. I dont think were quite at that stage of life that the Federal Reserve was at four years ago, five years ago. But i think the point that madam lagarde makes, the threat to growth jobs and the servicing of debt, thats the real thing. Obviously deflation kills consumption. I think you will see the ecb moving forward, not in quite the tidal wave of support that weve seen previously but certainly positively. There is one thing, though, that may help consumer if you have prices that are lower than come down, cost of living gets a bit more affordable for those who have wage increases. That might actually help consumption. Look where the uk has gotten, ross. Its taken us five years to get to a stage where wages have overtaken inflation. Inflation is still running. Because people feel richer because they have jobs and their jobs are paying them more. Productivity allows that to happen. Europe is in a different situation. When you have a downside, you get stalling of investments and potentially of growth. The ecb coming in, putting more liquidity into markets. That is an inflationary policy. What that will also do, i would imagine, in the medium term, it will look at the euro trading with risk on the downside by midyear to the end of the year. The germans would love that. Guess what, your terms of trade improve. Suddenly as the great exporter to the world finds theyre that much more competitive. Asset price, how would it view European Assets versus u. S. Assets . I think were in a different position innen bods to equities in europe than we are in the u. S. I think there will be down side risk bond yields bringing that down. If people are more confident thattheres inflation coming down the road, that will allow the implicit growth assumptions to improve. That will help equities. Any qe in the last five years has generated any inflation, really. Generated asset price inflation. Its better than the alternative. I get that. I get that. I wouldnt want to be in the alternative. We agree on that. Good to see you. Have a good week. Tim harris, ceo at harris capital. Talking about the European Central bank, its teamed up to the bank of england to push for an easing of rules governing controversial debt products which many blamed for their role in the financial crisis. Central banks want to make it easier to trade assetbacked securities in a bit to ramp up lending to