at 21.50 european. you have u.s. airstrikes in the middle east, tension with russia. a key oil producer. dropped 16% oil over the last three months. that is the worst quarter since 2010. how long can oil prices they desensitized -- oil prices stay desensitized to geopolitical risk? >> it is a miss for that. shocked they are not making their budget target until 2017. it brings a much bigger debate about europe, which is loosening up the purse strings. a bloomberg view piece was written that said spend. they are in naples for their meeting. that starts at one of the worst outlooks. that area has one of the worst outlooks anywhere on this map. there is more sentiment negative and greece. that is hard to achieve.

a quarter of a trillion dollars was wiped off global equities. the global index was down 2.8%. that was the worst since june. italy came out and said they are cutting the growth forecast. it is going to contract by .3%. they told the market that they expected the economy to grow bite .8%. they are slashing 2015 growth targets by 15%. there is a story that they want to get the ecd to buy greek and -- junk status bonds. let's see what the germans say about that. we are waiting for the dax to open. is down over 35% in 2013. they are a doing chair -- doing a share buyback of 1.5 billion euros. will get a little flavor of

what is going on in the run-up up to the unemployment numbers on friday. the numbers come in down, but not as bad as the market had anticipated. i will give you the precise numbers. sales down 2.8%. their market was estimating a follow 3.3%. it was the third quarter in a row where they saw deflation. nault said the market is due to slow recovery. there is a big deal announced by the government. babcock would gain contracts. they look after the naval bases around the united kingdom. no real repercussions there. let's go back to johnny and see if we can get a price. the dax has not opened yet. that will come through a little bit later. i'm sure you will bring that to our viewers as soon as it comes

through. they came, they conquered, they went through 110 and gave up the ghost. it is the lowest yet. it ready for 120 over the next two years. according to commerce make. -- comments bank. the analysts are beginning to move on where they believe dollar-yen will go. we broke through the 110. we have been and gone. how about the aussie dollar? retail says miss. in case you have not noticed -- down she went. we have analysts that target that you will hit levels that you have not seen since january of this year. .8660 is the stopping off point and you could see as low as .8545. retail sales missed and in case you have not paid attention, slightly strong dollar in the making. back to you. >> manus cranny, i am always paying attention.

we have a price for you. 3.6 percent up higher. -- finally some good news for adidas. a little bit of good news for saint bridge. let's bring in james bevan. sales beat. they are less back then everyone expected. good news for you? >> definitely. the big news was the 25th when they said we would do two things. we will do with a price match,/prices. it demonstrates they will take the battle to the enemy. the enemy i think is asked up. that is the -- asta. this is where they want to hit hard. the more they do, the more difficult it is at tesco. >> i am looking at some of the short positions on the terminal at bill burke. built up against this the -- terminal at bloomberg.

built up against this stock. are you a buyer of sainsbury's right now? >> i would not buy on the immediate rally. we will say short play and people reassessing fundamentals. the real challenge is who is going to win? i don't think we should be buying before we get to 170. theng way to go, reflecting challenge that the company has to get itself back into business of getting more profit. i don't think morrison's is in a good place either. the winner on the block in that sector has to be sense very. -- saints very. veryen you look at saints , isaenz very against tesco the positioning anyway different than tesco? >> they have already come out in

advance of the numbers. they understand it is difficult. here is our plan. this is what we are executing. they have done it. tesco is still talking. they have to be in the billions to be price competitive. it will be a continuing drain of management time and competency. when you have a business that isn't firing on all soldiers, it is hard to identify if your management will pick it up and run with it. tesco, look at sainsbury's, it is hard to differentiate. it feels like there is a one-way train on the race to the bottom. we have news coming out of sainsbury's that they are trying get customers out of 60 pence. >> things are desperate. we are seeing reduction in volume and huge hits to margins. that craters profits. we have the weight races on the other.

it is a far more fundamental challenge of how much people want to spend in total. we know the retail numbers were heavily fluffed by the ppi insurance paybacks by the banks. now we are having to look at the hard reality that retail sales will have to core operate with real earnings. they are not going anywhere anytime soon. >> you manage money. when are you a buyer? >> i am a buyer after the stock has gone off and the rally is short closing. it will come down and then i am a long-term buyer. >> once the short rally has been covered. james bevan, you stay with us. here are a look at two stocks on the move. sainsbury's and tesco. sainsbury's a little higher after sales are less worse than people anticipated. up by .5%. said down .1% as the sta they have commenced their investigation into the overstatement of profit. we are looking at adidas shares up by over 4% on the back of the

news there will be a share buyback. we are looking at france and a budget deficit target. when will it get to 3%? we will talk about that later. ♪

>> welcome back to "on the move ." i am jonathan ferro live from london. we stream on everything. let's bring in james bevan.

james, the last 24 hours, news from italy and france. italy cutting their growth forecast. the french cutting their budget deficit forecast, pushing that 3% target out to 2017. ecb meets.d, the what can draghi do? >> he can talk about buying high-yield from greece and cyprus. you might think, what is this about? the challenge of europe is essentially one of demand of efficiency. if you were to look at the current balances for window, what is going on in the economy, the peripheral five between 2008 and today has moved from a 58 point deficit, they were importing more than exporting, and to an excess of 2%. they have seen a ratcheting down of demand which is killing the global economy, and therefore mr. draghi needs to get money

into the hands of people. he needs to get spending up. he has few options but this is reasonable. >> i want to get my balance sheet up by a trillion euros. not looking good so far. i need to widen available assets. let's lower the standards. if that is the goal, can he get it past the government counsel? >> he needs to sit down and say we have a material problem and cannot get demand up. people are not spending given the premise that borrowing is cheap. go and put cash in their pocket. onebuyback program seems to that can get cash into the economy. if one were very brave, austerity off the menu for a few years. governments, go out and spend because we have to get growth going if we are ultimately to solve the debt problem. >> this is passed over from the executive board to the governing council, is that we are putting our balance sheet at risk.

>> absolutely. it is also at risk from the challenge that debt continues to grow. are goinggovernments to carry on spending more than they have got. the only sensible long-term way out of the problem is not austerity. economies have to grave. that is the message that mr. osborne put in the country at the mode. >> let's take that debate one side. say they execute that tomorrow at the meeting. let's look at markets and what that means. high yields. spread start to whiting a little bit. >> i was worried because we had a peak in pricing. back in june, we had three months to sell off. we had spreads going up. i thought we have a trigger. inhought it in meltdown equity markets. that goes out of the window. >> in japan, you might think, what is japan doing?

to support the -- it is buying jgb's in order to support the market. it will hold maturity. it is an interesting mechanism to get the economy moving. >> i am looking at a market. you think high-yield spreads should be wider. you know what happens to spreads if they do that. how do you manage this? you said it out and say, so what? we might get a rally but at some point this is not going to and nicely? long-term,k to good-quality growth with a good balance sheet. cheap in thes are context of low inflation because to me, it is about being very limited inflation. i do think that the valuable for u.s. equities should be 17 times as opposed to the 15.9 the numbers tell us today. to me, equities are not expensive. sap comes to--

mind as a company that i think is materially mispriced and undervalued. to 20 of opportunity surprise shareholders. i really do not believe the government is going to allow commercial banks to make huge profits after they have been bailed out. i am really nervous on the financials. >> let's go over to germany if we can because we are expecting the liston's of the lando -- the listings of delando. it is going to start trading in the next five minutes. hopefully we can get a price as we head out to hans nichols. you have read through the perspectives. we don't have an opening price yet. what are the arguments to investors right now? >> their argument is growth. they have gone from about half

$1 billion in 2011 all the way up to $2 billion in this last year. a 30% year-over-year when you look at the last six months. if you want a piece of the online retailing action, this is mostly a german-speaking company. they are in 15 countries. it is mostly austria, switzerland, and germany. one is the overall question. when you have returns at zalando, they have about 50% return items. industrywide it is 30%. that gives concerns about the on-time -- online retailer, and where they will go. 21.5 at what it was priced at. we will see how much higher it comes in. i don't think it will be hourly bob auf deutsch, but i am looking -- i don't think it will

eutsch, but i'md looking forward to a price. today we get zalalndo which is online at retail. it gives you a barometer of what is happening, especially in germany, but european wide. and theywe get rocket, have maybe 70 portfolio companies and they are international. long-term, their goal may be to go against alibaba. they are looking to raise 1.4 billion euros. they're going to need that cash for their portfolio company if they are going to want to compete with amazon, alibaba. that is tomorrow. that is the bigger one. today is the prelude. we will see if there is a pop and we will wait for a price and watch it rise. >> great work very to him i will bring you the price once we get one. let's bring it in james devon. in james devon

for his reaction. we're looking at ipos. 68 billion dollars in the last quarter. can you differentiate the program? is it a dwindling pool of shares available to me as an investor and we can keep sucking up the ipos? >> it is different. the vivax are about executive boards trying to pump out earnings-per-share. it dangerous because we see a nap -- we see an absence of reinvestment. bad news long-term. equally very bad news for the economy. it is ultimately lower trend growth. in contrast, ipo is about raising cash to build bigger businesses. i was a great skeptic of what was going on at facebook. look at how facebook is monetizing its position in envelope. it is doing a cash in the globe.

at facebook as a hugely successful prototype business. the insights take of a fundamental of a company when? they haven't inflated by continental engineering? ? >> he will not be able to massage the return on equity. you can't massage revenue, either. i would look for companies that have solid top-line growth, decent-quality revenue some drug. onlet's check on it -- in european equities. we're going to talk china because it is national day. over 100,000 protesters are gathered in hong kong for a six-day of demonstration. the holiday and without the hong kong chief executive? ♪

>> welcome back to "on the move. we finally have a price for zalalndo. it opened at 24.10. that is a nice pop for europe's biggest fashion retailer. it opens up 12%. we will bring you more on that.

let's move over to asia because it is a day of commemoration in hong kong. at least it is for the beijing backdoor authorities, marking the 64th anniversary of the formation of the people's republic of china. demonstrations against china's influence in the city continue another day. day six of demonstrations here in hong kong. today, wednesday, midnight is the deadline set forth by protesters demanding democratic reforms. they want beijing to drop plans to vet candidates for the hong kong leadership election in 2017. they also want hong kong's chief executive to step down. the chief executive held a ceremony. he raised a chinese flagged for chinese national day. he talked about one country, two systems. he was jeered by crowds who were

not happy with his communication and want him to leave. people here are getting ready for the long haul. there resting under umbrellas. it is called the umbrella revolution. last night from the rain, today from the sun. there is a system. people are handing out flyers and cleaning up garbage. estimates put the number of protesters at over 100,000. today being a public holiday, more people may be showing up. >> stay with us for a few final thoughts on that situation is james bevan. i get the political complexities. what i want to talk about is the slowdown in china how this could exacerbate this movement. we have seen chinese politician and the government as providing economic security to preserve political legitimacy.

slowdown in china will not have these movements. >> no. we are seeing fresh policies coming to the table to support the housing market. china'se basis on which future economy now depends. it is a rampantly overpriced market in a major cities. it was priced out in suburban areas. nevertheless, china is saying we will keep the party going and for now, that buys them time. >> political suicide. you can do find that by letting a housing bubble pop. if you keep blowing it up, once we get to the end of this, it is really not going to be very good. >> there is a terrifying trade-off between politics and economics. we know that economies would benefit from lower house prices, less money being tied up and depreciating bricks and mortar. politicians are not going to puncture the bubble because it will make them unelectable. >> news on sainsbury's. stay with us. i am reading some of the headlines that the dividends will be part of the full-scale review. we have gains that say that

sainsbury's is completely in reverse. share price will undoubtedly come under pressure. the issue is not about the company saying it does not want to reward it. it is about keeping its balance sheet. it will not even pay a reduced dividend with a -- within line of the reduced rate. the easiest source is to simply hold onto cash. >> we are so busy this morning. news on adidas as well. they're going to issue up to one billion euros in eurobonds after they announce the share buyback. bevan, thank you very much. as we had to break, check out the price of oil. bounced back from the biggest job in 22 months. that is ahead of a u.s. inventory report today. coming off the back of its worst

quarter since 2010. we will talk oil prices and conflict in the middle east. ♪

>> welcome back to on the move. i'm jonathan ferro. 30 minutes into trading day. this is what the market looks like now. the dax is up by .1%. the ftse in london down by 1/3. it opened lower and stays lower. pmi manufacturing expecting a pickup. that is the macro side of things. it is a day for corporate news flow. >> we keep getting breaking news throughout the program keeping you on your toes. for isthem to keep out adidas. they are selling debt for the first time since 2009. the key teak away for investors

is a 1.5 billion euros share buyback. they will do it over the course of three years and it kicks off in the fourth quarter of this year. a sigh of relief at last for the shareholders who have seen 1/4 of the value of adidas eroded. and thelimbing investors look like they might see a bit of an uptick in their share violation as adidas buys back shares. tesco, there is no end to the bad news. the financial conduct authority is going to be doing a full investigation after tesco said that they had overestimated their profit. they had overdone that overall. tesco off by 1.7%. that is not surprising. we knew that the watchdog in the u.k. had already had a bdi. -- a beady eye.

going to be digging into tesco much more later. it is falling today, as is its rival. sainsbury's is one of the key grocers in the united kingdom. worries about its capital position, whether it will be cutting dividends. by 2.9%.'s off it seems that the bad news in sales was not as bad as expected. analysts feared much worse. they were worried about the strategic review. that is why they felt some 12% last week. they are down again and currently trading at the lowest since 2008. the lowest price of sainsbury's in six years as they say the dividend is also going to be under intense analysis, i will put it, over the course of the strategic review. they will be announcing all about next month. >> great work, caroline. a very busy hour in europe. the me get you up to date on top

headlines. france is planning spending cuts in 2050. he said the french government set the deficit for 2014. that will be 4.4% of gdp and 4.3% in 2015. in italy, the government has cut their growth forecast for this year and next and pushed back a structural alan's budget target by a year. -- structural balanced legit target by you. the economic outlook has greatly deteriorated. gdpgovernment sees shrinking .3%. .8% increase they saw in november. near zero rates in markets may be distorting asset prices without creating any real gain in activity. in india, he worries that the

nation's too relight of rate changes. >> we have one tool, interest rates. i worry is that we may be in danger of overcompensating for the deficiencies in other parts of the system. >> let's turn to commodities. brent oil advanced after falling to below $95 a barrel for the first time in two years. production, the pressure is on the oil market right now. we're joined from in stem bowl with -- istanbul with nansen saleri. if i shot my eyes and you told me there were airstrikes in the middle east, there was tension with russia, at a guess i would say that oil prices are above $100 a barrel. they are not an brent has had its worst quarter since 2010. what is going on? >> what is going on is two things.

number one, the global markets are very well-balanced. it is the primary factor. the other one is, which is unmistakable, is the fact that the zaidi -- anxiety premium associated with isis is diminishing. the markets are reading the situation and making a consensus decision that the worst is behind us. as a result, anxiety premium is more or less being discounted. these are the main reasons. >> you discount the anxiety premium. my question is does the iraq and syria situation ever mean anything in the short-term, medium-term for oil prices? >> absolutely. it means a lot. both in the short term, midterm, and long-term. global energyt to markets associated with chronic anxiety and chronic instability

so close to a very important part of global supplies when it comes to oil. in the short-term, i would expect with a continuing control of the situation vis-à-vis isis, i would expect a further relaxation of the prices, even prices below the $90 mark right now. midterm and in the long ground beyond a year, this is not sustainable. of theonic complications crisis both in iraq and syria, even beyond the borders, whatever definitive upward pressure on the markets. i would not be surprised if we go back to the 90 and $100 range again. and we do drop below $90 a barrel, what is the bottom line for opec and the

saudi's? when did they look at this and start thinking we need to tighten the tap a little bit? >> i think they are looking at it right now. if it ever drops below a level brent, you can naturally expect some direct intervention from opec, specifically from saudi arabia. the markets are very reactive. people are looking at the situation right now and clearly are making decisions right now. the other one is it is not a one-way street and that prices cannot indefinitely drift downward. as you approach to $80, other mechanisms set in and clearly market forces are going to bring because the main engine for what is going on right now for the global supplies is the u.s.. the u.s. unconventional business

is very price-sensitive. when you push the prices to $80 levels, the biggest engine for the stability of the global prices will start having a negative effect. i suspect it is not sustainable, the drift downward. >> let's talk about the u.s. side of things. the approach at the moment seems -- netet imports into imports into the u.s. is extremely low. oil supplies in the u.s. are booming. side is unreliable, each seems to be complacent about abundant u.s. supply. know, the u.s. still millionabout 5.2 barrels per day in net petroleum imports. there is still a burden on the economy and there is certainly an economic incentive for the u.s. and many of the states, most notably texas, to maintain

their production. to maintain it at the highest levels, you need robust price levels and i consider a price level somewhere between $90-100 $10 to be very supportive continuing performance in the u.s. markets. both on the conventional side of as well as the unconventional. both and oil and gas. i don't think u.s. production will shift drastically. it is just a matter of how much it is going to go further up. combined oile u.s. and gas production is producing close to 23 million barrels of oil equivalent and that number is going to go up. how far it would go up depends on the prices. >> just a final question for you. spent a lot of time looking at the supply side of the equation, not much talking about demand. for you and the people you're

talking to at the moment, how concerned are they about falling demand coming out of china? think the global population is going down. you can debate many things, but one thing is not debatable. the fact that you have 7 billion people on the planet with rising expectations for energy consumption. we may have ups and downs and china is a very important player and so is india. the world's energy demand is still very robust. it is more of a question of how that energy demand is going to be allocated among different supply streams, including oil and gas. from a demand perspective, i am camp as farbullish as the growth of the man. we have been averaging about 1% annual growth. i don't see any significant departure from the 1%. we may see a slight drop to .5%

but even at .5%, you would need supplies to support you with that type of growth. have got to leave it there but we will continue this conversation at the end of the quarter and see if you're right. thank you very much nansen saleri. joining us from istanbul. coming up on "on the move," jonathan hill makes his case to become the eu's next financial services chief this afternoon. we will take a look at what the quizzing from the european parliament is likely to focus on. ♪

>> i am jonathan ferro. this is "on the move." welcome back. france has announced the budget plan and updated their growth outlook this morning. it does not paint a pretty picture. here with more is caroline hyde. budget deficit remains above target. when are they going to hit it? >> not for several years. this is painful reading. a country that needs to slash its spending by 21 billion euros. that has what been outlined for 2015. the years after that still going to be 15 billion euros a piece. these are going to be huge cuts in terms of spending, hiking up taxes and yet still they are unable to get the budget deficit below the 3% target for the

eurozone. it is rising. the budget is going to be 4.4% for this year. it is owing going to fall to 4.3% the year after. they are he delayed their target twice. they're going to have to go back to the european commission begging for extra time. building.re has been they have such lackluster growth. the growth is credible for france. growth justd that north of 14% -- .4% in 2015. this is why the pace of deficit cuts are going to be so huge because they say we growth is really holding them back. you can't get that much revenue in from taxes on businesses and people if you are not having any growth. this is what it is holding back the growth. they've had calls to rejuvenate, to change overall the way in which they regulate, the way in which they tax businesses and the way in which they look to

have a huge sum up -- amount of support for public funding. >> for a lot of people, this news will not be a surprise. some people may say that this target may be optimistic. hollande facing pressure public and political. >> they have backlashes in terms of strikes. they are trying to weave apart some of the monotony's they have in france. they are trying to make labor laws more free and flexible, trying to incite growth. you have backlash from thatacist, those out there have been striking because they don't want to see non-prescription drugs sold in supermarkets. they have backlash in terms of the public. political backlash in terms of votes. he is losing majority in the senate. in the highest level of parliament, he is seen as center-right opposition. the centrist allies steal the victory. they have a clear majority in

the senate. that will delay the moves he wants to see. the loss he wants to see past will be delayed because he no longer has control in the upper house. he has majority in the lower house, but not the upper house. political heat is ramping up in germany. on the public side of things, angela merkel is supportive of ideas.e and his he is being felt from all sides when it comes to france. no growth and painful tax increases and spending cuts to swallow if you are in the population. back to you. >> let's keep it on europe. in brussels, jonathan hill, the u.k.'s nominee to be the new european union financial chief, will make his case for the job. ns with anny joi look ahead at how he might receive. >> there are a lot of new

appointees going to the european parliament. i have some great lines here. he is called a fox in the hangmanhenhouse, a appointed to bury the city of london. i doubt it. juncker offering the united kingdom an opportunity to finalize pan european banking regulation. we will not be doing that in the united kingdom. offering a britt the opportunity to operate financial services. as well as kickback from the u.k., one could say. this is a man who was the leader of the house of lords. when major was trying to fight back the tories who wanted a looser relationship with europe. don't believe all of the hype that this is a vanguard for the square-mile. he has got to be seen to be and prove himself to be that will enact the cap on banker bonuses, who will look after the solidity of clearing houses, shadow

the structure of banks. there is a list of things he must do. they will ask him about his consultant the -- consultancy. he left in 2010. the voices of the center are already there. i call it backlash, 20 exclamation marks by the belgians. it is not exceptional that a banking unit goes to a country from low never join a banking unit. don't forget the germans. banking union is the main issue. his appointments would give a lot of responsibility for e uro-area integration for ache country that will never drop a currency. forward byt be put cameron. some say it is a good move for the united kingdom that they have a voice in financial

services. the city that we sit in, the industry that we make our money from is one of the biggest in the world in london. is a series of written questions that will be put to him. parliament will ask him how he plans to police the imitation of eu law given that your home member state is advocating against european union regulation. it goes to the heart of the issue, bonuses. >> it might strip them of legislation to -- strip him of responsibility to legislate. a man who wants to talk about this is guy johnson. >> we have a panel on the subject, talking about whether it will do the city's bidding or actually deliver for brussels. as manus was saying, we have the banking union coming up. junckers is talking about the capital market as well,

which is interesting. getting company's going directly to the capital markets rather than the banking channel. that could be important for europe's recovery. hill will be front and center for that debate. we will talk about the options that lord hill has in front of him. we will also be talking about sainsbury's. the cut could be a big story for that business. it already is a big story from here. its balance sheet is its main point of weakness. what happens on the high street, it is the balance sheet you need to focus on. we will talk about that as well. "on the move we will go out to hong kong. we will get the temperature of what is happening there. we will also talk to another guest about whether hong kong starts to have an impact on the taiwanese story. the taiwanese are pushing back against the influence of china. lots to talk about. a busy wednesday.

back to you. >> i don't know how i can follow that is, but i will try and talk about marijuana, one of the most controversial drugs a doctor can prescribe but an israeli startup can revolutionize the way that marijuana is taken. drug lab,l aviv medical marijuana is getting a makeover. isund and filtered, it filtered to a new 3-d pot puffing device that will not get you high. a cannabisdeveloped inhaler while using rock cannabis, no chemical alterations or additives which allows it to penetrate existing regulatory systems >> today. no expensive >> clinical trials. guessing how much cannabis a patient is to relieve pain. they hope that the real money spinner will be this.

it is a cannabis inhaler for home use. they hope to have it in israeli homes next year and then to the important american market the year after. billion,et, worth $1.4 could rise to more than 10 billion by 2018. they hope to win about 2% of that, or some $200 million. does the inhaler actually work? a former navy seal injured in lebanon was one of 10 israeli patience to try it. spend whatever it takes to have this device. show everyone how much i am suffering. it allows me to take care of my health and be much more relaxed outside. >> the device could change marijuana's image. >> doctors were reluctant to describe cannabis as cigarettes because of the stigma and the actual need to smoke for that. i think from now on, once

approved, everyone is going to look at it as a medicine as opposed to a substance that people use. >> with approval in israel imminent, they hope to raise up to $20 million to boost production of its device. well, they hope to apply it to technology is other controlled substances such as opium. "on the move" is back into goo. ♪

>> euro-dollar dropping below one dollar 26 since september 2012. manufacturing in germany disappoints. more on that news in "the pulse" that is next. ♪

>> defiance on china's national day. more protesters take to the streets in hong kong as leaders call for calm. we will take you live to the city. france says no to austerity. today's budget confirms the deficit won't fall below the 3% level until 2017. sainsbury's sales slump as the supermarket shares fall.