u.k. independent party. take the first-ever elected parliamentary seat. what does it mean for u.k. business, and what does it mean for the pounds in your pocket? ftse futures down over 1%. about what we have had this week. that has been coming into focus. it is the macro story. everybody is focusing on what is going on with the fed. this is how we are opening. looking at profits up

half a percent. we are going to be talking about that through the morning. let's see what is happening in asia as well. the asian markets were up pretty aggressively. john was mentioning what was happening. this is a two-day chart. you can see the selloff yesterday. the market is looking forward to the 27th of next month. is that a bit of a lead indicator? maybe we can start to think about finding a flaw in these equities sessions. little bit of a better bid coming in as well.

just a little bit of an indicator. we will watch how the next half-hour settles out. the selloff in asia. are beginning.gs >> let's get an inspector. investment in the director. brings in billions of dollars in assets. look at the map. it is red. talk to me. you are sitting at your desk. you have got your bloomberg terminal. be worried? >> no, i think we have been cautious over the last six months. levels had been very low. everybody was bullish.

then you look at valuations. they stand to be a little more cautious. once the correction began to , now is the time to sit back and let the value appear before you begin to say, where do i reengage in the market? max we are up 2% one day. we are down 2% the next day. look at the volatility. do i have to get used to that? >> i think so. indices we mainline want to send fairly normal up or down. i think it suppresses volatility. people got used to one-way directional moves in the marketplace.

grieve thoseay to -- create those. >> let's talk about growth. just as you think the fed is going to pull back, qe and next month. treasury yields start going lower. we start getting concerned about growth. can the fed get out of this? >> i think it was the expectation interest rates were going to happen in the second quarter of next year. the growth momentum is ebbing away. are very near to zero growth rate across the board. we are seeing china continued to slow down. this has spread globally. >> u.s. treasuries. are you looking at higher rates at the end of the year? . have yield of 2.3%

it keeps getting lower. >> i think it has to do with the stronger dollar coming down. ener prices are going down. it has to come down. there is a tightening taking place. in essence the tenure is going down, reflecting measures that are reduced. >> lower yields a little more stimulus. dealing with monetary side of things. my question is how do they deal situationt out of the they are in? there has been a debate as to whether they are scared of the market reaction. in your mind is federal reserve profit dictated by what happens in the market? >> it is a symbiotic relationship. the dollar is tightening, which

means the fed's work is just dominated. the fact that equity markets are coming down. it is another symptom the fed can take a backseat. the fed does not need to tighten right here. the prices and everything else is telling you everything is calm. that means there is huge excess capacity out there. it does come down. >> that is a big change since federal reserve minutes were written. 5.9%. does that change anything? >> it does. we are getting nearer to when excess capacity is reduced.

excess pressures is what they should be looking at. it gives them more time before they can begin to start the interest rate cycle. >> we're going to talk about this after the break. londonmarkets here in open lower. they stay lower. is lower. the dax in frankfurt down by 80 points. we are lower. check out shares of carnival. carnival shares down by 2.78%. look at the travel and leisure index. it is having its worst week since 2012. a lot of people are talking about the ebola virus and what it means.

there is so much to talk about. if you want to talk to me about markets you can follow me on twitter. two.he move" is back int

>> we are accountable to the european people.

it means lifting inflation from excessively low levels. we will do exactly that. >> that was the ecb president mario draghi. that was when he took the stage in washington yesterday. it has been a headache for the ecb president. he called for structural reform. do you see a man committed to his mandate? he wants to be more active with his balance sheet. can he achieve that inflation target? >> the measures they were taking , they are not going to work. they were targeted in the program. there is a small amount that would help them to do that. he needs to convince the germans

to sanction him and quantitative easing. that is the only way he is going to get some activity to build up to target level. >> bond yields are near record lows. we have germany as zero .9%. what differences qe going to make? it is too discounting high. it is almost like a repeat of the japan situation. the yield continue to go down further. it has been quite poor. the whole economy is going down. the way the bond markets try to help is to reduce further the cost of capital.

>> it is down 60 points. you find out who is swimming naked. a are the losers. where are the winners going to be? >> i think if you look, originally we had a mini boom going on. we are looking at the delayed austerity programs. the pendulum is swung to the large mid caps. something will be happening again. they are again going to find they have to go down a bit more in pricing. european markets had been .ullied by the prospect of qe

i think the growth prospects meaningfully improve. think it is until it comes down. >> which is going to profit in a low interest rate environment? >> it is low debt to equity. in a way high leverage companies benefit. stable growth., you will have flow growth in maine -- slow growth in maine economies. get a rise into dividend stream. they could become far more expensive than they are now. there is a range of sectors. there is a good range of stocks we are looking at. about ukip.k

the u.k. independence party, who wants to take britain out of the european union. defendant held the seat with 60% of the vote. it puts more pressure on david cameron. that is a shock. really fascinated, the fact that the stronghold has been that way since 1983. they were taken right to the brink. you challenge them on both sides. how much does that defined the debate for the election next year? >> it increases the uncertainty. you don't know what the mix is going to be.

it is clarity on which taxation is going to be evolving. we don't know what actions are going to evolve. the housing market has been important in creating a feel-good sector and growing momentum. this will effectively they're down on economic and equity markets as well. >> 45% of gdp comes from the u.k. membership with the eu. them talk about the europeanf union. is this a scottish referendum on steroids? worriednk we should be

integration has continued to increase. i think the questions of stopping economic relationships are very dangerous. it is going to create economic volatility. in a way we need a political solution because there is no >> you manage several billion pounds of assets. the next few years could be politically very uncertain. you might want to be exposed to those. >> i think everyone wants to be focused less on them and more on larger cap. if you look at ftse, the ftse 250, they have done very well after the last few years. their earnings on

the dollar, that means the pendulum is going to continue to swing on larger caps, which is the ftse. they are regional bully price. once the market volatility comes down, it is time to look back at .ne -- what one does >> that showed great insight. stay with us. up, a tweed revved up shares. about that later this hour. ♪

>> welcome back. travelers arriving at heathrow will now be screened for the ebola virus. this is impacting travel stocks. it has been a remarkable week come of the worst week since 2012. you are seeing air france lower. lower, seeing ryan air easyjet lower. they are all lower. should we be concerned? >> i think so. i think that ebola virus has never been taken seriously.

the western countries have never really understood the seriousness of this. they are also increasing the funding. i think this needs to be a lot eager. it so it doesn't come into the wider world. >> you see a stock like carnival down three or 4%. is traffic going to fall that much? what are they pricing in? >> if this is going to spread, all the travel related is mrs. are going to be impacted dramatically. they are going to be terribly close. there are a lot of unknowns.

it is the only way it can. it is quite likely the markdown will celebrate further. it will equably -- rather quickly. >> cheaper jet fuel, cheaper price of rent. we have got that. get me a chart. this is remarkable. it all comes up height of june. down 20%. that is a bear market, and oil keeps plunging. you talk about the demand. >> a lot of it is focused on the production side. there is extra energy coming out as well. that has obviously had a big

impact in terms of alan sing the equation. think far more important is that bigger increases in energy are coming out of india and china. those are actually not is growing as fast as last year. additionally, some of the larger economic growth has also slowed further in japan. well most of europe has slowed down. consumption is looking weak. to theket is responding weaker side of the equation far more vigorously than the supply side. >> the demand side of the equation. that move lower the trajectory. the markets are obviously a

continuation of further slowdown . also there forget are oil consumers. ofcomes with large amounts havey -- countries do not their own energy sources. they are going to be big beneficiaries. go down. is going to economists can rebound much faster. >> it is like what moves the market. what is moving the market right now? is it the tail or the dog? driving thely market down is lack of trust. is it the bigger concern china a downward trajectory?

>> i think although official numbers give you a growth figure seven and a half percent. it is difficult to reconcile some of the data that comes out of china with hard data. some of the markets are actually under severe pressure because the orders are not coming through. the increases are not there. >> i have got 10 seconds. we talked opportunities. we are going to talk with. the biggest risk this year? >> there is a policy error that it comes not to the aid of the economies. >> a big thank you for joining

us this morning. as we head to the break, here is a picture of the markets. we are still down 75 points. plenty to discuss here in europe. stay with us. ♪

>> welcome back to "on the move ." i am jonathan ferro. right here in the city of london. been five trading days for the brave. this is acting on session lows. we are down by 0.6%. what a week it has been. a third straight week of losses. bad news. markets trading lower. but the thing -- swing is a remarkable thing. the ftse 500.

up one day and down the next. all 19 indices are falling today. the components and parts that make up the stock -- stoxx 600 biggest declining industry today. it is down by 16% since july. that was a 17 month high either way. to the ceo principal investor and he says, it is not marketing, don't focus on china's demand, focus on the supply. if they oversupply a commodity. let's get to oil. indexoxx 600 energy oil is down by 1.4%. both are in a bear market and have fallen 20% from that high this year.

down 17% since june 24. the stoxx 600 travel index down by 1%. for the fourth consecutive day. that is the longest losing streak since the beginning of august. the u.k., will start screening travelers, screening for ebola. happen on the euro star as well. sector market story rather than a stock specific story. >> three top headlines. the u.k. will start new ebola screenings at airports. the move comes as the u.s. has started a similar policy. implements to screening tests for passengers arriving from west african countries with high rates of ebola.

european uniond independence party has won its first seat. after the vote after defecting from the conservative party and august. that puts more pressure on david cameron was promised a referendum on eu membership. draghi president mario plans to move the management policy if necessary at the annual meeting in washington dc. meanwhile wolfgang shows a warned against continued to terry discipline. warneds after the imf that the euro area could slip back into recession. let's talk but something we already knew. let's talk about china. leg of the free country europe trip. what is it mean for trade between the eu and china.

we are joined by ryan. i would say china is important to germany and the yuan to -- eu when it comes to trade. >> yes and evidence of that is the chinese leaders delegation. bringing his entire cabinet with them. and several hundred is this people. there will be a meeting and hamburg a 550 is this leaders in germany and china. many of those is this leaders came with the prime minister. china,idence that for europe its largest trading porter, germany is important. -- partner, germany is important. what do the chinese want? we know their economy is slowing down and they want more trade, they want more technology. that is something they will be pushing for, not just with volkswagen and the carmakers but across the board. they would like to see more

technology shared with them. want mores just trade. we saw those numbers on thursday. of declinet month and german exports in five years. that is what we saw from the last statistics. china is the second biggest export market after the united states. it is supposed to go from strength to strength but they want to make sure that works because they need that trade. premier traveling from germany to russia, what is the relationship between the three countries. normally angle america has a direct line to vladimir putin -- she is the intermedia intermediary between the russian west and the president during but this time she will appeal to her chinese colleague. the intermediary for her between her and the russian president. the chinese have been on the

fence throughout the conflict in the ukraine. for the german government, solving the crisis is a top issue. not just because of ukrainian sovereignty but trade relations. you look at the trade relations between china and germany it is worth about $160 billion or north of that. the relationship between germany and russia, last year was about $100 billion. this year it is set to decline by 25%. obviously angela merkel once that path. she wants the sanctions to end wantsckly as possible and the chinese assistance in getting the russian president to do what western europe would like to see. the chinese here also have interest in picking up some of that trade that the germans are leaving on the table and russia. the next place the premise or , -- go is course anddebate of

germany not just in russia not just in china that washington dc as well. i will start with bond yields. year, not ah, 10 big deal. but when i look at where we came from the start of the year, what is your take? >> i think the bond yields will continue to tighten. bad news, because europe is on the edge of deflation and the ecb does not have enough dry powder to intervene. it doesn't have the follow-up of sovereigns, some governments have opposed the plan. the market believes that the ucb -- ecb will be sovereign to. but i don't believe that will happen. boones are still going to be there but everything else is on the edge of a bigger selloff.

price and low growth, low inflation -- inflation. when does the market finally get it. doesn't make sense at all. >> i think we are borderline. what has been holding the market on is the hope that the ecb will do more this year. in the meantime while they are waiting for politicians to agree on fiscal policy, on drone friendly fiscal policy, merkel talked about investment in research and technology, this is not a quick plan. it takes several months. the ecb is just going to wait and at some point there have been outflows of other risky bonds. point bearers will just have to sell. equities have been selling off so hard the last few days. i think the bond will have to weaken as well. >> is there a catalyst? last dovish isg

a catalyst. earlier this week they retraced on their hawkishness but as soon as it gets less dovish again and signals they will hike, i think that will cause more volatility. >> we have oh mt, we have the unlimited on buying program, why would spanish and italian yields go higher? >> eventually that will create a ceiling. we are not talking about a repeat of the euro crisis, but credit investors are very comfortable. besides spain and italy, what has been holding on is the higher -- high yield markets. 6% withded again below spreads of three and a half percent. we have companies that are weak. or other smaller names. these names don't benefit if there are qe.

it sovereigns and large companies. it doesn't benefit the smes and the economy and the small part, the low end of the high-yield market. >> let's talk about spread in the high-yield market. investment grade, its highest since 2007. you saw some big investment houses coming in and saying let's get back in. >> it is easy to say. buying andn forecasting and trading central banks for five years. high-yield has done really well. it outperformed stocks. but the punch bowl is not there anymore. why by because of the central banks. we have to look at the cycle. companies are real averaging and getting aggressive, they're doing all the excesses that they were doing in 2006.

buy just threeo month the fed signals they will hike. are you worried about liquidity? one of the things that is really a problem in credit markets is that for the past five years, everyone entered into credit. from money market funds from mission great to high-yield. -- grew froms goo six to $10 trillion. the exit door has remained the same size. billion onround $20 inventories in the u.s.. that is less than .5% of the market. this, and any small catalyst becomes bigger because they know this. paranoia the middle of because the exit door is small and we are ending the party, the punch bowl will go away.

>> reason enough to ask the question. the fed sees is happening and are backed into a corner and scared of their own shadow. if they see a crisis emerging in certain sectors, will they put up interest rates? can they get out of this westmark -- this? >> it can delay. it makes sense to buy into the market now. europeanen a strong bowl for the last three years and since the summer we have turned more cautious, because of liquidity and the fact that people are still hopping on the ecb qe. i think we are in a three-month vacuum where the punch bowl is getting away in the u.s. and the ecb can't livermore immediately. can't deliver-- more immediately.

>> there was a big to do in the u.s.. europe has its nuances. can the reform -- and i know that you know italy very well, can they deliver on the raider -- labor market reforms? >> we have good news. the problem is it takes a long time for reforms to play to the economy. the italian parliament passed the labor reform. that is a key change. the next two reforms are on justice, the justice system in italy is the slowest in europe. it takes 10 years for a lawsuit to and -- and no. -- end. these three things, labor, justice and banks are reforms. if that is 50% of what they

are planning, that is change. the economy is at a part where you now need an urgent fiscal stimulus to make time for these reforms. much has been made about germany, wolfgang sure the are -- scheubler, and merkel. the problems are structural? >> they are structural. it now you see they are starting to do reforms, now you need to buy time. -- senset make france for france or germany to say i don't want to support, i don't give guarantees. and theycoordination continue to say that inflation is not a problem that the german economy is fine. it is not fine and we are seeing the data.

i've seen confidence in germany declining. >> i have to get back to peripheral yields. 99% of the people whose it in front of me say the rally may be done but not expecting a big turnaround. you are calling a big one. people will be asking the question, we are 2% on spain, and we talked about a ceiling, the how cai -- how high can they go? i think there will not be a big selloff but where you may see the bigger selloff, in the highest risk, the single be bonds, ies, the coco think spain and italy more or less are fine and italy is doing reforms so we like it or but the low-end of the market, for the junkie end of the market. those are overvalued. >> final word on fans?

>> france is too early to short. they are slowly doing reforms and they have a buffer. you have to be quiet on france. we will get you back in three months. thank you. credit researcher at rbs. a quick look at the volatility index. over the past five days, higher, much higher. what is it mean? getting rid of those signs of complacency. we would back in two. ♪ >> welcome back to "on the move

." i am jonathan ferro live from london. here are some companies on the move. airbus group, just closed a $3.6 billion jet deal. that's according to people familiar with the matter. the airline is planning to require 35 of the new planes. they are due to enter service by the end of 2016 and can carry 65

passengers than the biggest current plane. volkswagen is said to be keeping its research corporation. that is according to people familiar with the matter. to extend the agreement vehicle production by 25 years and it will include work on hybrid and electric cars. is a will drive version. the electric sedan will have matter -- voters -- voters. -- motors. has a camera aimed at identifying veterans. at motorcar will start $120,000. "the pulse" is coming out at the top of the hour. >> wait until you drive one.

the acceleration numbers, and figure changes, work. . is between china and germany, everybody's talking about it. factoredhink it is into the german numbers. think about the implications of that for the ecb. mario draghi front and center. we'll talk about ukip and the earthquake in essex, we'll talk about what that all means and the economic policies. do they have any? screening andla, oil. in ukipd lineup here election, big. is in aabour party state of shock this morning. they only held the majority by 600. a little bit of rethinking. -- push labor more

on the immigration story? maybe. maybe they need to think about for next year. >> a lot to talk about. remarkable move lower. everything from geopolitical risk at the market and nothing happened. break down over 20%. what it means for opec. back in two. ♪

>> welcome back to "on the move ." time to talk about crude. oil trading at the lowest since 2010. -- end of november >> in vienna. >> the opec meeting. will they tighten? >> every time you say opec will be interesting and then it is boring. they don't do anything but why would they? where thea situation price of oil has really come down. most of them think that oil should cost $100 a barrel. below 90 and it is falling nearly every day. i think we can expect action. the room to do

something is with saudi arabia. have 30 seconds. talk to me about russia. oilvery year the price of that russia needs to balance its budget goes higher. because the pie gets bigger. we just learned yesterday that the russians are going to run a scenario of what happens if oil me -- reaches $60 a barrel. is, that willwer be gloom and doom in russia. brent is lower this morning by 1%. $89 per barrel. we are staying low. if you want to talk markets you know where i am. i'm on twitter. the dax up by 50, college 0.55%. happy friday. have an awesome weekend. "the pulse" is coming up next.

♪ >> global equity markets on edge

as investors lose hope that the ecb can reside -- revive the eurozone. arrival, the u.k. joins the u.s. in checking passengers before they enter the country. and a political earthquake in ethics. the u.k. independence party gains its first ever elected mp and almost claimed the second. good