catalans want their say in spain. more than 2 million voted overwhelmingly in favor of leaving spain yesterday. the spanish government refuses to sanction the vote. catalonia wants a roadmap to independence. what does it mean for the open this morning? five pointsondon lower. that is nothing. the dax futures down by 36 points. it is manus cranny. >> politics seem to be at the top of the agenda, whether in the united kingdom apec, where obama is set to speak. been out already there, doing things with the chinese. theing to the japanese and chinese. equity markets are going to have a little bit of an offset opening. moody's says there will be no

significant rebound in growth in 2015. that is what i took away when i spoke to the new chief economist at the oecd. oil is also going to be in focus. kuwait coming out and saying they have no plans to cut oil production. have come a little bit lower. bank of england quarterly report this week. will mark carney be forced to reduce his overall growth forecast? decline inthe european exports from this country into the entire euro zone. they declined by 11% over the past year. the growth numbers that were assumed in august for england ecb will alsothe deliver data. you will also get the cpi numbers. 's challenge ishi

to get the rest of europe to replicate what has happened in spain and the republic of ireland. jacques question the validity of that real change. you are looking at dramatically-higher unemployment rates. let's have a look at some of the companies. sinsbury's will deliver cost cuts. there seems to be a consensus that a rights issue has been ruled out. could they reduce their overall openings to try to reduce capital expenditure? carlsberg, no news is good news. there you go. they boosted market share in russia. that is good news. they did not reduce their overall outlook for the year. volume dropped 2%. reco, hsb has raised its

offer for the animal feed maker. that is what they do. i-44 -- at 44 million off. dollar generally lower in the opening trade of the week. >> thank you. that is the market open. let me bring you some breaking news from russia. 2016of russia has cut its gdp forecast to just 0%. that is no growth. that is the base case for gdp next year. they have also pushed back there 4% inflation target to 2017 from 2016. is the big story. the ruble coming off the record low against the dollar. record low after record low. the bank of russia has done what many people expected it would do, forecasted 0% growth next year. joining us now for a conversation across all of our asset seems is a global

allocation strategist at ubs investment bank. great to have you with us. just a commodity story? >> i think it is very much a commodity story. i think the price of oil is going to affect gdp positively in some countries. in the eurozone, we think it is very positive. in the u.s., it is slightly positive. , norway,y, for example russia, it will have a massive impact. i think it will have an effect on cpi, inflation, but also a massive effect on sectors. our investment strategy would also be affected. >> i want to look at another region as well. , russia has had wins and china has its separate headwinds as well. once again, we are looking at another commodity story. >> it is also about the housing market.

people are not investing their money in the housing market in china. where are they going to put it? presumably somewhere dollar-based would be a good place to put it. that is another case for treasury yields to fall. >> when i look at the high-yield space, the french were tight. they came out a little bit and said buy. talk to me about the composition of the high-yield market right now and how energy and commodities are playing into this. >> i think our main worry is that we will see some kind of cycle-ending story in the u.s. based on the credit market. sector -- of course they went into this, you are expecting $90 to $100 on oil. we are giving $80. these are companies with a weak balance sheet, a lot of leverage. thatey start the default, will spill over into the rest of the high-yield market. that could also affect the equity market. >> we are talking about $50 billion worth of junk bonds in

the u.s. being issued from the energy sector. how do these dominoes start to fall? >> the credit market is notorious. the secondary market is tiny. the average high-yield bond trades $2 million a day. could0 million position take a while. i'm worried there is no exit for this market. there is a crunch we think which included a -- if there is a crunch, we think liquidity could dry up. selloff, there will, point where you have the crunch. 20% inave come off over june highs. how long do we have to stay here for that to play out in the high-yield space? >> they be another six months or another year. if it stays low for an extended time, companies could have trouble. >> talk to me about treasuries

as well. trade ofbeen the pain this year. a lot of people expected yields to rise, they have not. we had a goldilocks jobs report on friday. what is your view for treasuries? -- betweenincredible gdp and the 10 year rate, the t wo almost beautifully correlated over the last 60 years. -- 3.4% ofhave 3.12% the 10 year treasury. there are a whole bunch of reasons for this. pension funds are de-risking. lots of people abroad are buying treasuries. spain only gives you about 2.4%. there are many reasons why people are buying treasuries. what we are expecting is a low, flat curve for the next year. >> we are going to talk about politics after the break. we will get back to spain in a

minute. here is a look at what is coming up. unified euro was the dream as the berlin wall crumbled in 1989. 25 years later, europe faces cracks in its foundation. we will talk politics after the break. ♪

>> welcome back to "on the move ." i'm jonathan ferro live in the city of london. time to talk politics now.

british opposition party leader ed miliband mourns the threats to leave the eu are a clear and present danger to the u.k. when he speaks today at the confederation of british industry's conference. caroline hyde is at the event with more. this is a top theme today. how serious is the threat? caroline will join us shortly. -- onoing to get back to this particular theme. this is firmly on the political agenda. right at the top. the u.k.'s relationship with the eu. i don't see it on the market's radar. when does this really start to hit home that this is a serious issue and the u.k. could face of vote on the european union membership? >> as you say, i don't think it is priced in. that worries us. when we look at growth in the u.k., you see the number of people who come to work here from europe, yet we are still talking about immigration policy

when we should be thinking about growth, i think that is a real issue. it will be long-term bad for the u.k. if we do have some kind of exit. >> when i look at the growth story from europe, we have the inflation report on wednesday, how do they go about this issue? how difficult is it for them? >> we just have so much leverage in the u.k. that if we start to we think thats, could be very dangerous for growth in the u.k. simply because of the leverage. you compare that with something like china where there is much less leverage, there is much less risk of a sharp correction. hikees the 25-basis point he come extinct? about 12.5?talking >> i think they have to be super cautious. this is an unprecedented

stimulus period we have had. we just have to play it very slowly. shock would be disastrous. >> what is interesting is not just for growth story but the political question. 25 years since the berlin wall has come down. europe is plagued by division. spain, separate issue, but i still look to spain, the cattle on region. they are looking to exit. how much of a threat is that the eurozone stability? >> i think the reason they are unhappy is because -- is justifiable from an economic point of view. they pretty is one quarter of the gdp in spain. i don't think spain will ever let them leave. i think what they do have is a problem with fiscal transfer. for every hundred euros they make, seven euros leaks out into spain generally. there is not much spending on infrastructure but they produce above their weight in terms of gdp contribution.

that is unfair and that has to be addressed. >> i was reading over the weekend that the main protagonists are not bond investors but the insurrection or electorate is more likely to vote for a new generation of leaders. france, then five-star movement in italy. when we talk about the breakup of the eurozone, it doesn't sound like a forced exit but it sounds like some people want it voluntarily. do we face a prospect of that? >> i think it is very unlikely. once you start it, it is almost impossible to stop it. to see growth come back, there will be less talk about leaving the euro as it becomes an incredible force in financial markets. i think that is the key thing. there is a critical period before the growth comes when people talk about deflation, no growth, japanification, though stories are hugely overblown.

we saw that in the market action in october. that was a misreading of the numbers. in the future, there will be a lot less talk of exit. >> talk to me about the investment scenarios. we have gone from talking about high inflation and central banks doing too much, right the other way to deflation and central banks not doing enough. what is the threat of inflation right now? >> a lot of the numbers we look at suggest that we are going to see inflation in the u.s. the fed still doesn't think so. if you read about what yellen says, it is all excuses about why we don't have wage pressure. if you look at the credit rate in the u.s., that is picking up. you don't quit your job unless you are confident you can get a new job. the difficulty hiring people, that is also getting more difficult. theertain sectors of market, there will be upward pressure in wages. >> are we looking at a strong u.s. economy?

>> i think it is very strong. we had seen initial figures looking incredibly strong. the u.s. is just a powerhouse of growth at the moment. i don't think it is something to be sneezed at. you have to consider that when you invest. we have a large allocation to the u.s. >> and i better off getting direct exposure to the u.s. equity market or looking for european companies with u.s. exposure and getting the 1-to hit on the exchange rate as well? >> we go for the companies in europe which have that euro-dollar translational benefit, but also exposure to the growth. we have about 40 stocks which have that property. youcompanies which aren't -- aren't hugely overpriced but will benefit from the strong euro-dollar, and also to have

exposure to u.s. growth. >> and you give us some of the sectors? >> some of them are pharmaceutical companies which export to the u.s. that would be interesting. that would be the one we would probably look at. >> we will get the picture another time. run a nikita, thank you very much. up next, commodities in focus as we look at platinum's plunge. we are live when "on the move" returns. we will talk about dropping prices and crippling strikes as the company announces a loss. we are back in two. ♪

>> welcome back. i'm jonathan ferro live in london. it is time to talk metals and mining. full-year earnings are out from longman. they posted a loss of $.33 a share. this comes on the back of a five-month-long strike and plunging prices. joining us now from the london stock exchange is the ceo. great to have you with us this morning. when i look at these challenges, i see the five-month strike. i look at falling platinum prices. you tell me. current output right now, how much of your output is profitable? >> we have had a strategic

review of our assets. we have balanced back after the strike. at the current levels right now, shaft which is marginal but all our shafts are contributing to the business. >> will you need to close that shaft? one has to appreciate whether the low prices are going to be for longer. our view given the market fundamentals, the growing demand, the growing jewelry demand, we believe it is something we can contain. the importance for me, my employees matter a lot. jobs for south africa are critical. we believe we are finding ways to improve productivity, improve cost and improve efficiency. we have no doubt to bring that business, that shaft into the green. have seen this movie quite a few times before, the

platinum price being in and out of the bear market. industryient is the this time around? does the cost space become more of a problem? >> costs are always a challenge. we are seeing power costs, labor costs, all going up. the challenge for us is leadership, to look into ways to sustain our business. and create a stable operation environment which we have had since the strikes. clearly, what we have done with our strategic review to reduce our costs by 2 billion rand over the next three years, is key for sustainability. we will seize the opportunity when market improves, when platinum prices go up again. we will be in the right place to benefit from that. >> what is interesting to me is that you are the third-largest platinum miner and yet you are

off-line for five months, you had a cut in output, yet the price did not turn. when do we start to see the price turn higher off the back of supply shortages? >> we were equally surprised. that normally should have spiked the prices. clearly, the market analysts highlight that there is so much about ground stocks that are present and are affecting prices. however, what our analysis has shown us, those stocks which are liquid and available for customers in industrialization, have gone down quite a lot. about 1.3 million ounces. the rest of the above ground stocks are quite fixed. therefore, we believe the diminishing liquid stocks should help improve prices going forward. about how foreign exchange has helped or hindered your business.

in dollars.evenue is the market moving in your in your favor? >> it reduces our cost in dollar trends and that has been very helpful. it is still not enough given the subdued platinum prices and the prevailing macroeconomics globally are quite a big effect on us right now in terms of sentiment. clearly, the rand has been helpful and we hope that continues. >> how to you manage this going forward as you look at the cost space and the price of platinum? if we don't get the turn, you have been surprised as well, will you have to cut costs or do you just keep boosting output? how does this play out? >> the 2 billion rand we have identified as a targeted benefit ensure thatill lonmin can carry itself through. we have not -- we are working

hard. we have done that and we are seeing encouraging results in all the areas of production. havelieve we sustainability throughout these cycles. >> i want to get your view on the global economy. we have swung from cautious hopefulness to outright peasant is him in the eurozone. talk to me about what you are seeing right now. what kind of global economy do you see? what is your experience? >> i'm sure there will be much better people to talk about this. from my perspective, we are elsewhere, growth but i think the biggest challenge for us is the macroeconomy driven by the u.s. dollar strength which has subdued market confidence. we believe that will come through. in the platinum industry, europe is very important. most european vehicles use

platinum. europe is important. china is important because of jewelry. we are seeing growth in india. , we believe the fundamentals are coming through and we hope that we start seeing that in prices. >> thank you very much for joining us this morning. coming up, we will continue to talk commodities. the ruble has hit all-time lows this year. can the russian central-bank resolve the crisis of confidence? we will put this question to valentina runoff and talk currencies after the break. here is a picture of the market. equities in london are a little bit higher. to talk markets, you know where i am. i am on twitter. i am back in two. ♪

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♪ >> welcome back to "on the move ." i am jonathan ferro. here are the markets. gains across the eurozone. 0.25%. the general equity market moving. rower.ting with the shares are up by 3%. it is russia's biggest brewer

and they have said in their market share has increased. sponsoring a hockey league and a music festival, both to the visibility of its brand. it includes economy beer. shares are up. it is from 36.5%. this is a dutch animal feed company. shares are up of the most ever. company gracement its bid to almost 3 billion euros. to this with an 3.5 euros per share. it has rejected a bid to pay 43.2 euros a share.

if the company plans to break up with its private equity partner. hit a low. a loafer tesco shares. they are up 12%. 2.6% today.ve the outperformed, the new rating from stanford bernstein for tesco versus the previous rating of 4. the target is a wait for it -- two .35 pounds. up 2.5%. mark barton, thank you very much. headlines.e the top more than 2 million voters cast votes in independent ballot ruled illegal by the court of spain. the prime minister's office said

the results are not a valid because it lacks the proper checks and balances. china has secured a fifth of the natural gas it will need by the end of the decade from russia full of after the two nations struck a major deal adding to the $400 billion agreement made earlier this year. russian turn to china to die first fight is markets as western sanctions way on the russian economy. ukraine's that russian is sending weapons and supplies to rebels in the east of the company. heavy shelling destroyed buildings in the pro-russian stronghold of donetsk. they killed as many as 230 and surgeons in a battle for the airport. battle forts in a the airport. the ruble has weakened our next guest said no end in sight for the ruble weakness. strategy at citigroup joins us now.

have agoing to conversation about currency it we may not talk about dollar/yen. the bank of russia out this morning putting 4% inflation from 2016 and cutting its forecast of growth to 0% for next year. no surprise here. the dollar/ruble, short-lived, come to a little bit? >> it may be tricky to call the end of the rally of the dollar/ruble. how i look at it from the risks may further upside from here over longer-term particular to continues to it deteriorate on the back of weaker commodity prices also and furtherr russia escalation of the tensions may lead to new sanctions over time. the bank of russia will have to consider more options to stabilize the currency until they come, the risk can still to the upside. theet's talk about what central bank of russia has and

ammunition. they have went through quite quickly. >> they have amount of reserves, 300 billion and gold resource. it should be more than 400 billion and the faqs once a currency crisis occurs, the becomethe reserves could quite alarming. what could be see as a war chest could be depleted. what the officials of may have to look for is a combination of fx intervention was heightened monetary policy like the bank of turkey at the beginning of the year to restore financial stability. playlook out commodities and the russian economy and the forecast this morning and they set that best case scenario it was sanctions in place through 2017. and with oil price at $95. that would be nice for them oh them -- that will be nice for them.

>> expectations, that might get the optimistic side. it depends on the supply and demand factors from here. having the opec meeting in november of 2017 which will be key for the medium and long-term outlook of prices. if there are no indications it is saudi arabia were to cut supply, chances are to oil prices need not stabilize. at lower levels which could mean the ruble downside for the russian ruble. >> i look at the commodity currencies face and your staff has called on the perfect storm. .ou have the dollar rallying talk to me about which currencies are the most vulnerable right now. >> the oil producers have to bear the brunt and those are the canadians struggling to perform. ruble attracted a lot of headlines. the way you should view it is there's a growth impact from

falling exports especially commodities and oil importers on the back of weaker prices. in addition to that, the disinflation impact which means all countries around the world will continue with the disinflation which will result in lower inflation around the world. , higher-yielding and currency which may be the second leg of the adjustment. even if they stabilize, lower inflation like australia and new zealand and those currencies will be losing at underperform. one looks like contained underperformers may actually mean a little it more underperform. it is a perfect storm for the commodity currency as a whole. the drawstop beating for the swiss franc and referendum at the end of the year and how much gold they should hold. if viewers are not familiar,

give me a little bit about it. >> end of november, the voters will have to decide on an initiative that will become percent of thes 23 counselors deciding. according to the measure, the s&p was never able to sell gold again. they would have to boost the share of the gold in its reserves to 20%. given the combination of a persistent disinflation and the result ofncentive, a pursuing monetary policy and adding the constraint and have to keep at least 20% and never sell their gold. ultimately, the share of gold in the reserve will grow but also the share of the reserves and gdp could exceed 100% over time. any policy which is aimed to sustain aipac against the euro

may be rendered untenable. the referendum could turn into a referendum on the euro swiss bank which means over time, if given a yes vote, they may have to abandon. >> you want to miss whistle the third large -- you want to miss whistle and the third largest holder of gold and counter inflation. the third largest holder of gold and counter inflation. inflationer side and will make you richer. the current level of income, you will be able to buy more. the thing is deflation might have a negative impact especially if consumers start delaying spending as they expected their purchasing power to increase further. and investment for the same reason. switzerland may have

to lose the next two decades in a similar fashion to japan. there are quite a few wrists. are quite a few risks. chances are the referendum will result in a no vote. it is just a detail risk. the consequence from a yes vote could be quite long lasting and significant. to make it quite difficult sustain the monetary policy. >> in a word before we go to the maintain they have to gold holdings and 20% of total reserves, is there any way opportunity that euros/swiss? it will become untenable. that while five years to get to the 20%. the next few years, not much needs change. on the back of the referendum with a yes vote, we could see it coming under attack or they are speculating that the s&p may step away.

over time as the level of gold and continue to fight deflation, the fx reserves in gold reserves combined will start reaching proportions like 1% of gdp which will make it a risky. go.here would foreign exchange. we do not talk about dollar/yen. atd of g 10 strategy citigroup. what does it mean for business? stay tuned for that. ♪

>> welcome back. i am jonathan ferro. british opposition leader ed miller brand could warn a threat is clear and present danger to the u.k. and we are expecting this at the conference today. caroline hyde is standing by. a bloomberg first interview. over to you. >> i am joined by the former prime minister of sweden, thank you very much for joining me today. you are getting up onstage in a moment to discuss competitiveness in europe. a eurozoneied about slowdown, is that your key concern? >> it is not a one-story in the eurozone or europe. we have better figures, but we definitely have problems. of coarse, i will relate more --

of course, i will relate to stimulus and ecb and more of what you can do for reform and structure. >> in terms of reform, the united kingdom, will have david cameron taking to the stage and ed miliband as well. it is a key concern about britain accident the eu. what would you see -- say? you must have a words of advice because would have a ramparts which is very much a focus on immigration. >> their focus is anti-everything, and i media, anti-politicians. this entire media and they are a hard- anti-media and to trust. the main focus and the british economy as now the story of europe. they should be followed by other to thiss looking

country. part of meeting the stress is creating a better environment for it and creating jobs because everyone feels, yes, there is an opportunity and that's the way to deal with it. >> and many of the cbi, the businesses behind that are worried about political instability at home in sweden, we are expecting the party lines to be announcing a budget. what will happen if the sweden democrats support your budget rather than the new government? >> we have not seen if they will do that but if the government loses the budget, you have a real crisis of course. i cannot speculate into that. we have seen the voters and it shows something significant in our time and in many countries there are new politicians, more parties to get things done. it is more instability.

>> you say it would be real government crisis if the new government's budget did not go through. told you warn them not support the new government or support the new government budget to avoid such crisis? >> you need a government and opposition. they do not vote for their own party but the question is, what what the sweden democrats, the other party, what are they going to do? they should vote for their own budget but we do not know where they will end up. you get to the uncertainty. cleare alliance was very in the general election what we wanted to do to create more jobs. >> what should the countries be doing to tackle the immigration question? should the country still be peopleg free flow of

that currently stand? >> i can only relate to the swedish experience. our economy get stronger because we are an open society, open country. migration has proved to be very helpful in creating a stronger swedish economy. people get to sweden and learn swedish and we see a rise in our population and upon that, we can create growth. it is linked to the fact if you actually made possible lower threshold for people to come to --den and the labor market, >> these are questions the british population will be gearing up for. come through the election had to step down. what made you step down so quickly and what is your focus? >> that is mike richards to be here. i am trying to talk about my experience.

-- >> that is my reason to be here. and as it relates to the european union and so i would have to look into that and i were writing a book about my time in politics. i am not that old, but i am focusing on doing something else in the future. >> one piece of advice going into this election for the political party, what do think is the key focus in terms of keeping competitiveness and growth? >> stay on the message when it comes to creating jobs and on the economy. everys after the heart of reform that you have a good balance in your public finance and good environment for creating jobs. when you start talking about other things that you get other kinds of opinions rising which is very often not so good for the kind of party i am heading and also david cameron. >> thank you very much.

speaking today. the former prime minister of sweden. a few words of advice for david cameron will be taking to the stage at about 9:45 a.m. he will be taking the stage after him. back to you. >> thank you, caroline hyde. 2. the move" will be that in ♪

>> christmas is bigger than the 25th of december. it is a buildup to christmas and it is really about celebrating and storytelling again. we have created -- ♪ beckham, with romeo who was like a little superstar in him. we have designed a different piece of the different platforms. havewe have done is windows you can interact with and it goes in the stores and online. we are trying to join in with the storytelling. you might see a great outdoor advertising image and data relates back to the window. >> you are also the first british brand to take over the windows of paris. how does it feel to take on the

fashion capital of the world? >> it is amazing to be working in paris with such an iconic store. london being the fashion capital of the world -- [laughter] and also -- what is wonderful is the creativity we had as we worked on the windows and the experiences. the puppet making is incredibly beautiful and the way they go about doing that and that is the joy for the front windows. >> is it a bit of a rivalry with the french? >> is not a rivalry. it is a treat. it is a wonderful country. we love it. that was an exclusive with francine lacqua and the ceo of burglary. erry.rglary -- burb

a build up to christmas. this is "on the move." i am jonathan ferro. yesterday was a turning point in years sinceory, 25 the fall of the berlin wall. quite a show. what are the big takeaways for you? >> a show is a good way to put it. there was a laser show and a light show for them it was a mix of reflection and celebration and you heard angela merkel strike quite a serious note on the potential of human freedom. >> we germans will never forget -- thefreedom movement fall of the wall showed us that dreams can become reality and nothing have to say and it is no matter how high the barricades. we want to shed experience throughout the world.

thank you. >> throughout the weekend, fighting has been intensifying in ukraine and that was another somber note. mcelligott rich off spoke -- machelle gorbachev -- gorbachev spoke talked about potentially a new cold war that has already arrived. brink ofrld is on the a new cold war. some people are saying it is already begun. >> today it is back to work. the ukraine crisis of the also what you can do in germany to make sure the eastern and old western are fully integrated. >> great work. germany celebrating reunification and you look at europe. you will talk about that through the "the pulse. that is it for" "on the move." a look at the markets. if you want to tell markets, you can follow me on twitter.

i am @ferro. ♪

collects, putin, bash abe mettaputin, world's leaders. and just in time for christmas i sat with's ceo to talk about the policies.digital we will bring you that exclusive interview. welcome to "the pulse."