and morgan stanley warning about the uncertainty in the policies that will drive down the pound. we are watching that and we'll be talking to morgan stanley. now, a look at futures. up .33%. futures on the stocks 50 are 0.5% higher. the debate is whether you believe they have put in a baseline with all of the negative stories that you and i have been covering in perpetuity. has oil put in a base? has consequences for the whole commodity complex. this is a story do sure. -- du jour. the ruble is crying. ruble day, you have the rising.

wealth management this morning and the message was clear. they talked about no default as the best case scenario. that is what they discussed. no default for them. the ruble may go lower. moves withrabolic the dollar and ruble. no definition as to where it could go to. have a note out saying that it on the ruble. 62 on the dollar-ruble. russia is the story and is driving all of the other equity stories. equity markets break two days of declines. i think the story of apple is phenomenal. if this holds, it could change the view of technology. $40 million was right off -- wiped off in 60 seconds because

of a report coming out this morning. they will be requiring to deliver universal service all the way around the united kingdom. on it,ts some costs relative to the group. the holdings are down. to the left hand side, you have it rising. aviva is doing the deal. tom running out of things say. can i ever run out of things to say? can either of us run out of things to say? this gives the ceo access to cash to regenerate the dividends and the price hike for the life group. the stock has dropped. the deal could take place. it is down and gaining back some

life at 1.8%. it is down 2.75% on the back of the readings. quite a u.k.-centric report. talk about the dollar ruble and the index. you have a nice push of the upside. you have the unemployment report on friday. you have one of the strongest year since 2008. ubs wealthock and management's. -- wealth management. it is one of the strongest plays against the yen. year isa trade for next the long dollar against the euro and on sterling. that is our report. 88.12 is where we are. >> manus will never run out of

things to say. >> it could happen. >> we are bringing you breaking news for spanish unemployment. fallingclaims are 15,000 for the month of november, better than expected. the survey was for a rise of jobless claims. pain. is better news ofor s let's talk the big things with a little bit of perspective on all of the top stories. the chiefned by senior equity strategist at goldman sachs. great to have you with us. i'm going to the chart of the next five minutes. it is the outlook's year and be on. beyond.ok next year and we are looking for a 12% pop next year.

i dig down deeper and i see a forecast for economic stagnation in the euro zone and weakened growth. what is starting this? >> we have profit growth's year and you are right. it is better than what we have seen this year. it is a little bit better. it looks like things are improving for europe and it looks like a global growth will get better. ecb act see the decisively. you will see it be helpful. and, i think the euro will continue to come down. we have the euro falling. forecast a about the month ago and it has been revised. .> up, actually

>> based on the fact that goldman thinks it is likely we will get qe from the ecb. how does that help the fundamentals? >> it is a signal, more than anything else. in terms of the economic impact, i think we are skeptical, like many others. it is a signal that will help markets. i think it will help keep the euro lower and will improve investment. at the margin, it will be an improvement. i think that european equities will respond. drop toan sachs will parodity. feed into the

earnings? >> it is early to see it in earnings and a lot of companies hedge. they do not hedge all of the earnings. it will come through next year. you look at the european company sales and half are outside of the area. .e expect a transition benefit you translate that back and it will be beneficial. hit in the because european growth has been so weak recently. you will get a week or you are euro.weaker >> let's talk about the fixed income and the credit market yields that are low on the prospect that we may get action from the european central bank, even with apple coming over here.

the other thing i want to bring up is the dividends yield. stands out for you right now? >> we have found that, historically, if you go back to the 1990's, you find a few companies offering dividend yields better than you can get on the corporate bond market. you are not buying a stock in order to get the dividends. you want the capital and the growth. you do not have companies offering a good yield. now, two thirds of the stock market offers a better dividend on yields because bond yields are incredibly low, at the moment.

it has been very attractive, compared to other asset classes. even at a low growth or stagnating environment, it offers so much with yields. >> i look at the chart and i see it is below 10%. are we getting a reversal? we have seen a trend. do. little bit may it is not unusual to see it start and bonds rise a little bit beyond that. we may see them. the low growth stands out. of companies has been

conservative and the cash-to-asset ratios are tight. >> we will talk about that after the break. you also have a big call on assets. the u.k. regulator says they see no need to regulate competition in britain. the universal service obligation is not impeded by competition. we will have what the market thinks of that. we will talk after the break. is the price of oil good for the global economy? that is what christine look are says. -- legarde says. the ftse 100 is up. we are back in two minutes. ♪

>> welcome back. i am jonathan pharaoh. i know you are bored of hearing it. let's talk about oil and the financial crisis in 2000 eight. the managing director of the imf talked up the positive impacts and says the decline in oil prices translates to a boost for global growth for most of advanced economies. markets?d for equity

let's bring back goldman sachs. andlook at the equity index they are dominated by energy companies. >> it is difficult. the global growth is key. it is a positive overall. you are right about the large weight and the mining companies, as well as. commodity prices are coming down. it is a risk to equities. there will be another week year of earnings. mining is coming down. the oil sector is down 10%.

it will move in the next few days and weeks. ?> is that one of the biggest i know we are throwing numbers out there. we have a drop like that. there is an impact on earnings. price, youthe oil think it would come down further. ultimately, it will take time to come through and it will be a hit to earnings. it may be positive for 2016 or beyond. with oil prices going fast, you have expectations in oil prices

and, if they continue to fall, expectations may come down matter ifd it may not the expectations are running at 3%-4%. they are running lower and are deflation expectations. that can be a concern. it will push the tension and inflation. >> i see credit suisse and banks and insurers. it is a bet on financials. the views are in the sectors. we have financials on the one

hand. the economy could improve next year and i think they will benefit from that. there is also more monetary easing. and ie the rates low think the rates -- i think that would be beneficial for the banks. after earnings downgrades, you may see earnings. the banks will benefit. the biggest head wind of the banks is the economy. you are looking at profit growth to come from financials. do you see it easing? it would be softer on the

banks. you need the banks to stimulate economic growth. they are trying to get the banks to start lending again. they need the additional regulation and capital requirements. forestalling the recovery. we have been through the stress test and most of the banks have passed it reasonably well. >> i want to finish on this. 10% above the level of 2007. people talk about the bubble in the equity markets. that is not far from 20

years. it is pretty poor. in the context of the return, you had incredible volatility. with something from the middle, europe is stagnating with growth. >> sharon, thank you for joining us this morning. the senior equity strategist at goldman sachs. people you dorom not want to miss. we will get a view from the after head of fx strategy the break. we are back in two minutes. stay with us. ♪

>> welcome back. let's bring you up to speed. properties from blackstone. they built the industrial real estate company in 2010. they created opportunities to purchase assets. they say the purchase is expected to close.

strikes increased today and expanded to long-haul flights. 150,000 passengers. the as many hit with a series of strikes that has shaved profits. they are on track for their first return in years. problems continued to mount. the vietnamese have ruled that the service is illegal and the setback is the latest for the who areia-based uber, facing roadblocks from germany and thailand. keeping it on corporate stories, the deal is here. &a in the insurance sector in 15 years. creating a giants in the particular sector in the united kingdom. is as we expected and they

will create a 21 billion pound powerhouse, overall. we have learned that they will emerge. this is december 19. they think things out and they have. it looks like they will push with this and the half. -- they have. 16 million people. starting to challenge the legal and general, in terms of how many pension assets. this is coming in the longer term for an was an investors. this isnvestors -- coming in the longer term for analysts and investors. it makes and a norm's acquisition in the united kingdom and you have many questioning the rationale saying

that cash is king and that, if you give me cash, i can give you a dividend. >> the rationale for the deal is cost-saving. we talk about the ability to save costs. how difficult will it be to achieve? >> they are questioning it. you look at the background of these companies and it is phenomenal. it is light and out for bets soup. alphabet soup. they created the union and their art lots of the issues going on to make it a clear strategic company. you look at the life in 2011 and the amalgamation of management groups.

all of these companies have been forced together. how do you streamline them, john? there will be a busy man, george osborne. in march, he unveiled a shock to the entire system. retire, youand i can buy a flashy car. you do not have to be careful. you do not have to buy and annuity. this trove the deal. -- drove the deal. they have a lot of cash and they do not know had a keep on driving the overall growth. it ise likes of aviva, assets under management and that is how they offset the annuities they do not want. politics shapes business.

sterling it could get a pounding in the new year. -- sterling could get a pounding in the new year. join oz after the break for that. -- join us after the break for that. ♪

>> welcome back to "on the move ." 30 minutes into the trading day and this is how things are shaping up. dropped 1% yesterday and a little bit of a rebound. stoxx 600 up .5% and the dax at .1%. some great u.k. stock stories as well. ofi'm giving a little flavor post. today we have some massive news all related to post come up mail

and packages. the worst performer on the stoxx 600, this is the very of mailroomsupplier equipment. we are starting to hear this again and again talking about earning season and they are ,aying of all the performance mail solutions in france they are exposed to the deteriorating conditions in economy. that would be may have lowered their target. 15% lower. that is the worst since 2007. so mail just got sexy and getting sexy in the u.k.. royal mail down by almost 2%. we injection of competition are thinking about will not be a problem for you, you have to get over it. they had concerns over the opening up of postal market

reform. the universal postal service has to deliver across the entire country mail should it need to. rivals are now a lot to apply for licenses to deliver your mail that they are saying they will cherry pick the easiest bits. we are not thinking that. analyzing but a bit of a disappointment to the shareholders. 15%deal has come through a premium and friends life shares on the up from that m&a this morning. >> those of the stocks on the move this morning. europe's role in becoming a source of heated exchange. an exclusive interview with shadow chancellor ed walls over his concern with the british exit from the eu. oure need to make sure

economy is growing at a strong and stable way and to do that we need to say a member of the european union. reform but to to walk away from the largest single market on our doorstep would be a disaster for british jobs and investors will have to win the argument with the public and open international trading economy. >> what are the chances of the u.k. leaving the eu? >> it is a real risk. if you have them committed to a referendum by 2017 when there is little or no prospect of reform at a time when the eurozone is in a sluggish state that is a dangerous thing. we want to win the argument with the public's of being in europe is good for jobs and investment.

we need reforms to make that happen across a wide range of areas. i think the david cameron proposal -- the 2017 referendum speaks more to his weakness and division in the conservative party than anything to do with the british national interest. i think is this and labor are on the same side saying it will be really dangerous for britain's future. >> have you in speaking to leaders in berlin and paris and what do they say? i guess we have on hearsay it is a huge risk. >> our partners in europe want to stay. they have their own problems to deal with and the eurozone but they have also shown through the years that they want to find solutions which work for all of europe including britain so they don't want us to leave and they know we and they need reform. i find it hugely frustrating because it always looks to european partners like the

current government is making this about only short-term british politics and when david cameron stormed out of the pack summit a couple of years ago he did something that margaret thatcher, tony blair and john major had never done, to walk away. this blackmail politics is not something we want to be part of. we need to reset our relationship. we can do firm partner and a good partner. in a constructive way. i don't think it is possible for david cameron to be that prime minister for britain. the best way one would argue to keep the u.k. within the eu is for the e to grow, one will that happen? as any ofnot as fast us want as we move from the crisis phrase it feels like a long and drawn out chronic. of slow growth. -- chronic period of slow

growth. >> i sat at my desk yesterday and watched a whole host of research notes pouring own on u.k. political uncertainty and how it was set to drag down the value of the pound. much lower. i'm happy to say one of the authors of those notes joins us right now, hans reddick at morgan stanley. great to have you with us. and you/yourrecast forecast aced largely on developments in u.k. politics, my first question for you is why now? we had a few months ahead of the general election in this need to look at the position of the two major parties. labour and conservative. when you look at the current government in the position

concerning the eu there is a risk involved concerning the invert investment. this debate about leaving the eu would i tens of -- intensify. over the year we have a potential for high-tech regime which is not supportive for the exchange rate during for the next regime -- exchange rate. we have a political risk premium and lamented to sterling and now 4000 on theng at table. due to overalls u.s. dollar strength so not only the sterling weakness but the political environment in sterling is a negative one. there are other factors on top of that which is the straight relationship to a weaker european union. you look at investments for

invert investments which have been strong at record yields and there seems to be signs of slowing down on that side. you some that up and you come to the conclusion that sterling has to decline. well a factor as of additional sterling risk. >> let's talk about the u.k.-eu debate. where moving to a place conservatives are headed in the polls and make a referendum on the u.k. membership more likely and therefore conservatives -- conservatives ahead and you punish sterling, is that where you are going? >> i was pointing out the alternative. be fiscal plans would supportive for sterling. looking at this change in u.k.

politics and what this new government is going to look like and the choice seems to be a type of the regular conservative government taking our negative attitude concerning europe and a labor government taking a negative attitude concerning business. these two factors are equally negative so i would not point any preference to a political party. , if a's talk timing conservative led government is bad for the pound and a labor lead government is bad for the pound, when does this really start to enter the market psyche? >> i guess it has already started and we look in july we were trading at levels above 1.170, we got into the debate and saw this weakening of economic activity spilling over and we have to

consider one very important top ic which is a decline in british expectation. that is not only a topical .4 euro length and sweden and switzerland that expectations are declining radically and that in thisat grates country are too high and a negative factor of huge gross prospects of the economy not being supported by adequate rear rates. that is an additional factor. why want to do here is that all it takes are praying in but no pressure to the left or the right and those that are running in respect of the exchange rate are a profile which is not supportive for currency. >> let's finish things by talking about monetary policy. you talked to climbing inflation expectations. you and i sat here four month

ago talking about a rate hike at the end of this year and everybody is talking next year now, is that the place we are at and another factor for a weaker pound? you can see the expectations concerning rate hikes that have been declining everywhere on this low point -- i think here .he u.k. is maybe an example rate expectations can change in an environment where the global economy is a low inflation economy. you need to look from where do you get inflation? on wages, domestically, you don't see them. you import inflation when commodity prices are declining. seems to be aate way how to generate at least temporary a bit of inflation

expectations. we see the monetary policy scaling back the rate expectations in significantly in this decline of sterling. i wanted to make one point is inonally clear, this context of the whole u.s. dollar strength. that will be the main benefit or efiter of all of the global differential. that means a lot of capital that states ishe united now going to stay in the united states because the risk-reward in the u.s. is better. so this capital flow argument is a very strong argument in suggesting that sterling versus the u.s. dollar is going to come down to our target of 1.45. >> big pleasure to have you on

the show. hans redeker. sterling-dollar to a drop of 1.45 next year. make sure you tune in tomorrow afternoon for bloomberg's special coverage of george osborne's statement. as we had to the break let's check in on the ruble. getting absolutely trashed over the last month that a little bit of reversal this morning. look at that move over the last week. beatings the ruble has taken, down 11% against the dollar. we will break down what is behind the move when on the move returns.

>> welcome back to "on the move ." these are the top headlines of bloomberg. european banks may be facing a capital hold of $82 billion. that is according to analysts. as the danish institute for thatnational study says europe's latest bank test were flawed and that includes deutsche bank and they may not be sufficiently capitalized. in japan, prime minister a has launched his command -- campaign. his work cut out for him as the nation remains in recession.

cut japan's credit rating citing concerns over the debt burden. abe says the economic policies are on the right pass -- path. >> the labor market is improving and wages are rising. this is the chance to rid japan of inflation. i'm convinced the path we are on is the right one and i'm determined to move ahead. abandoned as natural gas pipeline that would bypass the ukraine. the $45 billion project would've passed to the black sea and was opposed by the eu, russia will instead boost its gas sex -- gas exports to turkey. we will talk you about that in a second as i see the dax hitting a record north of 10,000.

earlier in the day we talked to a dispute between russia and europe and what that would mean and now it is just happy-go-lucky matter what happens. talk to me about the dispute over the pipeline and how significant that is. was a big deal, i-45 billion-dollar project and gas prawn is arty spent 10 billion -- has already spent $10 billion on it. alternativeld be an into crane and belarus. brussels was never particularly apple -- happy about this idea. they did not like the edge of russians controlling the fuel and the means of distribution and then the geopolitical issue of this idea of taking away some of the ukraine leverage just as they are involved in this conflict. the ukraine said you cannot do , if you do that the

russians will send the fuel around us and will do whatever they want. those were the issues at play and the russian said fine, we started building this pipeline but the bulgarians under eu -- the russian president making fun of the bulgarian saying they do not have all their sovereignty -- they never gave the russians permission to go out of bulgaria. to they said this is a pipeline to nowhere and we will ballot -- build another one to turkey. that is a bonus for gas prom they will have $10 billion yes -- less. there will be additional gas flows to turkey to it is not necessarily a bad thing. >> not necessarily a bad thing on the grass that -- gas side but the ruble? >> we're still north of 50 and it has been strengthened but it is below 50 which is below and

weaker than where it started yesterday. we heard yesterday speculation that perhaps the central bank had intervened to the tune of half $1 billion and the central bank came out and said no, we did not. that doesn't mean you could not have state control. the world a lot of russian media reports that foreign-exchange withdrawals forming a hard currency would be limited at russian banks. between $300 and $5,000 was the cap. the big concern is that it is one thing to have your currency depreciate and another if that creates a run on the banks. >> i will leave it there i want to bring in the headlines from equity markets. a nice little rally. the dax getting back above 10,000 points. highermarkets pushing and the ecb meeting later this week.

giving back to those record highs. if equity markets and record highs are not enough, angels descend on london at the victoria's secret show in the u.k. bloomberg caught up with the stars before the big event and we will have more for you after the break. ♪

>> welcome back to "on the move

." the hottest ticket with at the annual victoria's secret show. it is the first time in his come to london and bloomberg caught up with the stars of the show and found out what it takes to walk the runway. >> i'm just very lucky to be picked and to have a chance. we have to work a lot on the way we look we have to be healthy all year long and before, i'd do my workouts and really watch what i've been eating to feel my best. careerwise it really opens

the door for you for many different jobs and all of a sudden you're walking the streets around the world and everybody recognizes you. it takes a lot of confidence. health and being able to take care and be strong. [inaudible] "the pulse" is coming up the top of the hour. we have coming up? >> big business and proper business. >> big money as well. , $5 millione girls for 2014. we will carry on talking about fashion, the british fashion awards last night we talk about

what happened on the red carpet, what that means to british business and what is the future and what is the space that you should be targeting if you want to make it in british business. we'll be talking to some of the best-known people, she is an american, an all-american girl , theell-known stateside consultant from vanity fair will be joining us. her black book is incredible she knows everybody. >> has she got a ticket to that night because it is a golden ticket costing upwards of $10,000. >> on the black market? will also be talking to the first billionaire out of silicon alley. not valley, alley. new york. we will talk about what it takes to make a content company and what it takes to make it to the u.k. and europe as well. . >> that is it for "on the move."

a quick check to the equity markets, getting back toward record highs. sterling at 1.157. errotv. @f ♪

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>> making friends. a british insurer, aviva buys friends. biggest deal in this industry and 15 years. warns an exit from the eu is too great a risk for british business. talking of which, without written on the red carpet. the british fashion awards. we will talk to all of them about what is happening in the business of fashion. ♪