shakeup. hugo boss's largest investor gets set to sell 7% of the company. that in 10w you seconds time. futures a little lower across ainland europe. we're looking at dax futures indicating a drop of 1%, down 99 point. we may get a lower open. let's get to caroline hyde. in theil sales helping u.s., but it looks as though the warm winds from asia aren't going to flow to europe. we are expecting another down day. barclays calls it oil lead to volatility. check out the fix. it's going to be the worst week in two months. we see the ftse 100 down.

we wait for the dax to open. the oil important number of oil continuing to decline. is relentless. that's what is fixating on investors minds. below $60. 59.38. the 10th week of declines in oil prices since october. there seems to be no end inside. iran saying we could see prices below $40 a barrel. some ways to go yet if you're looking at europe. up by 3/10 of a percent. keep an eye on the euro. we are keeping an eye on the ecb and what they are going to be thinking. yesterday it was about the announcement of 130 billion euros being picked up in cheap loans by banks.

refinancingrgeting operation. take it back one notch. it is the ltro. the payback will give us an idea of the net liquidity. how much cheap money, and how big is the ecb balance sheet? many feel they will not hit the one trillion euro target that is going to give money to the banks money toully pass corporate. we are seeing the euro traded lower against the dollar. let's take a look at what we're watching in terms of stocks. let's focus on oil first and foremost. that's what is dominating investors mine. the big oil majors are set to fall today. f its ownoubles on t still haunting it. the oil spill, they are going to the court. we have not found they are

appealing the grossly negligent charge given to them by a u.s. judge in september. that puts them on the hook for $18 billion worth of pollution. united utilities up i 1.5%. by 1.5%. we thought they were going to fall. they're going to have to fall by another 5% through 22020. that's only about 20 pounds. utilities has to react. keeping an eye on luxuries. the owner of gucci has been having a torrid time in asia. the ceo and try to look for a new creative director. back to you. >> that's the market open so much it has the ftse lower by 50 points. below $60 ang

barrel. in the bond market, yields in germany record lows. if you want a headline in the market, we have to get to those brutal moves have seen in greek stocks over the last couple days. investors shifting into crisis mode. the equity market heading for the worst week since 1987, down 20% in just three days. could early elections topple the government in favor of an anti-bailout rt? --'s bring in and delete .ndy leach welcome back. deja vu for you? >> to an extent. the treatment for the crisis is something new. it reflects the underlying stresses that haven't gone away, so unemployment in greece is still incredibly high. the economy is still massively below historic peaks. we see the rise in

greece. also in other countries around europe. we have spain, italy, all of which are countries that have been battered by austerity, and the population is understandably beginning to feel fed up by the process. >> we see a drop at 20%. we did not see that in 2011 and in 2012, but the big difference, it has been fairly contained. it has been localized. are we expecting more of that? >> we can say at the moment greece is a special case, because they have got their own political cycle that has caused tooerns that if they go early elections you have an economic policy not particularly compatible with the german led ecb austerity packages. then we have a real fight in our hands. in other countries, those are a third of the way. we don't need to worry about it

yet. i think it's something investors need to have on their radar screens the 2015 is going to be a year of a lot of elections all over europe, and that is going to produce political uncertainty. you can see that here. a coalitionther after the elections is going to be a long and messy process. >> let's talk about political risk. you get a crisis in greece. you punish greek assets. we understand that. you get political uncertainty in the u.k. you punish sterling. an election in 2017, when the political risk arises, what do i punish? >> at least it is 2017, so there takesll time for whoever on the leadership of the main parties in france to stage a fight. if that were to happen, i think

it would be the obvious risk asset. she stated she would like to see france pull out of the euro, and if france pulled out of the etre, the whole raison d' disappears. you cannot have a euro without france. just look at the map. france is in the middle of it. >> you are a money manager. how are you invested, not just with political risk, but when i look at the bond market see 10 year in germany at a record low, do you want any money and german bonds? >> if you aren't -- in german bonds? what if you are taking a three-year view, no. you are going to be heard. over a shorter time could the yields go lower? .- you are going to be hurt

over a shorter time could the go lower? they probably could. for a longer-term investor, this is what central banks have in trying to get everyone to do, move out of safer assets -- have been trying to get everyone to do, move out of safer assets and take on more risks. risky,y, assets are so let's just hold cash and wait for a better opportunity because cash will lose you money in real terms, but at least it gives certainty you have got firepower theyke opportunities when arise. >> what are you doing right now? >> equity only for folios, we , we areortfolios looking to stay in assets through january. they tend to be good months for equity markets. to go a lot more defensive. be a bumpy year

for investors. >> we got oil as well. here is a look at the stock on the move. hugo boss lower. you have hugo boss trading 3% lower as the companies largest shareholder plans to sell a 7% stake in the company. we will have more on the story later this hour. it's not all about equity markets. the big headline has been oil. again.nges we talk crude and what it means for the oil majors as saudi arabia clings to market share. that's after the break. stay with us.

>> welcome back. i am jonathan ferro. 10 minutes into the trading session. you have the ftse down. the dax down. it's the oil market that continues to rule the headlines. wti crude is down from $60 a barrel. the stunning collapse continues, falling to levels we haven't seen in five years. has dropped from the highs we saw in june. here with more on the outlook for the commodity is caroline hyde. when are we expecting a turnaround? it seems to keep going lower and lower. >> barclays calls it relentless. we have seen 10% down this week.

we have seen an 8% drop in the european contract. next week week doesn't look any prettier. expecting further declines in the oil price. if you check into what some of the big players are saying about where the price will go, it is terrifying stuff. the head of iran, the oil ministry, he says it could collapse as low as $40 a barrel. you start to hear talks of a price war with opec. ofc is the organization petroleum producers, and they make up 40% of supplies. they didn't cut their production target last month, and that accelerated the decline in oil prices. now it seems they are slashing prices further. we have heard from three key players in opec. that is saudi arabia, iraq, discounting prices to asia. they want to keep their market

share, this in the face of more production coming from the united states. they are drilling into shale oil of course. that puts pricing pressure. they are cutting prices even more. then price wars continue, we could see $40 a barrel or o says $60 a barrel. that's here to stay for six months. >> the clear read is the effect for the oil minister -- oil majors. is off because of concerns over oil prices. thelso learned they have oil spill that happened in 2010. the biggest offshore spill in the u.s. in history. they have already spent $28 billion in response to this oil spill. today we understand they are going to be launching their

first appeal. it could be one of many against the u.s. district judge's september ruling. he decided bp showed gross negligence in causing the gulf of mexico oil spill. to find.d expose bp -- find. they could have the biggest penalty her barrel of oil spill. one of the 4ms million barrels was spill. a few times it per barrel, $18 billion is the number of how much bp will have to spend. bp says the evidence doesn't say they were close -- grossly negligent. didn'tdence said it amount to willful misconduct. remember the words saying they were reckless. they were willful. there was wanton conduct.

67% responsible for this oil spill. at the feet of transocean. they were 30% responsible, and were 3% responsible. bp appealing this decision. meanwhile, the lawyers for the victims also appealing, saying they want harsher terms leveled that bp. they say they should qualify for punitive damages. keepargument is going to on rolling. the first of what i think maybe many appeals today. >> still with us for a look at the oil industry is anti-lynch. -- andy lynch. everyone is asking about why we are following. nobody said it was going to happen. how shocked have you been? >> i have been very surprised.

we know opec meets $100 a barrel to balance their budget. this is going to be hurting all the opec countries very much, so they have made the decision they need to protect market shares in a world where you have oil producing areas coming, and they don't want to be the only ones taking responsibility. >> talk to me. i remember a couple years ago we used to talk about oil service companies. you were pretty bullish at the time. have you gotten out of that sector? yes. we were more lucky than good. we didn't see the oil price collapse coming, but we got out of almost all of our service positions over the last 12 months. it was a much longer-term idea where globalld

warming is clearly happening, the science suggests we cannot afford as a planet to consume all the fossil fuel reserves we on thateady found, so basis, the demand for oil services was going to be seriously impaired on the 10 to 15 year view. that was the reason we started. it was longer-term that being able to predict what would happen in the last six months. flex your in equity investor. you are an equity investor. when you look at the pain they have taken on the back of the weaker oil price and think him a over a longer term horizon, think,ffer value -- and over a longer term horizon, these offer value? why can't you value stranded how do you value stranded reserves? it is not going to come to a

binding international agreement reserves and co2 emissions will be cap, then these companies look very cheap. they are close to the reserves they have already got. viewu take a different that we are going to move away from fossil fuels towards more renewable energies, actually you still have a lot of intervention to do. they have the resources to do that. each time they keep producing oil they are going to be generating cash flow. a can use that to reposition their businesses. that is a much -- they can use that to reposition their business. that is a much harder decision, rather than to see the case for business as usual, in which case there is value. >> i want to ask this question

quickly. we can talk about what it means for the economy, a drop in oil prices. what does it mean for the markets? >> it means lots of different things. for consumers, because we all have effectively more money in our pockets after going to the petrol stations and filling up the car. it is bad news for a lot of the high yield debt market because lots of the oil producers came into this highly indebted, and they are going to be feeling a lot of services. it also has some questions for the u.s. recovery. so far, the vast majority of jobs created have been in shale oil producing states. in the event that growth rate starts slowing down, you really need to see the rest of the u.s. economy start picking up the slack. will it be able to do it?

probably, but that is by no means a given. that is one thing to watch carefully into next year. the data out of the u.s.. can it cope with the decline in oil price? >> that was andy lynch. is not anl you what unknown. what oil and its decline means for the ruble. record lows for the russian ruble. russian aid a new convoy enters ukraine. rubel thinks about that. dollar ruble up 4%. russianows for the currency. we will talk politics in two.

>> welcome back. down avoided for now. the u.s. house of representatives approved a 1.1 trillion dollars spending bill that keeps the government open september. the white house supports it some democrats are mad. in's get to hans nichols berlin. he covered washington for many years. one high-profile supporter of the bill is jamie dimon. i wonder why. >> here is what the bill is. let's do the overlying numbers. one point one trillion. it keeps it through september,

passes the house, needs to clear the senate. they inserted the egg on the push -- something on the push out provision. this required banks take the riskiest assets and have them not be backstopped by the fdic or the federal reserve. the bank wanted to rectify that. they are successful in attaching that to this overall spending bill. democrats cried foul. they are quite upset. jamie dimon is supporting the , as is president obama and white house chief of staff. the overall vote passed with republican and democratic support, but 67 democrats voted against it. now it's going to go to the senate. no sure thing. just a quick residual note. to keep the government funded through monday they passed a 48 hour extension. that was passed by the president into law, but we still need to see how the senate is going to

react. >> when this goes to the senate, how big will the hurdle be to get this through? >> any senator can make a procedural objection. you just need one senator. what elizabeth warren or ted cruz has to say. it could delay the final passage. >> thank you very much. we will continue the political discussion after the break. we will talk to pam. ab -- talk japan. shinzo abe looks to strengthen his mandate. the dollar yen doing nothing, but still heading to the best week for the japanese yen in 18 months. the best week for this year. if you want to follow me on twitter, i am @farrotv. we are back in two. stay with us. ♪

welcome back. i'm jonathan ferro at bloomberg's european headquarters in london. this is how things are shaping up. a down day. the ftse 100 down by 1%. the stoxx 600 off by 1% as well. yields in germany, record low. 6.4% on the 10-year. wti south of $60 a barrel. five-year lows in the oil market. since 2009.n't seen let's get some stock specific news with mark barton. ring down 1.5% today. ceo leaving, creative

director leaving as well. the head of the parent company will take over running gucci on january 1. guccif course comes after has gone through a turbulent time as of late, struggling as customers switch to labels they perceived to be more exclusive. kering 1.6% lower. hugo boss down by 3.4%. plans to sell 4.9 million shares off. permira's sale of an 11% stake to institutional investors managed by merrill lynch.

households in england and wales received a boost today. britain's water regulator published a final determination on pricing. the averagee customer bill fall about 7% next year. united utilities and severn trent are the big two. shares are rising. bank of america merrill lynch said that it could spar some m&a. severn trent up by 3%. interesting times for britain's water utilities. >> thank you very much, mark barton. three top headlines you need to pay attention to. fallen below $60 a barrel, extending this week's losses to almost 10%. the move comes as opec refuses to cut output, defending market share. brent also slid to its lowest price since 2009.

the u.s. house of representatives has passed a $1.1 trillion government spending bill. the senate now has two days to pass the legislation. the package has been criticized by democrats because it rolls back some restrictions on banks. stocks in japan rose this morning. the nikkei closing up 114 points. index down more than 3% ahead of elections this weekend. shinzo abe's coalition is forecast to win. for more on that story, shery ahn filed this report from tokyo. >> abe is on course to become japan's longest-serving prime minister in decades. we had several polls this week saying that abe's liberal democratic party may get more 475 votes in the lower house in this election. they may get around 317 seats.

the nikkei putting that number higher. what that means is that abe may get his supermajority, which will help him push his policies through. of voters40% undecided, many coming from a younger generation. in 2012, only about a third of people between the ages of 20 and 29 cast ballots. that was about half of those in their 60's. many voters tell me they don't feel they have much say in politics. the campaign feels geared towards the older generation. that is the marketing strategy as they line up for people who will vote for them. more than 25% of the population here in japan is elderly. social security, health codes, taking a bigger bite out of the

budget every year. japan's budget deficit, already 9% of gdp. shery ahn, bloomberg, tokyo. >> joining us for bar is derek whole penny. derek, great to have you here as ever. let's talk about greece. i want to talk about japan. as we come into this election, it is not clear what the risk is. what is the risk? >> the key risk for monday morning is the ruling coalition does worse than expected. that would certainly dent confidence in abenomics. even the risk of that seems very low. are evenopinion polls close to being accurate, they probably will lose some seats. suggestinging is

something in the region of 300. that gives them control of the committees and they can move forward quite strongly with the impetus in terms of structural reform. >> when i look at the movement of the yen, more of a global story than anything, heading for the best week of gains this year. the market reaction to these elections, you expect it to be a muted? >> i do. of october,rst dollar-yen is up 6% on monday. that is incredible after the boj easing in 2013. 11.8%. in the aftermath of that rally, we had a 10% correction. the full boj move was reversed. we had a very similar strong move up higher since the easing on the 31st. the risks are that we could still see further liquidation

perhaps into year and as investors lock in profits. now, 118.60. right how much lower can let go? >> if it was to repeat the correction i mentioned, we could get close to where we were when the announcement was made. as 110. go as low i think there is chances we could get below 115. as i said here before, a lot of the market didn't get that. i think there is plenty of appetite to rebuild dollar-yen positions especially after the u.s. data we had yesterday. if we do have another wave of enthusiasm that fear, it is a very clear macro trade. i think if we do get the correction further, you will see income at those levels. >> let's get back to politics. let's say he strengthens his

mandate, wake up monday morning a very happy prime minister. what is the first thing this guy has to get done? >> for me, what has been lacking so far has been a very clear picture in terms of tackling the budget deficit. they have a target of getting to a primary balance by 2020. much the markets don't clearly understand how to get there. after delaying the sales tax from 8% to 10%, there is going to be concerns as the boj policy becomes more aggressive that this is simply monetizing of debt rather than tackling the real economy, getting the potential growth rate up, and bringing down the deficit. i think we need a very clear picture in terms of tackling government spending. you can't do it all on raising taxes. the consumption tax increase is important, but you need to tackle social costs.

that is one thing. tax reform is another. more inthey need to do terms of getting earnings, savings, on the corporate sector, into the real economy. perhaps the tax on earnings would be a very strong message to the markets that they want to get corporate savings into the real economy. >> i want to go back to the fiscal deficit. why does it matter? why did it matter when the 10-year yield is right now 1.4%. the bank of japan holds a fifth of the jgb market. yields just keep going lower, lower, lower. why will that change? >> ultimately, there has to be an exit strategy. at some point, there has to be conditions ready and suitable for this policy to come to an end.

it is about growth versus inflation. ultimately, it is about getting nominal gdp growing. since the crisis, nominal gdp is down around 5%. that is a huge reason my debt to gdp is not coming down. the most important thing is a mixture of real gdp growth and inflation. some level of inflation. that is about supply-side reform, getting potential gdp growth rate higher. if that doesn't happen, the markets could come to a situation where you start to see panic. although the boj is a big buyer of the market, it is a huge debt market. if all sellers started to come in at the same time, it would still be very problematic. >> the market is not paying attention to a downgrade by moody's. you think the bank of japan is playing with fire. it has stepped things up. is abe playing with fire?

as i remind our customers, there was a risk of doing nothing as well. over ak of doing nothing long period of time was increasing. the officials in tokyo saw what happened in europe and the fact that investors do start to focus on sovereign debt risk. that has encouraged this change. will be crucially important for determining how this plays out over the medium to long term. is on trial this weekend. think they will get to put their hand up and say whether they strengthen the mandate of prime minister shinzo abe? how do i judge the performance of abenomics? a lot of people call it a failure. do i look at gdp or inflation? gdp first. to be that is why the delay in the tax rate was important.

is trying to get the potential growth rate higher. scenario ise investors see the potential growth rate rising. , thation expectations will start to gradually change as we see more sustainable, stronger growth. then you start to see inflation picking up. year, 118, you say we could be as low as 115. >> we could get to 125 next year. , european headny of global markets research at bank of tokyo mitsubishi, thank you very much. up next, a tale of two luxury companies. both on the move lower. kering down almost 1.5%. we will discuss why. ♪

>> welcome back. a quick market check for you. equities here in london down by 1%. brent trading at $63 a barrel. the russian currency taking an absolute beating right now. record lows against the dollar. one dollar buys me 57 rubles. plenty to discuss in the market. we are watching two luxury companies, cuba boss and -- hugo boss and kering,

. there are changes at the top of gucci. hans is following the story of hugo boss out of berlin. caroline hyde has the latest on gucci. caroline, some big moves at gucci. >> two top executives to go. perhaps not that much of a surprise. even though gucci as the dominant force, more than a third of their overall sales of kering group, it is the dominant force, but haven't been doing so well in asia. look at its third-quarter sales. we saw like for like drop almost 2%. heads are rolling. the ceo is to go as is the creative director. this is the biggest shakeup in more than a decade since the departure of tom ford. what is happening is, we are expecting the ceo di marco to be replaced by marco bit sorry.

he was kering's luxury and leather goods head. before that, he led the jewel in the crown, the out performer in kering group. he became the head of that group in 2009. before that, he was leading the charge at stella mccartney. he knows all the brands very intimately. he's been tasked with turning around gucci. so far, the head of kering wants it as the most well-known brand. too flashy,allure, too many logos. the chinese want understated luxury. they are not meant to be ostentatious anymore. we've got a change in terms of ceo. ousted the creative

director as well. there for several years. she has been leading gucci in terms of handbags design since 2002. she is staying on for her last show, february 25, and she is out. toative directors are hard come across. >> very important. a shakeup at gucci. a little bit of pain over at hugo boss. let's get out to hans nichols in berlin. why is hugo boss' biggest shareholder selling such a sizable chunk of this company? >> they have been slowly divesting. wereer this year, they 50%, then they went down to 39%. now they are 32%. suggestion isble that you have gone bespoke. clearly this is the only explanation.

the company did issue a profit warning early in november. they have seen sales slowdown in china. there is concern about what happens in hong kong. overall, they've seen weak demand in europe. there is nothing really red light flashing that is wrong with hugo boss. thatmoore likes permira took a majority stake in 2007 and they are just unwinding. since that time, their stock is up fourfold. figure outneed to what percent you are responsible for. clearly you are a hugo boss man. >> hans nichols, let me be clear. this is not off the hangar. we are going to talk markets. up next, we will go through the biggest movers. not just the russian ruble. we are going to talk about greek stocks as well. ♪

>> welcome back. equities lower here in london. down by 83 points. what a week for the markets. we have seen some historic moves beginning with greece. the athens stock exchange heading for its worst week in more than 25 years. on tuesday, we saw stocks dropped 12% as investors braced for a vote that could sink the government. tough week for oil.

crude has continued to get crushed. to move this week only adds an already brutal year for the commodity. its worst run since 2008. a little further back in time, today marks the 100 senators -- 100th anniversary of the dow's largest ever fall. the pulse is coming up at the top of the hour. guy johnson likes to talk about anniversaries. >> a massive week. one thing we haven't talked a great deal about has been the huge e.m. rout. the markets really taking it on the chin. to look at that, what have we got today? mark mobius. when you want to talk a merging markets, you talk to him. we are going to cover everything from oil to russia to what is happening in china to the broader em story. the qe story coming out of , we wille agent region

try to get an idea of where he will be putting his money. >> i'm looking at these market moves and i'm seeing equity markets down. i'm seeing record low bond yields. oil selling off. emerging market currencies, the russian ruble, 8% lower this week. >> that is partly what is happening in ukraine and part of the story this morning, part and parcel of the oil story as well. it is a double whammy. >> i look at that stunning chart of wti over this year and i can't stop looking at it. this is the third biggest drop for oil in the last 50 years. we can't stop going on about it because it is really important. abouthave been talking the fact that this is a massive tax cut for the world. that is true for just about everybody. interesting story, back to

120 was markets, oil at a colossal wealth transfer, one of the biggest you've ever seen in history. as money moved out of western developed markets into the big oil producers, that is now reversing. that is a fundamental change. if it stays here for six months, a year, the change we are going to see is massive. that flow reversal, absolutely huge. >> we've got a week of what might -- what some might call political risk. japan, greece as well. we thought it was going to be a quiet december. pretty wrong, right? >> greece is going to be keeping a few people up. we will watch to see how that presidential goes. see if he can get the mp's on board. if it doesn't, i think we will have a very interesting thing to

think about. is, you are not seeing are not seeing contagion from greece in two other peripheral markets in europe. i think that is a significant point. greece could be isolated this time. we will wait and see. all kinds of problems and the world goes to hell in a handbasket, that is a different story. at the moment, looks contained. >> equity markets trading lower across europe. the ruble taking some big pain this morning. 57 russian ruble, we've got rubles for a dollar. down 74% this year. big, big move for the russian ruble as oil continues to sink. brent trading lower, wti trading lower. wti still below $60 a barrel. brent at $63. what a year for brent and wti. here are some of the most

important events we will be watching in the week ahead. the japanese election on sunday, the fomc meets on tuesday, and the first round of the greek elections on the 17th. plenty to discuss. ♪

>> a barrel below 60. the international energy agency releases its outlook. we are about to talk to mark mobius to get his take. that is an exclusive interview. >> uber speed bumps. the mobile app faces yet another challenge today in france. >> yep. >> we will talk to the head of the company in europe. >> gucci top executives will step down as kering looks to revive growth.