200 million euros less than planned. three things we are watching. i'm looking at future markets -- higher. daxhe euro stoxx 50, futures up 100 points. points. 100 up by 100 a very excited manus cranny. the last two minutes before he runs away for christmas. >> stocks perform the best in three years yesterday. that was after six days that saw the markets come lower. equity markets are opening higher. anemic we're told were yesterday. the market had rallied over 2%. were you part of this rally? wpp driving the ftse higher. 6,500.

maybe next year. a couple of breaking news stories. that will help the markets. skye. keep an eye on skye and bp. saying that they are going to keep an eye, i suppose it is the sports content and its division. that is a watching brief. barclays, however, saying they reinstated overweight position on skye. with a price target of 10 pounds and 25 pence. air france, klm three strikes. down 6%. what you saw was the cost of the strikes causing the third profit morning in a row. stock down 6.5%. basf coming out with their news that the world's biggest is wheremaker, 70.70 we trade, they has signed on a

deal with gas prom. to swap some of their gas trading assets. the deal is falling apart. those are three names in stock trading. euro. the dollar is coming off its initial highs. euro-dollar trading just under 1.23. i caught up with one analyst. he said get ready for the bank of japan to see dollar-yen somewhere around 1.24, the area of concern would be at 1.30. pressedressed him, and them again in terms of structural reform, he was very, very reticent to give me an answer. 1.1920. happy holidays, happy christmas, happy whatever. i'll see you in the new year. >> enjoy your break. that is the market open.

the ftse 100 climbing by 50 points. dax upu 1%. the big news in the last 24 hours, 12 hours, has been not just vladimir putin reassuring his nation that economic really full come. one western leader was looking to help his case. while angela merkel and david cameron insists russia comply with the west's demands on ukraine, the french president hollande ripped up the script. take a listen. > the gestures that russia is making are what we are waiting for. there is no reason to enact any new sanctions. on the contrary, they will allow us to start the escalating the situation. >> joining us is ryan chilcote. a suggestion from france that sanctions could be scaled back. are we about to see a rift within europe on the sessions?

>> hollande ahead of schedule. not to beginreed discussions about rolling back sanctions against russia until march. was if president hollande to get his way and the sanctions would be rolled back, that would not happen until july. the ones in place are there to the middle of the year. then it gets interesting. all of the eu's countries have to agree by consensus to extend them. that is perhaps were president hollande gets to fight the good fight. you can understand france's pain. they had to forgo that $1.2 billion sale to those two helicopters to russia. austria has been complaining about sanctions. they have huge exposure to russia. they, too, have been complaining. the german say, we, too, are suffering.

you look at basf ripping up there asset swap deal with gaxpromm. that cost the company $300 million. yet, the the german chancellor says that we still have to stay the course when it comes to sanctions. too early to start discussing rolling them back. >> the backdrop for this event has been a collapse in the ruble. the epic rebound in the ruble. where are we now with the russian currency? stabilizedrs to have yesterday and today, at least relative to where it was earlier in the week. i say relative because the volatility is massive. take a look at today. i was just looking -- i saw an 8% swing. extraordinary swings. i was talking to a bond trader. he said, it is too volatile. they would like to get in but their risk managers one often -- let them do that. the finance was speaking.

he said they agreed to spend as much as $7 billion of reserves to prop up the ruble. the rublee thinks is going to strengthening the year and they have no problem buying that hard currency back. jon? >> great work. we are joined by the head of investment that cross bridge. billion innages $2 assets. great to have you with us. do you want to get into russia? >> i would say the news overnight is risk positive. not just to buy russia but the emerging market as a whole. look at the 1998 crisis. that is the context in which we look at emerging markets. rateat time, the exchange was not flexible. this time it is very flexible. the emerging markets as a whole had $650 billion. now they are $8.1 trillion. there is reform. >> let's talk about the central

bank of russia. they have $400 billion in reserve. but vladimir putin adamant they were not going to be wasting -- a suggestion they may not be used in the way they have been. what is the point of having them? >> he said that he's very aware that oil prices could be low for two years. he also said that we might have to make some cuts. these are positive things to hear. when you see that the government is aware and they are going to take action, then they should be seen as positive. question howld highly intelligent the president of russian is. when we talk about the politics of the situation, sure, president hollande ripping up the script. we are long way off from them scaling back sentients. >> that's true. what we have heard from president hollande in italy, it isws that if russia

conciliatory, europe will go with it. >> what's driving this? i look at the comments from the danish foreign minister. he said it was not our intention to crush the russian economy. what was their intention? >> they wanted to make a stand. people are aware. europe also realizes it is the first -- it's just a way for them to find common ground and give putin a way back. think european leaders underestimated the impact it would have on the european economies? >> perhaps, yes. europe is not in good shape. to have sanctions does not help. it's saving things on both sides. >> one of the questions we had as we look at the ruble trading against the dollar, we're back to 60. down again on dollar-ruble this morning.

is it too early to say the situation has stabilized? it has only been a couple of days since we said this was a crisis. viole fromn 60t move. day.rom 60 to 80 in one there is more volatility in this. >> he stays with us. after the break, we get his big calls. dollar-yen. more on that in two minutes. marcus this morning trading higher. the ftse 100 pushing higher up across the board -- markets this morning trading higher. the stock on the move is in france. a third profit warning for air france. stock,, down almost 7% this morning. ♪

the ftse 100 is high. in japan, the bank of japan does nothing this morning. perhaps given the recent moves to expand stimulus we can call that headline. let's bring back the head of investments across bridge capital. when i look at what the bank of japan has done this year, later ago,year, a couple months it is remarkable. you think they will double down on stimulus next year, really? >> there is no other option.

they have 2% inflation growth. you are not going to get that by not easing. the yen weakening -- it is a dollar strength story. so i think boj's announced policy and the continued dollar strength, that will see the japanese yen go to 1.35 >> let's call this monetary policy on steroids because that is what it is. what is the risk? how can this go round? >-- go wrong? >> the central bank loses control over monetary policy. we do not see that happening now. it's an announced policy on behalf of prime minister abe. he's won reelection. people validated what he said. they have no other option to achieve growth with inflation. >> 1.35 is that not an overshoot? >> i do not think so.

it might go beyond that. start helping the japanese economy. they want their businesses to start doing well. that is a positive thing. >> d think it will help the economy as much as it will help japanese equities? >> it will. companiesese reporting earnings the end of this year may see a positive surprise because a lot of them have -- doubled down, because they were not aware of where the yen would be. >> you're looking at a 15% pop on the nikkei next year. what underpins that? is that boj policy? >> i think it's not just them. i do expect there will be higher equity prices and growth worldwide. and emerging markets. let's not forget that lower oil prices is a positive. janet yellen mention that in the press conference. what we saw from the conference

was while the dollar has come down -- the growth expectation is not come down. [indiscernible] are seeing a strong finish to the week in equity markets. stocks up the most since 2011. the same in the united states. the footsie up -- the ftse up .8%. this is been a volatile month. >> it is. i always like to think the difference between volatility and risk. what we are seeing is volatility. one thing to bear in mind is you do not convert your temporary declines into permanent losses. weeks, and you cut your position two days ago you would have taken losses. what we're seeing is volatility. if i look at the world going for, oil prices is bullish.

of oil inconsumption the world is 36 billion barrels per year. if you price it at 100 barrels. this savingsat comes into the economy. pay down the debt. that spurs production and leads to job growth. that will increase wages as well. that is a good scenario. >> what was your take away from janet yellen, besides the comments on oil and inflation? what struck me is that there was a hawkish tone. the equity market has gone high, high. have we missed the point? >> probably not. it was enough for doves and hawks in that. she meant that a couple means

two. that does not mean she will raise the rate. the message has not changed. we use the word patience. sho patients and be patient about how the policy will evolve. the message has not changed. should the date is a price to the upside, you will see some hawkish tones. don't expect the rates to rise as much. >> if it's all about the data, why this over communication? >> there are so many questions being answered -- asked everywhere. that is one reason why you see the monthly press conference. cutting it down by half. you can't escape. the more question you have, the more volatility in the market. thee'll continue conversation after the break. here's a picture of the markets. the ftse 100 another strong session at least for the first 20 minutes. the stock up .7%. the stock on the move we are talking about -- air france. for theofit warning

airline. this is what investors think. the stock is down by 8%. so much to discuss. ♪

>> welcome back to "on the move

." 8:20 in the u.k. we're going to talk about the u.k. battle for rights. they believe limiting the distribution of football content bp's aggressive move into the sports market has not changed. >> they do acknowledge those changes. they do say, look, you can fail to ignore the 900 million pounds in the champions league. sports rights. there is a wider availability on pay-tv. still, they are looking at other market trends. there is more over the top provision. like netflix. and bundling is more common. perhaps you and i are being

dictated with the access to the latest football results. we want to go to a provider that will offer us mobile as well as broadband. basically, ofconn is sticking to its guns. it's reviewed and it says that sky has got 75% of the premier league. they got their claws into some of the biggest spenders when it comes to those who have paid tv, some of the biggest, high value customers. they still dominate the market. they need to stick to current regulation. sky one and sky sports one and tv sports two to other pay operators such as mediuvirgin media. are looking for reactions to this review. that is offcon. sky is too dominant.

but they want to hear other people's reaction. >> the big one next year, early next year -- the auction of the next premier league writes. -- rights. everybody questioning what the price will be.what is the spillover ? >> interesting. the process has begun. we will find out early next year how much cash they splash. it is more than 3 billion pounds bt ands won out between sky last time they fought for rights. many assume it will be more than 3 billion pounds. we have got sky getting a war chest together. they sold their gaming arm. hopefully they can fend off bt from eating in to their ownership of for merely. has 25% and sky has 75%. could lose a sky

15% of its highs paying subscribers if it fails to win the biggest share of premier league packages. clearly this story is going to evolve. the regulator recognizes that. while we're going out and getting reaction to what our review is, they knkow this bid ding war is about to start. they know that ownership of premier league could change hugely. that is why they're asking the question -- does bt now have incentive to limit the distribution of key sports content? maybe we'll see both brt and sky having to offer content to their rivals to make the competition better for the rest of them. >> thank you. stay with us for final thoughts. let's get to the bottom line. this is a price war over content. does that continue next year? >> it does.

i find the technology sector fascinating. rnible]e it is almost like the telecom striking back and coming into the media field. it will be a war for content. beene u.s. netflix has doing so well. people are looking to bid for that. that is one of my predictions for 2015. netflix gets acquired. it is all about the fight for content. you have the customers. how do you keep them? how do you monetize revenue? how do take this market in u.k. you call it internet and telephone and the tv as well. thehat is driving consolidation story. the risk is these guys end up paying too much. before we go, i want to get to the stat for next year related to the oil price and the

spillover to equities. in 20 seconds. >> sure. historically, going back 100 years. fallen by 30%,s s&p has fallen -- that number is 18%. >> apparently lower oil is good for the market, not just the. a economy picture of the markets. equities are indeed pointing higher once again. the ftse 100 is up by .6%. the dax up .5%> 50 points higher off the back of the biggest rally in europe yesterday in three years. the biggest two day rally on the s&p 500 since 2011. a strong finish to 2014 after a very volatile month. if you want to talk markets, in the meantime, you can follow me at twitter. we willintues' time,

talk about what an epic year we have had for the bond market, not just in europe but in the u.s. as well. ♪

>> welcome back to "on the move ." i'm jonathan ferro. 30 minutes into the trading day. this is happening. the ftse 100 is higher. up by 40 points. the stoxx 600 up by 0.58%. as we sawns, just yesterday. the biggest rally on the stoxx 600 since 2011. a volatile couple of weeks. strong finish to this week. will we get a stronger finish in 2014? the dax up by 50 points. we go to ryan chilcote. >> we start in france. agreeing to buy xerox. investors love it.

it triples the french company's exposure to the united states. air france, ouch. issuing their third profit warning. they will push back the purchase of 10 boeings. basf, the world's largest chemical producer. they shelved a deal, canceled the with gaspromm, blaming the difficult political environment. back to you. >> thanks very much. here are the top headlines. script. rips of the the french president broker united front after suggesting that russia has been sufficiently sanctioned -- brorke a united front after suggesting that russia has been sufficiently sanctioned. hollande suggest that maybe be time to start de-escalating the sanctions. consider that the gestures that russia is making is what we

are waiting for. there is no reason to enact any new sanctions. on the contrary, they will allow us to start de-escalating the situation. where, stocks topped in asia. that follows a rally in the united states. three main indices up 2%. that brings the s&p up 4.5% over two days. in japan, the bank of japan keeps its foot on the gas. boj says it will maintain its stimulus as the central bank's inflation ambitions face challenges. the japanese economy will continue to recover, at a moderate pace. let's keep it on japan. record low bond yields. not just in japan. in spain as well. yields on the 10-year dropped. that has been the story of the year. yields, low, low. joining us as robin marshall,

director of fixed income at smith and williamson. great to have you with us. low, low, low. stunning collapse in yields in spain and italy. does this turnaround next year? periphery.n the that is one of the surprises. there were some of us in the more bullish camp year ago. but generally, people were forecasting higher rates and high yields this year in the g3. the surprising thing is given the deflation in europe people an not linking that to existential risk of break up in the eurozone. the debt deflation burden, the burden of carrying this debt in gdp growth environment, could be crippling. in the end, they will write a lot of that debt off as they have done in greece. the ecb will try anhdd prop

them up. >> robin, went to be get this term? right now you have a bond market that is looking at the klein a. that is enough to drive it lower. an ecb talking about buying sovereign debt. when does the bond market start to behave like credit again? >> if you look all the way through q.e., it is the anticipation of q.e. that is helped yields decline. when q.e. started, and this happen with the fed, the bank of england, when they were doing the program, yields to not falls. yields rose when they started q.e. we should remember that is an easing. which will push up the equilibrium growth. it would be wrong to say it is purely driven by q.e. the key is very weak growth post crash environment where we we

a lot ofe japanified europe. we will have much lower nominal gdp growth for years. that will keep yields low, in germany and the u.k. >> let me talk about contagion risk. we look about greece. a lot of people say that is an isolated incident. do you see any potential spillover? >> yes. i think when you look around -- we have clearly got contagion risks that still exist. they have been defused by this anticipation of central-bank activity by the provision of liquidity by from the ecb. gr hat's reduce risks. this is what happened in japan -- you saw five much of these economies. bify much of these

economies. yields have to fall because you have a very low nominal growth environment. >> what does this mean for treasuries? let's call it the pain trade of 2014. treasury yields carried on going lower when everybody expected the fed to start tightening and for treasury yields to rise. they have not. they dropped 2% in the last week. we are up to 2.22% now. does that change next year at all? does the global story keep these yields low? >> we will get more to of european yields from treasuries. europeanecoupling of yields from treasuries. six years into the recovery, this is much of a recovery in the u.s., either. get a 3% plus quarter, everyone gets excited. this is six years in. after monetary stimulus. so, i would not get too excited about that. what you could see is gilts yields continuing to migrate

near to bund yields. and treasury yields remaining the highest of the g7, most of the g7. so i think that is going to be the pattern next year. even in the u.s., i cannot see the fed moving quickly on rates. everyone is assumed they will goy by the spring or june at the latest. signalsgnals -- yellen this could be deferred. they are not sure where the natural rate of unemployment is. >> there's a risk, as we look to next year. there were two sides of janet yellen. they could raise weights -- rates even if inflation was low. do you think the fed could make the same mistake as the riggs 2011?ade, the ecb made in >> you are right to highlight the fact that from the fed's point of view they have one instrument which is interest rates on all the policy-setting and two targets which are

employment and inflation. we are going to get very low inflation coming through from these energy prices. in which case, they are going to be compromised if they continue to raise rates because unemployment is down towards 5%. i think they will defer that decision on rates. she hinted in the press conference of that they could -- they would be happy to take a period in which employment was full employment. they are happy to be he behind the curve because of what is happened in places like sweden, japan is the most glaring example where they did too little too late. now you could argue almost they are having to do too much too la te. they lost control because they raised the sales tax. they raced rates much too early. i think she will be happy to wait and risk it. if you have to much inflation,

you can take that back down. if you have too much deflation, we know you can lose control of it completely. >> final question. as i look to next year, i want to bring me oil story in. what we are seeing is the expectation for that to be a drag on inflation. bond yields are tracking lower. if i believe this is a stimulating story for the economy, then long term this is a story that could push yields higher. >> that is a good point. in a sense that, people are assuming that this is just like an old-fashioned oil shock. if you have lower prices, we then get this boost to growth. i think this is a much more ambiguous effect. energy coefficients and gdp are much lower than they used to be. we have more renewables. all of that has changed. what we know is the impact on inflation is faster and more certain. so i would not be as convinced about this o il price effect, if you take the u.s. for you have

production. we know there are a lot of energy loans. i think there will be more distress through the financial sector. it's wrong to conclude for sure you're going to get much boost of growth from this. >> robin marshall. thanks for joining us this morning. to talk about that pain trades of 2014. will it be painful next year? who knows? hard landing at air france. share price thinking this morning. stock down 6.5%. ♪

>> welcome back. this is "on the move." theirance will postpone purchases of new jets in a cost-cutting move after its third down great the sheer. carrie us now is lungren, a lady who knows little bit about airlines. profit warning, profit warning. what is this one about? >> things they're not getting any easier for air france. the third one this year. total value of downgrades, it is close to one billion euros. four issues, two of which we've heard about already. weaknesses some of their long-haul routes.

they talked about additional costs related to the strike they had. they said it cost more than expected to put people on other airlines. they raised a pension issue or a pension benefit will not be coming through. lastly, they talked about fuel. fuel has been falling for everyone. it is not something that will show up in their bottom line right away. >> can we talk about fuel? someone said, sure they hedged six months. when does this become a story for the airlines? >> many airlines are hedged 7080%. 80%.% or it becomes more of a story in 2015. for european airlines, it is also a currency issue. against theis weak dollar that might offset the benefit they get from a lower fuel price. so you might see some of the u.k. carries iag, easyjet

benefiting more from fuel. it is going to be more of a mixed bag in europe. >> i cannot let you go without talking about iag, owner of b.a. what is the story with aer lingus? >> a cheeky bid getting towards christmas. it was a quick assessment by the board. they got this offer on the 14th of december. they rejected it by the. 16th they felt they did not fairly valued the company. wanted to get home for christmas. there are few things going on. the ceo is leaving. they have not appointed a new ceo. their pension, had issues with that. it is beginning to come to a resolution. huge shareholder in aer lingus, has been getting -- put pressure on the, regulators put pressure on them to sell their stakes.

. you have to wonder if willie walsh did not just take a look at it and said, let's put in a cheeky number. >> thank you very much. let's check in on another company. chemical maker basf had big ambitious for an asset swap with gas rppromm. 100% guarantee it would be completed. this is the ceo in july. >> i'm confident because everything is in place, but some legal preparations we have to do internally still have to be undertaken. will happen in the fall of this year, not as previously announced on july 1. >> here is the breaking news. since then, the company has changed its tune. the deal will not go through. hans nichols has more. he said 100%. this is going to happen.

. it has not. , west will it cost them? >> 300 billion euros. a retroactive cost of i believe --euros for the last year. companies jointly owned in oil and gas storage business. that includes the largest underground storage tank and western europe. in return, gas prom will get all of that. basf was going to get shares in two west siberian oilfields. in july, you were saying the ceo was clear. tolder this month, the ceo journalist this was a done deal. a few regulatory hurdles. now we have the news it is not going to happen. big news. this is a company -- the jointly operated business, 12 billion euros in sales.

500 million in profit. that is a hefty business. and it now looks like it is on ice. situation in the russia. another story a that i know that you are talking about this are the automakers responded to the ruble's collapse. by halting sales. you are in berlin, the capital for europe's carmaking industry. germany, rather. who is leaving, who is staying? >> audi is repricing. jaguar or landrover and general motors are pullingout. russia is the second-biggest auto market in europe. been soldn cars have today. we've seen a huge tapering. hard to figure out pricing with the ruvell doing what it is doing. take a look at vw sales. down 14% month on month. bmw 24%.

audi down 23%. take bmw. it is one of the few auto companies that denominate's and let you know what the ruble exposure is. if the ruble drops by 50% in the fourth quarter, bmw could oslose 150 million euros. all of the auto companies will need to figure out some way to price their cars. >> hans nichols, thank you. brutal, the impact of russia on carmakers. nothing little about the ft market. equities in london up by 40 points. dax continuing strong gains. italy underperforming. european stocks across the board are higher. ♪

>> welcome back to "on the move ." i'm jonathan ferro. it is my last day before leave for christmas francine lacqua has been busy. catching up with europe's biggest movers and shakers. they talked about what to expect in the year two come. -- to come. >> i am always amazed the strength of the u.s. economy, incredibly strong. productive, creative, innovative. they focus on getting --

growth. that is something the eurozone is only starting to understand. by funding the economy. they focus on finding the economy. >> i have a question. >> go for it. you can play my role. >> you can -- [laughter] [indiscernible] ey havestion is maybe th4ey h goingight in lehmann bankrupt. do you believe in hindsight it was a good move or a wrong move? >> francine lacqua joins us now. the show airs at 5:00 p.m. u.k. time. big names around the table. what was the market cap?

>> it is above 100 billion euro s. he had a tough year. he took it personally when he had to pull away from the merger. massina had a great year. >> maurice levy always looks happy. >> he's not. he has a temper. show.e for a cracking said, i even forgot the camera's were there.

i asked her if there was a lehman brothers like moment for the ad world. he said the moment we are going through. play catch up with what the young ones are doing online. >> i'm looking forward to this. 5:00 p.m. u.k. time leader's lunch with a market cap of 100 billion euros. she is also doing "the pulse" in five minutes. a busy week for markets. . what is the chart that matters? oil, spanish debt. but the russian ruble. this week alone, we saw the biggest a central bank interest rate hike since 1998. biggest one-day drop and the biggest rally since 1998. of ruble has recovered some

the losses but the collapse through 2014 has been nothing short of absolutely stunning. i'll leave you with that. here is a picture of the european markets. strong gains to close out 2014. the ftse 100 up by.6%. the dax up. 42 points higher. we are having a strong close. yesterday, european stocks had their best aces 2011. the -- best day since 2011. the s&p 500 capping off their best today gain. you want to talk markets. you can follow me on twitter. "the pulse is up next. that is all from me until the new year. have an awesome christmas and a happy new year. ♪

>> hitting the brakes. gm, audi and jaguar are suspending car sales in russia. >> hollande the possibility of rolling back sages in russia. russia.nction in >> good morning. you are watching "the pulse." air france has cut its 2014