, saying that while oil is down by more than 50%, it is others that are responsible. oil down pretty heavily. who can afford to blink last? and, delivery day for airbus. after a series of delays, the company will hand over its new a350 to qatar airways. we are live in toulouse with the airbus ceo in around 30 minutes time. -- that is what we are watching this morning. how are the european equity markets opening this morning? caroline hyde. >> 20 seconds into trading, we are likely to see perhaps the fifth day of gains on the stoxx 600. the ftse up 0.5% already. a bit of festive cheer creeping in. we have risk appetite back on because oil seems to be trading up for a second day. let's check in on brent. up 2.5%.

you were just pointing out why. it is all about saudi arabia's oil minister saying prices will recover. he even jumped on stage with a little smile. it seems he is trying to show his optimism that oil prices will recover. potentially we should be listening to them. the market is. oil prices rise. we also get data coming out. we have european consumer confidence coming out. how is that being affected by these moves in the oil market? it is improving as we see oil prices giving up a little bit more cash. french, u.k., u.s. gdp data coming out tomorrow. the united states seems to be getting a bit of festive cheer. the federal reserve saying they will keep the near zero rates for longer. we will not be seeing any interest rate pick up until at least april.

up 12% thisp 500 year. the outperformed the rest of the markets. let's look at 10-year borrowing costs. we see them coming down. appetite in of risk the borrowing cost of spain as well. looking at the debt market, if we are looking at equities, not a lot of m&a moves at the moment. keep an eye on caplan group. reports on the week end in the press -- over the weekend in the press that they will be finalizing an offer for caplan group. all about moving into properties. will we see xl make that approach? meanwhile, for mobile up -- .a upl zero .5% because; they are backing away from m&a.

they provide as much as services and detention centers in australia. backed away from that deal. perhaps a little bit of a reprieve for ferrovial. bg off by 0.4%. this is linked to a lng deal. they say a tanker has arrived in eastern australia. ,ittle bit of news on bg group seems to be falling on the back of it. >> thank you very much indeed. investor's an perspective on the news we have been talking about. james, chief investment officer, good morning to you. china, the shanghai market, the chart is amazing to look at. four-year high overnight. do i carry on if i have the opportunity? >> i'm quite nervous about the risk of a hard landing.

one of the interesting challenges, is to look at the export-import numbers that china publishes and try to triangulate that against what other people are saying. actually, you can't make any sense of the numbers at all. my conclusion is that the companies are much more valiant than the government. the company numbers say that we need to be quite careful, particularly in the commodity-related plays. >> is this kind of a slowdown that we can manage? is this a slowdown we can be worried about? triple-double. we all know that. we also know that the central bank and government have ample capacities. that weresting issue as don't really know what the political priorities are in terms of creating a reform agenda. whether that is going to be long

and market friendly or short and sharp, and potentially quite painful. >> [inaudible] >> i do a lot of that. it is a game of knowing enough to make a decision. >> is china more of an unknown than others? this is a market that is heavily political and can catch you on a whim. >> absolutely. that is particularly scary. i'm nervous of the australian dollar because of that proximity with many of the risk factors that stock china. >> the political story is hard to read. greece, not a lot of people are invested in greece, but it does have the potential to shake things up. yesterday, we saw the prime minister promising that we could see early elections in 2015. >> it looks like we are going to get that election. in terms of the rules at the

moment, that election is on the cards. it is quite frightening for those of us who wonder how complete the commitment must be to preserving the currency and preserving the shared agenda to maintain not just a single monetary union but a political union and fiscal union. no sign of that at the moment. i think the share prices are taking the bad news on the chin. i would look at the interesting plays in germany. siemens underperformed in the context of what it should be priced at. >> is siemens being discounted because of russia or because of the eurozone? >> there is a whole level of pessimism surrounding the german market, german economy. part russia, part greece, part eurozone. everybody knows the central bank does not have the same discipline the federal reserve has. when you have monetary union but no banking union, no political

union -- >> how much undervalued is siemens? >> at the outside, about 25%. >> can you make 25% work for you in 2015? >> i think the first half of next year is relatively straightforward. we will have reasonable corporate. the second half will be much more demanding. >> james, stay with us. we need to talk about oil. we will do that in the next segment. now, it is about 10 minutes into the trading session. let's look at how equities are performing. of course, if you came in on a trade this morning, there are very few people at their trading desks this week. you are going to see some thin volume and you may see things being pushed around a little bit. generally, equities are very well bid. the overnight story was solid. we saw strong performance at the back end of last week. all i'm saying is that you've

got thin volumes here. just be aware of what you are buying into or selling into. now, as we've been discussing, we are watching oil this morning. it is extending its biggest two-they rally in two years. we are going to talk about opec and how it is playing the blame game. saudi arabia refusing to relinquish market share. what will it mean for oil in 2015? we will talk about that when "on the move" returns. remember, you can follow us on twitter. ♪

>> welcome back. i'm guy johnson in london. this is "on the move." let's take a look at how we are performing today. generally, reasonably well. we are up by 0.7%, 0.8% this morning. we've got a fairly decent session overnight from asia. a decent close in the united states. we are pricing that in this morning. let's talk about oil. prices this morning extending their best today rally in two years. this after saudi arabia's oil minister said he was confident that crude prices will make a comeback. it is just a question of duration.

down nearly 50% from this year's five. you get a very small blip at the end. elliott gotkine has more. what do we get out of this abu dhabi conference? what did they say? >> this was a meeting of oil ministers taking place in abu dhabi, and the ministers have been justifying their recent decision not to cut oil production. saudi's as one of the lower-cost produces are hoping a good deal less than other non-opec members such as mexico. what he is saying here, what he said to justify the decision not to cut prices is, first of all, it is not opec's fault. oilunited arab emirates minister decried irresponsible not opec producers. also, because it is not

necessary. demand for oil will rise and therefore oil prices will also increase. the saudi oil minister saying, if not opec oil producers want to cut, they will cut, but we are not going to cut. >> worried about other things. elliott, we have seen a little bit of a rally. maybe that is to do with the fact that the saudi's are talking about the price going up. i doubt that. we have come down a very long way very quickly. what is your take? what have you been hearing? what is the story? >> of course, two days of rallies do not a recovery make. certainly, some investors do seem to be taking the same view as others within opec. hedge funds have boosted their bullish bets on oil to the

highest level in four months. some believe the bottom has been reached and a turnaround has begun. to really see if the rally we've seen today translates into a more long-lived recovery, getting prices back up towards the level to which we have become accustomed, we will have to look towards the new year when more traders are around. certainly, if the saudi's are worried about oil prices right now, they are not showing it. >> it could be argued that this is where they want prices to be. elliott, thank you very much indeed. van still with us. what do you expect from oil in 2015? do you expect it to remain at subdued prices? >> i think we have two years. perspective on this is that we are still going through where people are trying

to adjust balance sheet, trying to save more. we see this in developed markets. we see this in saving rates in northern asian economies. ,hat we are seeing is oil-producing countries having to take the heat of people wanting to import less. we've seen that not only in the in the baseut also metals. significant price compression. >> it is not a supplied side story? >> i do think the supply side was the trigger, but when you have 90 million barrels a day being burned and quite small shifts in supply make quite significant ships and price -- demand is remarkably inelastic. it won't shift that much. seen for example u.s. motorcars beginning to go back to those that consume more petrol.

some very interesting dynamics. >> you can't drive halfway to work. equities, in theory, it should be a boost for the global economy. >> absolutely a boost. >> i have to drive to work but it costs me less to get there. >> great news for importers. >> where do i look for the biggest bang for my buck? is it the fact that the u.s. consumers are spending more money? where is the sweet spot? >> the u.s. economy is doing extremely well. we are likely to get better revisions to gdp numbers. we are likely to have compilation very low. the fed will not tighten any time soon. a place like home depot has to be extremely well-placed during 2015. >> how much has the market discounted about the impact of the lower oil prices? >> i think markets reasonably

assume that this is going to be a short-term low in prices before a recovery next year. i see two years of low oil prices. there will be significant benefits to the u.s., but also to europe and japan. >> put an overlay of the dollar on to that. how does the story work differently with a strong dollar? tothat is what we are going see in relative terms. the weakening yen and the weaker euro. i see some great opportunities in japan. companies like toyota are very well placed to generate significant shareholder value. >> what about the chemicals companies? if you are a company that is dependent on oil for some of your products, who is the most operationally geared in terms of the european industrials? >> we do think there is real gearing to the oil price, but also in terms of the demand that

is the result of low cost. that story is likely to continue to run. lacks -- >> if you are sitting in europe and the oil price is going down, you have a lot of taxes in europe related to the oil, you don't get the pass-through effect so quickly. you also have a euro that is appreciating. oil is priced in dollars. does europe -- compare and contrast the united states and europe in terms of the impact the lower oil prices will have. the u.s. gets 80% of the benefit, europe gets 40% of the benefit. >> the other layer we introduced is the district between economies and companies. the u.s. margins are remarkably high. u.s. companies are very shareholder-focused. european labor laws remain really difficult.

quite harder for the european companies to drive the same margins per euro of revenue. in that environment, i do think that u.s. companies that are able to maintain margins or grow margins, much better placed in terms of the system benefiting the way they want to operate. my challenge is that when wage costs he can to accelerate in , then margins in the u.s. are going to be really at risk. a number of companies are going to look very overpriced. story, if youil are talking to a client, five stocks, what would they be? >> one of the retailers. the discount retailers. i would go for a discounter. i would go for home depot in the states. i would go for siemens. i would probably go for one of the banks. i stick my neck out and go to

barclays and the u.k. i think the balance sheet issues are going to trump the bad news the government can put up on the banking sector. market,o for the major japan is likely to be the best performer next year. i would go for toyota. >> you have a great christmas. thank you very much. bevan, investment management. up next, president obama says the hacking of the computer system at sony is an act of u.s. vandalism, and a response is coming. stay tuned. we will discuss that story when we come back. as we head into brick, a quick look at the equity markets. we are reasonably well bit. more as the morning progresses. the cac now up i 1.2%. the main markets of around 1% in europe.

we will take a break. ♪

>> welcome back. you are watching "on the move." let's talk about what is going

on for sony. the fallout of the hack attack continues with the u.s. president promising retaliation against north korea. the fbi announced it was indeed north korea that it believes to be behind the attack that prompted sony to cancel the release of "the interview." here with more is caroline hyde. the americans now want the help of the chinese. this gets more and more complicated. >> it does. china is the number one trading partner of north korea and happens to provide all the network, or the telecoms division. not many in north korea have the access to the internet. it is generally the elite and the military. they have some and it is china that might be able to provide more information to the united states. apparently, the way that sony was hacked was being routed by china, but in servers in other countries as well. i think they are making this unprecedented move to say that

they will be retaliating in a measured way -- the u.s. president is saying, we will support privately held companies who are affected by cyber warfare. now, it is interesting that all the other countries are deciding to back the standing of the united states. japan saying, they are working with the u.s. closely, they support the measures being taken. in south korea, who knows a thing or two about being hacked by north korea, take a listen -- our government is also paying attention to the u.s. government's confirmation that north korea is behind the cyber terrorist attack. we believe it is desirable that north korea's actions stop immediately. >> it is unlikely that we are going to suddenly see a tit-for-tat between the u.s. and north korea. you could have real problems if you start escalating this.

north korea has come out with more threats. they have warned damage a thousand times greater than what has happened to sony, saying they will include targets such as the white house and the pentagon. clearly, they don't want to escalate this issue. we have the situation room coming together to try to decide how to respond in these sorts of issues. how do we see what the rules of the games are when it comes to cybercrime? obama is trying to figure out the next that. >> it has been an interesting year, 2014. 180 $7 million worth of damages, they say. if you look at companies, home depot, jpmorgan, ebay, 145 million data thefts. that is far more than just the record from sony. >> caroline, thank you very much indeed. up next, delivery day for

airbus. the company is handing its first a350 to qatar. we will speak to the company's ceo. that is coming up in a couple minutes time. ♪

works welcome back to on the move. things are shaking up. let's show you what is happening. a rally at the get go. rally thaticing the we saw overnight. we will start to get a truer reflection of what greeklooks like and markets are beginning to open. you see the 10 year earlier on. to the possibility of

general elections. we have another key vote on that this morning. we will wait and see how the stock market settles. we did see rising prices. fade on the of a rally. some things that we need to think about, but show you what is happening. >> it is all about oil. oil prices are getting a boost. the best performances are the oil and gas industries. they are currently up 6%. that is allmpany about oil rig's and deep drilling. pressure been under and get a bounce because it is

driving higher. meanwhile, keep an i on the bank. interesting comments coming from the chairman and he seeking bank could be to sell assets and increased capital. we say the capital increase could come as soon as july. in on thewill be particular deal. meanwhile, another big one is up 5%. 22.8 million euros. they were acting on confidential information when they cut the interest rate hedges. that the cfoered should stand down. so far, they say they are going

to challenge the decision and the cfo over maine for now. .nteresting >> thank you very much. >> it is delivery day. over.mpany is handing let's go to the airbus ceo. good morning to you. is the customer happy? >> good morning. i think the customer is not only happy, but supportive. it is a new aircraft and it is difficult. you said that before. and weexactly on time performed certifications on time.

>> there was a little bit of a anticipated the handover would happen a few days back. bring us through the reasoning for the delay and the price renegotiations. >> it was very well-known to be demanding. it is very minor issues. seven years of full development. aircraft behind me. it is interesting, the timing of what is happening here. you are handing over an it burns aircraft and

less jet fuel. whenis happening at a time oil prices have collapsed. demand forct to see these airplanes reduced as a result of the fact that it is less expensive? >> not at all. today and0 aircraft ityou want to buy a350 now, is a 2021 date for delivery. so, the airline's had aircrafts based on fuel consumption.

it is almost even with lower fuel prices. lower,el prices getting the airlines had more capacity. >> you realized the first lot is a fair way out. will bek that qatar able to get aircraft earlier? there was a cancellation of a substantial order. do you think they will be able to? >> to a limited extent. have it launch the aircraft

rushing to get the deliveries. 3500 aircraft in the backlog. consequence of our success and we have to deal with trying to ramp it up. is -- aircraft behind you can you walk me through any pressure from the airlines? discussions aty this stage? we will also deliver a passengers andre

it is the reference in this business. the 350 is that we will have 25% less fuel consumption. this is what we will address. it would probably be something they look quite >> it is may be slightly longer. i wonder if you have any thought . we do not need another stretch.

>> this is clearly not in our plans. we focus on it and have announced the 330 for the lower that is very cost-effective. the 330 and 350. from two engines to four engines. there is a lot of concern around the program. you will make a decision on whether you do a new engine? you have the current struggling with sales. do you think you will have to look at a new engine auction? >> no. i do not think we need to do that. we will reach break even next

year. it has taken quite a long time. so, 15, 16, 17 is a good reason. there are other customers. there will be an engine that is improving and we can contemplate a huge potential. this is not the real priority now. they have this fantastic aircraft and you give a clear preference to it and everybody will know it. this is the business model. other airlines can do it.

>> run the through the next few years. do you think that if you improve the process, you can increase the break even point? can you make money? >> yes. and is part of a movement we have targeted aircraft to man's. it and wen achieve will continue to do that. you are absolutely right. the growth of the have a largerwill market in the future. reporte was an aviation

that suggested that rolls-royce is ready to go with a more efficient engine. about thatng aircraft at this stage? do you think they are ready to produce that kind of engine for you? talking on many projects, including new generation aircraft that will never come true. and it not speculate comes at this time. priority is to continue and we are innovating. the same level and are

it isng down this and more efficient than changing the engines. >> a final question. is there a different view between the management group and you guys? certainly, you got a lotta people talking and people on the same you are page about the future of the aircraft. >> we are totally aligned. have thepport it and to the bottom line of the group.

take very sensible this is measures and probably what we will do. >> yes. >> we should not minimize the it is a big day for us and for the aircraft industry. it is what my teams have been doing. >> you look at what they deliver and how they deliver. it is incredible to see that. itlook forward to seeing

around the world. the ceo. thank you very much. stay with bloomberg. ceo.ll be speaking to the he joins us. after this short break.

>> welcome back. you are watching on the move. it is the second day this morning and the biggest rally in more than -- years. we are down pretty hard and it does not go in a straight line for that long. what we are looking at is a little blip. the members are pulling the strings right now. saudi arabia is saying that he is confident that prices will rebound. let's ask you that question. look at the shape of the curve's and you will not get a balance. >> you are right and we will see responses in the back half. we will see it in the third quarter. weake demand has been very

and we are expecting the numbers to be more or less correct and we will get closer to gdp growth. >> how do i play this? what is the tactic? company's and the they are financially flexible right now. attractiveing some prices and we would be looking at it. you kind of feel that it will be out there in the open. >> that is correct. it has not been enough of a duration yet. >> people are really struggling. in kind of feel that we are

a roll up environment and there are a town of companies struggling a little bit. is that where you go? one is shuthe old off to oil and gas producers and .t has been the incident >> who does those roll up's? >> you could see the integrated chevrons and shell and could be looking to supplement. you could also be looking at larger companies that are well capitalized and able to take advantage. >> where is the connectivity? price and an average i think you are going to be in the low 80's by next year. in certain senses, it is not.

you can get them more cheaply. what will the lower oil prices do for demand? >> we do not see a lot of elasticity. $2.50 aes are below gallon. it is getting back to gdp growth that is necessary. this will help that. >> we will take a break and we will see you after that.

>> welcome back. you are watching on the move. will go to our international correspondent, hans nichols. how is that going to work? >> you can start transitioning -- that is how much you will need to buy the euro. he had to say about the actual transition. think it is joining the eurozone.

our economy considers the step and it has already been in the euro zone. >> as you mentioned, he thinks that the rating agencies basically already assume that looked away and it is part of the eurozone. he says they will do most of the borrowing domestically. the current growth estimates are 3.4%. itbrought that back down and is because of what is happening in russia. of this is point that lithuania will be joining and have the same currency.

those three economies may be more tightly integrated. >> mr. hans nichols. latest.us on the the pulses next. i will be speaking to the qatar airways ceo. the delivery of the first 350 from airbus. has produced -- .'m not sure let's assume that you do. let's take a quick look at what is happening. now, the initial boost. a number of stocks that you need

to keep an eye on anson key markets. keep an eye on what is going to happen this week. right. the pulse is up next. i will see you after the break.

delivery day as airbus hands over its first a350 to qatar airways. we will be speaking to the ceo's of both companies about what the aircraft means for the industry. oil is up for a second day. saudi arabia's energy minister predicting a rebound in demand. and, a greek bargain. prime minister samaras offers the possibility of early thetions in exchange for backing of his presidential candidate. the markets up this morning. european markets generally a little higher. you are watching "the pulse." we are here in london. '