♪ >> the euro weakens to an almost nine-year low. concerns intensify over a greek exit on the single currency, while the ecb raises for things this week that could concern deflation boosting the case for quantitative easing. >> local opponents snapped into campaigning with less than three weeks to the vote that could determine the country's place in europe. >> and the changing shape of retail. john lewis sees its total christmas takings rise by nearly 6% as britain's embrace online shopping and black friday.

>> hello, and welcome to "countdown." i am mark barton. >> and i am anna edwards. >> a general election in greece. the markets already seeming to have cast their vote, sending the euro to a fresh low. >> the euro weakens to its weakest levels since 2006 in asian trading. that follows and magazine article that says german chancellor angela merkel is willing to accept a greek exit from the eurozone. and this makes it the european central bank in favor of large-scale sovereign bond purchases. >> ecb president mario draghi said the risk of deflation in the eurozone could not be entirely excluded.

within that statement, of course, and other events, the greek election now has less than three weeks to run, and europe is facing a turbulent start to the new year. >> so parties in greece are campaigning, and elliott gotkine just got back from athens, where he was covering the election and he joins us now. good morning. exaggerating the risk of an exit? >> good morning, and happy new year. look it is not a bad political strategy to put the vote to voters. in this case, there is an anti-austerity party. they want to renegotiate the greek debt with europe. its leader is saying it wants to write down the nominal value of many of those debts in a similar way that german debt was written down in 1953. they also want to boost employment and jobs and raise the minimum wage, and they went to bring an end to what it describes as the unreasonable and catastrophic austerity

policies that have been visited on greased these past few years but the prime minister says that would lead greece to default, to bankruptcy, and ultimately to an exit from the eurozone. >> so poll after poll is putting him in the lead, but a name we have not heard from in a while it a former prime minister papandreou could shake things up. >> yes, a really interesting wildcard at has been thrown in the mix with george papandreou. he is forming his own political party. now, no political polls have been taken since he made that announcement, but when there were rumblings that he might do something like this, more than 6% of the voters who said they would consider voting for a new party headed by george papandreou. he, of course, a former prime minister, and his father founded

one of the dominant parties of greek politics over the past four decades and it is dwindling in the polls, and george papandreou, in theory it is only about 3% over the incumbent and you could, in theory see new democracy getting into bed with a george papandreou party, keeping greece on the same path and keeping the deal with the euro. >> thank you very much. we will speak to you later. elliott gotkine there. >> sales shopping continues in times two take stock and see how sales performed over the holiday weekend. here with us is caroline hyde. happy new year to you. we have already had a look at the john lewis numbers. what do they say? >> it looks like online is where it is at, and they have done well. we had something last week where

we saw sales up from estimates an online really didn't see the bulk of the uptick, so we're seeing very similar sales trends here. in the five weeks to december 27, just after the boxing day frenzy, they have taken in 770 million pounds, and to break that down, that is about a million pounds per hour they were taking in over that five weeks. the christmas rush the boxing day sale, and it is now one third of all of their sales, a big growth so that you do buy online and then go and pick it up in the store. also quite interesting, not many cannibalizing in-store sales. they remained flat, whereas online picked up 20%. it was all about health, the neutral bullet, and wearables. there was a baking theme when it came to the kenwood mixer. >> i have to say, i did a little bit online and a little bit --

>> omni-channel. >> omni-channel. >> and tell us about black friday, because they did have sales on black friday. >> this has been a key trend in the united states. getting over excited by it. black friday. interestingly, the chief executive of john lewis is deeply overexcited. black friday with the biggest week for the john lewis sales come up 22%, a record read in their history, and home technology overall. interestingly, there are reports in the u.k. press today cautioning on our exuberance, saying, look it is not in the interest of retailers to continue to grow the pace of black friday the way that it is. try to stick to electronics. fashion company saying not to get to overzealous.

and that it eases off. we see sales drop off, and then you see an almighty panic and perhaps the peak and the discounting is starting to erode. >> things like tesco. >> not likely to see like for like sales drop anywhere of tooth read percent. that is the thought overall. and a problem in terms of price wars. we know it will be hitting tesco and mark spencer, as well. a decline likely on thursday. more than just christmas sales. they want to hear about their restructuring path and about whether their sales or their online streaming, blinkbox, or selling stakes back. interestingly, we get those the same day as tesco. trading up over christmas in luxury. general merchandise did poorly not only because it is slightly out of fashion at the moment

but they were having problems. delivery just did not cut the mustard. >> thanks, caroline. do join us for the conversation on twitter and let us know what you think. where did you spend your big christmas box over christmas? that is at mark barton tv and at and edwards and at manus cranny. >> let's talk about the risks for next year. what is ahead? and next guest says currency wars and a weaker europe are at the top of his watchlist. that is after the break. ♪

♪ >> time for today's company news. rbs is slashing its bonus pool for bankers in response to new eu rules. according to reports in the mail on sunday. the total will fall to below 500 million pounds as a result of the european cap on bonuses at 100% of salary. the bank, which is 62 % owned by the u.k. taxpayer, awarded many bonuses last year.

it is the fifth time lucky for a chinese company of global resorts to win a bidding war for club med. the resort has 939 million euros. they were saying they could no longer justify a higher bid. they say they expect one third of the club med customers to come from china. and smart phones and smart tvs, that is the next move. a challenger to the google android software, electronics giant will show at the consumer electronics show in vegas. they want to capitalize on a growing interest in internet elected appliances, a market that could be worth $7 trillion by 2020. the euro has started the first full week of trading, and it looks like it is going to have another tough year. >> reaching levels they have not

seen since 2006, and this comes amid fear of a greek withdrawal from the eurozone, and we are joined by charles at an investment company. charles, happy new year to you. thank you very much for getting up so early on january 5. the hard part of the day is getting out of bed. and for anybody who had a little too much festive cheer, bring us up to speed with what is at the forefront of your mind as we head into 2015. we mentioned the drop -- greek election. >> really, it is a continuation of the tensions we started to see in the second half of last year, which is essentially a strong dollar policy emerging, if you like, and particularly a weak yen policy that is sparking a kind of catalytic relaxing -- reaction elsewhere and in europe, where everyone is trying to prevent their currencies strengthening too much, and if anything, we are in this scenario where they want to

import growth. they are worried about deflation and things like a threat. that is obviously something that is undermining confidence in the currency even though i think the net impact this time is going to be a little bit different, but we also have mario draghi turning around and threatening more promising qe. >> are you then following the line in their spiegel -- der spiegel, which said, are you following that line? >> probably be german government is very cognizant of putting that message out there so that has a formative effect on some of the discretions going on surrounding greece. in other words, they do not want people to think they will agree to everything just to keep greece in the euro.

i think there is a bit of an under-handing game going on in that press story being published, but it is clearly something that has never been done before, and it is clearly something that would be running a huge amount of risk. what it does do, you can talk about the scottish referendum or the post u.k. elections, that people start to question investment in a region, in that case the u.k., and the same with the eurozone. do people start to postpone investment? you people start to become more cautious? clearly, that is not something the resident needs at this point in time. it needs investment and structural reform, and the threat of a greek exit is amenable make everybody back off. >> what does that due to the quantitative easing space? because i have had read some reports that said you have greek elections three days after the european bank meeting of 2015.

it is a very interesting nuance isn't it? we have got the swiss national bank and the greek election and the ecb. how does it change on this scenario? where is the most at risk asset class? >> well, i would get greek government bonds are not going to be a particularly favored asset class on that basis, probably, but the whole risk task it is going to be where some nervousness is going to show up, i would suggest, and you are talking about higher-yielding credit bonds those kinds of areas, and obviously, any companies or institutions that have large exposure to those countries. the real key question here is what about the contagion concept, because that is the real threat. we talk about a great exit. it was a complete breakup of the eurozone. and one assumes they have been

working on this since the last sort of episode crisis. the real question is how badly does it affect spain, portugal, ireland, and italy? >> do you think there can be an exit plan, somewhere locked away in a bank at the ecb question mark and inside, there is what to do in case of exit? >> break glass. >> yes. >> i would hope so, given how close we got to the president last time and how it was really only comments from draghi that saved us and pulled us back at that point in time. one would hope. one assumes that qe could be a similar sort of effect but the timing as you rightly point out, is the wrong way around. >> what does it mean? >> my personal opinion is that

they will not commit to full blown qe. i think what we're going to get is the groundwork laid out for what they're going to do in march, and perhaps how they are going to do it, what asset classes are involved. it walks like a duck and quacks like a duck, but it will not actually be the full-blown doc. >> should we be more fearful? actually, that is a bigger issue about the bond markets. >> that is a much bigger issue, particularly with the hold global deflationary trap. >> charlie, thank you for joining us. we'll be back with you in just a moment. having the same conversation at the start of 2014 about when the ecb was going to do qe. we will be back after a short break. it is 18 minutes past the hour. ♪

>> right. let's continue this conversation. charles is the head of macro strategy. charlie great to have you staying with us. let's talk about the u.s. a quarter million jobs apparently on friday and we get the minutes from the federal reserve on wednesday, and i read a fantastic article in barron's over the weekend saying forget 3.3% on treasury's creed we are going to test 1.38%.

forget everything you think about the fed raising rates. what do you think? >> i do not think they will do the one point 3%. but i do have some sympathy with these arguments, particularly surrounding deflationary pressures globally and then likewise it is a very internationalized market. now, if you are looking at the u.s. in your isolation fine but you have china that is lying down, europe that has more issues than we care to mention. the rest of asia -- japan is desperately trying to export deflation. there are all of these crosscurrents that in bed some value in u.s. treasury's that you would not necessarily would think would be there entirely based on internal factors, and, of course, real yields, the fact that you need to worry about them rather than nominal, so if we had very very low inflation rates, which we know we're going to get, then the real yields are

still not that inconsistent with what you would expect from a longer-term cyclical point of view. >> have we had any indication about how strong the economy will be in 2015? over the holiday season, some numbers that were a bit lackluster, and some commentators were speaking albeit be dovish ones. >> changing more dovish. we are losing a couple of hawkish members and are gaining a couple of more dovish members. it has been softening up, but broadly speaking it is still pretty strong, so there is no reason for us to think that the u.s. is about to fall off the edge of a cliff. if anything with the oil prices, it should be doing reasonably well. but, it comes back to the sort of conundrum type question. if you have such low inflation rates and have good growth what to policy makers do? do they try to slow growth down when they've spent the past six or seven years desperately trying to stimulate growth, or

information -- if inflation is allowing them, if it is letting them keep rates well below what we would present will easily -- previously would have considered a nominal level -- i think that is what is going to happen. >> beginning of may. spain. portugal. italy, presidential elections. the elections. how big is political risk in 2015? >> i think it is very big and particularly in certain cases, for example, in the u.k., it begs a much bigger question that could have significant macroeconomic effects. let's say we get some sort of coalition. it will involve some sort of euro referendum and that could really do for investment and anybody particularly wanted to get involved in u.k. asset. over the next 18 months even. in the eurozone, if you view it

in the metric that you have a collection, you have places like spain where you could be reacting to the whole crisis a variable for their popularity, and you could have a fairly significant shift in the political landscape, and that is not going to be lost on the people in brussels and in frankfurt, and, again, that is one of the big arguments that i think does support qe coming along. what europe needs more than anything else is growth. that is what it needs. and just as we saw in japan with abenomics, they put all of their chips on the table. the political agenda could be encouraged. >> you talked about abenomics. what do you think will be the judgment on abenomics in 2015?

how successful are they going to be in generating inflation in 2015? >> sustainable inflation, probably not that, but will they continue with the policy that further weakens the current see that artificially forces the inflation rate higher, yes, they will probably continue to do so. on paper, it will look like a success but i am not sure from a sustained point of view -- you are looking for a too much changed you will quickly from a japanese population. >> bit to get your input. some big thoughts for our viewers to digest -- good to get your input. the head of macro strategy. >> coming up on the program, the next big threat to british business. find out why the cfo's see this as one of the greatest 2015 risk factors, and we will bring you

the latest coming up after the break. stay with us on "countdown." 6:26 here on the first day back in the office, i would assume for many people. we will be back after a short break. ♪

>> you are watching "countdown." and time to look at the markets, the first full day of trading for the exchange and it is all about the dollar. at 91 point 54, the dollar is at its highest level since 2005 and will traitors add to their long dollar positions? do they believe that the dollar is stronger and that the fed will raise rates? 56%. as the dollar trades, quid pro

quo, euro/dollar. we did trade down. that was a nine-year low. two things driving this market. the ecb the buildup from mario draghi. will he deliver qe? we just had a conversation with charles. go to mark barton, twitter, and you will see what i mean. angela merkel, it was said will consider the world without grease in it, and that is a big step forward for angela merkel. again, that is putting pressure this morning. traders could take the euro/dollar down. this would be a 10-year low, so low levels there. translate that down into commodity currencies, you have got oil at a five-year low. the dollar strengthening is a story. and you have broken a support level at 80 .67, which was the

may level. and europe under pressure. >> i am an edwards in london. these are the top headlines. searchers have discovered four more bodies from airasia, and the indonesian weather office says it appeared to fly into a storm cloud with its engines possibly affected by eyes. it is shown that they encounter temperatures as low as -85 degrees. and it was said that another country could not achieve sustainable economic growth while leaving in isolation. he told a tehran conference that they would not suffer from becoming more transparent about its nuclear enrichment program. negotiation over the iranian enrichment program.

prime minister david cameron says only his party can be trusted to cut the u.k. deficit. cameron used an interview with the bbc to insist that his ambition to run a budget surplus by 2018 were realistic, and he restated his commitment to a referendum on britain's membership in the eu >> the referenda must take place before the end of 2017. if we can do that earlier, i would be delighted. the sooner i can deliver on this commitment and a referendum, the sooner i can deliver on that the better. >> the u.k. election will take place on may 7. main parties in the elections will be the conservatives, labor, the liberal democrats and the independent party. the euro weakened to its lowest level in asian trading which extended the currency loss over the past year to 12%. a magazine reported that german chancellor angela merkel is willing to accept a greek exit from the eurozone.

data released on wednesday will probably show consumer prices in europe fell for the first time in five years in december. >> some talk about a greek exit from the euro. lithuania is five days into its memory ship of the eurozone. their adoption of the euro has shaken up the way the european central bank organizes its voting procedures, and that means a dilution of the power of the eurozone' is against economy, and bloomberg's hans nichols has these stories. >> a big change. not just for the people exchanging their currency for euros. the entire balance of the eurozone shifted. that is because the lithuanian central bank will become a member of the ecb, bringing the number of represented countries to 19 but there are only so many seats on the bank' is governing council. the lithuanian arrival has

triggered a rotation system. germany france, italy, and spain now must share four seats. the bottom 14 countries will divide the remaining 11 voting rights among themselves. the six members of the executive board, including mario draghi and a quantitative easing critic and german, have permanent votes, but this means that the president of the bundesbank will not be a look to say no to any qe votes in may and then again in october of 2015. the lithuanian top banker will not have a say in march, april, and may. before any decisions this october, lithuania, which the economy has 2% of the economy of germany's, will have a vote, but germany will not. >> how lithuania is shaking up the ecb. >> let's stay with your but go to the u.k. with the british

general election in may. cfo's of britain's biggest illnesses are worried. that is according to the latest survey of them by deloitte. a chief economist at dealing joins us. good to have you with us this morning. when i was reading through the report, i found it fascinating that obviously, the election risk has gone to the top, and they are much, much less worried about interest rates. >> europe comes in as a second reissue. >> we have in running the survey for eight years, and for the last eight years, it has always been the same thing, which is the economy and the financial system in the u.k. and all of a sudden, all of this things are relegated to the bottom of the worry list, and what ails them is the risk outside the u.k.. >> and what is it about the

election that worries them? is it about who wins or what is going on in europe, or is it about the nature of the coalition? what do you think is the worry here? >> elections are always a worry but i think the new factor in your package, after parties contesting the election. >> and the s&p. >> it has changed and this gives rise to the possibility of all sorts of coalitions and kind of a degree of instability which ceo's don't like and i think that is on top of all of the uncertainties of who wins and taxation and fiscal policy and the rest of it. >> cfo's are optimistic about u.k. fundamentals on the investment front, only good news, isn't it? >> they are really pretty upbeat about the u.k., and they are trying to increase the

investment in their businesses by 9% this year, and i think we will see quite decent growth this year and u.k. has a productivity boom, which i was quite struck i. they do not seem to agree. >> a productivity question. they say they are going to be investing and lots of capital expenditure, so typically you would think that all of that would be going to a dress a lack of productivity, wouldn't you? >> maybe it is lack of capacity that is going up against constraints. i think the other thing is they face very, very easy monetary conditions. capitalists have strong balance sheets, and risk appetite, although it has fallen from the third quarter, it is still at high levels, so i think that points all to rising corporate expenditure and also m&a. >> the view in terms of wages,

this is something the bank of england is going to be particularly interested in. cfo's cn and of the squeeze and forecasted wages will rise by nearly 3%. >> yes. a big increase in wages, and that is against the background of cbi this year i may be sub 1.5%. >> and they are the paycheck. >> they are the ones. these are very large companies. the entire u.k. market cap, so it gives you a good guy about what the top end of the corporate sector is planning to do, but i think this is consistent with the way the nominal wage is gone in recent months, but it does suggest that domestic demand in the u.k. both consumer and investment, is going to be strong this year. >> could a country leave the eurozone, because, as you say, the euro area risks are up. is it too early to pose that question.

could they leave the euro area this year? how big of a fear is that? >> it is interesting you say that. every quarter, we ask that question, what is the probability of a country leaving and we close the survey on the 16th of december, said this was before worries about greece that really, really kicks off. the way things are going, yes. >> where are we? if the tories form a coalition we are going to go into this period were we will have to talk about it. with the u.k. position on europe . i have to rephrase that. that obviously did not feature in the survey. >> well, it did, actually. it emerges as the risks and actually in the survey that we did we asked these questions sometime, and in september, it was the number one risk. >> number one in september.

there is a lemminglike sentiment here. the risk factor. >> we saw the same thing in 2010. ahead of the general election in 2010, there was huge concern. an absence of a plan on fiscal policy six months after. let's hope it will be as smooth this time around. >> we will be torturing with this. many to be had. a chief economist, thank you so much. >> you can join in the conversation on twitter and let us know what you think of the show and tell us what you are worried about in 25th team. the cfo's the u.k., and you will find us at mark barton tv act and edwards news, and at manus cranny. >> we will take a look at the impact of the oil-rich emirates in the gcc. we are live to dubai, coming up

next. ♪

♪ >> welcome back to "countdown" and let's go to the oil markets.

after declining in 2014, crude has expanded its decline, and what it could mean for the economics of the middle east at this year, and we aren't toyed by a standard bank economist from dubai. i know you say that lower prices are not going to be a drastic challenge for the gcc, the gulf corporation countries. however you come to that conclusion? >> indeed. we do not think that this is the end of the gcc growth story. we are likely to see positive growth rates coming out from the gcc this year. it is going to be quite an interesting year. the least to say that our gcc economic outlook is tied to our loyal outlook, and we do think that we are entering a volatile and quite erratic first quarter four oil crisis in 2015. now, when opec at its last

meeting in november 2014, they said their next one would be in june 2015, and this was sending a clear message to the market that opec should not be expected to be cutting production to support oil prices in the first half of 2015 so it is not a surprise that the downtrend in oil prices has gained momentum and it is not a surprise that we are entering another volatile quarter for oil prices. now, we do think that ultimately oil production will have to be cut by opec around the second half of the year. it will have to step in and this would support oil prices in the second half of the year. now, what does this mean for gcc economies here and for the growth trend? we see two main impacts of from lower oil prices on the gcc

economies. first, there is a direct impact from the oil prices on government revenue, since government revenue across the region is mainly composed of oil revenue, and second, this leads to a second main impact, which is an indirect impact from more -- from lower oil prices to growth, because lower government revenues will affect the government's ability to keep increasing government spending on infrastructure projects and diversification projects. >> let's talk about the effects that this is going to have on the fiscal balances of these countries, because after almost a decade, you are now saying that oman and saudi and another are going to be in deference, ball rain, but you describe that as manageable. >> exactly, because we think the fiscal balance will be the main absorber lower oil prices on the

gcc economies, because of lower oil revenue, and since bahrain oman, and saudi have some of the highest fiscal breakeven prices in the region, they are likely to end up in a deficit if they decide to continue pursuing the capital expenditure projects and continue spending as much as they have in the past. they will end up in deficits but given that they have very low levels of debt, they can definitely manage this situation and whether they are phased properly. >> iraq is talking about increasing its exports of oil despite all of the geopolitical tension, of course and in december we saw iraq exporting more than anytime since the 1980's, i and. how does that look set to

continue? >> definitely, the increase in the oil production that has come out of iraq despite the domestic clinical situation that has impacted iraq it has been one of the game changes that has impacted the supply of the oil market and has led to some of the excess supply that we have been seeing in the oil market through the end and beginning of this year and 2015, so as long as we do see some production cuts in the second half of 2015, we are likely to see a rebalancing of the oil market and in oil price rebound to around $85 per barrel. that is the average -- this is our in-house average that we are forecasting. >> and just briefly, do you see any pressure or willingness to move away from a dollar peg given what we have seen with the

u.s. currency, or not at all? >> we can argue that there are some advantages to moving away from a fixed exchange rate regime back to the dollar. this would give the central banks more flexibility and more monetary policy tools to manage the real economy and to manage the challenges we are facing now in these current economies. however, we do not think that there is a willingness or there is a need for policymakers to move away from the peg at the moment. >> ok, take you very much for joining us. from standard chartered bank. >> coming up, why hobbits are doing the business for warner bros., and that is in our new bloomberg segment, the chewing the best of our digital content. stay with us. ♪

>> ok, time to look at our top picks from bloomberg news, the best of our digital content, and on this first effort i thought i would start with a subject matter close to my heart, the box office in the u.s. over the weekend, and the hobbit once a end. the battle of the five armies. i did go and see it, the final hobbit film, and it is well worth watching if you like death

and destruction, which is essentially what this film is about. it is one big battle sequence. it made 21 million over the weekend. overseas, this film has made $500 million. $722 million in total. the first hobbit film made $1 billion. these films make so much money. and there is a film that it beats, which i know you will be very fond of it into the woods and adaptation. >> emily blunt. johnny depp. >> in two weeks, it has generated a box office of $91 million, and number three, with angelina jolie. >> let's move onto a story that i've done doubt, which is a pessimist guide to the world in 2015, so i apologize if you are feeling a little fragile this morning, it being january 5.

i apologize. basically, bloomberg asked to geopolitical experts what were their worst scenarios for 2015 and it makes very chilling reading, as you can imagine, from full-scale confrontation in the china sea to nigeria tumbling and militants increasingly taking power, and all of this is, of course, what if, what if, but very interesting to consider the impacts of what some could do to the world, and syria saudi, and whether vladimir putin takes nato further. and then the taliban and and is. the arctic is in there, and we talked about greece. we only have to look about that boat being abandoned with all of the refugees in the mediterranean and you can see what kind of impact the violence in syria could have in europe. it is something the italians have been talking about for a

very long time. very gloomy, if not essential reading. >> now, speaking of ones to watch, what i found was where did this come from, and it is extendable. not only happy enough to have a selfie on your phone, but a stick from $10 to $30, at nordstrom in the u.s., 118 stores, and they ran out of stock before christmas. on december 25, that #dominated. this was the gift to give to ones that you love. >> such a great use at the natural history museum. there was no way to get a skeleton into a selfie shot. you cannot unless you use one of those. or, have someone else take the photo.

>> you have got to get a stick out to take a picture of yourself, but we leave that thought. "countdown" continues in the next hour. retailers are all about the details. we are going to break the numbers down from john lewis over christmas. stay with us. ♪

>> the euro weakened to an almost nine-year low. concerns intensify after a greek exit from a single currency while the ecb braces for data that could confirm deflation boosting the case for quantitative easing. >> campaigning with less than three weeks to the vote. this could determine the country's place in europe. >> the changing shape of retail. john lewis sees its total christmas takings rise by nearly 6% as britain embraced online shopping and black friday.

♪ >> hello, welcome to "countdown" ." it 7:00 here in london on this money where -- monday, january 5. happy new year to you all. this month sees a snap general election in greece, and the market seemed to have already cast their votes, sending the euro to a fresh low. >> the euro weakened to its weakest level since march 2006 in asian trading. german chancellor angela merkel said a greek exit from the eurozone was manageable, and to add to the mix eurozone debt that may tip the central bank in favor of large-scale sovereign bond her juices. >> mario draghi said last week the risk of deflation in the eurozone could not be entirely excluded.

europe is facing a turbulent start to the new year. >> political parties in greece have been campaigning. elliott gotkine just got back from athens, where he was covering the election. is he exaggerating the risk of an exit? >> it is hard to visualize a world in which it has happened before. we are in uncharted territory. he's not the only one sounding the alarm bells for a potential victory for anti-austerity. they want to negotiate some of the debts with european partners and boost employment and bring an end to what is described as unreasonable and catastrophic austerity visited upon greece. the germans have also been making soundings.

if griese sticks to the path, germany will have its path -- it's back, but if it deviates it will be harder to support greece. the comments are referred to by unidentified officials saying angela merkel is ready to accept the possibility of a greek exit. we have seen growing cost for greece spiked higher, but not much movement for the likes of ireland or portugal, and at the same time different from the past. there is a half trillion euro mechanism in place to put out any fires and to forestall contagion, were that likely to happen. >> it is not a given because of former prime minister may change things. -- a former prime minister may change things. >> this is very interesting. the new democracy is the biggest party of the coalition. it was around 3%.

now george papandreou, the greek -- former greek prime minister the founder of the social movement, he has thrown his hat into the ring, setting up a new movement called democratic socialists, and he wants to see as many seats as possible. in theory you could see a new coalition with new democracy and this new party. no polls done since the party was announced. 6% said they would vote or consider voting for a pop and rail party -- papandreou party. >> let's say i'm greece but turn our attention to germany. angela merkel -- let's stay on greece but turn our attention to germany. we were just discussing the elections. let's go to our international correspondent in berlin. this would be a bit of a shift

for angela merkel and her government if there is credence with this report. >> that's the question. is the report to be believed? what we have from the government is not exactly a denial. they haven't confirmed it either. they are saying they won't comment on speculative scenarios. the core of the report is that angela merkel's government increasingly her finance ministry sees a greek exit could be manageable. before the thinking was a greek exit was unthinkable and there wasn't any notion they were entertaining any thoughts to this effect. the government has said -- they referred to a statement in which he said the reforms in greece are bearing fruit and there is no alternative. he also said if greece does go in a different it will be difficult. this morning the economy minister is part of the

government, but he is the junior partner. he said there is no contingency plan taking place. there were and are no contingency plans. what you're hearing especially from members of merkel's own government, is somehow this time it is different and that is there is a firewall around greece and that we are in a different scenario than in 2010, 2011, 2012. the other big question i have is it is not that surprising they are doing contingency planning. it is surprising it has been reported, and you have to ask is this a signal, and if so, is it a signal to markets not to worry much, or is it a signal to greek voters, and that is the question we will be trying to find out throughout the day. >> the euro is reacting to a

ten-year low. let's see how it lays out. facts as sales drop continues -- >> as the sales drop continues its time to figure out how things performed. caroline, happy new year. let's talk about how these retailers are going to communicate what they are going to tell us. we had john lewis numbers. >> it is all about online shopping. we saw an increase. that includes christmas splurging, black friday. 777 million pounds is how much was spent during that time. about one million pounds spent per hour. it was so interesting that a third of all the sales are coming from online. they are not cannibalizing the

inside stores. those were main flat. you are showing where they want to buy i'm going into the store. >> they have a very good offer on espresso machines. i have done online. the efficiency with which they deliver is pretty surreal. talk to us about black friday. there are pros and cons. there is a message about the ceo about it. >> black friday week was the biggest have ever had in their history. 22% increase in weekly sales. they said we are starting to see a big change in the way sales are happening. you suddenly see a big peak in buying that happens in november. then a sudden selloff. we see sales a bit depressed and then panicked buying to the end.

>> that is how i felt about the aftermath of black friday. >> cautions are coming in saying we should be careful. it's not in the interest of retailers to continue to grow the pace of black friday at the expense of other ricks because the discounting is so huge it with others off wanting to buy. they say they want to play it down, particularly if you are not in electronics. >> retailers are out in droves. st. mary's and test -- since very -- sainsbury's and tesco's. >> we get to see how they fared. like for like sales many think will decline for sainsbury's. thursday we get marks & spencer's. general merchandise, they had

bad problems in terms of deliveries online. they are still not seen as the place to go for kashmir. we see of 14 consecutive quarter for merchandise. thursday we get the december sales, which will be fascinating whether they will likely fall. the interim statement is going to be about restructuring at tesco's. >> thank you. bring us more detail through the week. >> you're going to get more than you thought you could possibly have. we will be back with the tesco numbers. it is @markbartontv. i have done a little bit of merkel. i have done a little bit about the big bond boy.

>> will he get it right again? >> nouriel roubini. we are talking about technology and third industrial revolution. remember that stavros is over the snowy horizon. -- davos is over of the snowy horizon. >> great words this morning. coming up, u.s. equities a good year. that is the word according to forecasters. analysts predict an 8% advance this year. the outlook for the market next.

>> rbs is slashing its bonuses in response to new rules. but according to reports sunday. -- that is according to reports sunday. the total may fall as a result of the european cap on bonuses at 100% of salary. the bank awarded 576 million pounds in bonuses last year. it is fifth time lucky for the

chinese company, which won a bidding war. they valued the french resort company at 939 billion euros. the company pulled out because they couldn't justify the wind. smartphones to smart tvs. that is the next move for samsung's challenger to google android software. the electronics giant will unveil the first sets in las vegas this week. samsung wants to capitalize on the growing interest in internet connection, which could be worth $7 trillion by 2020. >> less than an hour to go until markets get underway. fidelity worldwide investments director of asset publication joins us for our -- for his

outlook for 2015. be careful what you say. would you say you are reflecting back to the 1990's? you say there are certain moments in the 90's which reflect well for setting us up to trade 2015. >> in the 1990's you had a big industrialized economy slowing down. in that case it was japan. now we have china slowing down. you had access commodity capacity. you have tons of access commodity capacity at the moment. you also have the u.s. economy doing well on the dollar. it's an environment which is good to be overweight u.s. equities in particular along with the u.s. dollar. i am cautious about commodities and emerging markets. >> how far do you push that? does the investment strategy look like one that would have done well in that decade? >> it does. to the extent you have to be

cautious about equities overall. we have been bullish on and off since april, 2009. consistently long equities since 2012. >> just one month? >> just one month? >> i would say there are times when you have to be a bit more cautious during any kind of bull run. at the moment our equity overweight is quite small. the shift size, and speed makes us concerned about credit risk. >> technology was a big leader into the 1990's. we know how that all ended up. there you put a timeline on this bull run for the s&p 500? what are the signs it is coming to an end? what should we be watching out for? >> one thing is inflation.

we should watch out for inflation. we should ask does the fed want the u.s. unemployment rate to go up this year? if you can answer yes, you should be much more cautious on equities. you should be surprised on the downside by inflation. i think that is the message this year. it feels a little like 1998 with russia in the headlines as well. >> two more years. >> and emerging market problem. in 1999 oil was up, rates were up, and that was beginning of the end. it could happen that way, but people say the situation is different. there is more excess capacity. maybe policy stays lose for quite a while longer. many people complain about stocks being fairly valued rather than expensive. we know how the 90's ended.

>> people go to cash in the pension. everything is not created equal. you are bullish on the u.s. you mentioned the emerging markets. they have to deal with the fed. some of them have the good fortune of dealing with a better energy price. if we look at him sei down 5%. russia was down. the ruble was down 44%. >> i think you are down into two main groups. the commodity exporters, so russia is a big energy exporter. you have south africa. a range of exposures in places like brazil. then you have the exporting nations like korea and taiwan which benefit from the lower energy price. there is a real mixture. in either get the emerging markets demonstrate -- and

aggregate the emerging markets demonstrate. >> your concern about where the credit risk falls is around emerging-market corporate centers. >> i won't go into details. there are corporate highly leveraged. also you have got venezuela teetering the whole time. you have russia and russian exposures. in the 90's you had a disinflation or a disinflation area recovery, which was great for wall street. one thing that made it disinflation or if -- disinflation was this pressure. i am a little more cautious at the moment. if you look at energy price drops, it's one of the big six or seven in the last dirty years. it's going to be a strong year for the economy. -- in the last 30 years. >> you are underweight european equities. you are short the euro. what would make you change

stance toward euro and the eurozone? what would have to change? >> part of me says full-scale qe is the time to be positive on european equities and still short the euro. look at the u.s.. being long stock market and short currency makes sense. the timing of this selection makes it hard to pull the trigger three days before. the next meeting is in cyprus. it's not obvious the dynamic is right for early qe. i would like to see it fiscally is. i am holding my breath for a long time. >> trevor stays with us. fabulous british understatement. europe is in a bit of a model. we will quiz him on that when we come back. -- a bit of a muddle. ♪

>> we are looking ahead to the new year. you liken it to the 1990's, and you said china has replaced japan as the slowing global and industrialized economy. where does that leave japan compared to the 1990's? >> i think japan is a different place.

the key thing about japan is it has entered this deflationary world a couple decades before the rest of us. it has learned by a lot of mistakes, so government debt is now -- not the sort of eye watering 200% of gdp. they clearly want to create inflation is one of the best ways of getting the government debt burden down. high nominal growth is what they are after, and they are pushing all the buttons. you have loose monetary policy currency devaluation. i'm very positive on that. i am very positive on the nikkei. i am short on the end. that's a situation we are likely to have for quite some time. i think it's going to work. we have the political big guns on the road. what is your view on u.k. risk? >> the u.k. stock market often behaves like an emerging market.

if you look at the performance of the u.k. versus the world it looks the same as emerging markets. the big resource exposures are something on your mind when you are trading footsie. political risk starting with the scottish referendum, you have the sort of political risk. >> does it help the equity market? >> it does a little bit. the housing market feels like it is slowing down. domestic economy feels like it is slowing down. it is still a big position. >> trevor thanks a lot, the director of asset allocation at fidelity investment management. >> coming up, tech goes to vegas. the consumer electronics show. samsung takes its challenge from google phones to the big screen tvs. we will bring you a look ahead to the gadgets and trends to watch at the industry's largest tech firm.

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>> time for your foreign exchange check at 7:30 this monday morning. the dollar is strong. it's the strongest it's been since 2005. on the week you're going to get the minutes from the federal reserve and a quarter of a million new jobs created in the united states. the dollar is strong. the euro is weaker. the euro is getting pounced upon by a couple of different aspect. we had a nine-year low.

you could make it to a ten-year low. will they implement bond buying on january 22? will they wait for the election? ms. merkel is ready to accept a greek exit. the euro down on the pressure. the euro is down. you are trading lower. the aussie dollar is also trading lower. as oil drops to a three and a half year low, commodity prices are under pressure. consumer manufacturing came in at the low side. a little bit lower their. >> i am an ad words. -- a little bit lower there.

i am an edwards. they are recovering bodies from the downed airliner. the airliner appears to have slowed into a storm cloud with its engine possibly affected by ice. satellite data shows flight 8501 encountered temperatures as low as -85 degrees. a rams president -- iran's president said the country cannot achieve sustainable economic growth while living in isolation. they said iran's independence would not suffer from becoming transparent about the nuclear enrichment program. negotiation have won some relief from damaging western economic sanctions. with four months ago until the general election in britain, prime minister david cameron said only his party can be trusted to cut the uk's deficit. cameron used an interview to insist the ambitions to run a

budget surplus by 2015 are realistic. >> the referendum must take place before the end of 2017. i think we can do that. i would be delighted the sooner we could deliver on this, the sooner the better. >> the u.k. general election will take place on may 7, and we will be talking with parties from across the political spectrum in the coming months. the euro weakened to its lowest level since march 2000. that extended the currencies lost to 12 percent. this after a report that angela merkel is ready to accept the greek exit from the eurozone. data due to be released on wednesday will probably show consumer prices in europe fell for the first time in five years in december. >> with some talk of a greek exit from the euro, lithuania is five days into its membership in

the eurozone. lithuania's adoption of the euro is shaping up the way the european central bank organizes voting procedures. that means a dilution of our of the euro zone's biggest economies over monetary policy. -- dilution of power over the euro zone's biggest economies over monetary policy. >> it was a big change. the entire power balance of the eurozone shifted. that's because the lithuanian central bank will become a member of the ecb bringing the member -- the number of representative countries to 19. there are only so many seats on the governing council. lithuania's arrival triggered a rotational system. the five biggest countries must share for seats. the bottom 14 countries will divide the voting rights among themselves. the members of the executive

board including mario draghi a quantitative easing person. they will not be able to say no until may and again in october of 2015. lithuania will not have a say until april and may. lithuania, whose company is 2% the size of germany's, will have a vote. the german bank will not. >> that was hans nichols our international correspondent. he joins us from brazil. let's turn to germany. there is a bit of a shift. merkel her comments about greece as a government possibly ready to tolerate a greek exit.

>> this is a remarkable story. it landed late saturday night. my colleagues were trying to track it down. they had not necessarily an official denial, an official confirmation. they had something from the finance ministry saying they don't want to comment on speculative scenarios. here is the core based on anonymous sourcing. that is that merkel's government thinks a greek exit could be manageable. before the line was that a greek exit was unthinkable. when we contacted officials in the government saturday night, they referred us to a december 29 statement. at that point he said there is no alternative to greek reforms and that they were "bearing fruit." he also warned if greece chooses a different path it will become difficult. one other thing is the economy minister, he is of the junior coalition party. he said this morning there are

no contingency planning for a greek exit. you have to overlay that with comments from members of the cdu members of parliament. they are saying there is a big difference between the situation today and 2010. but if there is a firewall in place. you are starting to hear this -- that is there is a firewall in place. you are starting to hear this. when you look at angela merkel's response, she always kept her options on the table. it's not necessarily surprising she is considering making contingency plans. it is surprising it leaked out. you have to ask is this a signal to the voters in greece or a signal to markets not to be too concerned if greece does leave the eurozone. >> it does question your perception of contagion. we are going to leave it there. >> let's get an update on the

airline industry. ryan are giving their details -- ryanair giving details. at 20% increase to over 6 million. that is if you compare december of 2014 to december of 2013. part of it is from filling airplanes more. that takes the factor to 88%. the company credits they are always getting better customer programs. it is a slightly friendlier looking ryanair. we talked about this strategy many times. they are trying to target more business customers. they are arguably taking a leaf from easyjet. bankers were blamed for the 2008 financial crisis. now there is a board game that lets you live the experience all

over again, should you wish to. bloomberg broke to the monetary game creators to find out more. >> it's kind of escapism because you can step into the shoes of somebody trying to make a fortune trying to make money while everyone is losing theirs in the financial crisis. you deposit money while everyone else is losing theirs. we thought the monopoly seems to have abated. you can gamble billions of pounds on spin the wheel, rather than having to spend a long time investing in the return. you go around the board in your private jet, and every time you have to do whatever the square asks you to do when you land on the square. every time you can invest in the

stock market. the first player rolls the dice. in this case you would roll a three. the deposit her piece moves three squares as well. i can now invest in the stock market or play roulette. hit the bell, which means the markets are open. i do the timer, and i have a minute to place my chips. i place my bet. 100 million on red. i would have lost me hundred million pounds. -- 300 million pounds. in the game everybody inevitably gets wiped out. you have to invest your money better than everybody else and try to stay afloat. >> that looks fun. flying around the board in your private jet. >> it takes you back to the days when you actually did some work.

>> we will buy you a game. you can join in the conversation on twitter. let us know what you think about the show. that is a report about that game. put that on my twitter account. >> the euro is at its lowest level since february 26, 2006. i am about to tweet what level the s&p was on that day. it was a lot lower. >>coming up it is our chart time. the first one of 2015. how far could the euro fall this year? -- it is bar chart time. ♪

>> time for today's our chart. how low could the euro fall in 2015? it started the year one dollar 20 -- one point 2898, having dropped 12%. that was the biggest annual drop since 2005. today it fell to the lowest since february 27, 2006. interestingly, strategists we surveyed forecast the euro to slump to one dollar 18 by the end of the year.

44 out of 59 analyst said the euro would drop against the dollar. looking for 2.5% decline through december 31. already the euro has fallen by 1.2% versus the dollar. the most aeration, -- bearish barclays and citigroup are forecasting a drop. morgan stanley forecast $1.12. one dollar 15. on the bullish end of the spectrum are australia and new zealand banking group. that is forecasting a rise to one dollar 29. the forecasts are all over the place, but the spotlight very much on the ecb. mario draghi, the ecb president, starting the year by telling the

german paper the risk in the eurozone cannot the excluded and that is bolstering expectations ecb will soon start action such as buying bonds which tend to weaken the currency. the big date is january 22. that is the next ecb meeting. watch out for inflation data, which may show consumer prices recording the first annual drop in more than five years in december because of the sliding cost of the price of oil. how low will the euro go in 2015? >> that has to be the line for the whole of 2015. if you haven't had enough of the latest electronic goods he bought over the holiday season gadget geeks has even more to come. here with all the details is caroline hyde.

i saw this article. it has become a little bit of a victim of its own success. >> it's huge. it starts tomorrow. they have to be pouring in 100 60,000 visitors. that's almost double the amount you can crown into wembley stadium. there are going to be more than 3000 companies showing. -- they have to be pouring in 160,000 visitors. they say, we have to rein this in. we cannot expand at the same rate we had. two miles of floor space that people are going to be looking at. drones, robots even connected appliances. everything is going to be there to play with. i wonder how many uber drivers there are and how much it costs to get around vegas. what is going to be on display?

accepting hot is going to be televisions. >> there are new connected versions you can be looking at. you are on trend, but android powers the likes of lollipop sony, sharp, philips. this is all about the reinvention of samsung. this is about focusing on its own operating system and also the drive for internet. they are having their own operating system tv unveiled. they already have a phone related to tyson. why are they doing this? google powers most of samsung phones. google gets 30% of the app. it is about gaining control. they are the number one player in tvs.

samsung wants to be on the internet of things. samsung makes refrigerators. they make vacuum cleaners. they make all sorts of other -- >> it is good design. >> if you can connect the dots i leave you this number. $7.1 trillion. that is the price of the internet of things. who knows what is happening in your kitchen when you are not there? >> with the eurozone trading lower and the european markets opening in a few minutes, let's start with our next guest, market commentator david buick. how have you been feeling about the year? >> mixed. i think the two great things are the political incompetence of europe and the great bear himself, vladimir putin, whom i

think put a real damper. i am worried about the ftse in the first three or four months of 2015, because i believe because the perception of the u.k. that it is almost ungovernable as we had no idea which direction they are heading apart from the coalition. it is really good in good news bad news territory. it was apparently about 5 billion pounds worth of ipos. they want to get out into the public. the investing public is not stupid. there is still loads of scope for ipos, but they have to be well price. they have to have a really good earnings. it is probably more certain than a very big one. >> hold your thoughts. 7:50 here in london. do stay with us.

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>> it is the market commentator. angela merkel sent a message apparently there is a tolerance for if greece needs to exit. >> there are two conundrums. we know we don't new -- do

austerity anymore. then there is the problem with attentional default. the best is for them to go it alone. the drachma would lose 40% in value. they would suddenly become a competitive place to go on holiday, to rebuild their industry. if push comes to shove, this would be a dreadful blow to the european union. i actually see accommodation by the troika. the ecb, the european union, the imf saying we will give you more time. we will let you know what we are going to do. to me that is not a mitigated disaster. if you ask me that is what will happen. >> linked to that is what the ecb might do in january with regards to quantitative easing, whether we are going to see full-blown quantitative easing.

before you were a twinkle in your father side, we had a wonderful program. archie andrews was on somebody's me. that is mario draghi. she is going like this, and he is opening his mouth like this and letting bits and pieces out. let the bloke be his own man. until that happens, the ecb is just a mouthpiece of germany. i think the perception is dangerous. germany is in real problems at the moment. it's a fantastic country, but with russia so reliant if that actually starts to damage germany quite badly, which i think it might do russia needs $60 a barrel for the oil to balance their books, and if this isn't happening, you get the domino affect. i don't want to hear anymore muttering about quantitative easing. do it. >> no more muttering. >> happy new year david. >> "on

the move" is next. we will be focusing on greece. the euro hits a nine-year low. but the more to come. -- plenty more to come.

>> good morning. happy new year. welcome. moments away from the start of european trading. let's get straight to the morning brief. the euro slides. the single currency dropped to levels not seen since 2006. speculation increases the european central bank will deliver more stimulus at this month's meeting. just three months away from election day, and with the anti-austerity party ahead, a suggestion merkel's government sees a potential greek exit from the eurozone as manageable. over the weekend prime minister

david cameron said you kde you relations -- uk eu relations need proper treaty changes. he has an election to win. futures pointing a little lower. stocks 50 futures lower. i am looking at tax futures lower by 40 -- dax futures lower by 45 points. >> happy new year to you. the press reports in terms of merkel and her acceptance of the reality if it exceeds power, what might it mean for the greek relationship for the rest of europe? gold is rising. the federal reserve will deliver the minutes of their last meeting. you're going to get the bank of england. you're going to get jobs report. let's give you