is excel a ring infrastructure projects. it is an effort to spur economic growth and ensure gdp does not go below the magic 7%. the markets are opening up. we are checking on future markets. the dax future is up. the markets are opening up in europe and manus cranny has that. >> a reprieve. scraping based on the news that saudi arabia has risen the price of which they are prepared to sell their oil to asia coming off of a record low. there is a view that the oversupply situation that you have and the price declining in oil will get the factors out of production quite quickly and re-stabilize the equity markets back.

they dropped over 2% with the periphery of europe declining in italy, portugal, and spain. french consumer confidence came in and there was a little pickup. no irony. the eurozone money is coming out and holding up towards the negative number in europe that will be delivered and loading up the guns of mario draghi and terms of what he expects and wants to do with quantitative easing and bond buying. wolfgang said the greek issue is a load of nonsense that germany wants to let go and these are the beasts of energy. it lost nearly 4% of the value add him on.

i find this fascinating. a big gaming company in ireland. morgan stanley and goldman sachs come out on the same day with a change in view and say it was fully valued. morgan stanley has the stocks underway and say it is an evaluation of a significant premium. the performance came out on one day with an investor meeting and the stock is lower. the trajectory and the momentum is at a nine-year high. the pace of the dollar rises too fast and uses more money, giving

the yen a bit of a breather. that is what you see. nearly 5%. the yen is also seeing a bit of a move. the is moving higher. those ears stocks. back to you. >> the market open and a bit of a rebound. the dax is up and what a day. the selloff and the indices were red across the board. a stunning collapse in the price of oil for the first time in five years and staying there. it was only trading at 107 a barrel six months ago. joining us for one of the stories is ryan chilcote. a look is lower and another big

move lower. >> it is the one to keep your eye on and below $50 a barrel. it hit $50 a barrel yesterday and it led to the battering of u.s. stock. it led to the decline on the dow and was responsible for a quarter of the 300 points shaved off of the dow yesterday. chevron was down and exxon was down 3%. bp was not spared in london. down 5% and is so far unchanged. the focus has to be on brent above $50 a barrel. it is at $52 a barrel. could it go below? i will give you a factor to think about. brent hit a low in 2008 and we

are not too far from that now. >> we will talk to you more in depth in 20 minutes. let's talk about the impact on equity markets and the move in oil sending shockwaves. the biggest one-day move was lower. i wanted to get the investor take on all of this. he oversees $9 billion in assets. you say the drop of the oil price is good for the economy. the drop in the oil price sends yields lower and has not been good for markets. >> exactly right. that is what you expect. you feel the pain and see the impact of russia on nigeria. you see spending in the oil industry and it will be a boost

to gdp with consumer spending being less at the pump. we will get the gains and we are feeling the pains. >> what is the last time? >> 3-6 months. >> you are not concerned about the high-yield space. >> there will be companies defaulting as a result. you will feel the pain and the benefit should be positive because we will get the economic boost. the economic boost in the oil price may add gdp. we will not feel that immediately. we will see that six months down the line. >> the situation in greece it needs -- in greece is the other

story. it feeds across to spain and italy. if greece exits the eurozone, there will be no contagion? >> i do not think they will leave. we are getting bluster ahead of the election and german politicians positioning and readying for the negotiation after the election. no one in greece wants to leave the euro. there is a saying that they want to stay in the european union and not as much austerity. the germans say the two or neither. the contagion is interesting. markets are not looking, at the moment. if greece leaves, we will see mario draghi do what ever it takes to make sure the eurozone does not fall apart and the

contagion is not touching bond yields, at the moment. >> you have german officials positioning themselves in greece and this is a question of the greek people. a decision not to go with the new democracy. it is staying in the eurozone or voting to exit. they are playing a dangerous game. >> they are not saying they want to leave. >> there is a decision to stay in europe or leave. >> it is trying to influence the election and, when we get the election whoever is in power in greece will be trying to negotiate low austerity within the eurozone or and that is quite clear. you cannot have that. the reality is that negotiations

will take place. >> what will we see as the outcome of this? do we get the extension of the loans negotiated? those of the kinds of develops you would expect to see. >> they need the money. if they left the eurozone, it would be a disaster. they will try to negotiate. they will have austerity. it may be reduced. they have already got a long way and need to go further. >> before the meeting du expect qe? the consensus is that it will mock work.

>> the risk is that we have some and not enough. we will get some and it will not be enough. whether it happens this month we will have to wait and see. we have inflation numbers coming and it will be see in falling prices, rather than flat inflation. i suspect we will see the ecb announce something they are moving towards and will not have a proper announcement. >> look at the inflation right now. i believe the survey is minus. do you think deflation becomes entrenched? do you share the view of policymakers in europe that the risk that that develops is small? >> we are in a deflationary environment. the mindset is that inflation is

not a concern. my investment career, i was told that you had to be careful because you lose value because of inflation. investing in assets to beat the monster of inflation that does not exist. a year later, it is not worth as much as when you put it there. whether or not you have plus or minus, you have a deflationary environment. >> we will be joined after the break and talk about the exclusive bloomberg report of china accelerating the infrastructure spending plan. what a means the economy facing the growth. we will talk about that. a quick picture of the markets for you. equities in london opened higher and go nowhere.

it is down .2%. that is nothing compared to what we saw yesterday.

>> welcome back to on the move. i am jonathan ferro. let's talk about china. in the nation is exhilarating

infrastructure projects. beijing attempt to keep growth. aches pains to this. -- it expands to this. let's bring jonathan bell back in. you see the chinese response and the oil price movement. is this a nice stimulus package or a symptom of the slowdown? >> the oil price will help. there is a problem of spending and infrastructure that is health -- half of the economy and exports are not growing as much as. consumption is not big enough to take on the growth driver.

you get the downturn in growth and the authorities go back to infrastructure. a lot is being wasted and does not generate the growth for future years that you would hope for. >> we see excess capacity and what is the risk that they continue to export the environment to the u.s. and europe? >> less than what it was. we have seen wage inflation and now, we talk about it needing to fall. it is less of an issue than it was and china has the issue of keeping its growth maintained for the time being while consumption picks up.

>> look at all of these stories put together with low growth and low inflation. i look at treasuries and the trade last year was to go treasuries. you can still make decent money on treasuries. >> a great question. if you look at the bonds you cannot make money in eurozone bonds. they are zero inflation. the places where people are saying there may be a potential is in the u.s. and u.k.. i think the u.s. is in an environment where they continue to grow and interest rates do

not go up. that is going to be at for a while. the problem is that it is only a small amount of potential return and unemployment continues to fall. you will lose a lot of money and there is a lot more to lose than to gain. >> is there a chance that they lose a whole lot of money? why would i want to buy 10 years? >> you would own them if you believed the eurozone story and a tie-in debt is the same as german debt. we are getting closer to that and i do not think it is the case. there are too many instances of little return and significant risk. that would be a risk i would not take.

one could be the european central bank at the top of the market. what does it mean for the central bank at the top of the market? >> the central bank is not concerned if it does what it needs to do and rescues the eurozone, stimulating growth. they do not have the same concerns that you and i would have. i think the ecb going ahead and buying at the top of the markets with the right things, and terms of boosting growth, that is the right thing to do. >> i look back and i see what mario draghi did with plans that works. we saw assets increase in value. can we see the price without

having the key we? >> we have seen the price affect and not the money of fact. we have a banking system that is not working and they are not all fine. they continued and want to get the economy going again. that is what you would hope you would get. >> thank you for joining us this morning. coming up, we get back to one of our stories. oil below $60 a barrel. what it means for the markets in the middle east after the break. ♪

>> welcome back to on the move. you've seen the impact on the stocks in the middle east and the index is down this morning. for more on the stories, we are joined by ryan chilcote and elliott gotkine. we will get to you in a second. we will start with the big move in oil. many indexes have big oil. >> you saw it drop yesterday.

that was responsible for about a quarter of the decline in yesterday. you saw it down and bp was not spared. a big broad-based decline yesterday throughout the day. bp is unchanged. we saw it come up a little bit and it is back down below 50. it is around there and the next to watch for is $50 a barrel. >> again, we're going to bring elliott back here. we have seen the big oil makers. a substantial read across this morning. >> i would say that the middle eastern markets have been

declining today and it was down. it has clawed back some of the losses. the market has not managed to eat out a single gay -- a single day of gains. so some of the reasons that the oil companies are being hit are under economies in saudi arabia being hit. investors are shying away from riskier assets, in the wake of what is going on. there are concerns that there may be further turbulence to come if the elections turnout in a certain way and greece. the plunge in oil prices and shying away from riskier assets. that is why we see the declines

across the board with the exception of egypt. >> you can see the reactions and it starts to hit people in the streets. >> it was part of civil servants being laid off. budgets were slashed because they were based on lower oil prices than previously. the impact has been felt and ordinary people will feel the pinch when wages are cut in government spending decline. >> thank you very much. you will talk about the impact after the break and we will get a forecast for the new year with the global head of strategy.

stay tuned for that.

>> welcome back. this is how things are shaping up this morning. here is the stoxx 600. almost dead flat. things are calm her than yesterday. dropping the most since 2011. the equity markets at $52 a barrel. the first time since 2009. what does it mean for equity? let's get the stock movers. >> big moves. this is a company that lends it out and loans you construction and industrial equipment.

the key thing is that united rentals thanked -- went 11% yesterday. it is being driven by bank and analyst recommendations. 11 percent downgrading the stock. ashton fell the most in a year. it is the worst performer on the whole of the stoxx 600. other moves dictated by analyst recommendations today. down almost 3%. goldman sachs and morgan stanley have cut their recommendations saying that there is not a problem with the company. they say they have an attractive growth profile and balance sheet. comparing to the competitors, it is on the side of things.

to go with the theme, it is moving the back of recommendations and all about improving sales in the united states. the sales come from the u.s. and started to look much that are last year with the gains. today it is up. >> thank you very much. let's get the top headlines for you. the stocks are flat in europe. the global selloff continues in asia. equities closed down and the move comes after the dow and the s&p 500 dropped. that was led by energy companies as the crew dropped -- the crude dropped. the u.s. stock files -- u.s. stockpiles are estimated to have risen.

it was the latest since the calamity -- the commodity collapsed. an exclusive bloomberg report on china accelerating infrastructure projects as beijing attempts to keep growth above 7%. the economy is estimated to expand at the slowest pace since 1990. it will help transportation. let's get back to europe. the euro is trading near a low. the ecb's meeting on the 22nd. the next guest thinks they could drop. he is the head of the global fx strategy and joins us now. 115 would have sounded like a bold call. >> i think the end of your

forecast shows the downside and it will largely continued to be a dollars story. if you look at what is happening with the yields this year and the previous year, you find they grind higher and higher with 180 basin's -- basis points rising, going hand-in-hand with dollar strength. there is a lot of discussion being priced in. i am inclined to think this is a dollars story. >> do you think we will see this without qe? >> i think we can.

it continues and the real yield is higher, even if the fed delays the rate hike. let may be clear about this, the dollar strength changes the rate hike and slows inflation with oil prices. this is going to get it higher. >> let's talk about consensus strength on the economy. what is the risk that the u.s. economy faces with the rest of the world faces? >> the risk is small and things could happen.

the risk is quite low, as far as this is concerned. they could happen. it is in the price of the dollar. looking at the last six months, we have seen the increase in the index that is substantial and it will continue at a slower pace. >> does greece move the euro? >> i do nothing with see -- i do not think that we see a scenario similar to the second quarter of 2012 and i want to differentiate between the big picture and the fluctuations. i think that i have little doubt that around the election time

and after there will be fluctuation and pressure. the big furniture -- the big picture is that greece is not that relevant right now. >> not even the situation with the chancellor and the similar situation in spain. >> we need to differentiate the scenarios. the central scenario, looking right now is the lead narrowing and we will have to see correlations. we'll have to see coalitions with parties willing to incorporate. we will see a significant turn

from compliance with the european peers. we will go back into a dollar strength scenario with greece being relevant. if greece plays hardball, there is a chance that is small. i think the impact will hinge on what happens to greece. if it fares badly, as i expected to, it will set a bad precedent and played to market perception that other countries will exit the euro. >> what if they do well? >> there is a risk. we need to look at the economy.

the idea behind exiting the euro is that you can devalue and export your way out of the crisis. based on conventional measures of trade, greece will have a benefit and there will be disadvantage. a lot of the structural reforms needed will help. >> a lot of people will say that the chances of greece leaving are slim. >> i agree. >> we talk about it theoretically. we have the unlimited bond buying plan and enshrine the notion that the project is your reversible. it opens pandora's box. >> it sets a precedent. having said that, i go back to my previous point that it

strengthens the argument that the currency is reversible for those who remained. >> we have to leave it there. looking for 115 by the end of the year for the euro. what will it look like for the u.k.? we will have a general election. will we have a rate hike? goldman sachs think so. and

>> welcome back. the market moves to talk about. the treasuries and yields dropping. you remember october 1 five. we are back down there again. there we are. that was the trade. the yields must go higher and they went lower. we have a treasury yields on the 10 year and it is 0.48%. that is a record low in germany. the continuing theme is the yields lower in germany and let's talk about the u.k.. it is set to be another big year for the economy with a general election in may. joining us now is the chief u.s. -- u.k. economist. you made my job easy by putting out a note.

i will start with the first one. the recovery. >> i looked at the risk of the recovery and david cameron would have had the election last year. the question is whether we can sustain the recovery. >> there are clear risks to growth and the growth is weak. a lot of the growth has been fueled by the falls in the ratios with only so far it back to go. we are optimistic it is being driven by oil prices now down 50%. that is enough to drive the rates and all else is really equal. we expect 2.9% growth against

the consensus. >> it may help the government and the scottish referendum. that is another story. whenever i attended the bank of england press conference, there was wage growth. when will it pickup? >> one of the query -- one of the key questions is the u.k. and employment growth while wage growth is as weak as it has been. this was driven by the increase in labor supply and by the workers staying on past the retirement age. there is a point where labor

begins to bite. now, we are at that point. the surveys have been consistent with the wage growth and the official data was weak, now rising a little over 3% over the last six months. we expect a reasonably steady pickup in wage growth this year initially. we think productivity growth will have support the real income growth. that is part of the story and it is not just lower oil prices boosting household income. you get a rise on wage growth and we think it will be robust growth this year.

>> if i got the dovish member and said wage growth, he would get annoyed with me and say that we have record self-employment and it is difficult to say what wage is doing in that sector. >> there has been a remarkable transformation and a lot of those are a flip side. the other is a rise in older workers that are self-employed. you have seen a big increase and it has not resulted in wage growth moving higher. unemployment is down on our estimates and we expect unemployment to fall over the

course of this year. it is not surprising that we are seeing the wage growth pickup. over the course of this year, we expect this. >> let's imagine it goes on holiday and i said to you let's send a quick e-mail. where is the bank of england interest rates? >> leave rule of thumb would be that growth would be above trend and should have interest rates around their. it changes the fact that the new full rate is lower on our estimates.

the rate is only a little above zero. it has been a surprise. we are where we are now. >> you are looking at cpi below 1% for much of this year and you expect a rate hike. how does this matchup? >> we have inflation data in our estimates that requires the governor to write a letter to the chancellor. that is is inflation dropping to a low in january and february. i think you will get people talking about deflation in the u.k. and it was not where we were a few years ago. the big concern was to high inflation. if growth is as strong wage

growth accelerates. bear in mind that inflation will be moving quite a bit higher. we are relatively comfortable with the view that the bank of england will tighten rates this year. inflation expectations are destabilizing into 2016 as the market expects. >> the final question in politics. is there any outcome that would make you think about pushing the call for the rate hike? >> my view is that politics and economic policies are in the medium to long-term and undeniable.

things would need to be a highly uncertain and they would need to be prolonged after the election for them to have the material impact on growth in the near term. that is not what we expect. it is likely that there will be a hung parliament and we think the conservatives will do marginally better than the opinion polls suggest for two reasons. the economic forecasts are supportive and the second reason is that it is likely to pull lower in the general election. those votes are likely to shift. it is an uncertain election. conservatives are marginally more likely to lead the

government which will be a coalition. >> thank you very much for joining us. we had to the break. here is a picture of the market for you. a little bit of a rebound. it is down 47 points. the dax is dropping. the story yields lower. 6% for the first time in its october. doing just that after the break.

>> welcome back. i am live in the city of london. pushing yields to record lows. below 2% for the first time since october. the yields hit a record low of 1.25%. the pulse is coming up at the top of the hour and they will be talking about the markets. >> it is another day. remarkable news. in the treasury markets, a reflection of what is happening. it is all related to the story of oil. you can draw the links between all of this and question where

it will end up. is this just a little bit of a tantrum? >> you have data coming out and the official reading. look in france and the trend is clear. oil markets are selling off again and the yields are going lower. the treasury trade goes lower. >> if you look at the flows, people are putting moneys it back into equities. it puts fixed income and equities. the market is against you right now. it is really hard. >> talk about that in four minutes. in the meantime, we consider --

we continue the conversation. that is it. the pulse is up and three. .