next half hour, because it is the european close. mark: european stocks are little changed. eurozone inflation data reinforces the view that more stimulus is coming from the ecb. the european close starts right now. we are going to take you from new york to london in the next half hour. mark, tell us how they are closing in europe. mark: little change, that he. -- betty. we are awaiting janet yellen's speech, and awaiting the ecb tomorrow. the macro highlight of the day was the euro area's latest inflation report. consumer prices just rose 0.1%.

economists expected 0.2%. that is reinforcing that the ecb has to do something tomorrow to accelerate inflation. don't forget, inflation has been way below the ecb's goal of 2% over a two-year horizon for the better part of three years. betty: ok. so staying on what is going on right now, mark, the worst-performing european stock today was steelmaker arcelormittal. what prompted this 12-year low? mark: check that out, betty, down 9%. a big iron ore producer today said steel prices are heading lower next year. citigroup says arcelormittal's earnings have further to fall next year. they cut their recommendation to neutral from buy, and said they jumped the gun in upgrading shares in october. they are facing a double storm.

china is flooding the market with cheap exports, particularly in europe and the u.s., arcelormittal's big markets. the other side, iron ore prices have sunk to a record low. here is a great step for you -- stat for you. the world's biggest steel producer, since 2008 shares have fallen by 93%, a massive decline in value for this company. what is a further 8% down compared to that? let's continue. moving from the markets to our bloomberg first word headlines. courtney donohoe has more. courtney: the climate conference is wrapping up. all the leaders have left paris. now the hard work is up to lower-level delegates at the climate change conference. one latin american delegate told bloomberg there is a disconnect between calls for action from leaders and what is happening in negotiation.

negotiators will try to work out differences by december 11th. parts of southern india have been paralyzed by the worst flooding in a century. weeks of torrential rain have left tens of thousands of people stranded in the city of chennai. andairport is closed, flooding disrupted production of the ford and bmw factories. xi jinping is on a five-day tour of africa, the continent that has suffered the most from the country's slowdown. trade between china and africa fell 18% in the first nine months of the year, with chinese officials saying that is only temporary, caused by fluctuating commodity prices. british prime minister david cameron is urging parliament to authorize airstrikes against islamic state in syria. he is expected to win approval. lawmakers said -- demanded he apologize for calling -- allegedly calling them names.

more than two thirds of the 130 victims of the paris attacks were killed at the bataclan concert hall, which will reopen in 2016. world leaders have visited the site this week, bringing a white rose to honor those who died. that is a look at our first word news right now. you can get more on this and other breaking stories 24 hours a day at the new bloomberg.com. betty? betty: thank you so much, courtney donohoe at the news desk. we learned private payrolls rose by the most in five months. this data plays into the usual role of forecasting friday's job data, a crucial hurdle for the fed rate hike later this month. today and tomorrow, said share janet yellen will likely take the opportunity to give the market another signal that we are ready, mark, for a list off --rates -- list off in rates liftoff in rates.

another big event is in frankfurt. mark: the wait is a must over for the ecb meeting in frankfurt. euro area inflation was stuck at 0.1% in november, reinforcing the view that fresh stimulus is needed. is charlieto discuss former bank of england deputy governor. i would like to start with the ecb. if you were one of the members of the ecb, would you be voting for further stimulus? because not everyone is. the germans, estonians, latvians, they say, let's just see what happens. the data is showing surprises. camp can would you be -- would you be in? charlie: as you correctly say, it is not black and white. on the other hand, if you look at inflation, it is well below the ecb's target.

some of that is obviously due to oiltemporary effects, weak prices. if you strip that out, underlying inflation is well below the target of close to 2%. it is important that the ecb, that people believe it is committed to achieving that in the medium-term. betty: do you have doubts -- mark: do you have doubts they can achieve that? there are worries about credibility issues. is that -- charlie: that's precisely why it is important that the ecb sense of the message that it is committed to achieving its target. one of the problems over the past two years when the ecb has left underlying inflation slipped below the target, people started to doubt the commitment of the ecb to ensure inflation for the eurozone coming back to

target. once inflation expectations dropped, it is harder to get them up, particularly in the current environment when you have interest rates, unconventional monetary tools of, let's say, unproven effectiveness. i believe that when we use them in this country they were effective, but that's when markets were dysfunctional. how much leverage you can get from them at the moment is an open question. but what is really important is that the ecb shows a commitment to achieve its mandate. one thing i would really applaud mario draghi for, he is really sending the signal that he will try and get the governing council to support him in doing exactly that. betty: charlie, it's interesting what you say about inflation targets. here in the u.s., the fed has been more successful on the employment front, a little less

successful when it comes to hitting their own inflation target. i wonder if that raises a question at all, even though i know it is against the majority, whether we are raising rates to suit here in the u.s.? charlie: that's a good question. what is clear is that in the u.s., as in the u.k., unemployment is back close to the sort of pre-crisis level, somewhere around what we would think of as the natural rate. that is normally when you would think you would want interest rates to be back at some sort of neutral level. now, the key puzzle for central banks is what that neutral rate is. there has been an underlying drift downwards in the natural rate of interest over the past 15-20 years, driven by deep underlying forces. demographics, similar things.

it is not at all clear what the right neutral level is at the moment. my own view is that it is significantly lower than it was in the 1990's. but it probably will start drifting up in the coming years, essentially because demographic forces have -- that have driven rates down should start changing now. you have this old of middle-aged -- bulge of middle-aged baby boomers passing into retirement. betty: and then you have the millennials coming up, who will be even further into the job market, expanding their wages. staying right now on the topic with the fed and janet yellen, who will be speaking in just a few moments, how do you think the fed has handled their communication? have they done a good job communicating to the market? charlie: having spent 14 years

at the bank of england trying to get communication right, i know that at times you make missteps, you think things which are misinterpreted, and so forth. so it's not easy, particularly when you have people who have different views giving speeches emphasizing different things. so it is important that you get a pretty coherent and consistent message from the key policymakers, which here i would think of as not only janet, but also stand fisher, bill deadly fischer, bill d udley. when should the bank of england be hiking rates? [laughter] charlie: that is one thing i will not comment on. mark: i was just going to put it

out there. try to meet me in the middle. the markets say beyond january 2017. economists say the first half of next year. would you be closer to economists, or the market? charlie: the key thing here is what to look at. the important thing is what is happening to underlying inflation. there's two things that drive that. pay growth and productivity. the labor market has tightened. weak paysurprisingly, growth given what has happened to unemployment, but productivity growth has also been weak, so the balance between those two going forward is the key determinant of at what point they should move. time for, i think the a rate increase is moving closer. what i would do if i was on the committee at the current juncture -- i don't know.

i would have access to a great deal more analysis. mark: you have been reviewing u.k. data collection, issuing an interim report commissioned by the chancellor. how important is it for the government to share information it collects with the ons, to improve the quality of economic data? charlie: it is very important. that is one of the key themes in the report. two underlying themes. one of which is about changing the culture to become more open, flexible, agile, and the other is more efficient use of data, particularly administrative data that is available within the public sector. v.a.t. data.oms, at the moment, the ons relies mainly on survey information. it makes very little use of that data. that is not the ons's fall.

it is because the legal framework is an obstacle, so one thing i am calling for is to make it easier for the ons to access that information, which should enable us to generate more timely and accurate statistics, and also reduce the reporting burden of businesses. it is pretty much win-win all around, so i hope the report will encourage the government to do something in that space. mark: and the final report will be released by next week's budget? charlie: that is right. theill cover issues with digital economy, the knowledge economy. mark: charlie, thanks for joining us. charlie bean, former bank of england deputy governor. he said we are moving closer to a u.k. rate hike, which from a former central bank calls maker, that is something. betty: that is. all right, mark. we have much more live coverage of janet yellen's address to the

economic club of washington, set to begin in a little over an hour. you heard charlie say, he has been in that seat for quite some time, talking to the media. also tomorrow, join us for live coverage of the ecb's news conference following their decision starting at 8:30 a.m. new york time, 1:30 p.m. london time here on bloomberg television. ♪

mark: welcome back to "bloomberg markets." i am mark barton, with betty liu. i want to come back to the steel company, arcelormittal.

citigroup says earnings for the world's biggest steel producer will fall more next year amid a collapse in prices. thomas joins us now. that is some note, if it sends the company's shares to the lowest level in 12 years. was it just that, or also that there will be more pain next year for steel producers? thomas: most investors in steel at the moment are skittish, and it does not take much to push them into panic mode. the industry is a real mess, really at the industry of -- the mercy of china and chinese exports. mark: they are flooding arcelormittal's main markets, the u.s. and europe. the citigroup note basically admitted that they jumped the gun on upgrading the shares in october. they downgraded to neutral from buy today.

is that embarrassing, or do we admire them for being honest? thomas: we admire them, but the analyst committee -- community has been jumping the gun on our slow middle for five years now. they have been saying a recovery is coming, and every year shares costs toand they cut deal with lower demand in europe and the u.s. i don't think anyone really saw what china's exports data to the steel market. mark: are we closer to an inflection point for the likes of our slow middle -- arcelormittal? when will the market be balanced? number is asxcess much as 700 million tons. across the world, 500 million tons of excess capacity in china alone. the inflection point, when is china going to cut capacity, stop exporting? mark: thanks for joining us. focusing on the u.s.

market. treading water, is that a fair description? that is there, though we are trading lower, particularly on the dow. most investors are watching janet yellen, speaking in about one hour's time. what could she say about monetary policy? that's what people are on watch for right now. abigail doolittle is at the nasdaq, watching stocks. some big movers? abigail: stocks seem to be on hold ahead of yellen, with the composite index just up slightly. but we are watching the truckers trading down, after bank of america was out with a downgrade of the trucking industry. demand is soft on a weak consumer, causing rates to decelerate as driver costs accelerate. not what investors are looking for. ch robinson,

arcbest, and werner were downgraded. what does this mean from a macro perspective? what does it say about the economy, especially in light of print that ism showed a contraction to the lowest level since june of 2009? betty? betty: thank you so much. abigail doolittle at the nasdaq. we have much more ahead, including the battle of the charts. you took out joe. we had to bring in some of the us. mark: i will ask this question. should the ecb be loosening policy? i'm coming to get you! ♪

betty: you are watching "bloomberg markets," at the

european close. time for the global battle of the charts, a look at the most compelling charts of the day and what they mean for investors. julie hyman is joining us. mark barton scared off joe weisenthal, maybe. [laughter] winning three times in a row p julie, kick it off. julie: a lot this year about the outperformance of megacap stocks, masking the outperformance of merely large-cap stocks. i did not do this alone. it will snow bloomberg news gave me the idea for this chart, and also helped me set up the index for the chart. this looks at the russell top 50 index, the most mega mega-caps in the u.s. stock market, versus the s&p 500. this is the differential between the two, all the way back to 1999. as you can see, typically the mega-caps underperformed.

but this year, the percentage point differential between them is 2.2%. in other words, the mega-caps outperformed the s&p 500 by 2.2%. on a day when we once again see stocks like amazon and alphabet hit records, i was reminded of this outperformance of the mega-caps. it pays to be big this year. betty: mark? bek: should the ecb, betty, loosening policy? i am going contentious today. as you might know, some of the policymakers of the ecb, such as estonia's central bank governors, said the data is surprising to the upside, so the ecb should hold. let's look at the ecb economic surprise index. in the figure above zero shows data is surprising to the upside, and anything below shows

surprise to the downside. look at the number, 21.0, on an upward trajectory since july, when it was at zero. so data is surprising to the upside. hi's preferreddrag inflation target, the five-year forward inflation swap rate. since january, when it hit the lowest point ever, 1.4%, it has been rising to 1.8%. so i'm putting it out, being contentious. draghi's yardstick is rising. the data is better than expected. does he need to loosen policy? betty: so could he be jumping the gun? possibly. but it is a near certainty he will -- mark: it gives us something to think about. betty: that is provocative, mark, but i will hand it to julie for her debut in the battle of the charts. mark: julie has a 100% record. [laughter]

julie: when i was here before, erik gave it to me. mark: julie is 2-0 against me. i am out of here. betty: what do you have coming up in europe? mark: little changed for european stocks today. we are waiting for the big one. here's what i'm watching tomorrow. a big day for europe. the ecb is widely expected to add to stimulus at a policy meeting in frankfurt. a cut of the deposit rate and an extension and expansion of the bond buying program are possible. opec ministers are gathering in vienna ahead of friday's meeting. that is it for "bloomberg markets" european close. see you tomorrow. ♪

alix: it is noon and new york and 1:00 a.m. in hong kong. scarlet: welcome to "bloomberg markets." ♪

scarlet: from bloomberg world headquarters in new york, good afternoon. i'm scarlet fu. alix: i'm alix steel. here's what we're watching at this hour. all eyes and ears on janet yellen. she is giving a speech later this hour. will she present a case for interest rate hike in december. scarlet: how to defeat the islamic state. israel's minister of education will be joining us. is reportedlyoard thinking to do about the company's internet business. what does that mean for marissa mayer and its stake in alibaba. scarlet: we want to give a snapshot of today's market activities. lettuce head over to julie hyman. the december rally hitting a speed bump. julie: we are playing a waiting game right before we