we wait this week's crucial decision, positive data out of china removes a potential high hurdle. ross mckeown says the restructuring of the investment bank is advanced and it will return to profits within four years. >> the work at the institutional bank primarily will be finished by the end of this year. is back, currencysy the u-turn on his finance minister's decision.

welcome. let's get straight to some of the big market moves. first up, as we said to you in he headlines, jacob does a u turn and so does the rand. he appointed his second finance minister in four days. bringing him back so what we saw was the rand jump almost 6.5%. that is the biggest interday gain since october 2008 and his goes back to last week when fitch had downgraded the country's debt, really having quite a dramatic impact in terms of the rand. it's about commodities and currency as we go into this fed week. this is west texas intermediate, sifpks to the lowest level in seven years, iran pledging more oil for the

market. this is the performance over the past month. i can tell you 11% of this decline was implemented last week by the market. there is absolutely no chance that iran will decrease the plan in shipments. traders, data, this is how we benchmark how negative the traders are there, the most bear issue ever. et's get the bloomberg first trade. >> the latest data out of china hows fresh evidence of stabilization. bloomberg's monthly china g.d.p. tracker rose to a grows pace for november, the best reading since june. industrial production and retail sales and figures all exceeded forecasts. the u.n. has fallen to a four-year low after the

people's bank of china said the currency shouldn't be measured alone. it's a sign that the central bank will allow further decline. there has been a rand rebound after jacob zuma named his second finance minister in four days. the u turn follows market turmoil that sent the rand to record lows. the restructuring of the investment bank is very well advanced with the business scene returning to profit within four years. ross spoke to man us in an exclusive interview. >> the work will primarily be finished by the end of this year. it will pretty much be done by the end of this year, which is a very, very good outcome.

manus, that was the c.e.o. there. ok, that was images, of course, of l even pen who didn't manage to take any power at the election polls. we're going to discuss what's going on in france, what does t mean tore sarkozy a little bit later here. in the meantime, let's give you some of the breaking headlines. we talked about a range of issues. these are some of the top lines on the bloomberg terminal today. the big conduct issue he hopes are settled by the end of 2016. he is able to slow the asset sales for better value in 2016. the message was, look, we're ahead on target. we're doing better than we thought. i'm not going to be under the same pressure next year as i was. i can afford to take my time. the investment bank will reflect strategic strength. this about choosing the areas

of the investment bank, the front end of the restructuring will be done and completed by the end of this year, still targeting a dividend of 2017. lots more to come from ross on that exclusive bloomberg interview. what a start to fed week. standing by in asia for us. take us through the markets, it doesn't bode well for the rest of the week, does it? manus, rtainly doesn't, in the asian region, the index is down 1.5%, the biggest drop since late september. can see they're reselling across the board except for this bright spot in china, getting quite a big run-up up by over 1%. and we have had that data over the weekend showing a little bit of signs of stabilization. analysts bullish on the outlook for production and copper prices next year. perhaps that is the reason behind it. perhaps it's another one of

those anomalies where we see the shanghai market rise in the last 90 minutes or so of trade. there has been a lot of selling. in japan, down by almost 2%. this was despite encouraging data out today. the survey shows confidence for manufacturers and nonmanufacturers, pretty positive, although they did have a bit of a weaker outlook for the next three months. the kospi down by over 1% and big falls coming through are the retail stocks in australia following on from that route we saw in global equities on friday seeing some big falls from the energy players. other stocks we are watching in the region, a big drop coming through from a lot of the shipping companies. this is on news that the chinese government has a planned merger in that space. in hong kong looking pretty good on a share placement and then this is the state of play of energy producers in australia closed over an hour ago, down 8%, sun corp down and

pretty much down, down, down, anus and anna. manus: thank you very much. pretty torturous start to the fed week. it has cleared the potential hurdle for higher borrowing costs. it almost feels like we're ringing a bell in terms of the ed week beginning to discuss it. you have your fed countdown clock version, as if anyone in the world didn't need to know the number of days, hours, and minutes on this seminal decision. let's talk about china. good data over the weekend, a third of the respondents say 6.5% is not attainable. what is your interpretation of where we are at the moment, the yuan at the lowest level since 2011, give me your take? >> on the currency, clearly we had some news that it was going

to be targeted against the basket as opposed to dollar. that will lead the way, the dollar is strong for devalueating compared to the dollar. we have to remember that the effect to the dollar is not what they are targeting and instead it's more of a reflection of its trade. i think that's very good. the reason venture people see this as is china devaluing again like this summer, when it was just add justing to the inclusion creating a bit of flexibility in the system. i think that's one thing to remember as we go forward. in terms of the retail sales, yes, they were good in line with expectations and we had that big day to remember with the singles day where we had the jump of 50%. that's really important. 60% of chinese economy now is consumption, so those moves are important.

if you look at production, if you look at success of investment, it is still a slowing path as the economy is rebalancing more towards a service economy. manus: i like what you said, oh, my god, are the chinese off on a devaluation train, which sort of things us very nicely, janet yellen reflects what was happening in china in the third quarter. the chinese need a gradual hiking path from the federal reserve. does this symbiotic relationship between the two. a lovely terminal piece this morning, economists question the fed's gradual rate hike path. this is going to be important in terms of what guidance yellen gives the market in terms of the gradual neighbor of what happens. 64% of commifments surveyed say the quarterly forecasts that we get will have a slower path. where do you see us in terms of

rates at the end? virginia: i think slow path is definitely, it's going to take time. clearly she gave some guidance over the next two years. they always go back to data dependent. as we know, things in the u.s. have been better than in the rest of the world, but still, given the stage of the cycles, this elongated cycle that we have, i could argue we can expect there might be. there is that long term business cycle. there is the desire to normalize before next election, efore possibly a softer cycle, but i think the path for rate increases is going to be really slow and really importantly is what do we do with the fed's balance sheet. i think that's really important to the investor. man us: we got a lot to get crunched in. we got commodities and credit. i want to get your take, third

avenue management has closed the doors, right. i'm seeing various tweets, meltdown just beginning in the junk bond market, blackrock hitting 2009 lows. 12% of the junk market is energy. do you see any warning flags from third avenue management, is it a rerun of 2007, 2008, it was about mortgage-related debt. here we're looking down the pipe at energy and materials, are you worried? virginie: worried is not the term. it's a little crack that we must absolutely pay attention to and see if we have other situation across the financial system. at this point it's just something to watch. but clearly rising rates, commodity companies with where commodity prices are, some of them might be quite highly leveraged, this is something that is very important to watch very carefully. manus, i love your face a

little bit of a crack. you're with me the next 45 minutes. sit back and have a coffee, settle in for the long haul. at the height of the financial crisis, r.b.s. is still on the road to recovery. i spoke exclusively to c.e.o. ross mcewan, he talked about asset sales in 2016. ross: because we had such a good start in the last two years and taken so many assets off the books and recreated our capital position so quickly, we live in a position where we can go a little bit slower next year if we get better value for the assets we still got to sell. we got a very experienced team. we're still selling assets. in the last two weeks, we have been selling russian assets. we have been selling a lot of assets around the world as we are coming out of countries and we try to sell the business, if not, we sell the assets and try to run them down. we have done an amazing job.

if the market slows down because of a lot of others out there, our capital position is such that we can go slower. it's not my objective to go slower. my objective is try to finish the job by the end of next year. if we do need to, we have a capital position now that llows us to be more patient. manus: that was ross mcewan, c.e.o. at r.b.s., you can watch that exclusive conversation thursday night 7:00 london time. so we get to the bloomberg december economic survey, this is your day ahead. let's have a look at it. 7:30, european union finance ministers meet to discuss the bloc's commitments to combating terrorism. that starts at 9:00 a.m. u.k. time. german chancellor angela merkel's party opens a two-day national convention. merkel will give the keynote speech.

up next, flip-flopping in south africa, the second finance minister named in four days following market turmoil. we'll bring you the latest from johannesburg. ♪ ♪

nus: 6:17 in london, 7:17 in frankfurt. >> the c.e.o. of r.b.s. says the restructuring of the investment bank business is very well advanced and return to profit in four years. in an exclusive interview, he also spoke about the thorny issue of bankers pay. ross: you need the right people in the right jobs and pay them enough to really do the job. what is important in our business is to build a culture of this organization that it is not about the money, it's about doing the right thing. >> hsbc has held talks with

canadian officials about relocating its headquarters from london to toronto, that is according to the times newspapers. the discussions were held in october with senior figures including the chairman. after that, the bank said it would delay its move to any haurs move until early next year. shares plunked as they resumed trading in hong kong today despite the return of the chairman. it was confirmed that he had been assisting with an investigation reportedly into former shanghai vice mayor. alibaba has bought the leading english newspaper. the $266 million deal includes the south china morning post and local editions of esquire, "elle" and other magazines. they are following in the footsteps of amazon's jeff basel who bought the "washington post" two years ago. for more on these stories, head to the bloomberg terminal and

bloomberg.com. manus. manus: the rand has surged as i was telling you at the start of the show. jacob zuma named his second finance minister in four days. the currency hit record lows relative ointed a unknown. what a u turn. a very familiar figure and should restore some confidence, is that a fair take? >> good morning, manus, you're right, that's a fair take. he is a familiar face in the markets. he gained the market's confidence by being the finance minister for five years up until may 2014. he steered the south african economy through the first recession in 17 years and fended off pressure from labor unions to increase spending in government. he has definitely been a figure that inspired confidence from

the market and also inhibited any inscrupulous spending in manus.ent, manus: and tell me this, this is about restoring confidence. we have seen quite a magnificent rally so to speak in the rand. the credit agencies are deeply concerned. >> yes, i mean, we have seen the rand really rally, last night after the announcement was made itself. this morning it's beginning to strengthen even further. that's just the beginning. the market is definitely going to need more reassurances. it's good news, but still a very confusing time in south africa. what is needed right now is stability and clarification in terms of what lies ahead. president zuma is trying somewhat to restore confidence in the markets by reappointing a man that has been known by the market for five years in having steered the economy quite well through the recession. so there is going to be new

reassurances that need to be made, but so far it seems like the markets are accepting the news quite perfectly. back to you. manus: thank you very much ollowing the u turn from jacob zuma. this is instability, isn't it? >> it's very difficult. it should go one step away from being a south african problem, it's a commodities issue as well. with low commodities, a lot of countries have been relying on commodities will find it harder to find growth. you also have potentially a stronger dollar that generally puts some pressure on emerging markets. if you have a little bit of political instability or events not anticipated by the market, you see the reaction quite quickly. i think this is very important to keep in mind when you think about emerging markets for the next 12 to 17 months. manus: thank you very much.

you are going to be with me for a little bit longer. let's turn our attention to france, the national front in france failed to win a single region in the runoff. it was beaten by the republicans and the socialists. he results for now, le pen hopes to become france's next president seems a little bit shaken. what does it mean for the national front, what does it mean for the next presidential elections? >> this is personal blow because to lead in the first round, her party, the national front has failed to win any single region in france. the republican party of former president nicholas sarkozy including the biggest of all, the region which is going to become right wing for the first time in 17 years.

and the socialist party has only managed to retain five regions. however, there is no victory for the governing forces. the prime minister said that the danger of the extreme right has not gone away. >> tonight no relief, no triumph, no message of victory. the danger of the extreme right has not been set aside, far from it. i don't forget the first round of results and the results of past elections. i am aware of my responsibility, ours, that of my government under the authority of the president of he republic. >> le pen has blamed her failure in the second round on the mainstream parties who joined forces in order to create a republican barricade against the national front. by failing to win control over any regions, she has lowered

her chance to show the capability of the party to govern in france and in fact according to the latest poll we had last night, she still leads in the first round of the 2017 presidential election but she will lose in the second round no matter who is running against her. manus: caroline, thank you very much in paris. interesting how barely a week ago, the markets were really quite shaken by this surge in support in the first round, but it didn't transfer into votes for le pen, a sense of relief, suppose from the "politico"s, not just them but all? virginie: in the context of low growth, very difficult environment in europe, refugee crisis is polarizing really the political scene. i think what's really important here is clearly more people went to vote.

the first one was very limited, i think about half of the voters went this time, but a lot of people have not read what her program is about, nationalization, exiting europe. it's very, very drag continue. i think most people who are voting for her are just voting against an issue of malaise, if you want, as opposed to really understanding what that would do to the economy if she ever came into power. manus: they took 40% of the vote in two regions and came top in six regions in the first round. that is a political -- that's a statement of society. hat we do at bloomberg as well is turn it into economics as well. before this, france, you know, they're potentially dying grades on the mat terrorism in france.

it has been swooned and booned by the e.c.b. >> would you concur that those debt matrix are sustainable? virginie: clearly it's a tight situation. there is not much leeway that you have. the key is to focus on continued reform and trying to bring an improvement to growth, rtainly help unleash the entrepreneurship spirit to create a sustainable economy. i'm not sure that we're there. i think we need much more. that is what this government and the next government needs to focus on and it's certainly not by electing le pen that we're going to get there. manus: stay with me, we have a ot more to get to. next, 21 clouds, it's going to take $16.5 trillion to clean up the mess. that's the global statement.

what does it mean for markets and me and you for me as commerg consumers that may be triumphant, but will the markets give a resounding cheer. stay tuned for the consequences. ♪ ♪ ♪

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manus: 6:30 in london. that each up to speed. the latest data out of china shows evidence of stabilization. clearing a hurdle for higher borrowing costs. the tracker for to a growth pace november. that is the best reading since june. figures all exceeded forecasts. the people's bank of china says the currency should might be measured by a move against the dollar alone. that statement is being interpreted as a sign that the bank will allow for the decline. the rand is a surging after the

south african president named his second finance minister in four days. whoeappointed travis healthy posts between 2009 and 2014. the turmoil that sent the rand to record lows. rbs's ceo says the restructuring is very well advanced. it returned to profit for the first time in four years. he spoke to manus and an exclusive interview. >> it will be finished by the end of this year. from the structuring of the front and -- we will be done by the end of this year. that is a very good outcome. nejra: francis national front failed to win any assemblies. along -- francois

francoise along -- for more on the stories had to bloomberg.com. manus: let's get over to caroline hyde. are we going to see a lower opening? cautious may be comment comes to europe. asia feeling the pain could look at what happened on friday. $700 billion worth, the market value moved from the old country world index. significance of the loss that we saw on friday. the worst day for global equities since september. energy stocks being hit hard. this is how australia is performing today, up by .2%. for certain metals. lows onceto record

again. news.ews is bad chinese data coming in better than has been expected. you talked about it, industrial output, retail sales. investment coming in better than forecast. that means all paving the way for the first rate hike in the united states since 2009. concerns -- 10 years. where likely to see the first rate hike in almost a decade. concerts are building. what does that mean for the riskier asset classes. south african rand doing all of its moves at the moment. a grand rebound. this is been the rand weakening against the u.s. dollar. the u-turn coming from the jacob country'stating the second finance minister

appointed in the last two days. there is some reprieve in the rand over in south africa. you got to keep your eye on this commodities. you're seeing what metals are doing to australia stocks. what is happening to oil? it keeps on seeking is down in the last three days. -- keeps on a sinking us down in the last three days. .anus: caroline hyde i would to bring you breaking news. data flash from india. this is about wholesale prices. year on year they declined 1.99%. they are contracting by 1.99%. the survey was for a contraction -- 2.47%.nt or 7% that is the state of play on that data flash for you from india. a landmark climate deal was reached in paris.

nations endorsed the goal of limiting temperature increases. less than two degrees celsius. for more, let's bring back in our guest host, it is risen a mess enough -- it is a virginie maisonneuve. give me your take. that teacher into the scale of your estimates? virginie: i think we need to spend more than that. theres say that is investments we need. all of the adjustments that need to happen in energy efficiency and making a way to combine to make a more balanced world in terms of emissions and absorption. it is going to be much more. it is good be a long-term period. the one thing that i think is good about the deal is we are

bringing in countries that in the past have not been willing to help contribute. we had business involved. we had transparency goals of measurements and monitoring. medical if you don't make your numbers in five years time. -- manus: if you don't make your numbers in five years time. have this thing that concerns me with political change as we go back to this mismatch between political cycles and this very long-term issue that we have with time a change. we need much more. investment is one side of thing. the other thing i think it is interesting is we are seeing some backlash. some people were talking about the option to possibly in the u.s. get a three dollars subsidy

per barrel to energy companies that they would not be hurt too much. the idea is we need a just a change. it's just the way it is. contributorsarbon is not the solution. we need to think radically different. the backlash when all of the governments go home is the thing we need to watch. it could usurp anything that was achieved. i was looking at a report, big .il makes way part of this discussion is from the iea. 59%wables were contacted by of the capital and the power sector over the next decade. rising to about two thirds from 20.26. that is quite -- if you look at capex reduction.

this is the investment opportunity. simplicity?g overly virginie: if you look at sustainability anything about probable investment in climate which leads to issues of trend. renewable, you have to be careful, because the profitability of the sector is being challenged. it is a good contributor to the climate change issue that we have in the world. in terms of making money and a sustainable way, you have to be very careful. what i like is the energy efficiency. the smart metering. the internet. i think that is where you can have some really interesting business. manus: who will invest in the zone? virginie: oh i think many. it is not coming out of the

question but yet to be careful with profitability. manus: she stays with us. japan, not confident in the world third-largest economy. it was unchanged for december and better than the market had anticipated. listed to tokyo with jodi schneider. -- let's get to tokyo with jodi schneider. by thexpected to drop time we get to the end of the first quarter, isn't it? jodi: it was 12 today. a lot more optimism than pessimism among large manufacturing companies here in japan. that number is expected to go as forecast by those companies to go to seven in march. that is lower. that is on the concerns about the global economy and particularly china and emerging markets. economists say well this is a good figure today, that people should be concerned about that forecast number.

mental are there any signs indicating that we should be worried -- manus: are there any signs indicating that we should be worried? , theis back on the agenda capitulation to one of his junior partners. heiette: it is interesting, numberto have a lower for food and drink at 8%. tax thatan 10% sales is going to rise in the -- in april of 2017. that was seen to be a way to build some consensus with his junior ally. the speculation at what he is trying to do is something that is only desk that is only been done twice is to have the upper end of lower house elections on the same day. it would be good news for him. this is not confirmed.

this is political speculation. it would make sense and it would be a desk it would be an interesting move politically. manus: thank you very much. tokyo.hneider there in everyone made so much of shinzo raise again into april. turning to his junior partner is saying he will backtrack on that, possibly jockeying for double elections to come in the summertime. does this man get any credibility? virginie: and he does. but it is a tough environment. increased taxes on the consumer that is in a week democracy. japan is very challenging. so i think it is more --erstanding that

understanding. there is the macro in the micro. therate -- japan is one of star markets. if the u-turn makes sense in terms of not creating another brick in the economy that is in a fragile state, i think that could be a good thing. the key thing is to understand finances and a long-term, sustainability of the model in japan. japan has an opportunity in terms of climate change relief. investment technology. as you know, that has not been an area -- what the market is looking at is changes that the country is trying to promote the past 12 to 24 months. there is a lot of progress that could be made in this area. can be a test for the rest

of the world economy. one has to be very careful for south africa in terms of political or economy changes, -- and iany cycles call them changes with the range is very tight, can have a big impact. there is this location in markets. let's hope it is not a hindrance to abe. out by the u.k. government. that was at the height of the the royalcrisis as bank of scotland is on the road to recovery. i spoke to the ceo about retaining corporate cuts and the perennial issue. of 2016, another year mainly to exit out of the countries that we have come out of.

we were in 37 countries. we are going to be back to 13 to 14 countries. it will be right for our customers. strategict for our strengths are. it is primary product areas which is great fx. that is where our strategic strengths are. whereof the areas customers recognize us for having strength. question andtural we have touched on this before witches are you seeing corporate customers say you cannot give me full-service, so i have to go through hsbc. i got to go to another institution. where are we in that? >> the thing that is important to understand is they are of multibank anyway.

manus: are you losing more of the wallet? we're not because of the areas we are purposely coming out of. we come out of global transaction servicing, of course we're losing that share to somebody else. but are we losing that share in areasre areas where a -- i am talking about. those are the areas they see our core strengths. will be finished by the end of this year on the structuring of the front end. we will be and -- we will be done by the end of this year. which is a very good outcome given the amount of work. manus: john cryan over at deutsche bank here at -- deutsche bank. many people in the sector still believe they should be paid off for no real wages for turning up to work with a salary and a pension. banking need to look

deeply at itself in terms of -- i think it is rather sanctimonious. >> what you've got to realize is the marketplace is changing and you've seen all of these companies, you been talking about changing, downsizing, that will have an impact. the thing for me, i have become very pragmatic there were quickly. you need the right people and jobs. you need to pay them enough to get them to do the job. they think that is the really important for us is to build a culture of this organization. it is not about the money. it is about doing the right thing. manus: is that good for the environment. you need to get through this reinvention. you have to pay. >> that's why we had to pay.

the structure for us is down dramatically. is a muchnt where it smaller part of their overall salary. i think we are in pretty good shape now. the question is how do you read moderate people -- remunerate people for doing the right job? one has to be somewhat pragmatic. mental you will be up to hear what -- matthew: you'll be up to hear much more for him later in will be -- manus: you up to hear much more from him later in the show. up next on countdown, the pen loses eyes in the elections. no break you for a party you'd what is next for the -- party. what is next for the national front. ♪

man cook it is 6:50 here in london. 7:50 and -- manus: it is 6:50

here in london. 7:50 in paris. >> the business is very well advanced and the business will return to profit in four years. he talked about the thorny issue of bank of pay. >> you need the right people and the right jobs. you need to pay them enough to get them to do the jobs. the thing that has been culturet is to build a of this organization. money, it isut the about doing the right thing. had talks with canadian officials about relocating its headquarters from london to toronto. that is according to the times. the discussions were held in october with senior figures, including douglas flint. the bank said it would delay its decision until early next year. resumed --ged as it

the company's president confirmed that it has been assisting with an investigation, reportedly at the former shanghai vice mayor. alibaba bought england's leading newspaper. the two c $6 million deal included -- the 266 main dollar deal included other magazines. jack ma is falling -- following the man who of bought the washington post two years ago. manus? pen's --rine le despite a strong showing in the last weeks first run. today attention turns to and merkelk are -- to angela . the chancellor will give a keynote speech later on this morning. germany's refugee policy is

likely to dominate the conference. to talk about all of this, we are joined by carsten nickel. thank you for joining me. let's turn our attention back to france. marine le pen swore in reality who is itls which -- more of a relief for? the nation? hollande? carsten: probably all three. the biggest challenge has been the government -- the governance of his own fractured coalition. that is not going to change. nicholas sarkozy poses some very difficult questions. the question is do you want to continue imitating marine le pen ? or potentially do you opt for a candidate -- a more centrist candidate?

.hat is the crucial importance the need for the center-right to track the socialist vote to defeat the program national. -- the pro-national. isus: the whole issue hollande's popularity is under pressure. turn tragiccan't , but translating statesmanship into political has not happened for him, has it? carsten: he has benefited to a certain degree. there has been a rally around the flag. the problem simply is the presidential elections in that sense are quite a while away for him.

the dominating problem for him will remain. record levels of unemployment. ,ere you have a serious problem the governance of this fractured center-left coalition that really constrains the ability to push for far-reaching economic reforms. as long as this is the case, this benefits the pro-national in the polls. it is not likely to go away in the short-term. manus: let's turn to merkel. you've got an important day in terms of merkel's policy. -- her refugee policy. what is the most recent thinking? managed in thes run-up to this conference, she has managed to cook a deal. passeds a motion to be

that will pay attention to some of the concerns of her more refugees skeptical critics within her own party. if she compares own situation to france, she may come to the conclusion that it is not that bad, in the sense that if you look at france where the right -- the big advantage for merkel is that her own critics are within her own party. that gives her an opportunity to reach out to a broad spectrum of rightist voters. i am not saying this is entirely staged, what is happening now. if it is managed well, it may play out in the run up to 2017. it is something that could work as an advantage. manus: i loved the phrase he .sed, cooking of the fear it will take a little bit more than that. carsten nickel, thank you so much. senior vice president.

oil on a slide. wti flooded with a seven-year low. news from around the world with hsbc seeking gains. stay with me. ♪

manus: down to the fed as we await this week's crucial rate decision. positive data out of china removes a hurdle to a hike. exclusive ceo ross mceuen says the restructuring of the investment bank is very well advanced. it will return to profits within four years. >> the work in the bank primarily will be finished by the end of this year. rebound. -- a grand rebound. a u-turn on his finance ministers decision. ♪

manus: welcome, it is monday morning. i'm manus cranny. let's give you one of the big moving beasts in the market. it is the rant. 15.18. if you're going to go on holidays to south africa, you should've gotten your exchange rate down. rand, it jumped 6.4% , the biggest gain since 2008. this is the second finance minister in four days. problem on gordon. that will provide a certain amount of relief for the currency markets. you are seeing the dollar decline and the rand begin to rally. let's talk about oil. six toxas intermediate the lowest level in seven years. drops to a level we have not

seen since february 2009. 50%, a percent demolished last week in the market. 11% demolished last week in the market. clock --e countdown you've got the countdown clock. the next three days, you're going to take away. two days, 11 hours, 53 minutes until the federal reserve decides what they're going to do. what is gradual in 2016? let's take you to bloomberg's first word with caroline hyde. caroline: data out of china shows stabilization. clearing a hurdle for higher borrowing costs for the u.s. federal reserve this week. the best reading since june. industrial production retail sales all exceeded forecasts. the yuan has fallen to a four-year low.

the beauty of state says the currency should not be measured against the dollar alone. says the currency should not be measured against the dollar alone. there has been a random rebound after the south african president named his second finance minister in four days. he held the post between 2009 and 2014. flood -- lord -- rbs chief executive says the restructuring of the bank is going well advanced. rbs should return to profit in four years. he spoke -- he spoke exclusively to manus. >> it should be finished by the end of this year. -- we will pay much be done by the end of this year. which is a good outcome.

far rightfrance's national front has failed to win any national assemblies. long doesfrancois the francois hollande -- manus? mecca let's get up to speed with the asian markets with juliette saly -- manus: that's get up to speed with asian markets with juliette saly. juliette: the shanghai composite rising again in the last 90 minutes or so. finished higher by 2.5%. we're seeing good gains coming through from some of the mining players. this is signs of stabilization in the china economy. copper players having a solid day. it is been a different story across the region. trepidation ahead of the expected fed lift off as well,

playing into markets. in hong kong, we got the hang seng down .9%. hitting a three month low. 225 closingkkei lower by 1.8%. a number of the expert companies -- that is despite the fact that we had some fairly positive data out of japan. the rout in commodity prices hitting the australian share market, a close lower by 2.5%. -- it closed lower by 2.5%. the anomaly has been the shanghai market. here is the chart of the shanghai composite throughout the course of the day. similar to what we saw in the rest of the region. once japan, australia, korea close, it's big rally coming through into the market. really quite extraordinary that we're seeing these gains coming through. manus, the market closing higher by 2.5% despite a big downturn

in the rest of the region. asian stocks having their worst day since september 28. manus? manus: juliette, thank you very much for rounding up -- the latest data out of china shows fresh evidence of stabilization. king.g us is stephen welcome to the show. we are counting down to the fed. if i look at the china story, it is amazing how they need one janetr in that the u.s., yellen, was so perplexed by what was happening in china. china needs a gradual fed. you can merge the chinese economies and put the federal reserve inside both of them. -- it will do so looking at the u.s. economy alone. the u.s. economy is more

advanced than the rest of the world. the federal reserve has an indirect responsibility for thinking about the rest of the world. if it raises rates and the rest of the world goes wrong, that will have an impact back on the u.s. economy next year or the year after. the fed has to tread carefully because of the fact that china and other parts of the world are not as robust as the u.s. itself is. made of great deal was good data over the weekend. sincean is its weakest 2011. my question to you, there is an admission that the chinese want to go to a trade rating. gently like correlation to the dollar. what does that mean? why do i care? what does that mean to me in the market? speaking, --hly

the other 2/5 is totally dominated by the u.s. and china. the problem that china has is the closer it is tied to the u.s. dollar, the greater the unintended appreciation against the rest of the world. it is damaging to chinese exports. china has managed to get into the spr. john has more possibility to its currency. -- china has more pop -- china has more flexible to to its currency. that helps china because the more flexible the currency is, of bigger the chance avoiding the kind of excessive depreciation that might be tied to a u.s. -- tied to a higher u.s. -- mark: we shoot 74% to 75% of the

manus: 64% think you're going to get lower guidance from the federal reserve. give me your expectation. where d.c. rates going? -- where did you see rates going? steven: a big increase in interest rates. no one believes the federal reserve would commit to that because of the global disinflation pressures. next year, we are good see very little in the way of rate increases because the rest of the world will continue to limit the pace of recovery. maybe to rate increases next year. two rate increases next year. if the fed has a timetable which is also data dependent.

it is a problem having a timetable and data dependent. if we are right in suggesting -- there'sonomy is more disinflation pressure coming through globally. the pressure to raise rates quite fast is quite limited. mind, with all of that in there is a story that it is the long end of the curve that bends. it is the long end of the curve where you should say hurrah. there is no inflation -- i should be careful with what i say. there is none at the moment. is that how you think markets will relate what we have seen in terms of market moves? moves --if the fed

remarkably low. with the threat of higher u.s. rate, the 10 year yield in the by what isluenced happening in the world. the qe coming through in europe. the possibility of more qe coming in through japan. japanese heels, german yields are incredibly low at the moment. much more difficult for the federal reserve to have an impact on the far end of the curve. manus: let's turn our attention back to the commodity markets. wti has fallen to its lowest level in seven years. the rand press to boost its crude. opec members will add to the global glut. let's bring in stuart. when i look at wti, the big question is if this is where we

are with the specter of iran coming online, america might be like to export. it doesn't bode well. stewart: it is overwhelmingly bearish at the moment. we got some of the warring factions in libya. you can hear i am very being cautious because there is a long way to go. i am thinking in terms of andher one million barrels get consistent exports again. that is a huge chunk of oil that the market is not thinking about. manus: opec, the disarray has been well headlined in terms of last week's debacle. if you look at the positioning, traders positioning, it is not at record highs. a speculative edition nature of the market is quite impressive, isn't it?

,> a little bit of good news something that would suggest prices should be higher than have a disproportionate effect. the volatility in the oil market is extraordinary, relative from where it was a year ago. that is something you need to watch out for. manus: the other big aspect is the credit side of the energy markets. 12% of the high-yield market is energy and commodity related. that seems to be where the market is focused in terms of concerns. >> exactly. again, the same volatility your sing in the oil market, you are seeing in the equity market. it is right across the board. how do you play that jack out yet to be quite courageous here it -- had you play that? you have to be kuwait courageous -- you have to be quite courageous. headlines get these

coming the bti, seven-year low crude. when you talk about both the me what you, tell talk about? stephen: the demand story versus the supply story? what is surprising over the last hasor three years is demand been a lot weaker than expected. he goes back to the china story. china slows down. many emerging markets and up in trouble because they little the export to china. if you look at the risks of global growth and recent years, it is been skewed toward the emerging markets. proportionally, emerging markets consumer more oil for any incremental growth than the

developed markets do. regardless of what opec does. is wect of the matter have seen tremendous weakness in global demand, skewed toward emerging markets. manus: part of what we need to do is narrow our focus in terms of emerging markets. stephen king from hsbc. up next, more of my interview with ross mcewan. ♪

london.:18 in 8:18 in france. let's bring the up-to-date. caroline?

caroline: hsbc has had talks with canadian officials about relocating from london to toronto. the discussions were held in october with senior figures. shortly after that, the bank says it would delay its decision until early next year. todaynged in hong kong despite the return of chairman. -- haspany's president been helping with an investigation into former vice mayor. the englishbought newspaper -- the $266 million l andnclude esquire, other magazines. that is you bloombergs business flash. manus: buildup but u.k. government.

on the road --of royal bank of scotland is still on the road to recovery. i spoke to ross mcewan. roscoe we got another year of we got exit -- ross: another year of 2016 to exit out of the countries. we are going to be back to around 13 to 14 countries. we think we will be right for our customers, particularly in the u k and ireland. it is right for our strategic strengths. products whichry our- that is where strategic strengths are. that is the area where we are staying in. that is the area where our customers recognize our strengths. manus: the natural question say you customers

cannot give me full-service, so i've got to go through hsbc. i've got to go to another institution to get the full gamut. where are we in that? ross: the think that is important to understand is they are very multi-banked anyway. losing less -- are you losing more of the wallet? ross: the fact that we've come out of global transaction -- losing that share of wallet in the three core areas, the answer is no. those are the areas where they see our real strengths. finished imarily be the end of this year. -- finished by the end of this year. it is a very good outcome.

manus: john cryan over at deutsche bank. he derived at anchor's bonuses. many people in the sector believe they should be paid for turning up to work with a salary and pension. banking need to look deeply at itself in terms of -- personally, i think that is rather sanctimonious? the market changed -- the marketplace is changing dramatically. changing, downsizing. it will have an impact on me in remuneration. the right people in the right job. you need to pay them enough to get them to do the job. the think that is been really important for our business is to build a culture of this

organization. it is not about the money, it is about doing the right thing. manus: is a good for the environment? you need to maintain to get you through this reinvention with rbs. you have to pay. >> that is why we have had to pay. the bows and test the bonus structure for us is a down dramatically -- the bonus structure is down automatically for us from where it was five years ago. we are in pretty good shape now. had you remunerate people for doing the right job? getting the right results? focusing on the customer needs and getting the results? one has to be pragmatic about that. come fromh more to ross mcewan on what he is doing. you get the full monty, it is an exclusive conversation tonight at 7:00 p.m. here on bloomberg

tv. i want to move to currencies. lovely bloomberg on our top fx page. by the dollar again. that is the message. you got deutsche bank, citigroup all saying we're getting ready for another ripper. stephen: the dollar has a very well over the last couple of years. simplyson for that is the fed raises rates on our forecasts more slowly than the current that's the market currently expects. current -- than the market currently expects. we are running out of assets to buy. quites the ecb cannot be as unconventional as people would like it to be. through at came

couple of speakers. what did you guys expect? is limitations to what they can do. in regard to the relationship between germany issuing very little debt. what proportion of ecb to be buying off the markets? a lot of things make it more difficult for the ecb to deliver the dramatic listenings that people have been looking for. you have a situation where the ecb is not delivering enough loosening. the yen. too has beisk of i don't want to negative. stephen: it is probably that. the fed is not going to do as much as people were thinking. yearsok at the last two

anglican what the fed has delivered in relation to what it was expected to deliver. is typical story in the u.s. people are optimistic about the u.s. then i find out their optimism was largely displaced. -- then they find out their optimism was largely displaced. is gradual really mean? you'll find -- you will know in under two days. you got jon ferro and guy johnson. for aan equities are set slightly better opening in terms of the markets. london up five points. ♪

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it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. guy: welcome to on the move. there counting you down to european open. i am guy johnson, alongside jonathan ferro. it is fed -- jonathan: it is fed week. economists expect yellen to hike rates for the first time since 2006. commodity contagion. -- bearish bets climb to an all-time high. the zoom you turn to the south african president names his second financial minister in four days. guy, what a move. guy: he was pushed into it