let's speak to our editor in frankfurt. paul: if there is a surprise and here, it would be the number of hedge funds the ecb executive members have been using. the list goes on. some people may be raising an eyebrow and thinking, who gets the most set of these

meetings? the ecb or the hedge funds? the concern is out there in the market. to ecb has been struggling correct the perception. those hedge funds have been getting unfair access dating back to the inadvertent release of information back in may. they may 18, when disclosed sensitive market information. there were new guidelines issued october 6. what are the tricky guidelines balance? you want them to understand exactly what is going on out there. there needs to be some balance. they need to say the right things at the right time to the right group of people. paul: it is a matter of perception, balanced against getting the right people. look at december 31 bc be

ecb announced policy stimulus. the markets misunderstood what they were going to do. the markets have suggested that the ecb was very doveish. nobody wanted the outcome that we got. there was a disconnect between the policy and market expectations. one way to correct that is to get in there and talk to banks and hedge funds, workout how the markets are likely to react to certain policy reforms. that is the transmission mechanism for policy. it is very difficult to balance and i think most people would have some sympathy for the ecb over that. anna: thank you, paul. a lot of people have talked about the fed and what we saw from janet yellen this month. be the view from a few of the guests we have had around this desk. what do you make of what the ecb

communicated and then did in early december? do you think markets had it wrong? what went wrong there, do you think? >> i don't envy any central banker's job. i do think that there is a little bit of, somebody dropped the ball somewhere. expectationslk up in his october press conference. what i was surprised about was, as expectations got far ahead of themselves, none of the subsequent meetings or speeches during november and early december did any ecb open shall try to temper market expectations about what was coming down the road. markets got very far ahead of themselves and it seems draghi made a rare slip. 3% higher.euro move anna: in all of these communications, it matters what

is said and who says it. if you are going to lean against market expectations, you have descended out the right person, the person markets won't dismiss. >> you have got this credibility aspect to it. the next time draghi talks to the markets, it will be hard for him. some investors will remember what has happened over the past few months and how underwhelmed they where from the ecb announcement in december. anna: i noticed one of the things you flag is the potential risk for next year. a misstep in monetary policy by the central banking. what kind of missteps you have in mind? >> when i think about missteps, i am focusing on the fed as the main source of the problem. if we have mistimed the first rate hike, if they have to move faster than we aren't dissipating, that would count as a misstep.

or maybe, we have completely misread the signs and rates have to come back down again. anna: the fed is suggesting four hikes next year and the market is suggesting two. to closeivergence has and what it does, volatility will play out in assets. anna: alexander, thank you. it is 10 minutes past 8:00. beware the consensus. we will tell you what some of the best forecasters tell us what is to come. stay with us on "on the move." ♪

anna: welcome back. this is "on the move." a lesson from this past year is to ignore the crowd. consensus estimates were wrong. we have the details. be smart in the crowd, is the message. nejra: it seems if you want to know how to trade, you should be breaking away from the consensus or listening to those who are. as you say, the consensus largely got it wrong in 2015 for u.s. equities, treasuries, and gold. here is what those that are breaking away from the pack are predicting. u.s. look at u.s. stocks, forecasters called for a 1.8% rise in the s&p 500.

the u.s.mark index for is on course for a 1.8% decline this year. that is shrinking corporate end to the zero interest rate policy from the fed. that has sent global stocks towards an annual loss. one of the most accurate forecasters sees much more muted gains next year. moving on to treasuries. when it comes to u.s. treasuries, the yield on 10 years is lower than the consensus forecast. we're looking at a yield of 2.19%. the most accurate forecasts of this year says 10 year rates will end next year almost exactly where they are now, at 2.22%. the estimate in a bloomberg survey sees 10 here yield rising to 2.75%.

the most accurate forecast actually sees lower yields for thesuries next year than consensus. finally, commodities. it has been a terrible year for commodities. in commoditieste surprised almost everyone. the bloomberg commodity index is on course for its worst heryear since the financial crisis. gold prices are down 9% this year and will probably drop another 12% by the end of 2016, as we see this environment where rates are rising, starting with the fed. if predictions are ion target, experts can expect disappointing returns from the resh500 and tha f six-year low for gold. anna: thank you for that look ahead.

let's talk to alexander dryden. it sounds nice, doesn't it? step away from the crowd, that is how you stand out in markets. alexander: it is easier said than done. person to brave step away from the crowd. you have to have a sage-like quality to be able to get into es, markets, ride the bubbl and be the first one out the door when things go wrong. i can't say a process having any sage-like qualities. anna: we will test you on those and replay this tape. yearve really, then in ten rates in the u.s. go along with that next year or do you see yields in the u.s. going higher? alexander: you have to look at

how quickly rates will hike. we have to start going down this military divergence policy path. we have to look at how quickly divergence will take place in 2016. markets are expecting two rate hikes next year. that will be one of the poorest slowest interest rate hikes in history. in the first year of an interest rate hike, usually the fed funds rate moves up by 2%. even the fed funds is saying four rate hikes. i will be surprised if we only get two out of the fed. that will push yields higher as markets bake more interest rate hikes into the year. do seem to be different opinions about whether we will see more quantitative

easing from the ecb. the fed hiked, but they did it in a dovish way. anyou still see this as investable scene? banknder: every central more, in the or case of japan, for example. long-term inflation is so far off the 2% target of the ecb. they are likely to do more in the next 12 months. i would be surprised if we have not heard again from draghi about a potential extension to their quantitative easing or the change in the deposit rate. anna: you talk about how the bank of england could be entering into a rate hike in territory. when do you think that will happen? some economists have suggested they will keep a lid on wages.

that means the bank of england is way behind the fed. the fed has raised rates and i think that has paved the way for the bank of england. there are lots of things in the u.k. economy that are ticking boxes. we have seen wage growth coming out of the market. unemployment is down. we are ticking lots of boxes. 3%k carney has asked for a wage growth target out of the u.k. markets are expecting a rate hike at the end of this year, at the beginning of 2016. anna: from the market perspective, will a make sense to have the brexit vote dealt with? that makes sense, but

whether it happens, we have a lot of uncertainty floating around the brexit vote. we don't know what it would look like if it came into effect. it would be great to get these things out of the way before hand, but i would be surprised if the bank of england holds off just because of the brexit. anna: thank you, alexander dryden. up next, a not so happy christmas for tesco. we discussed what the season holds in store. ♪

anna: welcome back, you are watching "on the move." nejra: china's leaders have signaled they will do more to boost growth. monetary policy must be made more flexible and fiscal policy more forceful. this came at the end of the central economic work conference. we get the rate decision from the turkish. bloombergurveyed by are expecting half a percentage point hike. has placed 11 commercial satellites in orbit before returning the booster to earth. it was guided to a soft landing at cape canaveral. for more on these stories and

others, go to the bloomberg terminal and bloomberg.com. anna: tesco's ceo dave lewis is ending his first full geayheaear that the helm. it is predicted that sales will fall over christmas by 3%. good morning, sam. how important is this christmas then for dave lewis? he has been there a little while now to try and turn around the business. sam: it is important. the share prices hit an 18 year low. that is bad news for dave lewis. he needs to restore a bit of confidence around tesco. the spreads on the company bonds are rising as well. about building faith back into his recovery plan. christmas will be a great test of that because this, in its simplest form, is predicated on getting more people to buy more

things from tesco. anna: as far as that magnifying glass goes, what is it that tesco has been trying to do? sam: they have been putting price credentials and quality. in terms of quality, the idea is to get the idea across that they offer discounts. they say this will be the biggest food tasting or free sampling in u.k. retail history. there will be 2.6 million samples across their stores. that will be something like duck eclairs. anna: i always think of those as a sweet dish. sam: no. anna: i learn something new every day. sam: discounts can't quite match that kind of thing. a push and, but they have repriced what they had last year.

that is knocking down the price of five different vegetables. 25 cheaper than they were last year. anna: they cannot stop talking about the quality of their bubbles. tesco016 the better for than the previous year? sam: it is fair to say we should not expect any dramatic improvement. grocery prices are falling due to lower commodity prices. the are trying to narrow that gap on price to the discounts. they are running faster and faster to stand still. they are still expanding pretty rapidly aunt opening stores up and down the country. there is one more sort of problem for tesco. set to living wages is come in next year and that will affect them much more than anyone else as the country's

largest employer. anna: up next, the business of banking. we will look at what is in store for the biggest blunders of 2016. ndresest blundele of 2016. ♪

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sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. anna: a lot of things are winding down or the holidays. 100 is down 6/10 of 1%. picture of the a

equity markets. caroline: one of the biggest movers is a relatively small stock. it is usg people. , because thater is the premium. just shy of the premium being offered by recruit holdings of japan. they are offering 1.4 2 billion euros. offering a 31% premium helps send the stock price higher. look up for the likes of adeco. performers onding the stoxx 600 today. this is the second largest ranch french bank. strength in its balance sheet. strength in terms of capital and investors like that. credit agricole goes higher.

actelion. does it be ikely to see available for patients in the u.s. as early as january. thank you, caroline. we have breaking news from the banking sector. thedeutsche bank is set tally of suspect russia trades billion.h $108 the tally of suspect russia trades is set to be at $10 billion. they have identified many suspicious transactions, in addition to the $6 billion in

mirror trades. it just so happens that we are going to talk thinking now. the performance of eu banks should stem around dividend payout plans. let's find out more. joins us on set. thank you for joining us. just to tie up a loose and on deutsche bank, made turn out to be of a material nature. they are trying to identify some suspect russia trades, something we have known about for a while. jonathan: litigation is not going away. if you look at some of the banks that have underperformed this year, it is the unknown quantity that continues. you said, this has been well flagged. it is not necessarily news.

until you get to the bottom, it is hard to put in ua number on it. anna: what are the key themes for 2016 when you to watch for? 2015 is a guide for 2016. we look at things that have begun to address capital concerns ahead of market expectations. problemsh capital stand a chance of being f lagged. the reason we are focusing on dividends is for a couple reasons. one, it is more relevant. most people of gotten through the 10% level. you have got swedish banks over 20% still saying we're not sure if we are there to get. what you are allowed to payout

is very informative of what the local regulator is saying. banks will have to add to their provisions. us, for some of us were not up today on the latest accounting regulations. some banks have quite strong capital rate, because some banks will be told they o provide more. anna: the layer of regulation is incredibly complex. jonathan: the difficulty is harmonizing it across different countries. spain vs. italy. you can't do it.

it is difficult. that will be a drag for some banks. some having to make conclusions or estimates around these .hings, like the stress tests jonathan: we have seen a few backwards steps. who performs well and who does not? if you look at the sell side, on everything is trading between eight and 13 times. everything is set for another year of stock banking. it will be a capital restructuring story. some of them will come through, but interest margins and pressures on fees and commissions, that doesn't go away. anna: what about the extension

of qe? what will that mean for the banks? i guess you are talking about whether the ecb does more. jonathan:w we have a couple things. we might see more banks charging for deposits and accounts. competition will get tougher. the focus on fees increases. none of these things are good for margins. the other thing we have got is the tltro. some of these things will have to be repaid in september. we have $500 billion in excess cash part with the ecb. anna: they were meant to lend it out into the economy? jonathan: they were given two years not to. look at the bond yields. anna: thank you, jonathan.

bloomberg intelligence, jonathan tice. up next, turkey decides if we look at an interest rate decision. istanbul forn that, next. ♪

anna: welcome back, you are watching "on the move."

nejra: shares in the mcdonald's japanese subsidiary have fallen the most in five years. japanese arm has struggled from a series of food scandals. deutsche bank has tallied suspect russia trades said to total $10 billion. they will receive the internal review in september. has not proved enough profit for many investors. one analyst told us people are asking themselves what they own the stock for. beeneo, bob iger, has talking up the franchise. bob iger: when you the most important thing we had to do was make good films, starting with

this one. it was always going to represent more than just the movie and movie business. as we look ahead, there is a lot starctivity that is " sta wars" related. ceo bobhat was disney iger. for more on at these stories and others, go to the bloomberg terminal and bloomberg.com. anna: turkey announces its latest rate decision late today. the central bank governors says it is reasonable to expect a rise after fed left off. let's speak to constantine in istanbul. expecting today, given what the central bank has been communicating? the market expects the central bank to raise rates today. he central bank had signaled in august it would begin

simplifying its monetary policy framework, moving away from its multi-rate regime towards a single rate. it would begin this process once the fed had hikes. once the fed interest rate increase is out of the way, attentions turn to the turkish central bank. the media forecast shows the market expects a 50 basis point increase. a 25 basis point increase for the overnight. anna: what about the politics here? are we expecting to see a fine show of central banking independence? there has been a lot of talk about pressure piled on the central bank by the government who may not be as keen on the centrarate hike? constantine: there has been a lot of pressure from politicians to keep interest rates low and boost investment in the country. last week, the president said

the central bank should look for an opportunity to cut rates. there is definitely pressure to keep interest rates low. it is worth noting that even if the central bank increases rates they, they can keep average cost of funding unchanged by providing liquidity. the market will be looking for those details as well. anna: thank you, constantine. he joins us there from istanbul. let's welcome tom levinsohn. we are talking about the turkish challenge. good morning to you, tom. they are dealing with all kinds of global headwinds. this is another currency that has been dealing with the fallout of global flows in 2015.

there must be many inputs to your calculations. how much of those are based on the oil price. tom: the oil price is the overbearing determinant of where the ruble is. the ruble stands out. we think the story is well priced in terms of the negatives and may hold potential upside for the ruble, we can see there is no durable recovery. -- i i expect one currency spoke to one currency analyst who said there are negatives from the weakness in the oil price, but there is a fundamental restructuring story going on with the russian economy trying to move away from oil. is that something that does not materialize? tom: i think the diversification of oil is a long-term story. there will be limited progress

so far. when you talk about the outlook for next year and the many risks in the world, many worry about the hike cycle in the u.s. russialook at constructively and consider what it has been through in the last 18 months. there have been huge capital outflows owing to a domestic situation. to ruble is desensitized what is going on in the u.s. anna: it can be very volatile, can't it, the ruble? we saw a big move of 17% in of the ruble. this can be a volatile time of year. tom: this is exactly one year from the "perfect storm." sanctions were strong, the central bank was moving from a managed currency to a flexible currency, there was huge

confusion, the population demand for dollars was high. there was a lot of concern, but the ruble is different. it has moved to a flexible currency. it allows for the system to adjust for what is going on externally. from where we stand, russia is no longer the most volatile currency in the world. now, it has been caught up by the likes of the turkish lira and the south african rand. anna: do you think things are structurally changed since last year in terms of the things that pushed the ruble around? tom: i think we are in a very different situation. there are still downside risks for the ruble. the drivers of the ruble are very different, mainly the oil prices. there is no longer the concern about where this story might and. -- where the story might end.

and temple will everybody anticipate and judge the decisions. this year has been about credibility and rebuilding for the central bank, proving itself as a targeter. it wants to establish it credentials. the market is beginning to come up around to the idea of that it is doing the right thing. it is a long-term story. anna: thank you, tom levinsohn. up next, what has been the most monumental year in the currency markets of 2015. we choose between them. ♪

anna: welcome back, you are watching "on the move." first up, we get a rate decision from turkey. then we get a gdp reading from the u.s. from the recent quarter. later on, we get u.s. existing home sales. coastereen a roller year and for exchange markets and the valuations reshaping currencies. richard jones joins us.

is still with us. richard, good to see you again. i know the answer to this because we spoke at 6:45 this morning, but what was you must shocking currency move of this year? when the year began with the massive move in the swiss franc, that set a tone for what we would see this year and stands out for me as the most shocking move. anna: tom, dealing with headaches disappearing -- dealing with pegs disappearing is something we had to deal with. is there any good way to lose a peg? you can't really telegraph it ahead of time. tom: in the case of russia, they had long signaled that they plan to move to a flexible currency regime. it was forced to do so a couple

months early. by definition, most always the shift to a more flexible currency comes because of a pressure. in a case of many of the cis countries, the case has been the folly oil price -- the fall of the oil price. anna: could the swiss central bank have been given a few more hints ahead of time? a few days before the decision they were talking about being committed to the peg. swissrd: the euro- floor seems like an involuntary part of the swiss monetary policy. we had a massive move. just a few days before that, they said it was an important part of their monetary policy and approach. i think, the way it panned out, i am not sure they could have

acted much differently. qe to takeb effect, they did not want to be the last resort. they put themselves in a difficult situation, but i am not sure they could've acted differently. anna: this was one of the slower burn moves from last year. wasweakness of the euro part of this. 12% in 2015.down when we were talking earlier, it is one of those. if you want to judge ecb policy but the metric of the currency, trading dollar was

$1.48 and we are now at $1.10. for them, it is not necessarily a job done, but i think they can stand back and assess the situation and know there is more they can do if they need to. i think at current levels they are probably pretty comfortable. anna: we mentioned the peg currencies. do you, we have seen this in kazakhstan and argentina. do you think there are more that will fall in 2016? as soon as we saw the swiss one going, people looked for other pegs that would fall. tom: we have seen a big flushing out of those managed currency regimes. that have been because fx reserves had fallen so sharply that those countries felt had no other option. if you are looking at the oil price, most people think new

lows in the early part of next year and then a rebound. if oil prices remain low, the attention will turn to some of those gulf countries. they are already running big deficits and the pressure is on them. as long as you have stress in the financial system, a managed currency regime is difficult. anna: you managed the oil price. that is a key part of the fed conversation going into next year. whether they will manage to generate the inflation they are intending. rd: it is a concern for the fed, but a more pointed concern for central banks like the bank ecb.gland adnd the if you get headline inflation in this country near zero, the bank of england will have a very hard time raising rates when carney is writing letters to osborne asking why the inflation rate is

so far below target. anna: thank you both, very much. stay with bloomberg television. "the pulse" is up next. you with that team. ♪ bring your family and friends together

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>> told the fed. turkey central-bank is following yellen's lead. economists see a hike today. [cheering] leap for elon musk. spacex pulls off a vertical touchdown, bringing