anna: welcome to "on the move." 7:30 in london, and we are counting down to the european open. i'm caroline hyde, here is your morning brief. china intervenes. the state steps in to stabilize the yuan, the risk aversion remains. oil grinds lower as crude hits 12 year lows. will we see wti dip below $30 for the first time since 2003? we will speak to the new governor of the ecb in his first interview since taking the role.

welcome to "on the move." let's get first of all right into the first word news with hans nichols. hans: thank you. the cost for banks the yuan surges to a fresh record amid speculation of intervention by the central bank. jump climbed to .6.2% meanwhile, the people's bank of china is said to have repeatedly intervened in the offshore yuan markets and yesterday. according to people familiar with the matter, the central bank has been cracking down on speculators, in a move aimed at maintaining a stable currency . it narrows the onshore and offshore yuan rate difference. oil has extended declines for

the lowest close in more than 12 months, following a 12.3% slide on monday, before u.s. government data, forecast to show crude expanding. caroline: thank you very much. less than half an hour until the european open. let's dig into where the markets are running themselves up. the script is pretty much the same. oil trading lower, china intervening. we have a real market view on risk aversion. dax off by one half a percentage point. we did dip lower, and the u.s. just hit the green yesterday, as they managed to see some companies driving higher, but overall they should be going down today. many futures are off by 5/10 of 1%, so clearly money coming out

of the less safe, the riskier assets coming out of equities, likely to be dipping their toes and the havens. gold is trading higher, the yen continuing to drive higher. that ise, is it oil wagging the tail? 2.5%, sube down by $31. could we get as low as $20? could it all be because of dollar strength, the u.s. dollar up against the rand? the emerging market is feeling the pain in the stress of the south african rand, at record lows again. there you have a picture being painted of risk aversion, but let's talk exclusives. let's talk about one million's an's view. caroline connan has a fantastic

excuses. away.ne, take it a verye: yes, it's special day here at the banque de france with a special symposium to say goodbye to the former governor, who was heading it for the past 12 years. eitherppy to be joined the man who has replaced him for the past three months, the former executive now governor. good morning. >> good morning, caroline. caroline: you have become governor at a very special time. we have all this talk that the european economy, and an ultralow interest rate -- how concerned are you in the ultra low interest rate environment? >> as we said, we are here today to say farewell to a man who

delivered an impressive achievement as the governor of the banque de france. willery pleased that they be the center of the monetary world, and we will focus on this challenge of ultralow interest rates. if i take only the french -year interest rates were around 6% 20 years ago, around 4% 12 years ago, and less than 1% today. we will be discussing the general phenomenon, the causes that are cyclical, but there are also structural causes, probably the demography, the aging of the population, rising inequality, lower investment rate, and maybe a shift to less risky assets. but the jury is still out.

if the challenge for central banks, due to the so-called the banks have central shown that they are still in capacity of acting, the lower bond is probably lower than zero, and we develop so-called unconventional monetary policies. caroline: let's talk about this. you have become governor at a time when the ecb has given unprecedented stimulus. despite that, the growth is still lagging in europe, compared with other parts of the world. we are also seeing inflation well below the ecb's target of 2%. the last inflation number we had was 0.2% in december. what more can the ecb do? can it cut the deposit rate further, or buy concrete bonds? >> first, if we look at the

eurozone economy, it is picking up. we had a growth of 1.5% last year, and we expect 1.7% this year. inflation remains too low, it's true, but facing the situation, we have been active and effective. active, look at the decisions of december 3 last year. we decreased interest rates at -.3%, and we expanded our asset purchase programs to march 17. we said we would reinvesting principal. we have been very active and it is effective. converging studies that this policy will bring about half a percentage point of additional inflation this year and almost the same for growth. for the future, let us first look at economic data.

this is the most important point. if needed, and i stress the "if," we have the tools in capacity of action. caroline: are these solutions? >> they are on the table. we use them in the past. the first let us look at economic data. caroline: finally, how concerned are you that france is lagging terms ofs peers in economic growth and reform? >> the french economy is recovering with a growth at 1.1% 2015 and expected at 1.4% for this year. but it is weaker than in the eurozone average. some reforms have been implemented for the labor market and labor costs, the so-called responsibility pack. macro ask for increasing

competition and services. but it must go further. but if you look at the unemployment rate in france, it is above 10%, which is much too high. france doesn't lack strength, if you look at its demography. labor productivity is high, strong industrial champions, a strong banking sector. up, and we catch must accelerate reforms in order to reduce unemployment. caroline: do you think more stimulus is needed to catch up? >> this doesn't refer to monetary stimulus, which is a different story. this refers also to the need for structural reforms. monetary policy cannot be the only game in town. caroline: mr. francois villeroy, the new governor of the banque de france, joining me live from the banque de france in paris

for this special symposium. back to you. caroline: caroline: caroline connan, a great exclusive. my take away was that inflation is too low, but they have been butve and effective, monetary policy is not the only game in town. great there. up next, let's talk china. let's talk a crisis. we get a view of why the china markets ar may not be supported by fundamentals. that is coming on a day where we see the chinese once again intervene for the yuan. ♪

caroline: welcome back to "on the move." almost 50 minutes to the opening of trading, with futures picking up a little bit but still down across the board. so much business to catch up on. let's hear it in berlin. hans: thank you, caroline.

christmas revenues met analyst estimates on strength in the consumer electronics unit. 1.5% to 17.1ned billion euros through december. that matched the average estimates compiled by bloomberg. -- itincide failed reported a net loss of $.39 per share due to falling aluminum prices that impacted cost-cutting efforts. but profit excluding one-time items related to closures and taxes was four cents per share, helped by rising demand for aircraft parts. sap reported fourth-quarter sales at top analyst estimates. revenue rose 16% at 6.3 5 billion euros as businesses are deciding on their latest flagship software. that is your bloomberg business

flash. caroline: hans nichols, thank you. it's time for your morning must-read, and i have a great one. it's in bloomberg intelligence in a piece called "what crisis?" slump. the china market he states that, no, china is not collapsing, no, china's market slump doesn't mean the data is fake, and no, china is not plunging into financial crisis. it's a great read, outlining some of the myths, hyperactivity in the market, and some of the key truths surrounding chinese market volatility. such a great read. it seems as though china once again intervened to try to support the yuan, particularly offshore. we are seeing the cost of

borrowing yuan spiking higher. we will get into that more now with our guest, the ceo of asset management. talk to me. crisis? no crisis? is the market right to be selling off in this capacity? >> it seems to be very aggressive, what's going on in china and the old markets. china is slowing down, it is not a meltdown. we have domestic economy is looking quite robust. there are a lot of things going on that are quite positive, if you can live through the devaluation process. caroline: what positives to be receiving? being in the imf currency basket is a positive. the devaluing is a positive. thirdly, bond issuances through the european market is a positive. fourthly, exchange connects linking the hong kong market with the mainland market.

it is in the market trading at -- what? 12 gdp growth, 7.2%? obviously gdp numbers over 10 trillion per year. this is a very strong economy that is going through a significant slowdown, but this isn't a meltdown. in the longer term, when you strip out the trading, china will be a good place to be. caroline: but not yet? if you are looking at assets currently available in china, you talk about the exchange happening, the investment going from mainland to hong kong, and it seems most mainland investors are piling into hong kong asset to try and get out of the yuan they see depreciating. >> it's going to continue to depreciate. so there is a risk that there will be a larger depreciation, that the issue here is that is paid to the wrong currency. japan and the rest of asia and europe are its biggest trading

partner, not the u.s. but i think what we are seeing at the moment is obviously uncertainty around global growth, which is still quite robust at 2.9%. let's keep it in perspective. concerns about oil prices are declining, but the reality is you have significant growth, reasonable valuation, a much better long-term picture, and we suspect a lot of the volatility we are seeing is due to fast many traders. caroline: that volatility is spilling into europe. we are seeing the worst start for u.s. stocks ever in the beginning of the year. how can we separate this volatility away from what's happening to your portfolio right now? >> you can't separate it. you just have to live through it. volatilities stay, and have been quite difficult. the market is down 6% year to date already. last year they were essentially flat, marginally positive.

it hasn't been a great environment. in 2016, and are the thing to remember is what drives price appreciation. it's earnings. it's not gdp growth, it's not slow down, its earnings. whilst we have a few revenue misses, a lot of the issues from last quarter were driven by a stronger dollar and a slowdown in china. that's not old news. we're expecting a much more positive q4, and price-to-earnings ratios are what drive share prices, not gdp price numbers. caroline: i want to dig into those next, but first talk to me about oil. we say that the global growth isn't doing as bad as expected, --ut whereor oil do you see it stabilizing? >> we think it will stabilize around these levels. the reason we have seen a

decline as much as we have done is because of the strength in the u.s. dollar. the dollar is incredibly overvalued. if you look at ppp levels, if you look at euro-dollar, ppp levels are around 131. the euro is some 20% undervalued versus the dollar. if you look at the yen, it is a very similar situation. strengthensr significantly, you can start to $30, butve toward sub it is being driven by currency moves, not by smart supply and demand financials. from our perspective, oil will stay in the order of $30 to $35. if it goes below $30, it is fast money. if it goes above it is fast money. we're unlikely to see a significant change in policy going forward. companies,for oil but good for the broader

economy, and it will go through to earnings numbers. and earning numbers drive share price appreciation. man who previously managed the money of the billionaires at goldman sachs, now the ceo of asset management. now just a quick live shot of a rather beautiful morning here in london. currently we are seeing the ftse 100 futures going down for the start of the market trading. up next, it is all about retail. ♪

caroline: 7:54 in london, 8:54 in paris. here is all we are watching ahead of the open. stocks are coming off of their lows, entering the green for the cac 40 and potentially the dax, but i want you to look out for some new stocks today, because we have retailers that could jump. weekgood news, after a 19

-- and also keep an eye on morrison's, another key retailer for the united kingdom. for the first time in four years, we are seeing management post positive growth on a like for like sales basis. it?ings -- is this is this what will stop the rock? >> we are expecting q4 earnings numbers to be quite reasonable. q3 was in great -- a lot of revenue misses. but earnings equals revenues minus cost, and a lot of big companies are managing their costs very effectively. we are expecting all the negative views around the strong dollar and slowdown in growth in china to be priced in to the q3 numbers, so q4 should be more encouraging. the worry about q4 is sentiment, consumer sentiment in particular. we know that the christmas period was in great in the u.k., despite some of the retail numbers. in the u.s., it looks like it

may be more positive because unemployment is so good. it's also an election year. caroline: he stays with us. coming up, the market open. futures opening, trading flat. ♪

caroline: good morning and welcome to "on the move." we are live in london. we are moments away from the start of european trading. here is your morning brief. china intervenes. the state steps in to stabilize the yuan, but risk aversion remains. oil grinds lower, crude hitting fresh 12 year lows. will we see wti different below $30 for the first time since 2003? and the banque de france governor tells us in a bloomberg exclusive that central banks still have the capacity to act, and inflation remains too low. let's have a look at what you should be looking at the open. 15 seconds from the open,

futures trading pretty flat. clearly, risk aversion in china moves. we are seeing support for the yuan again in offshore trading, spiking of the cost of borrowing. it has managed to put some floor on the chinese stocks, in the european stocks are heading for the low start to the day. let's get straight out to mark barton to see how the european equities are opening. mark: the sixth decline in seven sessions. lower, francetad opening higher, the eighth decline in nine sessions for the stoxx 600. the stoxx 600 is now trading at its lowest level since september, having sunk by 7% in 2016 ahead of today's session. 666 billion euros of value wiped off of the european stocks. you can see it is a mixed start.

today is once agains overshadowed by events in china, the shanghai composite wavering between gains and losses. senior government officials stepping up their rhetoric in support of the yuan. there was little changed for a third consecutive day. the offshore yuan in hong kong rallied as much as .7%, raising the discount for the onshore rate to ward off speculators by intervening. money market rates in hong kong surged more than five times the previous high seen on monday. that is the early start. want to show you what's happening to a couple classes that are really taking our imagination. crude oil is down 2.7% today, $30.41 earlier, the lowest level since december 2003, bringing its daily with losses to seven, the worst run

2014.july, two german companies and want to tell you about, starting with metro sap and william morrison. no opening prices as of yet. william morrison, the fourth biggest supermarket chain, unexpectedly snapped a four-year record of declining sales. sap, the business software company, reported fourth-quarter sales of profits that beat analyst expectations. finally, metro reporting christmas revenue that met expectations. no opening prices for those as of yet, so let's quickly finish with the japanese currency, which once again is a haven currency. what's fascinating about the yen is when you look at its relative strength index, the dollar has fallen below 30 for the fifth consecutive day. any charters out there will tell you any figure below 30 means

an asset is oversold, which means it could be time for traders to start buying the dollar the end. stocks falling for the six-day in seven. caroline: seven where they had been lower in asia, outlining how much of a haven there is in gold and money coming out of japanese stocks. let's get over to david ingles in hong kong to have a check on asian trading. david: asian equity markets did better today compared to monday, which is often not the most flattering of comparisons, but these losses weren't as steep. they played a bit of catch up, and felt a very sharp loss. has really been off all this chaos, by the traded as much stronger levels. apart from that there was a bit more risk appetite.

both the big funds and retail investors are very cautious. was aside, the big story further intervention by the pboc in the offshore space. sources told bloomberg that they to squeeze this gap between the onshore and offshore rate, which disappeared for the first time in months. the problem, though, reappeared in the money market. the cost to borrow within th rei of 67%to an average overnight. in other words, this intervention has really dressed up the price of the renminbi, possibly making it expensive. we will continue to track that. it is far from over, but there is a sense of calm, although you could make the argument that it is slightly artificial.

that was another day and another attempt by chinese policymakers to stabilize markets. now the central bank has intervened in hong kong's offshore markets, sending loans soaring. let's get out to our asian emerging-market affects other. is reportingerg that china is now intervening in the offshore yuan market again. why remind us is it doing this? is it to stabilize and reduce the desire to stop shorting the yuan? caroline, i hate to say i told you so, but i told you so. last week, right here, i said that the only reason why china is creating all this market turmoil was to narrow the gap between the offshore in the offshore rates, in they kind of achieved that today.

the whole reason why they have done this is it's clear from the start they were trying to weaken the onshore yuan and push up the offshore yuan. trying to create some sort of clarity, that gets rid of people speculating on the currency. there were lots of people buying the yuan in hong kong, shipping it to shanghai, and selling it at a more expensive rate. they were making a charge profit from that. that is not the kind of money the pboc wants. they are trying to weed out speculators, which has become almost impossible. caroline: robin, impossible to speculate, impossible to borrow, achieved -- what has it achieved, after all this market turmoil? it seems to have completely flummoxed the market. >> you hit the nail on the head,

caroline. they wanted to achieve parity with offshore and onshore rates. what they have achieved instead is complete confusion. people who started trusting the pboc over the past four months, that they mean what they say, that they will allow market forces to make policy decisions, that has pretty much gone out of the window. what we see now is that the pboc will give market forces a greater say only when it suits the pboc, when it wants to do something that it thanks is at its own interest. it will not allow market forces to come away. whether it has an impact or ony, in hong kong, global currency commodities stock markets. it will do what it is going to do, and that will make it really difficult to bet on the currency either way in the short-term. caroline: so much for a free

market. robin spelling it all out, thank you so much. we love a bit of i told you so. let's check it on how the european markets have been open. some phenomenal moves in the retailers this morning. william morrison's beat analyst estimates, shares surging this morning. it is leading all the retailers hilar. devon's is also trading higher, morrison's up by 11%. the biggest move since 2004 for the fourth biggest supermarket. why? because for the first time in four years they managed to post positive like for like sales, the chief executive showed off what he is made of. another retailer also beat analyst estimates and posted a 1.9% like for like increase, up 15% this morning, the biggest move since 2009. retailers are putting their

money where their mouth is. let's look to earnings futures and where we see the numbers going and fundamentals here in europe. yogi is still with us. you are overweight with european stocks. >> yes. it's a trade relative to the u.s. and japan and other regions as well. the key thing about europe is that we are starting to see reasonable gdp growth, unemployment seems to be controlled, hovering around 10% or lower depending on the region. but the key thing here is that the euro is significantly undervalued. 12,ations around this is a good entry point for european equities. a lot of the big names of global

exposure and it is hard to buy domestic exposure. global exposure is a play on global growth, better than the market is pricing with all the news we have seen coming out of china. caroline: let's talk industry groups. you say exporters and i think autos. looking at the chinese auto numbers that came out, and it is the slowest pace of growth in years. should we be betting on the german export industries, or are there others? >> there are lots of industry groups you can hone in on. the first one is financials. as interest rates start to go up, banks start to make money. they are already trading at very low valuations, so the financial sector across the board looks quite interesting. we also like consumer discretionaries, and that is a play on domestic growth, particularly in the u.s.. european equities is purely evaluation story. -- purely a valuation story. if sentiment improves in europe,

they will benefit and do well. chinese growth, obviously it is slowing. you can't expect the numbers to continue to grow at 7% year on year forever. you will see a pullback. but there are other reasons that will do well at the global economy slowly recovering. caroline: talk to me about the united kingdom. we have u.k. retailers surging today, didn't fare as badly as we thought. industrial production, manufacturing, china suddenly looking favorable if you are an exporter. what is your outlet? >> the u.k. looks ok. the pmi data is quite negative, -.8%. you also have a meeting on tuesday. don't expect any rate hikes until september if not later, maybe none next year. the interesting thing about the uk's that sterling has depreciated quite significantly. it was significantly overvalued, ppp levels at 143.

that is fair value. you haveoaching this, a currency that is fairly valued. the big issue with the u.k. is it's really hard to buy u.k. domestic exposure. if you look at the ftse 100 constituents, they are all massive international companies with significant u.s. market share, european market share. it's a hard market to play. but overall, manufacturing sentiment don't expect any rate hikes. it is a market that will be somewhere between the u.s. and europe. we still prefer mainland europe over the u.k. caroline: stick with the eurozone. thank you very much. up next, we will be getting into the majors on the ftse, with the impact of oil. floor?t hit that $30 could opec call another meeting? that is coming up after the break. ♪

caroline: welcome back to "on the move." we are seeing green on the screens when it comes to stock trading in europe, up 5/10 of 1% on the dax. let's dig into the business numbers and what happened in asian trading with hans nichols in berlin. hans: thank you, caroline. the cost for banks borrowing in hong kong surged to a fresh record amid speculation on

currency intervention by the central bank is draining the supply of the currency. overnight it climbed 53 percentage points to 66.82%. meanwhile, the people's bank of china is said to have repeatedly intervened in the offshore you want market since yesterday. according to people familiar but, the shank -- people familiar with the matter, the shanghai has been working to maintain a stable currency and maintain arbitrage. hillary clinton is calling for a 4% tax surcharge on americans making more than $5 million per year. it is a move that would lead to the highest income tax rate in 30 years. wouldx rate on wages is a apply to just one 50th of 1% of americans. caroline? caroline: thank you. let's turn our attention to what

always takes our attention -- oil. extending declines from the lowest close in more than 12 years. we are looking at the stoxx 600, oil and gas once again underperforming today. are is as u.s. stockpiles set to expand the midst the glut. ou managingr editor for energy ins us.modities jone oil will be $30 to $35. at the moment, in malaysia -- petroleum nationale coming out saying we have $30. critical lower? -- could it go lower? >> it is possible. no one is calling the bottom of this market and prices are falling fast, down 10% over the last few days. we're less than one dollar away from that. caroline: no one is calling a bottom. yogi, you are almost calling a bottom. >> i think we are pretty much

there. it does traded below $30, it will be fast money and currency driven. that is not based on fundamentals. when you are investing on the long-term you have to based on fundamentals, not getting caught up in short-term noise and volatility. what the fast money is doing -- if you get down to the morgan stanley levels, it is purely based on the dollar traded with a dollar that is already significantly overvalued. caroline: let's dig into fundamentals. talk to me about supply. who is going to be the first to start pulling back? where are we going to start seeing -- >> the shale part of the industry is hurting a lot. we expect to see 100,000 barrels per day disappear in february alone. fast enoughpening to clear these very large stockpiles that have built up. it's a race between falling supply and stockpiles, but these

prices will accelerate, and we will see more oil come out faster. caroline: could we see an overshoot, if we suddenly sees supplyall -- see full? >> it is possible. caroline: it seems extreme. >> i don't know. you are seeing a lot of offshore trading. people buying in the 20's or know, there is a lot of volatility, people positioning themselves. >> the market is having a massive impact on oil trading. it's another market where retail investors and it's too to investors can get access to oil. soody can take delivery, it's a futures driven market. the problem with the etf market is fast money in, fast money out. if you look at data at the beginning of the year, lots of

funny coming out but it is not coming back in. you have arspective, lot of dynamics that are artificially pushing prices down, adding to volatility. really, all that has happened is opec has turned around and increased the production to 33 million to barrels per day. improving,is slowly which should help the demand cycle. it's hard to see a fundamental reason. >> all i would say is that what has changed is the outlook for china. the oil market has been very supply driven over last year, so people are getting a little nervous about china. that's adding to the bearish mood. caroline: and hedge funds keep putting those on. will kennedy. yogi, fantastic to have you on. their views on where oil could go.

thank you very much, gentleman. we are talking retail. was it a good christmas in germany? metro seems to think it was. we will run to the members of the german retailer looking to return to growth. stick with us. ♪

caroline: welcome back to "on the move." as the sunlight spills onto the city of london, the ftse 100 is looking rosy, too.

it is being driven higher by retailers today. wn morrison's is up almost 9%, the biggest move for this retailer since 2004. that is as the new chief executive manages to turn things around, and we see the first like for like increase in sales in four years. ies for other retailers as they posted beat when it comes to earnings. it is having its best day since 2009. metro shares in germany, we will keep an eye on them. the german retailer just that christmas revenue estimates. let's go over to our international correspondent, hans nichols, in berlin. take us through these numbers. it was still a deterioration, but nevertheless beating estimates. hans: yeah. driven by

electronics -- i think 1.5% it was down for the last quarter, but that gives you a revenue of $17.1 billion, and they expect to return to profit this year. a lot of this was driven by stronger consumer sales than expected, at least in the german market, not the overall german electronics market. here's for the ceo had to say. he says "metro had a very good christmas business, particularly in our domestic market." that media mark, those are two electronic stores. they were up 0.4%, down a little bit, and it came in less than expected. we have a company that wants to return to revenue and profit. they are shedding assets and trimming down. personally, i won't tell you which side of the ledger i contributed on -- i think i will. i went the other way. i didn't by many electronics. when you come down to berlin for your shopping tour, we will hit

the mall. easily more than just brands to you. caroline: [laughter] it. feel intimate with tell us, is the long-term vision of the chief executive -- know, this gives us an indication that it is. this is a company that has had some challenges. they are trying to become slimmer, become a little bit more efficient. some of these conversations we have had, whether or not we are talking macro or what will happen with gdp in france or elsewhere, a lot of times we come back to the german consumer. the german consumer has a price on the upside. not that much, but consumer confidence in germany is very strong. caroline: the share prices picking up 2.8%. hans nichols, thank you very much. in germany not quite as populous as the retail

numbers in the u.k. keep your eye on it. up next, we are turning our attention to china. the boss for his view. ♪

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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. francine: welcome back to "on the move." 30 minutes into the trading day where to check in on how the currencies are currently doing it -- doing. retail is driving high. up .9%. mitchell doing very good -- doing there -- metro doing very well. retailers and autos leading the charts. individual stock stores, given on nejra cehic. starting -- nejra: starting with morrison's.

the best former on the stoxx 600. shares have risen the most in 11 years. just over 9%. what is happened is we had a trading update in which the supermarket unexpectedly snapped four years of declines. rose as theyles had been expecting a 2% drop. the new executive officer started to stamp his authority on what was a struggling growth. since he took over in march, we have seen morrison add more workers and reduce prices further. the challenge has been to keep up with the growth of those discounts of supermarkets here k.the u k -- in the u , the companysap sales.d fourth-quarter

software, the preliminary results came ahead of schedule. they were split come out on january 22. as we can see, those shares up as well. tele-oil one of the worst performances on the stoxx 600 today here it -- today. both deep -- both the dti and brent down. caroline? caroline: we are going to be speaking about oil. a downturn for the start of the year. echore hedge funds feeling -- feeling? let's welcome. garage -- let's welcome here go -- let's welcome.

the garage. pierre: we need to let volatility plays course. the central bank intervening to manage a depreciation of more difficult difficult -- more difficult thing to achieve. we are just beginning with that process. it would be wise to reduce the risk exposure to that area, directly, before we understand the impact. that means watching the outflows from the capital side. we can have a clear picture the cousin the equities we are focusing on are going to be hostage to what is happening with the currency here it there are -- currency. there are conflicting policy adjustments.

the reserves that are used for buying back the currency. it is still very messy. it is not going to go away for a couple of months. caroline: when you see support like what we saw today, the liquidity trains, that is support for the yuan, is that likely for the long-term. can we get back to 2010 levels? unlikely. is not they got extremely powers to do the right thing. central banks when they really decide on a measure, they are usually winning. caroline: have a you really decided that's have a really decided? -- have a really decided? pierre: they have to medication challenge -- they have communication challenge. they have to make a decision to asian of thefix

ofce of the -- thick station the price of currency. people took any opportunity to go against it. it is too early to tell here it you can't discount the power that they've got to stabilize it . caroline: do you feel the economy we should not be worry about the fundamentals. out are trying to spell that china's economy is worse than expected. pierre: every time we have had an estimate, it has been revised down. that is going to continue. this is not a comment -- not a climate where juergen have economic growth. the still on the downside --

where you are going to have economic growth. it is still on the downside. if you look at equity markets of countries where there has been such a fight on the currency, huge powers on both sides, it is usually within the last you start reaping the benefits from an equity point of view. non-direction, you have massive amounts of discrepancy from one stock price to the other. from a never excellent point of view, you have to wait to be a look to form a judgment on who is wincing -- on who is winning the currency battle. caroline: what about oil? pierre: that is a critical question.

a very big risk that everybody is focusing on which is the supply. issue whichng a big is the demand. equation part of the is the chinese growth. the numbers are quite astounding. if you take a lower growth to 4% in china, you would probably use 30% to 40% of the additional demand. you can imagine the effect. if you think china is going down more than people expect, then you are going to see massive amounts of destruction for demand. definitely for oil. caroline: you try to work out

where to invest, what do you do at this junction? would you look to put your money when you have continuing downward trends in the commodity? pierre: they are commodities that are definitely cyclical. you can start taking a more constructive view. it is still early. they are going to it until there is stability. demandond leg of the structure the biggest was in vegas last week. extraordinary cars being talked about. the chevrolet volt. one is banned the last that's

when we spent the last six months very frustrated. nobody was talking about how much 10 electric vehicles displace and demand for oil. people still take -- still think it is not happening quickly enough. it is still going to be a minority. if you think the iea of the big oil companies, the amount of energy running from alternatives interest petition is very small within 20 years. that can only imply that electric vehicles are safe. we have to move on from saying it is a failure. chevy volt was presented with $145. i was reading in m.i.t. study from last year this time that was saying how cool it was that

we were now $300 per kilowatt hour. has a later, chevrolet budget car, $145. , a really any of us bad idea. it is moving mainstream. within five years you are going to have the budget option. that is good to take away a huge amount of oil demand. that is not factored into the markets. while we are focusing on the supply and the economic cyclicality effect on oil demand. maybe there's something completely different which is structurally. transport which is the easiest gain to be had. this is where to watch. if we go down to $20 per kilowatt hour -- $200 per kilowatt hour, then the adoption rate will become to be huge.

-- ofstake of adopting gradual adoption. if you make a budget, everybody's going to want to. -- want it. this is something to work on. how much can we take away from the demand because of alternative energy? caroline: we're been to be talking about all toes much more -- talking about autos much more. -- another apology from volkswagen as the chief executive speaks for the first time since the scandal broke. ♪

caroline: welcome back to on the move. let's keep an eye out on turkish stocks. he stumble 100 index just raising its earliest gain. the reason? reports of an exposure near a district of istanbul. at the moment, turks stocks trading flat, losing their game. gain.ing their

here's hans nichols. quarter jobsast 18% as a net loss of earning nine cent per-share -- loss of $.39 per share here it -- share. profit excluding -- taxes were four cents a share, held by rising demands. is poised tot man become the first chinese person to control a hollywood company. his group agreed to by legendary entertainment for $3.5 billion in cash. legendary production and coproductions include jurassic godzilla. knight and 16% to 6.3 5 billion euros for his latest

flagship software. caroline? caroline: hans nichols, thank you very much it china's -- very much. we spoke to manufacturers about the future of the market. -- american national into an the american international auto show in detroit. >> there is no question weirs -- there's no question that china is saying bumps in the road. >> today the yen is weak, tomorrow it can be stronger. disturbing.it it is important for us to understand that china cannot grow enormously every year. china is a more normal market. caroline: volkswagen's chief executive is in detroit apologizing for the emissions

scandal. he is holding critical meetings with government officials. let's bring back hans nichols. you have been all over this story. despite what is happened, he said u.s. is still core to the market. hans: when you look at how volkswagen got into this mess, because they wanted to play in the u.s. they wanted to get over that 10 million number. they wanted more market share in the states. they are moving market share in the states now. when we heard from the ceo, not only are going to introduce 20 new hybrid models by 2020. they are going to read -- meet with regulators. he seemed optimistic about the chances with an agreement with the epa. >> a lot of constructive discussions during the past couple of weeks. i suppose we have a good

solution package now. hans: four people familiar with the matter, here's what we think that solution is going to look like. foreign to 30,000 vehicles, they have a new catalytic converter -- 430,000 vehicles, they have a new catalytic converter. that will be a big step forward. about 50,000 vehicles, they are ofning the possibility buying those cars back from consumers and putting them on -- putting them on volkswagen's book. the latest numbers coming out of china. 26 point 4 million vehicles sold there. states at 17.5 million vehicles.

up-to-date with what is going on with volkswagen. thank you very much indeed. we going to check in with the turkish stock market. the depreciation of the lira at the moment. the market losing its gains. the first report from dha news agency there have been bomb blasts in istanbul. it is been reported in the cities touristic district. we understand police and and let's rust to the scene of explosions. rushedce and ambulance to the scene of explosions. china is set to intervene in the offshore yuan market. all coming up next. ♪

caroline: welcome back to on the move. a beautiful shot. oil and gas companies still lower as our miners. now let's have a look at what your day ahead involves, because the bank of france is holding a policy conference act with speakers, they include mark carney and christine lagarde. at 9:30, we will get u.k. industrial and manufacturing

production. tonight, president barack obama delivers his final state of the union address in washington, dc. course we have been talking about central-bank policy today, whether it be in china for the moves that are being made by the chinese and offshore yuan trading. we are talking more locally in bankclusive interview, the francois president villeroy de galhau said it is picking up. >> facing the situation, we have been to the euro system, active and effective. look at how decisions of december 3 last year, we discrete -- we decreased interest rates and we expanded

our asset purchase program's to march 17. we said we would reinvest. it is effective. let's bring in richard jones. richard, your takeaway from that? low.tion is too this race to the bottom. who can push down there? richard: there is an element of if you look at france and germany as the political core of europe. if you look at the economic data, they have to get destiny have two very different stories -- they have two very different stories. france, they have unemployment at a 20 year high. the pmi numbers are moving in a different directions --

different direction to german numbers. at the core of europe, you have a two speed europe. the implications is the ecb will act in a very defensive way. they will keep rates lower for longer. there is chances we could see more rate cuts this year. it will keep them very defensive. for the dollar, we are still getting calls for that. was the 1.10euro story against the dollar. they are comfortable with that. they don't want it falling off the cliff. if the inflation numbers do not pick up, they have left themselves more room to act. caroline: simon kennedy put out a great piece. talking about heavy central-bank is rushing to depreciate.

it is the long-term bet that china continues to depreciate. engaging as anre smoothing process to weaken the currency. they'll don't want to fall that's they don't want it falling off the side of a cliff. they will control over the process as much as they can. seeing --at we are this is why we are seeing what they're doing with the onshore versus the offshore. i suspect they want their currency to grind a little bit lower. caroline: that yen being overboard at the moment. great to have you on the show. pulse, we wille be talking to the investor and jim rogers, the ceo of intercontinental hotels group.

itscompany today opened 5000 hotel. alcoa beating analyst estimates. ♪ we live in a pick and choose world.

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caroline: bears beware. china steps up yuan intervention. one official says the currency is destined to fail. to increase production. knowledgeable, be worried and want the jim rogers bad news is coming in 2016. he joins us. ♪ welcome to "the pulse." i am francine