♪ manus: across the outer classes, we have it covered from bloomberg hq in london. here's what we are this next hour on bloomberg tv. as i ran crude hits the market, it hits a 12 year low. what the saudi's are saying. they are not concerned about the extra supply. the offshore yuan gains as china looks to curb the bearish fed. will it work? adidas stock surging on news home asis taking the ceo. can he restore growth to the german sportswear company? you're welcome. let's get straight to the markets desk. mark barton has everything needed to know.

i bet of reprieve. his stability the word -- his stability the word? mark: earlier we rose as much as 1%. isare a little change, which an improvement on the trend we have experienced in 2016, the worst ever start to year for global stock markets. earlier the stoxx 600 fell to its lowest level since december 2014 after dropping for a third consecutive week on friday it achieved the dubious distinction of entering a bear market. andgains now fallen by 10% 2016. it's a must a trillion euros trading in stocks 600 shares. it's about 50% greater than the 30 day average. that is interesting. the part to interesting fact is the fear index. europe's volatility indexes rising for third consecutive day. in 2016.by 59%

we are still below the august high of 14.8. i want to show you where the money is going on the currency market. notonce, it is actually going into the end. as you can see, the things have changed. the dollar is trading lower against the yen. majorthe best-performing local currency in 2016. earlier, we had china stabilizing the offshore and the onshore yuan. the people's bank of china strengthening the yuan. that boosted the dollar, push back the end. as you can see, the yen is rising and the dollar is falling against the japanese currency. this is the chart of all charts for 2016. the price of oil -- we fell as as $26 for brent crude.

not as low as we were earlier. international sanctions on iran have been lifted. country's deputy oil mr. says iran wants to raise shipments by half a million barrels a day and analysts are not quite so bullish. they say iran will only be able to increase oil production by 100 thousand barrels a day. 400,000 over the next six months. what matters are what hedge funds are saying that now. there have never been so bearish on wti, which for the record has fallen by 24% in 2016. what's his get to the big corporate story. you refer to it in your headlines. it refers to this company -- henkel and adidas. there are joined at the head today because one man is leaving henkel and joining adidas. he is the chief executive. he is surprisingly leaving henkel with shares down 5% and

joining adidas, up by 7.3%. he will be replacing as chief executive october 1, 2016. manus: the company and shareholders really appreciate what you're about to do with the company did. let's focus on oil. brent dipped below $28 a barrel. investors ismong that the lifting of iranian sections will worsen the oil but. a little bit of volatility in these crude markets throughout the church session. sandra potter is in dubai for us. -- samuel potter isn't the by for us. it is nice i think a shock that iran was going to come to the market with extra supply. if they can get that storage crude at and to the market quite quickly, the question is this -- what comes next, isn't? it?

samuel: that's absolutely correct as you heard mark say a minute ago. iranians have talked about releasing 500,000 are sure barrels onto the market in the coming days. later, they are even boosting that to half a million barrels per what they're going to add is an unknown factor of course. in an oversupplied global market, it can only be bad news, in particular for the opec members and for the markets i cover here in the dcc. people,hen we talk to there is concern. the swing producer society just has not thrown it and the tally up. there is no sign of it. what caught my eye is that the saudi oil minister is referring to mexico late in the 1990's. back in the 1990's, it is one of the saudi's in the non-opec producers did come together and they did affect supply. samuel: it's important to

remember that throughout this whole process that saudi has maintained production and even boosted it. very clearly committed to running their u.s. shell-based competitors out of business. it is the strategy they have chosen and will stick with. we have seen the government now preparing for lower oil prices for the longer term. they're cutting budgets, reining in spending. the saudi's have been quite open and quite honest. they are not going to blink first. manus: let's see what the next 24 hours brings, but where we actually managed to put some kind of base into these crude prices. say no potter in dubai, thank you very much. of turkeyminister will be meeting david cameron at the conference hosted by bank of america merrill lynch. he also sat down with guy johnson. here's part of that exclusive interview. challenging part is fast

now. year ofthe first political stability. in the last 12 years, we have had an election in two years. years, there four will be no election. andeclared reforms comprehensive consistent reform agenda. it is one months, three months, six months, one year reform agenda. this is a very big chance for us. 2016 will be at your of political stability. -- a year of political stability, economic stability, and growth. was 4%, which was the highest after china and india and the world economy. also, it's twice more than the emerging market growth. this momentum will continue.

i sure there will be a very positive year for us. guy: many of the markets have a concern that political stability when not come to pass because turkey is leaking -- looking to changes constitution. >> constitution is a reform agenda. but not a source of concern of hope. the existing constitution was in 1982by militaryjunta could you want to make it much more liberal, less restrictive, less detailed constitution based on human rights. make it on checks and balances and separations of powers. if you want to achieve constitutional reform, this will be one of the biggest reforms and turkish democracy. i met with opposition leaders immediately after i reform the government. they approached positively. the allorming it where

parties will bring one member, to members. source of new hope. whatever happens regarding this constitutional process, reform agenda continued without a break. an existing political economic stability will continue. is what we have hmet, the turkish trimester. listen to the prime minister from turkey, obviously a great message, talking about constitutional reform and that turkey is not looking in isolation, but the leader is under pressure. at turkey from the prism of risk, how do you look at it in the emerging market

space? ashok: it's probably toward the higher end of the risk spectrum. it is very important on capital. it is really high and not really correcting fast enough. havinge inflation difficulty coming down. impactsening lire inflation as well. they are stuck in this very negative phase right now where basically the credit outlook is looking at little bit on the negative side as opposed to the positive side. you got the global growth rate slowing down so the rest of the markets remain under pressure. you have got to fight away from emerging markets. you have funds liquidating emerging market access. any imported capital will have difficulty to finance its current income deficit. manus: two of our main stories this morning are about oil and iran and china.

if i look at oil, we had a brief despite there. we are trading at 28.83. money managers have doubled their commodities overall. this aggressive positioning and the commodities space and in the oil space. how do you look at it? we were below $20 at one juncture. screen atrent on the 92885. hurt ofu be joining the offshore's on this? this pressure is building. ashok: it's very difficult to call the bottom of the oil price. the reason for that is the margin or incremental buying has been the shapes of where we store oil and the strategic reserves are being increased in the u.s. and china. you can only buy certain faces. we haven't increase in supply

which the market is having trouble digesting. this is before the marginal producer stop producing. at this point in time, you cannot see anything positive due to even find a bottom in the oil price. to make matters worse, you got the global growth projected to be slowing led by the chinese slowdown. you look at all the emerging markets and how so much is connected to china. it's all slowing at the similar pace. it means the demand side is not picking up despite the falling price, which is a normal reaction you would've expected. manus: stay with me. we have to bring up a quick line on the positioning of the oil market. hedge funds raised their brent long positions by over 17.5 thousand. speculative bets that prices will rise if you just combined

rose by 200-2000. in the next half hour on the special bloomberg markets , speculators have been pushing the yuan sharply lower in offshore trading. what a reserve requirements set by the bank of china helped cut liquidity? it's a new game. id this announcing a new ceo that will take position later this year. is it a good move for the sportswear maker? with brands like nike and under armour. as theyoil sanctions were lifted in iran. while prices continue to tumble? ♪

manus: welcome back. "bloomberg markets." we're live from london. chinese stocks have found their footing today after an announcement that the country will require foreign banks that are engaged in offshore yuan trading to place reserved for the central banks. what does it mean for the economy? ah.'s ask ashok sh here we are. a new week and a new attempt to stabilize the yuan or save the yuan. we are asking foreign banks to raise the amount of deposits that they make at the pboc. is this enough to stabilize the yuan? we do not even know yet how much they will be doing. ashok: that's a very short-term move. it's to bring some temporary content market. the underlying problem is simple. you can see that in terms of the

way the foreign reserves are following. internally, china has continued to slow. there's a lot of money leaving the system simply because there are not enough investor ,pportunities or to speculate which is what the money is all about. the money continues to come out of china. inevitably, you have a currency under pressure. more importantly over the last two years, the chinese currency has actually become overvalued. become uncompetitive. we have seen the first round bring it down a little bit in terms of devaluation. that is another somewhat like an store for this year. this is preempting the forthcoming weakness and the land for the rest of the year. week from thest ubs, they were saying to me at some of the trillion dollars of our close to go. some trillion dollars of euros out to go.

do you challenge chang? ashok: there is a cost to every strategy they employ. if they do not devalue, then they will have manufacturing and that sport side remaining under pressure. experts from china to africa are down 40% on an annual basis. that is a similar picture going across the board to all commodity producing countries. china's exports are fully quite significantly. in aggregate, the chinese export will continue to remain under further pressure. that means the manufacturing side in china will remain under pressure which will bring it lower down. serviceoment, it's the side of the chinese economy holding the economy up. if real wages begin to stop growing, how fast will the services grow off? manus: many would say that's the

reality. we like numbers that bloomberg. tomorrow morning when i come in at three clock a.m., we will begin to look at some of the growth numbers in china. what are you going for? he consensus estimate the 6.9%. where would you call the when at the end of q1? you're looking for this year at probably a similar magnitude of devaluation as we had to last year. you're looking at high single digits. that's what you should be thinking about. in terms of the growth data coming out of china, we all have talked about the reliability of the data and so on. we look at all the coincident indicators like freight, transport, shipping volumes, so on. all those indicated on the manufacturing side that there is a severe slowdown in the process . manus: this is where the

discussion is on bloomberg.com. i tweeted out this morning the are overreacting and that sort of pandemonium in this regards to china. a complete another herd mentality and we have utterly overreacted to this scenario in china. what would you say to that? ashok: it's a very large economy, much larger than it was five or 10 years ago. as a gets larger, and gave comes -- it becomes more stable. you cannot continue at this double-digit growth risk. we will see this at the growth two years.e next that's not bad compared other developing economies, but its much lower than people are used to in the past. as thelity is that economy transitions from export driven to more internally driven, it will automatically have to go on a lower projected. -- trajectory. manus: this is about the human

psyche of and patience. sentiment has likely lurched to far too quickly into a bearish said timoverhyped adams, the u.s. treasuries former point man for china. when you have seen some of the fund flows, global equity flows out last week. the largest outflow in 18 weeks. and float to the u.s. treasury is the biggest and over year. -- a seismicsive shift in position. ashok: we had five years of solid runs on equities. they are not as cheap as they were a couple years ago. the corporate earnings trajectory now is quite subdued and has been negative for the s&p 500. at the dollar continues to strengthen the bit further, that will take a lot of the earnings momentum from s&p 500. that's a very similar to the oil markets. expectations on the earnings have been too high. we are talking about low

single-digit returns for this coming year. overall, the growth environment does not deteriorate for them. manus: hold that thought you would have a little thing as to whether we have capitulated not. ashoks my question for shah, who stays with us for more analysis. we're going to talk adidas. the henkel ceo is the new head of the athletic wear company. ♪

manus: here's your bloomberg markets extra. adidas has had a bit of reshuffling as they appointed casper as the ceo. he is currently the chairman and ceo of henkel. you will want a look but stock

differences and it's really quite shocking. this is the incoming ceo. .didas has traded in germany have a look at the bottom of your screen. it's 89.74. the stock was up 12.5%, the highest since 1995. if there was ever in expert expectation he would deliver, there you go. talk to our reporter in munich. good news if you are a shareholder and adidas. the shares have certainly stored on this news. as been a long time coming for more than a year. investors have been waiting for adidas to finally name a new ceo. a year ago, they had begun the search and it's been a long a projected one. been thereg ceo has 15 years, the longest-serving ceo of any blue-chip german company. he had a good run.

growth and profitability certainly expanded under his watch. he had bad moves. tony 14 was kind of a wipeout for adidas so the market really likes this move. manus: thank you very much. he is breaking down the news on adidas. the ceo coming and has got a lot to do, just like we have gotten the next 30 minutes of "bloomberg markets." sanctions have been lifted. the oil has left. what does that mean for the overflowing oil supply? checking out the oil prices. this is volatility. 1.3%.crude down more to come after the break. ♪

>> welcome back to "bloomberg markets." let's check in on our first world news.

>> iraqi forces are searching bad bad, trying to find three kidnapped americans. officials say that they were taken from their interpreters home on saturday in the southern section of the capital. the three workers contracted at the main airport. officials say that they are being held by shiite militiamen. meanwhile the defense ministry says they are reporting a new round of airstrike on the islamic state. targeted by bombings north of baghdad. the video could not be independently confirmed. the coast of hawaii, searching for 12 marines who have been missing since two helicopters collided early last friday just north of luwawu. research plane was forced off course when it was targeted by a laser. bernie sanders relying on his populist message as he tries to gain ground on hillary clinton. in charleston, s.c. the democratic presidential