guy:, welcome to on the move. we are counting you down to the european equity open which looks like it could be strong. i am guy johnson here is your morning brief. slowdown with gdp at the weakest level since 1990, increasing anticipation of or stimulus. brent trades near a 12 year low as iran run orders of production increase. unilever says it is preparing for high volatility and tougher market conditions in 2016. we speak to paul holman.

welcome back. let's talk a little bit about what is going on. i need to update you on some news. recall 15,000 cars. they will be checking engines. i think this is them speaking on the radio right now. 15,000 cars are going to be recalled by run out -- by renault. she does not name the models not meeting the norms. other -- he says it will be exemplary. she says the car emissions need to be tested on the road and they need to meet standards. open, bute how they

as you can see the stock, after back, it isew days still down on the week by 12.9%. it will be interesting to see how equity markets open on the back of this. there is caroline hyde. caroline: official chinese growth figures came in below expectations. gdp rising 648 percent. the world's second-largest economy expanded 6.9% annually. it signals that further stimulus may the needed after a roller coaster year that saw a record evaluations and a $5 trillion stock market route. brent crude continued to trade near a 12 year low after iran issued an order to boost production. meanwhile opec says supplies for non-cartel producers will plummet. production byt

non-opec nations will slump. tinto is slowing the pace of iron ore output expansion. the world's number two exporter will freeze this year. said the company is handling a challenging market backdrop. we are 27 minutes away from the european we market open and it looks like it could be something of a humdinger. this is the fair value calculation that the bloomberg terminal does for us. we have euro stocks up by 2.2%. the ftse 100 up by 1.7%. the dax looks like it will bounce back by 2% to 3%. it looks like we will see a very strong equity market open. it looks like the dow will be up

by 1.5%. the s&p up by 1.4%. a strong equity market story looks like it will be part and parcel. let me show you the other things we need to think of as well. 29.t crude is trading at copper is also stronger despite the news coming out of china. we'll have a turkish rate decision later on. to davos, traveling here this is trading at 1.09. . in line with government target

of around 7%. surprise, but we are seeing this difficulty that china is decorate -- generating in transitioning its economy and the expectation is that we see more stimulus as a result. >> that is right. the issue is that the growth, the cost of the growth has been a huge debt overhang that companies are finding increasingly costly to service. this transition so what you want to do is move away from an economy built on infrastructure and investments to one built on the back of its own consumers. what this data shows is that is really not happening as quickly as the government would like. they are still relying on a lot of those home growth drivers and they have had to do it by pumping a lot of money into the

economy. we are not quite there yet for the government's goals within this transition. guy: what kind of stimulus would be best most targeted to generate this? >> the big gun that they can always use is interest rates cuts because it frees up so much money and makes the cost of taking out that a lot less. the issue is that it would only add to more debt. is for overseas investors and others, the thing they can really do is continue to allow the you want to depreciate. that is a painless way to help the economy because it would make exports much cheaper. of choices.lot some appealing some less appealing to international investors and we do expect some

measures to be announced in the coming days. parker.'s bring in bob a bunch of factors to talk about this morning. let's start off with china. clearly slowing and struggling. yet this morning i see equity markets called higher here in europe. draw the line between one and the other. i would dispute the word struggling. china is slowing down but it is this long-term glide path down to slower growth. this is consistent with 6.5% growth for 2016. i take the view that if you look out two to three years we should growthsurprised of deceleration toward 5% over a three-year time. guy: the point that nick was making is they are struggling to make the transition. >> we are going through a significant restructuring of the

chinese economy and what we have seen today is the fears of a short-term hard landing. i think those fears have now dissipated. transition to a service sector driven economy is still very much intact. if you look at the pmi's, for the service sector they are strong. for manufacturing, weak. this is consistent with the manufacturing slowdown in china. spending, strong service spending and strong infrastructure spending. we are going to see another easing and monetary and fiscal policy. don't forget that this quarter china will have a budget with lots of room to ease policy further. back to your question, the fundamental point is the fears

of the hard landing in the short-term are much reduced. is it the fact that as the result of the data we are seeing you can anticipate the probability of more stimulus and maybe even have interest rate out beme through china? something i could look at and say, i can get on board with that. >> there is a very high probability that over the next two to three months we are going to see lower interest rates and lower reserve requirements on the banks. talkwe have some wish to about. bob parker staying with us. next we will talk about rent ault. that in a moment and we will talk about oil. one buyer said he can pay almost nothing for crude. that story up next.

guy: you are watching "on the move," we are a few minutes away now. i want to give you a heads up of where we think we will see european equities when we start. probably closer to 2%. cac are bothn the up by 1.7%. it will be interesting to see how the renault story feeds into the cac open. ceo said the company's profit will fall more than 20% due to the slump in oil prices. added --oint yeah llen reported that it

will fault but he cannot say when. they also have a surplus of 9.2 billion pounds at the end of june 2015. renault is to recall 15,000 vehicles to check their engines. minister environment said that adjustments can be done in half a day. the longest run since september after it was rated in connection with an emissions probe. that is the bloomberg flash. let's welcome back bob parker, the senior adviser. story atl-gate volkswagen now looks like it could be moving into the french car sector. how serious is this? >> we need clarification of what

exactly has happened at renault. we have the raid on their offices by the french police and we now have this announcement. >> let's render what her job is. she is a leading member of the french socialist party. she is not a spokesman for renault. is this a vehicle recall? what is the evidence that renault has the same problems as volkswagen? i certainly hope that is not the case and that is why the market reaction initially is going to be somewhat cautious until we actually get clarification of what these recalls are all about. vehicle sales are up and it is quite interesting if you look at german vehicle sales, they have rebounded very strongly. you have a switch to the other manufacturers.

are exporting this long-term trend toward hybrid and electric vehicles which i do think is a very powerful long-term trend, if you can clearly demonstrate that you do not have the emissions problems that vw has, your market share is increasing and with this recovery and consumption in the european union. we have had a reasonably good figures out of germany and spain. even italy consumer spending has increased. for those sectors where we do not have the emissions problems, the auto sector looks good. that is purely based on the sales data. guy: what is interesting here is that vw had diesel cars in the u.s.. a lot of these other manufacturers do not have that issue. does this look more manageable? >> i think it does. but coming back to your question on renault, let's get a clear

statement from the company, not the french politicians as to exactly what is going on with these vehicle recalls. guy: paul talked about great numbers this morning but is warning this will be a year of volatility and many challenges. >> you are about to make a very clear distinction tween the human -- consumer discretionary sector in the consumer staple sector. it is very expensive relative to consumer discretion rates. i would argue that the passion we're seeing them consumption, not just in europe but the u.s. as well and in a number of emerging markets is that we will see increased expenditure on discretionary items.

likeonsumer staples supermarkets will remain under pressure. input cost point of view, they are benefiting. moving huge quantities of food run the world is expensive, but it is a lot cheaper with oil at sub $30 per barrel. >> it is not just oil. let's quantify it. in may 2014, brent was up north of $110 per barrel, but let's look at soft commodities which are very relevant to the sector. in the beginning of 2012, we had corn prices close to $800 per bushel. today they are down at $360 per bushel. if you are a consumer of commodities whether it the commodities, your margins are up significantly. if you are a producer than you are in trouble.

i have fun 60 seconds here. are you suggesting that the luxury sector will bounce back? >> i think you have to make a very clear distinction between what i would call the middle-class consumer and the luxury sector. the luxury sector in china is under pressure because of the anticorruption driver. i think that if you go one notch down below the luxury sector that is the area where profitability will increase significantly. >> we will come back in a few minutes time. as we say, unilever has reported numbers this morning. we will hear from them in just a moment morning we could see a year when we will see a great deal of volatility. the copy numbers have for his positive results and difficult market conditions. the ceo expecting that 2016 will be even tougher.

in terms of the stock, people have been hiding out and we have been watching it very carefully. think about how the rest of the industry has done. my colleague anna edwards spoke to paul about this volatility. very mindful be .ow we manage our businesses the inability of our politicians to make tough decisions in these parts of the world is going to haunt us for some time to come. anna: commodity prices is something -- it's been volatile for 2015 that you benefit from that. what is the biggest benefit that you can see coming from weakened commodity prices into the year.

>> you can see operating profits up 12% and earnings per share up 14% and while that is undoubtedly the easing of the input cost, but with all these things you have to work with it. we see oil prices below 30. many of the nations have severe tightening of their budgets. you see it in brazil and in the middle east. in that sense our markets are more depressed and other parts of the world. we have a commodity pool at about 20% oil dependency. what happens in these developing markets where we have 60% of the business, the weakening of these currencies offsets a lot of the weakening of commodities. in the emerging targets you can still see inflation and in the case of unilever, we have 7% growth in emerging markets that more than half of that is inflation.

>> people were pointing out that india was perhaps a part of the problem in that business. youf you react to one call -- quarter, you are too myopic. with india, we have had a stellar performance with enormous pricing power. unilever, 80% of our products are at 1% or 2% anywhere in the world. tenure, we have even brought more focused. we have seen these results which are outgrowing the markets on the top line and outgrowing again on the online. have a consistency, hell or high water. this has been a tough year and we are putting it into the seventh year of consistent growth. anna: can i ask a little bit about the way that you find growth in these tricky times?

m&a opportunities. are you getting pressure to do more m&a? organic growth you have demonstrated but if it becomes more difficult to achieve is there a pressure to do more deals. >> for every buyer you need a seller and the deals need to make sense. we have been very prudent with acquisitions and we have improved our portfolio and the acquisitions we have made have been good for the shareholder. to buy for the sake of buying is stoking the ceo's eagle and this one does not have any. but we bought some last year, valenti some of the smaller businesses and beauty care. we have created nearly 500 billion prestige beauty business last year alone. where does our main growth come from? lack of development in the emerging markets. getting more people to use the lorentz giving more people

access to products and getting wash all watch, hand of these things moving from bar soaps. that is the market development. >> paul taubman speaking to an edwards a few minutes ago. a fascinating conversation we will have more of it as we work our way toward the open here in europe. it is 7:54 in london, eight: 54 in paris. equities look like they will open firmer this morning. we are looking at a much firmer story. euro stocks will be up by around 2%. up byse up 1.7%, the dax over 2% at the moment. the selloff we have seen since january over. >> i think so. you seen the reasons for the

selloff, we are not having rapid deceleration in china we are having a moderate slowdown. the second concern is the impact on global markets from lower commodity prices. and i think investors need to realize that a number of these commodity price to kleins have very positive impacts on western consumers. consumers a number of emerging markets such as china. i thought we were going to have a nasty correction. we had it and i think it is over. guy: more thoughts from bob parker coming up on "on the move." it looks like it's going to be a firm open for european equities. it looks like you will have a good morning. watch renault, watch unilever. we heard earlier on from the french government speaking on rpo radio indicating 50,000 vehicles will be recalled by renault. we will see how it's stock

opens. it looks like we will be opening on the front foot. london waking up, very cold this morning and a slightly warmer market.

guy:, good morning and welcome to on the move. i am guy johnson. we are moments away from the start of european trading in here is your morning brief. the china slowdown comes in at its weakest level since 1998 increasing anticipation of more stimulus. crude turmoil. brent trades near a 12 year low. decline.casts a steep unilever says it is preparing for high volatility and tougher market conditions in 2016. 2015, we have at continuously lowered our growth estimates. say thereum we can

has been more follow-up time and that is the question we will see this year. >> european futures look like they are spurring signs of a very strong open for cash this morning. watch renault. what else are watching? let's find out. caroline: we have to keep it to bounce back. volatility still remains elevated. we have the vick stocks double where they were in december and today we're seeing risk appetites rejuvenated by worse than expected chinese data. bad news means good news once again. because we will see more stimulus and speculation of state funds buying up those equities in china, helping china have their best day in two months. clearly there is risk appetite when it comes to the equity side of the story in europe. germany.ye on

about what financial analysts think is in anticipation. they think situations going to get worse for gemini. you can see it fall by about half of the expectation side. ahead of that we have the euro down a quarter of a percentage point. meanwhile, oil driving higher this morning. you are seeing an upward tick of 3% on brent. it is all about rampant selloff as it looks as though iran might inject more surprised into the market. today recovering just slightly. gold is not so in vogue at the moment. it's basically flat which is usually the haven trade. this is higher, yen lower. julie will be talking about what happened in asia but really it's as if it's also helping drive up the metals today. the money is coming out of the havens and upon seeing yields

rising for the u.s. and for italy and germany as well. money coming out of the debt markets. risk appetite, outcomes money from those havens. you are talking about renault. like a light by the radio waves and we saw plenty of news coming from french radio. the ceo says i'm not looking to cut that dividend. even though oil prices could go further lower because of supply. we cannot tell you when the bottom of the hit that it does say the dividend is say. saying we see right now 15,000 cars to be recalled, it would seem that there is perhaps a little bit more optimism. member january the seventh when we saw investor data sweeping into renault, looking for evidence. potentially they are too embroiled in diesel gate.

unilever up 2.7%. he is putting off some pretty good numbers and worrying about the future and volatility. guy: asia had an interesting reaction in china. the fourth quarter gdp number coming out of china, missing expectations we saw a lot of buying coming through in the latter part of trade. the shanghai composite closing back above that 3000 point level which means it is now officially not in bear market territory. you can see a lot of that buying is really coming through in the last 90 minutes of trade after the lunch break. again the speculation we have seen state-based funds picking up heavily beaten stocks on these expectations that could be more stimulus coming through with that fourth quarter gdp number, the weakest since 2009. elsewhere, we did see a pretty good finish for regional stocks

but it was a really choppy day of trade. the regional benchmark index in and out of negative and positive territory about nine times today. nikkei 225 closing higher about 6/10 of 1%. it was on that cost of the bear market post up today there are some good bands coming through in the asx 200 which closed higher by 1% with rio tinto gaining there's. and we have the announcement we have the korean market looking quite good today up by 6/10 of 1%. the shanghai market is standout and there is probably going to be a lot more speculation that we have seen the so-called national team by state-based stocks in china. china's gdp, six point it was a number. that kept full-year growth at 6.9.

it's a lowest level since 1990. as we have just been hearing, the shanghai rallied out of its bear market. but as she was mentioning maybe we got a little bit of help from the authorities into the close. let's go to china or the bureau chief is standing by. the, were there surprises in the data? talk was about this transition china is going through. >> what is happening, with the numbers show is that there has been a drop off in industrial output in investment. they are not rising as much as people hoped. but we are not seeing this pick up on the services side which would suggest that they are not making that transition as quickly as they would like. what we have been hearing much more of is what the government calls the intention to make supply-side reforms. that line which has been used repeatedly.

it looks like now they are going to target overcapacity and potentially lowering taxes and boosting productivity. they're looking for new ways to stimulate the economy which would not risk capital outflows, potentially adding to their massive debt overhang. equity markets are off to the races following shanghai. we arey say that anticipating more stimulus. is that what we are going to get? we also have the new bank coming through in terms of the industrial development story. walker's to the stimulus element . >> there is a broad expectation. interest rates in china are still quite high compared to the u.s. and europe so there is a lot of room if the government does want to act. the other thing you have to take in mind is 6.9% is the lowest number in many years since 1990 or so.

the amount of growth is so massive compared to the amount of growth from that time. but economy is so much bigger now than it was. discouragingtally numbers to see the economy growing in this way. we are waiting to see what the government to plans to do but the supply-side reforms are quite interesting because they would suggest a different tack. boosting productivity and possibly lowering taxes and cutting over capacity which is seen as a much-needed move. lets richard is bob parker into the conversation. china stimulus, european equities are up this morning. there are a number of factors behind that. talk to clients who are long on cash, is this the signal they are looking for? >> that in the answer is yes.

two points, the first point is that if you look at investor positions, they are very the risk. derisked. assets like risk in government bonds. i think this will extend for the rest of this week in some time, it is -- this edging up in bond deals as the cache is increasing and putting it back into the markets. that thoseint is investment institutions, which are cash flow negative. since they are cash flow negative, they are -- there was a lot of evidence last august when we had a correction that part of it was due to the sovereign wealth fund being forced to dispose of the riskier assets.

we have not got the data and we need to try to dig in to the data, but i think that there is evidence that sovereign wealth funds which are under pressure in january. earlier guy: if oil stays low for longer, does that continue? >> i think so. in saudi arabia, their cost of production is less than $10 per barrel, but they are struggling with a very significant budget deficit. therefore, they will be -- what we can call riskier assets. let's not let this rally in europe get carried away. there is going to be that constraint on the extent to which markets can rally back. talked to a lot of people and i would be interested to amalgamated their views.

some ofi's are putting their biggest assets in the market. there is a series that does the rounds that say they are selling because they know that the writing is on the wall for hydrocarbons and they know that this is the moment to sell. renaultull circle, to and the car sector, this move to a electric vehicles which seems unstoppable. >> it is accelerating. guy: can i try a link between one and the other? once i have done that link, what does it mean for asset classes? >> it means a number of significant things. one graph which i did not bring with me, but we will bring to bloomberg next time is energy consumption going back to the mid-90's raking that energy consumption down between developed economies and emerging economies. years,e last 15 to 20 energy consumption by the developed economies has to client.

all the growth and demand has come from emerging economies, most notably china. if you assume over three to four years that china grows and decelerates and we have the structural shift toward the service economy, then you have to assume that emerging economy, energy demand will decline and could start to show a similar pattern to what we have seen in developed economies. you compound that with the fact that we are much more efficient and using energy. whether it is the move toward hybrid and electric cars or more cost efficiency of alternatives such as wind and solar, particularly solar, one has to conclude that the long-term outlook has to be fairly negative. i think that short-term there is a good chance that oil may well bounce back a little bit but if

you take a three to five-year review what is the probability of oil going back to even $60 per barrel. guy: it will be an interesting world to live in. bob parker, the senior advisor and credit suisse asset management. up next, find out which countries opec thinks will be hit hardest by prices. european equities are firmly in the green this morning. the ftse 100 is trading up over 2%. you have some of the other continental markets up 2.25%. we will take a break and be back very shortly. ♪

>> we should not underestimate the consequences of lower commodity prices or discount the vulnerability in terms of foreign exchange exposure. but i wouldositive see the potential for substantial shocks. guy: that was chairman clark schwab. our extensive coverage from dev us -- davos starts tomorrow. let's get you up to speed. here is nejra cehic. china's official growth

figures came in below expectations with gdp figures rising 6.8%. the economy expanded and its lowest rate since 1990 and signals that further stimulus may be needed after a roller coaster year that saw a record evaluation and a 5 trillion stock market route. 16,000 is to recall vehicles to check their insurance. the carmaker's stock has fallen for four days. the longest run since september after it was rated in connection with an emissions probe. rio tinto is to slow the pace of iron poor output expansion amid the global supply glut. they will offer free salaries after the ceo said the company is handling a challenging market backdrop. iron ore has sunk more than 75% for the 2011 week.

guy: the ceo is today morning that his firm rough it could fall by more than 20%. turbulence in china's markets is adding it to the mix. let's get more from elliott goc and. crude may be starting to firm a little bit. it still stop 30 on the brett line. what are people saying? what are analysts anticipating. anticipating as investors are anticipating more in opinion oil coming to the market. as you say, we are off of these 12 year lows inching back toward $12 a barrel. very small gains for brent crude. and additions to the supply glut.

byy try to boost exports 500,000 barrels per day and another 500,000 by the midpoint of this year. in the short run, goldman sachs reckons that iran might overdeliver. because it is able to tap into these stockpiles that have been off the coast of iran. there is disagreement of whether they will be able to meet their extra one million barrels. some think they will in some think they won't. no doubt, they will be scrutinizing how much oil is coming to the markets to work out where the prices ought to be going. guy: elliott goc and joining us on the oil story. it's talk a another commodity. rio tinto. expecting to slow the production of iron ore production this year. let's get more with ryan chilcote now.

give me the details of what he said. >> it is not as if sam walsh is standing at the top and -- top of an open pit mine and saying, we will take the rough. they are not -- we will take the year off. they are not cutting production. if you look at the fourth quarter of last year, they have produced 87 million metric tons of iron ore. wasrange they came up with somewhere between 88 and 100. the would produce as little iron ore as they did. that is not a cut, that is still more than they produced in 2015. 7% if theycrease of hit the target as opposed to the

increase we saw between 2014 and 20 15 which was 11%. they are scaling back their ambitions for production a little bit. oreif you look at the iron price it is still down 75% from its peak in 2011. there are still a lot of iron ore producers, bhp billiton included. they are adding more and more supply to the market. guy: i want to go back to the oil story. get few weeks time we will the oil majors coming out with their numbers. how easy is it to get a front run of that? guy: this -- ryan: this year we are getting a nice early lead. they will come out with him from earnings tomorrow. alreadyysts are plugging the numbers and they reckon that shall's fourth-quarter earnings will

have fallen by 39% year on year to just north of 3 billion at the end of 2014. that is pretty interesting. they have been scaling back their estimates for adjusted profit or the fourth quarter as we see the oil price fall. be of another read from the ceo who said their earnings will fall by 20%. they will not cut the dividend. thankfully he said, we are helped by the fact that we are an integrated oil company but then if he came out and said that was the nine-month forecast, which cuts out the fourth quarter. you detailsread from this. setting the 2016 net production at 470-4 hundred 85 million barrels saying that it's is as much a 60 billion yuan. that it will drill 160 exploration whales -- wells and

expects new projects in 2016. estimated net production is 495 million barrels. compually do not have a number in terms of what we were anticipating what that number looks like this year. my gut reaction is that china is still going for it. thatthink you will see with a lot of oil companies. they do not really have many options. removeifficult to production. everyone is expecting a correction and supply but like he was saying today, it will take a little bit of time for that to come about. what interesting when you look at the big oil companies is that safety net they have had in the form of refining merchants, it seems to be falling away. there are new holes in it. price hash the crude been plummeting, these guys are able to make money in refining. the fourth quarter is always a

bad one and in addition to that, because it is warm and because there is a lot of oil, the refiners are not able to make as much money as they would before. guy: good news keeps on coming. we will see you in a minute. ♪

guy: let's get you the charts that matter. caroline: it will tumble.

this is a volatile index because it is all about what analysts expect in the future. it is more volatile than gdp data but it does reflect what happens in the stock markets and today we are expecting when the numbers come out that it could drop from 16 to eight. look how closely related it is to the green line. clearly we do see a lot of close relationship and when you track it, you can see that the z ew and the dax correlate closely with the change to at least as far back as 2005. we will signal what happens in volatile trading. how muchignals less is we should worry about gdp and germany. so means we will get a falloff in gdp.

overall, the analysis is no. data do next, u.k. today. we will talk about low inflation and what that means. see you in a moment. ♪ ♪

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guy: you are watching on the move you to 30 minutes into the trading day. let's see how things are shaping up. a bounce on the way. all of the main european markets off their highs but certainly high. many of these markets are still down heavily so far this year. the ftse set off by 5%. the dax still down nearly 10% so far this year should in terms of the movers, the big miners are trading hider -- trading higher. in terms of other asset classes, up 2.4%.

copper up by 2%. turkish lira is higher. we'll hear from the central bank later. thisu're off to davos morning, euro swissie, trading fairly flat, one of 9.6. let's talk -- 109.6. let's talk stock stories. caroline: it is up 10%. stock but it is driving higher amid speculation that we can see a tie up between -- ocado. oconto will amazon use it to help push up its own grocery ambitions? if you are a prime user, how will it manage to break that out

and expanded -- and expand it? pushed its stock price up 5%. the french lender is looking to be selling off some of its regional bank stakes. it may transfer regional bank stakes, it is all about including its capital structure guide. this is in reference to media speculation that reported by bloomberg earlier. dozen tune of three regional bank stakes. that is an improvement. on the downside, you pointed to sign -- novoo zymes. is on the low side.

the margin, a disappointment. it is not going to expand in 2016. they confirmed they organic revenue growth is going to be 3% to 5%. pretty. looking too back to you. guy: mark carney is set to share his source in a speech at noon. we will be just off the back of some fresh u.k. data on wages and inflation, plus employment. we'll get retail sales data out as well. tim:'s -- pim co's office. pricedt is bank -- it is all the way out to 2018. is that right? mike: you need to see the oil .rice bounce a little bit more importantly, you need to

see wages go up. the markets are pushed out to don'tddle of 2017. i think you can exclude 2016, but if you were to mark market, it would be hard to see market rates get where the oil price is. i thought that would make that data a little earlier. we are going in the opposite direction. mike: there are two things happening. .e are 3% off on trade wage on the other side, what we're seeing is pressure on the utility companies to cut bills. you think about what is happening to the energy crisis. i expect what you see is a pressure on utility companies which will offset some of that pickup in import prices. the challenge is you got core inflation. how long it takes headline to

converge to that core. it is about the energy price. being disingenuous. the back end of last year into this year where we start to get clarity. i am not getting much clarity right now. is they arearity nowhere near hiking rate. think about the conversation we are having. are they going to be in a position to hike rates and any stage this year? you've got some stabilization, stalling in the wage data. is have the -- the clarity they are on hold. suspect that is what we're going to get from carney at 12:00 today. he is going to push back on expectations for a rate hike, i am sure.

guy: there's been a big move in deals. over going to see more to come. mike: you put the tenure rate at 170. that is -- the 10 year rate at 170. that is a big move. to get bond yields material of the lower -- materially lower this year. our suspicion is as we look we would expect to see some stabilization and risk assets when things level down. we have had fireworks. of the year. what you need is a further impetus to get bond yields to go materially lower this year. if we can get a few days of karma.e, -- relative guy: what is the right way to

play the u.k. here? mike: we are broadly speaking. we are a long with high quality assets, investment-grade credit. we like bank debt which we have liked for a while. in a world where government bond yields are extremely low. supported by central-bank policy. we prefer to take some incremental risks. you've got to recognize the world we live in is a relative this is a relatively volatile one. -- relatively volatile one. , ithink if you do that brings it means -- it means high -- tile carrier

i am wondering what your thoughts are on why we are seeing what we are seeing? the hope was the u.k. was place wherehe only there was a slope to the phillips curve. ishink what you are seeing consumers are relatively defenseless. the different -- the rate is fairly low. the consumers and labor market are still willing to accept low nominal wages because the headline inflation rate is so low. that, if you're a central banker, is not great news. you get to the point of which people's inflation expectations are at a risk of taking a step down. that is not what anybody was see. you are likely to see more dovish rhetoric out of the bank

of england. i don't think the phillips curve is dead. you're seeing a delayed reaction from what has been a pretty tough few years for labor. i suspect we will see incremental wage growth. i think it will be a pretty slow march rather than any great acceleration. the ecb later this week a firm focus for investors. how important is it for mr. draghi to step up and deliver more from here? job -- mr.ruggist draghi's job is to talk dovish sleep. is the march ecb has the updated forecast. i suspect what we're going to see this week is a reassuring words out of both governor

carney and draghi without any actual action. the set up for march is coming. if you look the ecb minutes for the other day, there is discussion about how much to come in the deposit rate. they don't think they are at the lower bound. i suspect you'll get words along those lines from jockey. if he was to do anything, that would be quite surprising. likely thane anything this month. guy: always a pleasure. mike amey over at pimco. unilever prepares for tough market conditions and volatility. ♪

guy: welcome back. you are watching on the move. this is london right now. very chilly right now. they sold off progressively. we are getting a little bounce. 58.72 what we are treading on the ftse right now. slowing theinto is pace of i and or output amid the global supply glut. they will freeze salaries this year after sam walsh says the company is handling a

challenging market backdrop. i and/or has suffered more than 75% from its peak. vehicles toecalling check its engine. the adjustments can done in half a day. the carmaker's stock has fallen for the last four days. withs rated in connection an emissions probe. prudential has reported a solvency you ratio. a surplus of 9.2 billion pounds at the end of june 2015. the first of the u.k. ensures to disclose its capital strength under new rules that came and forced. up. unilever shares are the company managed a good performance and difficult mark -- difficult market conditions. the ceo will be a little tougher. -- edwards talk to

anna: it starts with a list of reasons why 2016 is going to be .hallenging geopolitical instability, high currency. all of these things makes managing a business more difficult. we talk about that. he wanted to talk about the importance of being diverse. the cost-saving initiative. we talked about china and where he still sees the growth opportunities come through there. >> i think it is better to be prudent. 2015, with at continued on a global basis lowered our growth estimates. it has become more volatile.

especially, markets capital outflow, bigger investments in the currencies. commodity prices have come down. structural changes have not been made. china to some extent. these are big economies that are pulling in more now. anna: when you pull -- when you manage a business, one of the ways to do that is around cost discipline. can you flesh out what kind of discipline you'll be instilling you mightt? paul: lose on the roundabout. we can manage it. you see it in the 2015 results. if gross is lower, yet to step up your cost. one of the initiatives we're going to roll out, being much tighter on where we put our money. aching clear choices with

categories we're going to invest in. continuing the looking at redesign. leveraging our office is better. these are the big buckets we expect our improvements. does the story around the stock market concerns about the story in china dominate the headlines of course. do you see those trends reflected? for unilever is 4% of our turnover. the chinese economy is going through changes. to aduction-based economy more service-based economy. that change causes friction, certainly's some parts of the -- certainly in some parts of the industry. they have seen significant adjustment. of. have to get rid

in some of the sectors, if you want to grow, you have to look arehe right gear. there opportunities in the big cities. anna: there is still opportunity in china. the long-term story, is that still in tact? will any part of the world die for 6.9% growth rate. anna: -- anna: we have swings and roundabouts. if you look in china for growth, you need to bring the right gear. that is his advice. achievements over the past seven years. under his management. -- his running of the

business is trying to get shareholders away and be more focused on the longer-term. many ways. world in he talks about the environment, global warming. he talks about the ability of the business to grow in emerging markets by more and more people buying these household products. keeping the close in themselves cleaner. rescuing their clothes and themselves cleaner. -- keeping their clothes and .hemselves cleaner her guy: central banks take center stage. mark carney's first comment of the year. that is next here on the move. ♪

guy: welcome back. you are watching "on the move." let's talk about turkey announcing its interest rate decision. implements reforms to shore up the vast economy. i spoke to the prime minister yesterday who told us the measures should help to rebalance the lira after it plunged 23% against the u.s. dollar over the last year. >> i am sure after

implementation of these reforms, we have implemented 30% of the reforms in first three months. also 60% promises. with this performance, i am sure meanwhile we will be rebalancing these currency rates. turkey not only the central bank and focus this year. we'll be hearing from mark carney good -- mark carney. carney is giving his first speech of the year today. jpmorgan and img have forecast weakness playing into 2016. we are getting down to levels this morning. were getting into 141 which we have not been until 2009. richard jones joins us from bloomberg first word for more. let's talk a little bit about what is happening with u.k.

economy. a lot of things seem to be going right. the pound is going down. the market is smelling a little bit of nervousness. right to be worried? richard: what is interesting, we had the newest member of the mpc . he outlined his view. it was quite dovish. he is concerned about growth slowing. there is a concern we don't have the wage growth that we should be having given the rate of unemployment. to me he sounded very cautious. i suspect we will probably get a similar tone from the governor and he speaks. 1.4298.re trading there is quite a lot of air below that. the pound will go sharply lower. are we standing on the edge of something interesting?

richard: i think they are pretty comfortable with the moves they have seen so far. the index has weakened. the cable, the sterling dollar exchange rate, is one of the key components of that. they don't want it falling off a cliff. to the extent that the sterling rate is really important to the bank of england, i think we might have a central banker on thursday who may shift the price actions slightly. mario draghi will be concerned that his currency has risen quite sharply against the pound. guy: equity markets bouncing this morning here at up to percent on some of these markets. we're still down 10% on the dax -- 10% on the dax on the year. is this a hiatus? is this the start of saying we have had aggressive selling. now to put some of this cash back to work?

a lot of people are long cash. richard: the interesting thing is the latest bout of marked equity weakness was on friday. to me, that was driven by disappointing u.s. data. going forward, we bemoan the term data dependency from the fed, but realistically, that will be one of the things that drives investors. -- it becomesk about fundamentals, macro and earnings. the thing about the date on friday is that it surprised people. the retail sales number. that might be the one thing that spurs the next weakness. bridge jones, thank you very much indeed. that wraps things up for "on the move."

we are back tomorrow with a fantastic lineup. day one. it is chilly. we have some great conversations for you. ♪

cools.a gdp growth returns to levels last seen in the 1990's. shares are rallying on increase stimulus bets. unilever beats as its ceo warns of a rocky 2016. we will bring you are interview. and slow inflation for longer. low-flation. pound struggles to make itself felt in the u.k. analysts are forecasting a 0.2% increase for december.