equities tumbled led lower by commodities producers. the world economic forum kicks off in. both. davos.icks off in >> the first european oil major to report this season. >> lot buster -- blockbuster, netflix beats estimates for subscriber numbers. >> this is countdown.

>> it's 6:00 here in london. let's get straight to the breaking news. japan stocks enter a bear market , down 20% since august. we are counting the numbers. shanghai, the russell 2000, though stood out to me as i was looking this morning. the imf downgrade weighing on markets this morning. asml plans to buy back an additional one in shares. if you have cash, what do you do with your money? the bear market is knocking on the door. enter ahe stoxx 600 bear market. the hong kong dollar is really being pushed.

look at the commodity markets now across the globe. the $28 a barrel level on brent again. it's quite stable, but we're looking for u.s. numbers later in the day. glencore,n care -- tony hayward says oil prices are staying near current levels. the bp chairman says there is too much oil. yen and treasuries. let's look at those. the dollar yen is on the move. it gained for the first time in three days. especially the long dated government bonds. a major market like the japanese

market is going into bear market lacquary and francine and hans nichols are standing by waiting for the start of the world economic forum. i'm sure it is very cold there. what is on your mind this morning? aboutne: will be talking fear. hans nichols and i will introduce some of the top leaders of the world and what will try to get from them as far as how worry they are about china and where they see opportunities. : there is a lot of gloom but there is an opportunity for doing deals and coming together. there are significant headwinds out there. showing froma big the southern auckland, and in the past they have dominated. that stands out, the people who are not here.

expecting some figures from the stockpiles this weekend. people are not showing up here because they are concerned either about perception or they are at home dealing with crises. it will be interesting to see what the perception of the other deal me -- dealmakers here. chile is down to 14 billion dollars. it's a retrenchment across the board, across commodities. what extent the oil store becomes a commodity story is an interesting one. the thing we cannot talk about his immigration and migration. to what extent are events taking place in europe going to take over the conversation? francine: there were some great

on the top risks of the year. the second time in a decade that economic growth is not in the top five. we want to talk about donald trump, and if there's anything from his economic program that world leaders would actually take away from that and say it makes sense. : i'm not sure we can get any certainty from this conference because there are so that arees out there beyond the capacity of a lot of people here to actually predict and do something about. it will be an interesting few days. we are just trying to give you some of the breaking news of the world. time as at a crucial the imf just downgraded their forecast for world growth.

we have two great bankers, one from italy and later we'll talk about commodities. manus: we look forward to all those headlines and interviews over the next three days. first word news now. >> japanese stocks have entered a bear market of the topics down 21%. earlier chinese shares traded in hong kong at the lowest level since march 2009. that's due to the slowdown in china and sliding oil prices continuing to weigh on investor sentiment. chinae fund manager says should weaken the yen by 50% this year. it would let policymakers draw a line in the sand at more appropriate level for the currency.

ben bernanke says the greenback may have the. the former fed chairman leaves much of the appreciation of the dollar may have already happened and we may not see much more. the currency has rallied against pastts peers during the two years on speculation the fed would boost borrowing costs in contrast to other major central banks that were easing policy. chief executive officer's have turned pessimistic on global according to a, new survey. a poll of 1400 ceos from 83 countries found just 27% expect the economic outlook two improve this year, a fall from 37% last year. 23% said it will worsen. >> i think the ceos are really concerned. thisa less positive result year than just a year ago. the trend line is not good.

concerns about the renewable economy and the volatility that exists. secondly, concerns about the geopolitical issues out there which has all the potential to continue to be disruptive and unstable. and the together outlook for 2016 is not as encouraging as most of us would have expected at this point in time. trump'snald presidential campaign has won the backing of warmer tea party favorite sarah palin. hishad already defended call to ban muslim immigrants from america. as fall he said he would consider naming her to his cabinet. she has said she would like to be energy secretary. manus: thank you very much. juliet is standing by for

us. a bear market in japan and not much better news coming from the rest of the asian sector really. x absolutely not. not a lot of good news for you to wake up to. we've seen the nikkei 25 and the topics enter bear market territory. all down 21% from their highs of last week. the nikkei being sold off today. downturn in those commodity producers. that's despite deutsche bank saying a lot of oil produces could survive on crude below $30 a barrel. a lot of weakness coming through in korea. the cost be down by 3.2% and the one weakening with the shanghai market off by about 1%. you can see the stocks listed on

the hang seng index, and honor in the black today. they're all being sold off led by the oil producers and casino stocks coming under pressure as well today. some of the markets we been keeping an eye on, in the energy space. energy in australia closed lower by almost 9.5% today. property developers in hong kong also coming under pressure. this is what the nikkei to 25 index looks like over the last 12 months. down 5% over the last 12 months but if we look at the highs from july last year, were now officially down 21%. bear market territory for japanese stocks and investors today. thank you for the context on the asian markets there in hong kong. let's bring in stephen, welcome

to the show. marketted with the bear arriving in the nikkei. oil is crumbling. i am reading a whole variety of rings. we are dealing with a new world off wherere moving the central banks can not or will not intervene. >> we cannot get to wrapped in the markets emotionally. certainly the effects of driven by low liquidity. insaw liquidity follow cliff 2015 towards the end of the year. what do you put that down to? >> regulatory issues that are horsing banks to put less risk in markets. a bad year for many hedge funds,

not committing risk capital. different segments of the market are causing it. outlook is for the that this is a relatively ephemeral process for china. it is a normalization about how policymakers should approach it. many policymakers wanted the fed to move away from zero load bonds and wanted the fed to end quantitative easing and move away from it. the fed itself has wanted to over the and china last decade or so has pushed forward and unsustainable growth model, and we are normalizing from that. the market moves notwithstanding, it should be a relatively short-lived process. paul donovan said that

level is overheated and cannot be sustained. it comes down to what they are trying to do with the you want. -- with the yuan. there is precedent going back to 1994. get it over and done with. that is what needs to happen. do you think it is going to be a dramatic move? >> we don't think it's going to be a dramatic move. china over the last few weeks, last month did come close to into a its currency vicious feedback loop. financial markets react and then capital flows react negatively. if that spirals they are shooting themselves in the foot. the fundamentals don't suggest, if you look at china's growing

trade surplus, those fundamentals don't suggest there is a competitiveness issue for china. anna: isn't that to do with the reduced price of oil imports? certainly it is, but regardless of how you look at it, they don't have a trade. there's still a precarious trade position and it was fundamentally too strong on the basis of that trait. china is not in that situation. manus: where do you see this >> offshore016 onshore, regardless. thank you, stephen. we will get you kate wages at 9:30 this morning.

also are reading of u.s. inflation this afternoon at 3:00 p.m. u.k. time. we will get a rate decision from the canadians. ♪ anna: the world economic forum kicking off in switzerland. miss all of this exciting lineup that francine is going to tell you about. printing: it is a little swiss town but we have 2000 of the world business leaders and thinkers descending on this town over the last three days. you are mentioning canada for to first time, we will get meet and greet the prime minister of canada step, -- of canada, mr. trudeau. argentinian president itts to be much closer, so

will be interesting to hear his pitch for investors. we will speak to axel weber, giving up his first interview in davos. linkagelk about the between real growth and these bear markets and what that means for all attila t in the next couple of quarters. -- four of volatility in the next couple of quarters. we will talk oil with the leader of the iea. i'll ask if it is a shock to investment. then the deputy manning -- managing director of imf joins us and we will talk about china with him. we look forward to that. that is a great lineup, trying

to get some perspective around the big issues. the first major european company to report later this morning. has the group price of affected the bottom line? ♪

anna: welcome back. shell will become the first european oil maker to report earnings. it comes after quarter which salt crude lose more than a quarter of its value. ryan is here. what do we expect from shell today? ryan: we can expect adjusted 39%, down justby over 3 billion at the same time last year. if you look at the last quarter show reported, in terms of

upstream visit, they actually lost money but they made about gas billion from their station business. effectively their downstream business in the third order of 2015 saved their bacon and made up for their losses on the upstream. given the normally seasonal weakness in the fourth quarter and the shift we've seen where refining margins are getting narrowed, whether they are able to maintain that momentum and continue to help provide that cushion so they can continue to make money. manus: the refining story was one of the big boost for a lot of the majors over last year. shellss this fit in with acquisition of bg group? ryan: we're not going to get the

full monty of earnings today, we will get those at the beginning of february. but we are getting this information one week ahead of that extraordinary meeting in the hague. i think investors will want to that theye extent revealed savings. the logic of the deal is effectively you have shell buying reserves and that makes sense at the right price. the oil price has not been helping, with the justification of the logic of the deal. if they can get that rate, that is a good name. the earnings we get at 7:00, shell will break out how their gas business is doing. that could be interesting because the other logic of the catapults really shell into and eve are larger position -- and even larger position. it's already the largest

nonstate produces in the world. two things to look at the we get those earnings. thank you very much. stephen is still with us. about where the foreign exchange world and the energy markets come together, saudi is a good example of that. do you think they last? >> in the short run, yes. in the long run, it's a different story. but in the short run, certainly you don't have a floating currency and you are dependent on energy resources in your trade. you are in a more difficult situation that australia and canada.

saudi arabia, i would not say the risks are zero. we think they will defend the peg to the oh most -- to the utmost. oil-producing ,ountries, if we look at canada a lot of people are speculating that there is a 63% chance they would make a cut. can they, will they, should they? >> we think they do move this week is our view on the bank of canada. risks of the the scare flight from cap -- canadian assets are low. boc needse time, the

to balance the criticisms they will get for keeping the canadian dollar week with longer run concerns over what might drop and oil does stays there. i think without bank of canada's ranget, if we get to that and it looks like we will stay are go below that range and be there for a projected time, canada may flirt with that type of flow. anna: what we saw the new government sector there was a lot of talk about what they would fiscally due to stimulate policy. is this something different? of both.bably a mix regardless of how you slice the cake there is advisable risk premium that will stay with us , barring a sharp

reversal in crude oil, but that does not look likely. they say it's an opportunity to load up on emerging market stocks. it doesn't seem as if there is any abatement in terms of concern in these markets. how do you look at the emerging market currencies? the perspective of commodity producers we are in a classic dollar uptrend. the selloff and emerging-market currencies outflows, difficulty for commodity producers within the emerging world. these have been with us through history and they are here again. our view on the broad value of the dollar is that the peak is coming in will be with us by midyear. anna: we will pick up on that thought on the other side of the short break. next, live from davos,

axel weber. ♪

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you've got the power, to turn on the light shape the best sleep of your life. sleep number beds with sleepiq technology adjust any way you want it. the bed that moves you. only at a sleep number store. 6:30 in london, 7:30 in davos. anna: japanese stocks have injured a bear market. earlier chinese shares traded in hong kong at the lowest level since march 2009. continued torices weigh on investor sentiment. a hedge fund manager says china should weaken the yuan by 50% this year. it would that policymakers draw a line in the sand at a more ropey level for the currency.

ben bernanke says the greenback may have he. he believes that much of the appreciation in the dollar may have artie happened and we may not see much more. the currency has rallied against all 16 of its major peers in the past two years on speculation that the fed would boost borrowing costs in contrast to other central banks. anna: let's go back to davos as francine and hans are joined by special guest on bloomberg tv. printing: there is no one we would rather speak to -- francine, there's no one we would rather speak to that axel weber. thanks for being our first interview here in davos.

you know what central banks have left in terms of ammunition. are you concerned that the correction means something more sinister for the world economy? we have iced down the growth forecast for the current year. i think that's where we are at the moment. we have come out of the deepest financial crisis and we are nine years out of that crisis. at that point in time, the global order has reversed. industrial countries had fallen behind and implemented more programs and the emerging .arkets had strong tailwinds some of them are facing correction. emerging markets are seeing the reversal of capital flows.

i'll don't think we really see a downward spiral in the global economy. >> the problem is that central banks don't have any ammunition. there is not much they can do. when you look around davos, there is fear that china could go wrong. bubbles burst and fear that we're just not ready for it. i think the chinese authority, if you talk about ammunition, the chinese authority has plenty of ammunition left to stabilize their economy. what is true for the u.s. is not true for emerging markets or for china. bes: it seems like it would an opportune time to deploy some of that. overey are doing that and

the years they will continue to do that and add to policy stimulus. some of the measures they took were a bit improvised and you had some back and forth. there is some policy credibility issues and some emerging markets and not just china. look at brazil or some of the policies came late and there was some volatility around it. we expect that to gain traction. we see stimulus that will start to kick in. the sovereign funds will start to play a role. for the first time we had privatizations in german telecom. it turned out to not be a wise policy and they're not going to go there.

whether they devalue the yuan or not, they will have deflationary pressures coming from oil and from the china story. is that the main risk we are facing at the moment? have tried toks reflate the economy for some years and have been successful in doing that. they have also tried to reinvigorate growth and have not been so successful at that. what used to be tailwinds from demographics added advantage is of growth and it turned into --lwinds and it's hard to china, in my view, will go through a correction that is ongoing. but they will come out stronger. we just announced that we will more or less double our headcount because medium to

long-term we see huge potential from china. if you look at service sector growth, it grew at 8.5% in the first quarter. service raised growth is much more job creative and income created. i think they are doing the right a. long-term. correctly call that inflation would not get a close to the 2% growth. are important. do we get close to that price stability target in 2016, and if not, do we just drove our arms and throw in the towel? inwe are not getting there 2016. basically you have a continued slide in oil crisis and if you look at core inflation,

everything we are seeing is adding to global supply capacity which basically means prices will continue to go up. many of the products or services you get on applications are for free. industrial reduction is changing because authorization, everyone on a -- theplatform will mean benefit -- the rich will benefit a lot more than the poor. see a rebound and a return of the growth in the industrial world bowl it will boot and savings are abundant because the rich have much higher saving rates than the lower ones.

>> when will oil find a bottom? we've heard everything from $15 to $20. how important is it to find a floor? when we look at oil, i try to look at fundamentals. hans: so far your glass ball has been pretty clear. >> if you look at who is currently still making revenue on oil, you basically have saudi and some of the eastern countries, kuwait in particular. now you have the lifting of sanctions and iraq. we are seeing a price that is my view it will continue to add supply. potential ass the some of the conflicts in the

middle east get sorted out. i talked to the leader of shell and he said you cannot exclude anything. suppliersno other that can act at this stage and be profitable. i learned on exchange rates and oil the forecast will stabilize somewhere around current levels. hans: eventually that will true. >> i don't see a lot of additional supply that will drive it further down. what we've seen in the past was that major countries did not want to change their expenditure profile, so continuing to not lose market share, that has not gone away.

hans: your inflation outlook seems so dismal. for 2016-2017? end upink inflation will somewhere around 1.5%. , i don'tok at japan think it warrants are forecast to go beyond 1%. ns: are you banking that the ecb does more? >> they are doing the same for longer at the moment. that is what they have announced. i don't think it makes it a difference whether they add another half year. it's not my main scenario. they will do that in a very adverse environment, but at the moment what they said is beyond the end of this year we will continue to add stimulus.

that is providing some insurance against tail risks. if you look at what we talked about today, the market has shifted completely away from europe and switzerland, away from the turnaround of monetary policy in the u.s.. francine: i've read some analysis same part of the volatility comes from the head -- from the fed hike. who do you believe? morethink we would see volatility and uncertainty in the market but it's hard to prove. if you look at what happened between september when some thought the fed might move and then later, the first move in december, i think that what the world faces and what markets need reassurance and guidance by policy makers, policy gives the

credible outlook. i think the fed has said we will roughly moved by 100 basis points over the year. it's just what fits the u.s. economy. they do not want to run into a credibility trap. francine: what are the chances of the target rate cut this year? , theat you saw in the past central bank for example in japan moved things up and took baby steps but the ecb started hiking rates in 2011. we face a policy credibility in the global economy because the guidance given by central banks, that's where markets get nervous. people are on both sides of the argument so you get a lot of volatility.

the vesting the central banks can do is give guidance and followthrough rather than speculating about their own future moves. isseminating volatility mitigating volatility, and therefore you have to be very clear and determined inner guidance. there is some lack of guidance at the moment on what the guidance that the is given is not perceived as being credible, and that is a problem. hans: is there anywhere in particular that you think there is a lack of guidance? turning points are always hard to predict. what the fed has done in the past was basically followed it through. hike rates ifnly growth continues. if growth continues, that has always been good for equity valuations in the u.s.

the fed will continue to tighten, growth will be isong, and the u.s. economy the strongest economy of the industrial world. we expect growth of 2.5%, it's pretty strong growth. it's more of a medium-term demographic. cyclically they will continue to move forward. : what are your three smartest place for this year? it's not a good town to have a flight into cash. this is a high volatility area so we recommend taking risk somewhat and to have a diversified portfolio. it's not selling emerging markets. neutrala general equity position but we are very positive on japanese and

european equity. monetary stimulus will extend and continue, but we are short on emerging-market activity. on average we are neutral on everything. hans: does that mean you agree with ben bernanke that the dollar has pete and will plateau, or does it have further to gain? >> i think he said the dollar rally is running out of the. remember what we heard two years ago, people felt this was unlikely. don't and it has completely run out of steam. if i look at long-term investment, and where people put their money, we're strongly focused on the u.s. and china among the emerging markets. improve.s. continues to

, i think the dollar will continue to float into dollar-denominated assets and that will keep the upward pressure on the dollar, including the fed rate hike scenario. there are many other reasons that will make people dollar bullish and there will continue to be pressure on the dollar. francine: what is your main concern for the ubs? what are your three main focuses? we've moved already on our strategy and we've seen our strategy layout. we are seeing that this is playing out and we will continue to execute our strategy and be a well mannered tour globally. well manager globally.

in china we are seeing a clear benefit of having an investment bank with the strongest investment bank in china. that is a segue into the billionaire clients in china. the synergies are part of our business model and we are seeing that work. competitors are having a hard time catching up with the things we put in place over the last few years. i'm not making predictions on bonuses. we are in the middle of discussion so i don't want to prejudge that. francine: we have plenty more great interviews coming up. and we talk about oil will talk to the imf about china. anna: thank you very much, francine and hans.

you can see some of the guests coming up on the program there on your screen. coming up, sterling slides in 2016, heating a level we have not seen since 2009 against the dollar. how low can sterling go? let's check in on u.s. equity futures. lookings. futures weaker this hour. axel weber saying we would see more volatility had the fed not weakened but he said they will continue to raise rates. we will take a short break and see you in two minutes. ♪

anna: welcome back. let's check out the commodities market. a great deal of selling coming

through in the asian equity session. let's check out one of the underlying drivers. trending back toward $28. oil prices staying near the current levels, we just caught up with axel weber, the chairman of ubs. see any more huge amounts of supply coming on chairman the former bp says there's too much oil on the global market. these commodities are under pressure in the bears are all over those asian markets. anna: we will see how that plays out in the european session. losingg extending its streak, falling to its lowest level against the dollar since 2009.

>> last summer i said that the decision as to when to start raising interest rates would likely come into sharper relief around the turn of this year. well, the year term in that decision is straightforward. now is not yet the time to raise interest rate. stephen carney, many people criticize the flip-flop attitude. now is not the right time, normalization is along well. a very clear message. the question is of course how long it lasts. >> it's about flip-flopping. there's no way can do the job unless you communicate different things at different times as the facts change. conditions, a break

of 140 is looking ever more likely. we have traced the sterling devaluation directly back to the interview in mid december. i don't know if you recall that but he was particularly dovish and starts to downplay further market expectations of a rate rise over the forthcoming six months or so. given the relative resilience of the euro as risk appetite diminished over the second half of the year, december-january was a great time to be talking sterling lower because they got euro sterling higher. he was talking about a time when the year on year decline in oil prices would be something we didn't have to think about quite so much. you get up better view of the underlying inflationary pressure.

without stabilization oil prices, is it possible to imagine the bank of england hiking interest rates? but they'vessively, been looking well over the scope of just inflation targeting. toolse looking at macro and policy and a number of and facets ofrs the u.k. economy which will dictate what they do in policy this year. smallll think 2016, a rate rise in the boe and macro tightening before the year in our still possible. we think raising the countercyclical capital offer would potentially be very damaging to banks, given what the cost are on the regulatory front already. where is a small interest rate hike it -- could help bank

profitability. targeted tightening could slow some of the more concerning aspect of creditor housing, like you mentioned. manus: you're talking about maybe 50 basis points. it takes you back to perhaps your interim target. .> that is one factor it means basically we start pricing hikes back into the curve of the second half of the year. that is one thing. the other thing is capital flow and debt and loan dynamics in the u.k., very healthy, very robust. finally, at least as far as q3 the uk's external position start to improve in the second half of last year.

anna: thank you so much for joining us, stephen. away fromare moments the start of the trading day. ♪ the only way to get better is to challenge yourself,

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japan slums into a bear market. it will be the talk of the town as the world economic forum kicks off in davos. anna: how will plunging prices affect profit? netflix stocks surging after hours. it beat estimates for subscriber numbers. ♪ manus: welcome back to "cou

ntdown." anna: let's talk a little bit about the oil sector. we are some numbers coming in. bg, that marriage is yet to be finalized. supply andost of earnings, $1.9 billion for the fourth quarter. they call ccs earnings inlusively saying that is that range. the big question hanging over this groups numbers, does the deal with bg still make sense? hashe run up to that, shell been mostly in the support of camp. manus: the average production coming from bg comes out at 740,000 barrels a day. in terms of the upstream

areness, $4.1 billion, they guiding in terms of the average production. that is ahead of the estimates. they say.own to what shall have been proactive in the oil downturn. it which of the company takes a long turn approach. the acquisition in terms of value, and the risk to ship or -- shale oil price can be part of this. 2050 will be in line or ahead of the original guidance. anna: and it would want to fret about dividends, underscoring shells commitment. let's get the bloomberg first word -- let's not, let's --

seeing quite a substantial drop here. you can see london over 2%. you have the bear market entering into the topics in the nikkei. -- were thebooker weakest since 1999. nelle to be bloomberg first news. caroline: japanese stocks have entered a bear market. earlier, chinese shares traded in hong kong at the lowest levels since march of 2009. sliding oil prices continue to weigh on investment. the hedge fund manager who predicted the hedge fund crisis says that china should and devaluehe yuan it by 50%.

he says he has been betting against the yuan since 2011. and the greenback may have peaked. much of the appreciation the dollar map already happened. we may not see much more. the currency has rallied against 16 of its major peers over the past two years. that is in contrast to other major central banks that are easing fiscal policy. weber does not believe the economies in a downward spiral. china and particular is in correction, but the economy will become stronger afterward. >> i think we are going through a correction. the imf has revised the growth outlook. i think that is where we are at

the moment. we have come out of the deepest financial crisis, and are now nine years out of that crisis. caroline: more on the stories online. manus: let's constrict out to davos where francine is standing by. no downwardtoicism, spiral, normalization. it might get a worse, but we will carry through. be the conflict of germany back in the 1990's. francine: he was a little bit cautious, he is expecting a correction but you pointed out his optimism. that is because he is chairman of ubs, they can't say it is all doom and gloom. like cautiously optimistic. he was saying oil is extremely difficult to predict.

we saw it go below $28 at a couple minutes ago. he said it could further slide further. he said with the right asset manager you could weather the storm. he wasn't overly optimistic about the world economy. his basic scenario is no recession that we have to watch out for central bank action. we are also expecting some great interview struck the day. r really anchored all of our expectations about china and the big transformation. he's also talking of course about the fed. he does not expect a fed rate cut but saying it may be difficult for janet yellen to do those 4 increases. we have a lot more of those interviews coming up. we will speak to the head of the still on a slide to

is a very interesting time. also's pegida at imf deputy. the dual be really great to get his take on volatility. anna: thank you very much. talking about the chinese turning that around. showing some appreciation for that. let's get to the asian markets. good morning, not a great leader for you guys in europe. have a look to be selling we are seeing across asia. the nikkei and the broader index in japan both into bear market territory. both down 21% from their peaks of last year. you can see there was only two stocks higher. a lot of the exporters coming under pressure. we are seeing a lot of selling coming through. you in hong kong as well,

can see out of the 50 stocks of the hang seng none are in positive territory. a lot of selling coming through. one down by over 6% to a record low. china closing lower than 1% today. a lot of property developers also under pressure on the shanghai composite. you can see korea closing down by over 2%. see this risk of epithet we have seen to the yen with asian stocks as a whole benchmarks holding a levels we haven't seen since early 2012. the yen really being this flight to a safe haven. they are generally lower in the region.

the aussie dollar down by 1%. a very negative day here in asia. japan's main industry cap both in bear market territory. manus: thank you very much for rounding up the news flow in asia. let's get across to ryan. time, 1.6or one billion dollars that is below the 1.8 billion of the analysts estimates. $1.8 billion falls in between. my read is, no big disaster here. steady as she goes, that is what the shell ceo can tell investors. they can tell them where they are voting on the acquisition of bg. i think the interesting second life is the upstream business

actually made money. between four and $500 million is what they are guiding us. not as much as they made in the last quarter. perhaps they didn't need to because of you to go but the last quarter, the upstream oilness and production of business lost money. they need to the refining business what we can see margins are getting squeezed across the industry. need as much help this time around. that will be reassuring to shareholders. paid a dividend every year since the second world war. thattors really count on dividend. any suggestion that it would be cut or suspended would be a huge red flag. finally on the cost cutting front, the company same it will spend $33 billion in capital

expenditure. important because the price of oil has fallen soak three. what investors want to see is the oil company trying to keep up with that fall in prices. anna: thank you very much. manus: let's bring in our chief oil analyst. , the iear demolished says we're drowning in oil. like why would be not go to zero at this rate? honestly, sentiment is very bearish. what i find it difficult it a lot of the data, with all due respect, is backward looking. they are looking at data that is already in the market.

the futures market is already price that in. interesting thing is, what you're seeing in the physical market is quite different. you are starting to see signs of strength with the u.s. imports. anna: you seem to be pointing to something that i don't know whether it looks more positive or a bottoming out, but tell us what you are seeing in the intricacies of the way the oil market -- what is it telling you at the moment? >> i think the futures market can go further down because it is a very macro play. many still viewed oil to express -- china, and iran coming back. and the physical market supply cuts aren't happening. this will be slow, this is not rebalancing. but things are starting to change particularly in north america. 's crude prices are

starting to get shut down. fastening partr is that china was on the main driver of overall demand last you. who is the swing demand or? >> last year it was the u.s. ironic, said they began export for the first time in decades. > 2016 at think it will be india. india was up at a very strong last year. we are expecting another similar area of growth this year. anna: if you at up all the parts of the world that should benefit from where consumers benefit from a weaker oil price, you can get to 75% of the global economy with not that many countries. these weaker oil prices having a positive effect elsewhere? >> last year we grew by 1.7

billion barrels. yes, i think we shouldn't underestimate that the $30 oil does wonders for consumers. the u.s. and even europe grew a lot. i think we could see local growth because the economy isn't necessarily doing very well, but consumers are. manus: i just want to break one headline coming in on this conversation. i think it is very relevant. one of the large utility producers cutting gas prices. that is by 5.1% this year. reality in terms of what is happening. that is a dramatic drop in terms of gas prices. what goes on in that part of the market? gas's bear market could go on for longer.

to your point in terms of passing this on to consumers, this is exactly it. lower energy costs are giving all us more disposable income. you are seeing that the european numbers. outhe 10 the data comes with it this is not that bad. it is all relative. anna: if we are looking for that clues, and you say there are signs of that in some of the actual physical markets, how long before you are sure. i think it couple of weeks more i would personally wait. anna: what is it you're looking at specifically? >> any physical differentials of the u.s. and europe. i would say that once we've had this divergence between the physical and financial for a month or a month and a half he should see those realigning again. anna: thank you very much. manus: let's get back to down

with our exclusive coverage of over the next three days. francine has a right special guest. francine: it's our first day, with two more to go. it is day one of the world economic forum 2016. axel will give us a nice overview. francesco, great to have you on the program. on the airget you because you've just been to an ipl. you're now more vulnerable to market vulnerabilities. when you look at oil or japan or other indices in the bear market, how much is it have an impact on your shareholders? >> the way we position, a fundamentally distribution service company. without lending risk, we feel very comfortable with the notion of the stability.

we are not on planet mars, we are exposed the same kind of all her ability. -- of vulnerability. values are still there despite the fluctuations in the market. francine: how concerned are you with the banks? could these impact the ability of banks to lend to the real economy? >> i think the bank is just a monthly fundamental reform. it is important to keep things in perspective. big banks are fairly well-capitalized. we don't to any fundamental reason for issues. hans: in italy, where do you see your projections for his official projections? >> the business we're in is really twofold.

see the analog side of the world. some of the retail side for savings and things. i think that are on balance relatively good news on both sides. you need to focus on the right segments. continued growth in parcels markets because of the e-commerce and a growth in italy. on the asset management sat is demand from consumers. looking for relatively new forms of investment coming from traditional government bonds. we are likely to stay at a zero interest rate for a long time. and creates new demand for the italians to look for instances that could get them appeal. hans: new demand, or new risk? >> i think that is very

important. role is an educational that we might be playing. i think it could be a bit of good news. >> what is your take on your lending arm? been what may be royal mail was 10-15 years ago. do you plan to grow that business? are into transaction banking. we don't lend the money, with fundamentally play the role of the payment platform as a service platform for people who have karen's and -- current account with us. particularly around insurance, it is an indication that people are willing to take different

instruments. francine: we talked about what they're here to do come whether it is business. you are also here to understand the fourth revolution. this crucial to your business, talking about delivering more parcels. the way we shop and expect our packages to be delivered is changing to radically. when we think about that from a strategic standpoint it is to play the role of a bridge between the traditional economy and the more advanced digital economy. i think in this emerging quite clearly. brand and ourur market appeal to my be playing the role of helping small businesses and consumers to adopt things that on balance should yield to more competitive countries. vos is a great lineup of people going through this. more importantly, about what , what regulation do

you need, what infrastructure needs to be put in place? hans: you could of job losses. we are having a theoretical conversation, but in switzerland was eventually 200,000 lost jobs to automation. what do you see in your industry? >> they're not alone in this challenge of creating outrtunities for employment of an industry that is been seeing volume evaporating. opportunities in e-commerce and growth. we can see opportunity in asset management. the challenge is the skill that we have to manage. the other thing is to advise families on their savings. once again, technology could

help by trading platforms for consulting and digitizing, but it is a challenge. time to trainake our dogs to attacker barnett post men. francine: what is your business plan? is there anything you can preview with us it will be of great interest to shareholders? are recently out of the ipl. the first time we talked to the market is probably in march. there is the major news that we have. what i was saying before is important, the three legs of our business just six, payments, and savings, seemed to be holding well in the context of volatility. francine: what is your main concern? them, theyeak to need to get the service

absolutely right. even if that letter is today's late there will be an incumbent will come in. quality is huge. that is part of the fundamental change we are running in the company. i think it is important that tos digital world is not lose the site of the fundamentals. customer to are there to send and receive mail. they use it because they need to. therefore, incrementing a fundamental change in universal service provision where it is been associated with frequency. we are starting to lower the delivery in some areas to make the service sustainable. once we get that, we need to deliver. hans: i'm glad you mentioned italian reforms. how has your relationship with the state changed? can you still rely on them? is aat we have seen

fundamental change in attitude in terms of market openers and transparency. i think the government has growth andpace for innovation. i think it is now a big-time for entrepreneurs to take that opportunity and run with it. francine: thank you so much for joining us. speaking to various ceos, it's interesting to see the reasons why they conflict up and scripted he came to learn more about digitalization and automation. manus: great interview there from you and hans. anna: saudi arabia set to order a halt in relation to the currency which is paid to the dollar. china can take action to limit the amount of direction of the currency. manus: this goes back to the

debate whether all of these pagans will hold -- pegs will hold. to 1.2%.ut estimates this is a chart that shows if you think these will be defeated in terms of this -- this is a retrospective. night -- like to stick with the pagan. -- peg. anna: it is a very volatile session over in asia. it looks as if you have a weaker session here in europe. expecting to be down by more than 2%. futurese have equity indicated on the dow jones down 1.6%. there, a droprope

by nearly 4% in sydney, that is under pressure. brent for those $28 a barrel mark. if you want any sign of that in the markets we can find it for you this morning. just 50 minutes ago, she does see something that looks like it could be a bottoming in prices. we will have to wait and see if that transpires. a look at's take where the money is, in his footing out of equities and into 10 year government bonds in the united states. long-term treasuries of the best-performing bond markets. concern and risk in markets out of equities. anna:* it is one of the talking

points in devil's -- davos, in switzerland. the first of three days of live coverage. beautiful swiss town you see there. we leave you with the on the move team. ♪

to "on the move" we are counting you down to the open. with quite a show lined up. let me tell you what you need to know. japanese stocks into a bear market. equity markets fall sharply lower this morning. shock to the oil majors. it is a rout in crude prices. vos day one, the chinese slowdown dominating discussion at the world economic forum. we will speak to ceos.