>> opec strikes a deal. oil prices stabilize after surging 5% on an agreement to cut production for the first time in eight years. deutsche bank's china challenge. the lender is set to face a hurtful moving money from the leaveshile mario draghi blame on industry behavior. the paris motor show, speaking with industry leaders after the scandal rocked peoples motors.

>> welcome, this is countdown. >> they did it, the iranians and saudi's got together and got on the same page. this is what has been agreed. a new corridor or for production. #, the bandwidth. 33 million barrels a day. if we take it to the extreme, they agreed for november. 700 50,000 barrels of production per day taken out of the market. the question is how does it get allocated. it ran looks as if it may have an exemption -- iran looks as if it may have an exemption. the detail is one question.

who is going to produce what exactly. how will the russians respond? and what will the shale producers say? that was the fear from the saudi side that if the deal was agreed, would that encourage more u.s. production. we are on you where various acids including oil prices. saw increases in oriole yesterday. this is where we are now. both have moved up considerably in the next 48 hours. currency -- sachs has said it is probably worth $10 a barrel. that takes you into 55. $60. it is going to provide short-term support. >> the saudi's are gambling that

increased improv -- production will have a compensating effect on prices. we will see whether that happens in this environment. china creating a potential headache for deutsche bank. a $9 million stake in a chinese lender and moving proceeds off shore. they are reviewing application to move mouse -- amounts of money on a case-by-case basis. that is according to people with knowledge of the matter. deutsche bank working closely with regulators but declined to comment further. they haven't received any relevant application. janet yellen says lawmakers are looking into disturbing compliance failure at the u.s. banks.

breaches,investigate including manipulation of interest rate. yellen was responding to questions about wells fargo's scandal would not confirm the fed breaking up the bank. patrick will give his first interview here on bloomberg at 11:00 a.m. u.k. time. said event driven hedge funds are most at risk of shutting down. speaking to bloomberg, the head of the world's largest hedge fund manager said complacency will lead to outflow. he also discussed the impact of central banks on potential economic shock on the industry. >> in the world of these very low rates. the reality is we start the year somewhere in the hole. it is difficult to take the right amount of risk. you need to be tolerant

otherwise you can't make money in this environment. spain's mainn opposition party could help end the nine-month deadlock that has highlighted the country's politics. the 35 person executive committee that -- steps down. sanchez led lawmakers into voting against lopez's candidacy. he ceo of wells fargo says would like a settlement with the u.s. department of justice and civil authorities by the end of the year. bloomberg, he also said he wants the settlements to have a solid planning basis. it is too big whatever it is. we made a huge mistake. we admitted it. we are going to pay for that. but i cannot give you a figure. we will have to see. export boom and foreign

investments have helped vietnam's economic growth in the third quarter. 6.4% from a year earlier. up from 5.6 in the previous. . -- previous period. news 24 hours a day, powered by more than 26,000 journalists and analysts. you can find more stories on the bloomberg cap. emily chang, bloomberg. manus: let's see what is going on in these markets. last -- oil rocked in the 24 hours on the upside. that is good news, they say. >> definitely. the fact that energy prices will , now gaining 1.5% on that. analysts say that japan's energy

markets is not that big but risk onhey are showing sentiment among japanese investors. the mensch mark of 1.5% -- benchmark up 1.25%. china, 6/10 of 1%. at energy,e a look leaving the game in hong kong. emerging markets, currencies gaining for the third consecutive sessions and taiwan up 1% after being closed for two days. they shut down because of a typhoon. australia also gaining as much as 1%. not surprising. australia has been shares in energy stocks and you can tell that petroleum, for example, gaming -- gaining 7.5%.

oil prices, opec preliminary deal, in plain markets. oil importing countries, malaysia currency aiming about 4/10 of 1%. holding two days of decline. >> thank you. oil has stabilize this morning after its just advanced since april. as a --: the deal came an iranian administrators said he was pleased with opec. >> very good argument. excellent argument. i am very happy. had a2.5 years, we have productive argument in opec. that means opec can overcome to

the many very difficult situation. bloomberg in algiers, the deal has been a long time. -- long time coming. very few expected the saudi's and iranians would be on the same page. finish, a remarkable you could not have scripted a more exciting ending. is, there was too much oil in the market. this is what we had heard from a lot of ministers ahead of that team meeting which took four hours and went late into the evening. they realized the market would not balance itself after all and not fast enough, so they had to take steps to try and bring that in. the devil is in the details. they decided to bring production ofn slightly to a range

$30.5 million to $33 million per day. that is quite a softening. the allocations have yet to be set up. a committee will discuss this for -- further. individual countries will be set in this meeting later on. now the other question is the timeline. is this going to last six months? a year? what are the parameters of operation? what are the benchmarks you are going to use for this? finally the role of non-opec supply which has been a big headache for these opec producers. the resilience of non-opec, they are going to have to sit down with russia. russia willing to do that, we will see whether that conversation gets further to bring supply under control. that is going to be the

challenge of 2017. great work on bringing us all the news from algiers. joining us in the studio, smith, head of strategy for equity strategy at j.p. morgan asset management. great to have you. when you saw this deal, many were surprised by it, there has been some expectation. it caught many off guard, does it change your attitude right now? >> certainly, as you said in beenpiece, opec has not opting market cartel for some time. the devil is in the details. not be as material as the original reaction suggests. step back a little bit. most oil majors, the major

damage, earnings was down last year. residual damage this year. a lot of people speculating on whether it is sustainable. -- it isonly reinforce good news for majors. it is also good news for the --irations, much more viable volatile on the way down. got a chart of the tracking in the u.s.. hammered every time we see a spike above $50. the fractures in the united states of america coming back. ,hen you look at this, the u.s. that particular sector. they have a risk problem that is coming back to life. next,ms of what happens does this open up a signaling

that there is capitulation from saudi arabia? there a acceptance that finances are so screwed we have no option? myit is slightly outside of gambit -- gamut. clearly -- >> under pressure. i want to finesse it a little more eloquently. int does it mean to you terms of ramifications? will it bring inflation to japan? question, to me is interesting. if you look at it from a european point of view. europe has suffered with low levels of inflation. negative inflation for some years. if you look at the correlation between them, from the ecb's , a very important

view of market sentiment of future inflation. before the sovereign debt crisis of 2011, there was zero between inflation and the old price. after, there was a .8 correlation. not clearly the ecb theerned with correlation, influence on other parts of the economy is minimal and the major inflation dynamic is shaping expectations. >> it would have to have an -- a -- on oil prices first. use to her this -- you're the slime that, if they cut production because of the supplies -- demand situation, it is not clear whether that would push up rising all that much.

what we think of the demand side of things? that they cut production of it, and it does tell you it should push up the price. you look at the shortfall for earnings, a lot of it is coming from shortfall. it is holding up. america is -- europe is recovering fine. ,hen you look at nominal because inflation is so low. we get some kind of a return to a more normal inflation cycle, forecasters in return toation will 1.8 over the next few years. -- theminal gdp mentality of the consumers and investors. manus: thank you very much, stephen. ahead, highlights. >> unemployment numbers followed

by u.k. market approval. manus: half an hour later, the eurozone conflict and 1:00 u.k. climb, german inflation data. 9:00 u.k. time, video link at a forum. we also hear from other federal speeches. manus: coming up, full steam ahead. we are hoping japanese consumers just with the click of a button. >> behind the wheel and battling accusations in technology to buy car emission standards. we are at europe's biggest car show. manus: a dovish tone struck by the minneapolis, but he is not a

voting member just yet. this is bloomberg. ♪

>> welcome back, this is countdown 1:19 in the afternoon in hong kong. ceo's for the automotive sector gathered at the paris motor show. manus: that comes almost one year since the diesel emissions cheating scandal that rocked the industry. we go to the french capital where bloomberg's caroline hyde is standing by. general motors had a european division. caroline, good morning. >> very good morning. here, the headn europe.nit in fabulous stage. give us a sense of the car behind us. what is the salesforce expecting? >> first of all, this is a big

premier. it is a car we could announce twoy has a range of kilometers more than any other competitors. you don't have to have any range anxiety. we think it is big what we are announcing. >> interesting on a date that we are expecting opec to come up priceskind of deal, oil rally, will that help demands for the vehicles? that get people buying them in europe? >> it is a coincidence. butll know they will go up it is not a main drive. the main drive is the co2 reductions and society really wants us to go electric. we need to get them excited. this car is trying to not only address the minds and heads but the hearts. it is fun to drive, well-connected. --take range excited he

anxiety away. you can really buy this car. featurestalk about yet, but for this to be -- this is not a luxury car, it is something everyone can use every day. for 2016 to target break. is that the case? you had to withdraw somewhat from russia. brexit concerns. any of that 2016. even the first half of the year. it shows our plan works. unfortunately brexit came our way and that is not helping because the pound. every fourth car we sell, we sell in the u.k.. it is a big draw. we are aiming at breaking evening, seeing how we get on. >> when it comes to brexit, are

you feeling consumer sentiment has been didn't it? >> we don't know it yet. a lot of stopped being sold off. we will see. >> what else is in concerning you in terms of global outlook? many people worrying about growth when it comes to regional european economy. where are you seeing outperformance in where your sales are going? >> at the show we also announce an upgrade of the previous car. segment, a crossover of a u.s. -- suv, still a lot of accessibility. we have the debt -- become very successful in this field. >> give us a sense of a , francehip with persia is relevant to talk about. how is that partnership

evolving? are you adding more vehicles to the project? whichhave these two cards will be along soon and are making good progress. these programs are important for both companies. we are very satisfied and look forward to these cars. after that, we can always see how we can extend the partnership. >> who do you see as your competitors nowadays? talking about electric vehicles, technology connected. is it the apple, the teslas? more than your auto sector? where is the hottest competition. >> there are new players like tesla, this car does compete with new cars that might come up in the future of tesla. , wethe googles and apples are in competition with them. appleroduce android and technology into these cars but in the same area, we also have

them as competitors. the auto industry is on the move. >> what is the sense of what you want to see from global leadership right now esther mark a sense of more -- global the overp? how will rounding environment help you in 2016 to make your greek -- breakeven? thatople have to learn these are cars for everyday use. we need infrastructure, incentives are good because they help people over the barrier. good help there. we should not expect these things to happen too fast. not only in the minds of our customers, they need to know they want these cars. but also for us, a transformation. we have a touch of the entire company. this is a big change. >> thank you very much.

joining is bright and early on a bright stage. it is all about the electric vehicles, all about the suvs. >> thank you caroline. , suv's,tric car definitely will be in focus. up and running for the paris motor show. anywhere in a half an hour's time. we will have live coverage on the latest models as they are unveiled and hear from key executives in the industry. we have got breaking news on electric cars, but you have to stay tuned for the rest of content. have a look at gm and if you want to understand what risk is going on. oil rallying by 5%. look at the stocks. above 1%. risk bornedefinite

appetite. >> a dovish tone struck by minneapolis president neil. that story ahead on bloomberg.

manus: it is 6:30 in london. shot in tokyo of the emperor's palace. the high for yen, dollar rising, again dropping risk on outside the markets. it is daybreak. look bloomberg and take a at the front cover. oils new don. a paradigm shift. agreed an output deal, the cartels agree to limit production for the first time in eight years. the deal still to be worked on. isunderstand that iran

allowed to produce but is this a boldface? anna: what will russians and americans do? , in itraghi's interview he said rates can rise when higher wages and stronger growth bring inflation near the ecb's goal. the fiscal latitude that he thinks the german government has. manus: can you imagine the -- new ining fiscally e-mail -- economic data with german regional inflation and the bank of england secured lending data that prevents andy -- any follow-up from the brexit vote. is the market slowing for real people? i am talking about the real economy quest -- economy.

2016 not going to be a vintage year for investors. charts.with good morning. we are talking about stocks going high, bringing up the gmm throughout the morning. one area is not producing such a risk and that is what is happening with chinese equities, projected to be down 30% this year. the sellout we saw years ago could be felt. is -- people by equities, in china there is an alternative call the property market. when china is still going andlutely through the roof the chinese authorities are going to have to react. they are keen at the moment to

be below the radar but the chinese housing market has strengthened. ago, whenttle while we saw that trouble in the chinese equities market, then bubbles and barriers commodities. people calling in waccamaw where the money has to go somewhere. now it seems it is property again. >> yes, clearly. given how poorly stocks outperformed. have -- does that whatmore to do with investors busted? push to trade elsewhere in other others with rebar steel, -- >> reinforced steel and they are

staying away from the equity markets in a world with -- we are not seen this anywhere else. investors look at it policy as opportunity. the linkage that exists between hong kong and various markets. volume has been pushed out. makes you wonder when that money stops and maybe flows in the opposite direction. what can happen again? we saw the chinese market shoe for the stars and come down very hard. anna: the chinese story has the ability to grip the rest of the world. thank you very much. mario draghi says the financial industry must stop blaming central banks for their problems. the focus on internal management. ecb president was asked about accusations by some in the financial industry that the ecb is responsible for some banks close. >> i do not share this view and you said why.

represents a threat to the eurozone, this cannot be because of low interest rates. it has to do with other reasons. ceo ofluke ellis, the the largest headphone -- hedge funds said he has a larger outlook on deutsche bank. >> if you look at it as a credit risk, not at all. germany,ged the law in 60 billion in debt is bad. it comes before any of the depositors. billion, which becomes equity in a crisis, that is more than enough for deutsche bank to be healthy for a long time to come. anna: stephen macklin smith from draghi says itt, is not the fault of the ecb, deutsche bank's suffering more

than others. of work is still a lot to do. i am afraid germany showed up not particularly well in that chart, about 73%. one of the worst in the eurozone. if you look at what has happened in banking sectors across europe i country over the last 6-7 thes is a reaction to sovereign debt crisis. so there has been emphasis on making sectors more fit purpose. they think europe is over banks. that is a healthy project -- projection of the markets. the issue is capital. that is what the markets focus on. you heard 60 billion of tier one

capital, for a number of institutions. deutsche bank lagging its. . that is the critical issue. -- deutsche bank was lagging its here group. >> in relation to some of its major fears. credit wellness is not relative to your peers. it is relative to your business. ,f we think about deutsche bank they compare that to the market capital of deutsche bank. deutsche bank trades at a big discount from book value. there is a lot of equity -- behind business. we were chatting in saying what were the likelihood that deutsche bank goes up in the next five years. i think it is zero. talking have a story about the challenge merkel faces

because he was one of the bigger bankers in the recovery. it is a straitjacket around the european government now and means they do not have the ability to step in and help banks in a way they want to. banks backstop in general are still there? .> yes make banks more fit assets. keen to sees very this happen in the sector in italy. a lot of restructuring in germany. we are on a progression towards what could happen in the banking sector. forget that in 2009 when the banking sector was trading on the same book that it is now. ratios were around 6% across

europe against risk rated assets were a questionable value, now is the result of the stress or 12 verseave 11 .isk rated affect -- assets i think banks are one of the great value opportunities over the next five years. appraise -- a price of 314 is downright cheap. if that risk doesn't eventuate, and banks don't comply -- >> you see deutsche bank not going over? ?o you buy financials talk about us about what you like, equity or debt? exotic,'t dabble in the i like equity.

have clever colleagues at j.p. morgan who know much more than i do. from the equity point, i think simply because the average is pretty low on a price to book basis but the spread value is huge. likely there are decent value opportunities for which we will be parroting around. anna: thank you. stephen staying with us. sayingneel kashkari banks cannot keep rates lower than used -- can keep banks -- rates lower than usual. >> it is rare that the federal reserve would. -- adopt interest rate. we think there are other tools we would go to, such as other quantitative using, other types

of forward guidance to try and ease monetary conditions. manus: still with us is steven madden will smith. warning rate hikes are a dangerous way of popping bubble -- bubbles. hinting that the market would not assure a rate hike. the probability of a rate hike is less than 40 fmc. , they can't get this market to change. they cannot get the market to catch up with them. guest: i could not predict exactly what inside yellen's mine. -- mind. i think what was interesting about what she said yesterday

was about the labor market. the u.s. labor market clearly has a room last over the last three years. way a lotnated by the of the growth and employment came from the shale industry. you see that on rig count. that is a lot of jobs. when the oil prices come down, to count went from -- down 400 50. with that a lot of jobs came up. you did not see that from the employment statistics. the exertion of jobs out of the shale industry was incredibly strong. you are close to full employment and the participation ratio rising to come back into the labor force. showschial european

underlying strength in the labor market. anna: fiscal authorities could boost growth, like what you said, there might not be a need. guest: my sense is that if you are being paid to borrow money nothe market, why would you spend it on infrastructure? it is not that u.s. infrastructure does not need spending. manus: this is the bloomberg economic surprise for the u.s.. subzero, first time since the beginning of july. i'd hear what you're saying about the employment, but they is -- one of the elements the employment but also the economic surprises. is, is the u.s. economy at risk? guest: i love surprises. we talked to economists. surprises show how wrong we can be. when we are too pessimistic and

the economy surprises on the upside, we get boosts and that is what you see in the third quarter. people were downbeat on the referendum vote. surprises --- expectations are going to continue. i would have thought the fed would be hardened by the confidence of the brexit. i have already talked about employment picture in the states that looked healthy. real incomes look healthy and this is in economy that looks reasonably well positioned for the next two years. anna: thank you very much. head of strategy for european equity at j.p. morgan asset management. manus: what we have planned for you on countdown. covering deutsche bank. if only the lender found it as

easy to move money out of china. that is the story to come. world's largest music subscription business will be hosting japanese consumers. plus, the paris auto show is underway and going green. live to the show with bmw. this is bloomberg.

anna: welcome back. looks from the future will be a little stronger. thaticy session in asia has to do with the vote yesterday in european time which had to do with the oil price and agreement coming out. let's get to bloomberg/. separate settlement talks with the u.s. just met --

justice department about the toxic bonds crisis. they set a sale could be announced in the next several weeks. the u.s. already asked deutsche bank are $14 million for its shares in a all-time low. all parties declined to comment. -- management and has agreed to enter its third prosecution. a federal probe into million dollars. the admission of guilt is part of a settlement with the doj after a conflict five-year investigation. shell companies, oil indictments, a request for comment. outflows are creating a potential headache for deutsche bank.

seeking permission to move proceeds off look -- offshore. its focus is on preserving currency stability. that is according to people with knowledge of the matter. deutsche bank said it is working with closely with all regulators but declined to comment or the. they have not received any application. spotify launching its music service in japan, a market where customers have sparked a new interest in cds and final records. meanwhile, the financial times reports spotify is being cloud.d with by the company that invented the smartphone finally admitted defeat. they finally stopped making handsets after losing to apple

and samsung. they will hand it over to overseas partners. the move has been in the works since -- since ceo john chan took over three years ago. manus: thank you very much. we had a great story about blackberryr of them hanging up their tools and not making them anymore. they were responsible for so many innovations. -- s: anna: the paris auto show coming a year after the emissions scandal's. models -- new electric models. manus: we go straight paris with caroline hyde is joined by a a board member of the volkswagen brand -- the bmw board.

thank you very much. i'm joined here by the head of sales for bmw. , we werevehicles talking about how this car show is all about electric. how do you fend off the competition? everyone unveiling one, how do you focus? there is a lot of unveiling but the car behind us has been three years on the market with plug-ins and electric vehicles just clicked over 100,000 sales. a lot of people talking about future, we are doing it too real customers right now and will build on that in the months and years to come your >> is the demand they are in europe? differentnt ways in countries. a lot of taxation supporting it. we are seeing a big spike in german sales in recent months. as morend the world, players come in and more discussion is there.

customers become customer with range anxiety, this car has 50% more range than the car a few years ago. these things are moving with technology. pricing zaidi? is there a sweet spot that customers are demanding when it comes to war the s -- luxury electrics? >> we position these cars within the range and if you look at some of the taxation policies, scandinavia for example. a car like this is less expensive than a similar gasoline model because of taxation benefits. it is not an easy consistency, but it is one the customers can actually latch onto quite quickly. gate,ear on from diesel has that crisis spurred demand in any way? >> i think there is some correlation, manufacturers all around the world and how we see

it roughly the same. it is slightly lower in the u.s. than it was, but already quite low. shares between 70 and 90%, country by country. some countries dropping a little at but nothing significant this stage. i do think the gasoline-hybrid engine is an alternative here policies support it, over time that could be a trend that continues. there is still a huge portion of our business. >> the ongoing debate between margin versus sales. maybe suvs are hot topic in paris, tell us about your seven ranges, give us your sense of whether you have to face more on profitability because you are reaching a limit in sales volume. if you look 25-30 quarters

back, we have stayed consistently within the range guidance we have issued to the market. if you look at q1 and q2, you know where our profitability is. that tells you we balance our profitability and our volumes. they are not mutually exclusive but there is a sweet spot and my team all -- teams all around the world look for that. the answer is, i am not going to chase the last car volume at the expense of profitability. some manufacturers take a different view. we have a guidance out there and that is what we hold dearly. around the world, which teams are outperforming and where is the concern is to mark -- concern? >> that is an important issue on balance as well. america's see business, a good european business, a good asian business. the economies are at a different stage of development. in europe, sales are very strong

at the moment. southern europe, strong double-digit growth. but it is coming off a base which was depressed in 2008 team -- 2008-2009. in the united states it has peaked. they are on the record as saying that market will flat line. it is way past its precrisis peaks but it has peaked. in china we saw last year that the market slowed down dramatically. this year it is picking up again. we're seeing sales grow to around 8-9-10% at the moment in china. having that balance allows us to at be too dependent and have good view on the global scale. >> thank you. head of sales for bmw. right here in paris. back to you. anna: thank you. you can follow paris, live

coverage and more as they are unveiled. next, we talk about ♪

>> the blame game. mario draghi says a year on from the cheating scandal that rocked the auto industry.

good morning mrs. count in prime minister. manus cranny. >> they are planning to cut their workforce by 1000 employees. >> 500 layoffs in denmark. >> the reductions affect their research and development units. they're keeping their outlook from the statement from the copenhagen-based business this morning. this is the company who develops producers and markets, cynical products. we've spoken to them many times in diabetes products. >> we had a high-performance plastics industry hoping to save half a billion over the next few years. rip a cannot get growth

cost out of the business. >> let's look at the futures once they tell us that where we are going to end up. as they go to the asian section, the weakness in the yen is helping to boost the japanese system or a. but the hang seng has gone kind of flat. that is not -- that is not being reflected. >> we are playing a little bit of catch-up game. the oil market rallied. is that a boom or a warning sign. and is a boon for a bit inflation or is that a risk to global growth. we're talking the oil and the risks on the map. that's what we have for you. nymex giving back a little bit of that before rally that we had a little bit. that theachs saying deal in algiers is worth about $10.

i would say that saudi arabia has capitulated and made a turn and agreed to actually go for a cut. that movement and dollar-yen a little less appetite for the japanese currency. we have a boost to those currencies that benefit from that higher oil price. commodities and especially oil perform robustly. this is a reduced charges of what they call the typical decline for commodities. >> yellen has been in the tape last night again. say right nowan seems to move the work function. a it was 54%% them before janet yellen started. . a poll suggesting that

the market believes in corona extra ability to speak at the-year-old curb. limits capital outflows creating attentional limit in deutsche bank. they're seeking to move commission proceeds of sure. the currency regulator says they are reviewing applications to remove large amount of money on a case-by-case basis and this is on subverting currency mobility. deutsche bank says it is working closely with all relevant regulars but declined to comment further on discussions. told automakers that the fed is looking into what she called disturbing compliance failures.

they will investigate breaches including mortgage abuses and manipulation of mortgage interest rates. she was asked to comment on the wells fargo account scandal that would not confirm whether the fed was considering breaking up the bank. luke ellis says larger macro and event driven hedge funds are most at risk of shutting down. speaking exclusively to bloomberg he said in the face of low overturned, complacency will leave to outflows. the reality is you start the year in the whole. some people have found it difficult to take the right amount of risk.

you need to be really tolerant of swings are you cannot make any money in this environment. report in spain's main opposition party could help and the nine-month deadlock. 17 members of the socialist party's 35-person committee stepped down. and move that could trigger the dissolution. they led lawmakers into voting oy's candidacy for prime minister in a recent confidence vote. speaking to bloomberg at the paris motor show he said he would like a settlement to have a solid planning basis. because were is too made a huge mistake we admitted it and we are going to pay for

>> this export boom and foreign investment have helped it surge in the third quarter. it's being voided -- growth is uyed following a crippling drought. >> let's get straight to sherry and. the euphoria of the asian market seems to have dissipated a little bit. is that a fair call? >> just a little bit. asian stocks are still headed with her best corridor since 2012.

oil said to retrieve a little bit. energy shares have been boosted. the nikkei is up 1.4% and j.p. morgan asset management saying that japanese energy sector is not that big but it was enough to have some risk on investment and investor spread and closing up and also reversing. taiwan came back after a two-day break because of a typhoon and increased 8/10 of 1%. when it comes to the shanghai composite some people say don't trust the mainland chinese shares because analysts expect shanghai composite to see its worst year's 2011. has collapsedver

to a two-year low. the hang seng index lost some ground. we're also seeing the ash 200 up 1%. coruscating for the second consecutive day. we see energy producers leading the gains. not surprising that santos led up 8%. they were upgraded by city. today we are of 1.6 sent in these stocks cause compromise in southern australia. a power outage, they resumed operations. sabean the ability and is up 5% at the close. sherry and with the latest out of hong kong. oil has stabilized after its biggest advances april as opec agreed to cut production. >> this is for traders who had expected the member's to maintain output. found that there was a

strong willingness among these states to make it efficient. -- making these decisions. this will only be through an official extraordinary meeting which we all unanimously agree upon. is been there all week. the deal has been a long time in coming and it was quite unexpected. are they really all on the same page? >> that's the way it looks at the moment in terms of the visible promotion. might beeous sunrise symbolic of a new beginning for opec. this was more than just about trying to rein in the over some i. this was about reasserting the

potency as a market force and that is partly why the market was caught off. 32.5 million barrels per day to 33 million barrels per day. that is the new target range. in november we will find out the production targets for individual countries. they will sit down and find out how to allocate these auction cut. second time frame is the production cuts. what are the benchmarks you'll make your assessment on and what is the rule -- the role of non-opec supply? it is been very resilient to the environment and that could come in for the oil you are picking up. -- taking out. they had a note saying the agreement will take one million

barrels per day of the oversupply. down to how the deal isn't worth and can agree on the final details in november. manus: great work by you and the team. next 30r guest for the minutes. ,hen i look at this marketplace this is the new range. you heard him say that they reckon about one million barrels will come out of supply. is this a seismic shift? >> the thing to talk about here is saudi arabia. why did the saudi's suddenly change? they have been embarked on a policy of cutting the oil price for the last few years and

suddenly they realized that the voodoo economic approach doesn't work. jet -- debtee its to gdp ratio rise. they're about to launch international bond issues to fund themselves. they are running into domestic crises because they are running out of cash. that makes saudi arabia week. that means all the other countries especially iran will be looking for other opportunities to pick them up. i think we will be talking to pressures back in the market and of course how much the americans start reducing once the price goes up stop america is able to increase production. >> oil prices will not risk bonds for a long time. >> i think we will continue to see quite a bit of volatility

but in the current range. it is unlikely that we will see the current agreement start the predicted one-year, two-year move. anna: if the price doesn't go up that leaves them worse. >> they are in a difficult position. anna: they are gambling that the price will respond? >> they are hoping they can turn around a world where oil prices were coming down to keep other producers out. withannot really play economic forces or market forces in that way. that is the lesson they will learn very hard. worth do you reckon it is $10 on the barrel for the price of oil? in a in terms of -- and abe, terms of getting to the target. let's pull up the price.

is, he will succeed which is well done kuroda. you have done what greenspan could not. >> where our oil prices going to go? upon't think they will go $10 now and i don't think we will see much change in the global inflation outlook as a result. bg is an interesting one. always buy and buy some more. anna: you think he will be successful? >> he is playing with the yield curve. is he going to be successful? i am told that it is by some people whom i respect deeply. even they are wrong sometimes. i give up sometimes trying to figure out what is going on in

japan. didn't work for eight years so i don't think it will work for the next eight. that is a bill blaine move, rather than a mint move. anna: eating division to interpret that -- you need the vision to interpret that stop --ar comment comment. thank you very much. the world's largest music subscription business will help japanese consumers will switch from cds. i might.

conflict by the investigation or hundreds of millions of dollars.

they did not respond to our experts arecomment creating a potential headache for budget bank. reviewing applications to remove large amounts of money on a case-by-case basis. that's according to people with knowledge of the matter. deutsche bank said it is working closely with all relevant regulators but declined to comment further on discussion. onlinehis want to its these of service in japan. the largest physics obstruction business will offer a free service as well as a description version for just under $10 per month stop the financial times are boards modify is in talks to

buy its rival streaming service is it wraps up -- ramps up competition with the music. blackberry will stop making handsets having lost the battle to samsung long ago. the canadian company will have the ability to receive orders and concentrate on its more comfortable and growing software business. john chen took over almost three years ago. that is your bloomberg is this flash. >> let's thought what central bankers. the financial industry will stop blaming the actions of central banks for their problems and focus on fixing internal management and risk failings. >> after speaking with german lawmakers wednesday the resident was asked about accusations by some that the ecb is responsible for some bank woes.

>> i don't share this view and you said why. if a bank or presents a systemic threat for the eurozone this cannot be because of low interest rates stop it has to do with other reasons. >> the ceo of the largest public we traded hedge fund manager told bloomberg in an exclusive conversation that he had a positive outlook for deutsche bank. >> if you look at it as an actual credit risk -- they change the law in germany. any of thefore business creditors or depositors. it becomesely means equity and is more than enough for deutsche bank to be healthy for a long time to come. weigh in.nna: he says it is not about to go bust. but there are many views on

deutsche bank that have been heard in the market just now. yesterday we saw a lot of positive views that there were rumors that a sovereign fund might come in. they're all coming to agreements with the u.s. department of justice and that deutsche bank can easily get a deal that can reduce it down to $5 billion, which they can just about a fourth to pay without going bust that this comment of which a bank as a healthy bank -- banks are enormously complex. when they get into trouble, it is enormously difficult to fix. that is what all of these bank ceos are discovering. when you have a completely glencore everyone addicted -- predicted you have to take a leap forward. they sorted out asset sales.

you cannot do that with banks. when banks start to spiral they continue to spiral. i think the endgame -- we are nowhere near it yet. i suspect new rules in place mean that it does continue to be a problem and they cannot recapitalize. we are going to see a fundamental change in europe's banking the first getting exercised where tear one debt holders get hit and also avail in a senior debt holders is possible. >> what is that due to the market? we have a #on this for our viewers out there which is the tv 3582. this is exploited for deutsche bank. if they were executed over that do.

with that bolster confidence in the word that europe has righted itself? >> not at all. it will confirm what everyone knows which is a little banking in the u.s. was very quickly fixed after the crisis. banking in europe remains essentially unfixed. if such as deutsche that has problems, there are good banks in europe but also bad x. you 2008ke a stock there are a host of them with a string line down. many of them have enormous amount of capital still to raise just to get themselves where they are. european banking remains in crisis. we see the exercise that will cause another wave of investor revulsion across the banking sector. >> this is supposed be part of their solution to improving things. googling joining us there.

that will do it for "countdown. >> futures indicated up a little bit higher. 1.311.g

guy: we are counting you down to the european open. i am guy johnson. caroline hyde is at the paris auto show. saudi abandons comfort as they pursue a plan to reduce supply. who will take the hit? inflationary pressure. how will a boost in oil prices affect global prices?