a very good morning to you. this is worldwide exchange. >> these are your headlines from around the world. >> central banks are calling the shots. europe trades cautiously higher ahead of expected easing from the ecb while fed chair janet yellen sounds her most hawkish tone going into the rate hike. >> when the committee begins to normalize the stance of policy, doing so will be a testament also to how far our economy has come in recovering from the effects of the financial crisis and the great recession.

>> oil pairing some losses after dipping below $40 barrel. as a report suggests saudi arabia and others could consider a production cut at this week's opec meeting. >> terrorism has not been ruled out as a motive behind the shooting in california that left 14 people dead and 17 wounded. >> based upon what we have seen and based upon how they were equipped there had to have been some degree of planning that went into this. so i don't think they ran home and put on these tactical clothes and grabbed guns and came back on a spur of the moment thing. we have not ruled out terrorism. >> brazil's lower house approves impeachment proceedings against the president. assets moving higher on the news. >> good morning, everyone, the euro zone november services pmi,

54.2. that's slightly below forecasts. we're looking for a print of 54.6. now the october services pmi was 54.1 so what we're seeing is a slight acceleration. if we break it down, the german services pmi came in line with expectations. it did accelerate slightly in the month of november but for france services growth as you would expect after the terror attacks it did slow just a touch. >> we're waiting for russian president vladimir putin to deliver his annual state on the floor the nation address in the capitol moscow in a few minutes. we'll keep you up to date when they hit the wires. let's get the latest on the news story of the day, the mass shooting in the state of california, just an hour outside of los angeles. 14 people are dead. 17 are wounded at a social services center. this is hours after the attack. two suspects, one male, one

female were killed in a gun battle with police. authorities identified the suspected shooters. he is 28 years old. an american citizen and his wife, 27 years old and we'll have more on this developing story throughout the program with our nbc correspondents right there on the ground. >> thanks, susan. now diverging in december. today is the first of this month's highly anticipated central bank meetings with the ecb expected to unveil more easing measures while across the pond the fed is forecast to use next week's meeting to hike rates for the first time in almost a decade. what does this mean for markets? the focus on europe today with the ecb meeting in a few hours time and as you can see we caught a bid here ahead of the expected easing. ftse 100 basically flat and then europe which will be the beneficiary of any easing up

about .5%. i wonder if too much is baked in. that will be what we have to wait and see, whether he delivers enough. let's have a look at asian trade as well. we are a little more negative. australia and hong kong down slightly. shanghai up about 0.4% and the nikkei is flat. carolyn, what about other side of the atlantic. >> pretty bad day for u.s. markets. the worst trading session and the worst losses in three weeks or so. in part because energy underperformed on the back of the 4.5% drop in crude prices back below $40 barrel. the dow jones off by 0.9%. the s&p 500 falling north of 1% and the nasdaq off by .3%. this came on the back of hawkish comments by janet yellen. she is looking forward to a rate hike that would be a testament to the recovery for the session. yellen that testifies before congress today says the timing

of a rate hike is not as important as moves that will be gradual. >> we're seeing fomc to delay the start of policy normalization for too long. we would likely end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting both of our goals. holding the federal funds rate at the current level for too long could encourage excessive risk taking and undermine financial stability. >> moving on to the ecb it's all about mario draghi today. today's decision is no easy call. he maintains that economy is improving without further measures and a member of mario draghi's inner circle broke rank saying that she sees no reason for further qe. >> yes, indeed but with

inflation and fwroegrowth barel above zero, the euro is dropping to a seven month low. they focused on expanding asset purchases and charging banks to discourage cash hoarding. let's get out to julia with a preview live for us in frankfurt. >> we have been asking all morning quite frankly how mario draghi manages to pull arab bit out of the hat today given the extent of expectations for what he will announce. the question is what more can he do to overdeliver today and of course ultimately given all the measures we have seen from him already, just what good, in fact, is extra stimulus at this point going to do? what next also a question we have been asking. let's get views on this. i'm joined by the chief german economist at deutsche bank. great to have you on. in terms of your expectations,

ten basis point deposit rate cut, 10 month extension to the life of qe. how based on expectations in the market already can mario draghi beat that? >> i think he has to be very good in marketing this and he has to point out there's some elements that could reinforce each other. we are expecting a deposit rate cut and we see the interest rate floor going and we see also some of the liquidity exempted from the lower deposit rate so encourage that and provide more credit to the banks. that would be the focus of draghi's presentation to say listen it's more than elements. >> so it's the fine tuning of the announcements that he makes. so even though the market is pricing, even if we focus on the deposit rates only, 14 basis points are cut. if he says look we'll exempt

some of that from the deposit rate actually it's going to have a self-reinforcing effect here. >> that's what he probably will stress so that overall it might be worth more than just 10 billion. >> so actually the press conference here is going to be crucially important. we could see initial disappointment when the announcement gets made if we get something initially but then once he starts to explain the interaction of these facts. >> in the q and a when he has a chance to elaborate in more detail that he will show the interactions. usually he's a good marketing man. he should perform. >> you don't bet against mario draghi is your point. we have sense that they're saying look, come on, everything that's happened this year, china, emerging market concerns, greece, is actually quite well. so you to give them a point

there. if you look at the growth profile it held up pretty well. it's putting too much focus on market based expectations. if you push it to the back burner and look at the real economy and say it's not great but it's held up so why do more? in germany obviously we were more concerned about side effects and the negative impact on the insurance industry and the negative consequences of the monetary policy probably receive a bigger focus than other countries. >> do we just push it to the side here and gag them quitely in order to do more stimulus? >> i think they have a point. if you look at the central bankers debate in 2009 they said okay maybe we contributed to that and if you look at what we're doing right now it's the same instruments and the same strategies so we should be aware of the potential side effects. >> so that makes the argument or discussion at least about tapering and how we contain what we're adding here. very important.

>> exactly. so it's early days for tapering right now because if you think about the extension of the qe for another six months, i mean, this should have a strong effect and so i think you don't want to take away from that by starting a tapering discussion right away. >> but it's all about influencing expectations at this point. stefan snyder, chief german economist at deutsche bank. >> thank you. we liked your suggestion. it's an idea i'll pose to our next guest. >> i was po draghi has managed to gag them himself such as they have to act based on what he has teased the market to expect. >> that's the interesting thing is that so often the positive policy impact of what the ecb have done has occurred long before they have actually done anything. if you go back to the whatever it takes thing, nothing

happened. it was the promise that something happen that have this enormous impact on asset prices. you were posing the question earlier about how does he deliver the market expectations. and that is the risk today, if they do something that you would have thought was quite aggressive now looks almost timid because the expectations are so stro. >> what would underwhel m the market if we only got an extension in term of the length of qe without the size increase? that would be underwhelming, right? >> as long as there is a rate cut, it's relatively muted. if there's no depo cut that's significant because that's been one of the major drivers for people selling the euro and propelling a lot of the peripheral spreads e tending qe,

people aren't thinking that's going to do much to drive asset prices it will effect those but not on a generalized basis. >> we have a guest that argued the ecb should be preserving the ammunition. weakness is here to say so maybe we shouldn't be overwhelmed. we shouldn't be surprised. there shouldn't be shock and awe tod today. >> you were talking about the u.s. and the fact that we're now approaching the first rate hike. one of the reasons that you saw the response was the federal reserve doing more, more, more

until it's enough. to not do it now would be questionable because they're going to undershoot their target ifs they don't. >> other central banks are watching what the ecb are doing as well. what happens to sweden, denmark, switzerland when we get the action later on today? >> to a degree they're going to follow -- there is a degree of a currency war going on. >> glad you said it. >> there's only a certain amount of growth going around at this point in time and heading in the wrong direction. the u.s. and to a degree the u.s. look like isolated cases. on a generalized bases growth looks soft globally. except for the u.s. and u.k. to some extent. which one of those wins? i don't know. we're in a different world. used to be where ever the u.s. goes everybody else gets dragged along. now you have u.s., europe and asia all as almost equal blocks and they're all doing different things.

makes it more interesting to come up with strategies to play those kind of conditions. >> actually there's probably starting to be value at the long end of the u.s. curve and there's better value at the front end of the european curve. >> thank you for that. >> and we'll be updating you throughout the day on cnbc.com and also don't forget to tune in for special coverage of the decision. decision time is with myself and carolyn. starts at 13:30 cet.

worldwide exchange back in a couple of minutes.

russian president vladimir putin is delivering his annual state of the nation address in moscow. putin says turkey will regret

what it did. he says we will keep reminding turkey about the downing of the russian war plane. moscow's response will go beyond food embargo. if he thinks russia's reaction will be limited to trade sanctions they're wrong but he says we won't use weapons in response to that incident. in terms of flashes on terrorism he says one country alone can't defeat terrorism. he calls for broad coalition and he says the countries should not apply double standards on terror going pack to that issue with turkey. let's bring in jeff that joined us around the desk. let's kick off with that strong line that turkey will regret what it did. >> we don't expect a military response. >> no and he ruled that out early on. two things that strike me in this statement here. one is that the language still

remains very hot and the second is that he has repeated the allegation that has so upset the president that turkey is somehow facilitating the action of terrorists and the accusation has been that turkey is purchasing oil from isis. president putin effectively restating the claim here in this speech. the issue though is just exactly how bad are relations between the two governments because we know foreign minister lavrov is going to meet with his turkish counter parts on the sidelines of the ofce meetings. he said i'm not going to meet him on monday but we now have a meeting of foreign ministers so i wonder if behind the scenes there is an attempt to deescalate even as the president

uses here what is clearly a political opportunity to talk to a domestic audience and remain robust about the death of two aviators. >> i want to pick up on that point because he wants to come across as the statesman. how is he being perceived after the string of events over the last couple of weeks? the downing of the jet but also the terror attacks. >> difficult to see any real change in his popularity at this point. russians endured aifficult time over the last months. if you sit back you can ascribe to president putin's determination to provide support in the ukraine to separatists. now we're in a different theater, the middle east. you have this falling out with turkey. the president clearly feels to bolster domestic support he needs to appear strong on this. so i think you nailed it. this is in part of that just

reinforcing that popular support that he enjoys and i was in russia just last week and you did not hear any descent on any of the major media networks. there's a manipulation of news flow going on here but while the support of the domestic population is behind president putin he can pretty much say what he likes at these major political events. >> i also want to get your gauge on the economy. we broke through $40. brent is look weak and some of the economic statements in the state of the union address here, putin says it's difficult. critical for the russian economy and he says we can't wait for a recovery in oil prices. what does that mean for russia going forward. >> what i think is interesting about this opec meeting is that minister novak is not going. at least that is the message that the russians were putting out last week. that the oil minister is not

attending on the sidelines of the opec session which to me suggests there's not going to be any significant movement as far as the saudis and others are concerned and the messages coming out of iran and iraq this morning have been this is down tonon-opec producers to also manage their production. the russians told us what they are going to do. we are going to continue pumping at record rates and it's a race to the bottom as far as the oil price is concerned here so the russian view even as we see less revenue we're going to carry on pumping and the weakness in the ruble has had some beneficial translation effect as far as russian government revenues are concerned but the foot is down on the go pedal as far as the oil story in russia is concerned. >> jeff, thank you. good to see you as always. jeff with a look at the state of the union address from vladimir

putin and russia. let's get the late fres california alatest from california. 14 people are dead and 17 are wounded in this mass shooting taking place at a california social services center. hours after the attack two suspects, one male, one female were killed in a gun battle with police. authorities have now identified the suspected shooters. he is 28 years old. he is an american citizen and his wife at 27. >> police zeroed in on the suspects hours after the shooting. they moved from house to house after a deadly fire fight with the suspects. >> looks like we have two shooters and we're pretty comfortable that the two shooters we believe went into the building are the two shooters deceased. >> both were dressed in tactical

clothing. both were armed with assault rivals and handguns. earlier in the day police were called to a social services facility after reports of a mass shooting. three gunmen killed 14 people and wounded many more. it happened while many people were at work. they struggle to describe it. >> horrific, scary, nervous. i just want to see my kids. >> the attack appears to be coordinated and investigators have not dismissed terrorism as a possible motive. >> i'm still not willing to say that we know that for sure. we are definitely making some movements that it is a possibility. >> many questions remain unanswered about america's latest mass shooting. the rampage happened after an argument broke out during a holiday party for county employees but it's not clear whether that was a factor in what appears to be a planned attack. nbc news. >> we are heading back out to

san bernadino for the very latest of the events as they continue to unfold. >> brazil's house speaker given the light for impeachment proceedings against rousseff. she denied committing any illegal acts. >> the u.k. launched the first air strikes in syria against isis following a parliamentary vote. the defense secretary said they hit six oil field targets in syria. after an intense debate lawmakers voted strongly in favor of air strikes despite opposition from the labor matter leader. prime minister david cameron said action was the right decision to keep the country

safe. >> inaction is a voice. i believe it's the wrong choice. we faced a clear threat. we listened to our allies. we have a unanimous united nations resolution. >> we heard unfortunate comments made about terrorist sympathizers and corbin tried to capitalize on those comments but it didn't help. he was hoping it would harden the opposition against the air strikes but we saw that the house of commons overwhelmingly actually voted for the air strikes. you have to hope for more coordination on the ground because there's so many parties now involved in those air strikes in syria. not just in iraq. we have the russians. we have the u.s. the u.k. now. the french. you would hope that no more incidents would happen. >> i think so but let's go back to the vote because although it was a resounding majority to push the air strikes through the interesting thing is the momentum he did manage to build

up over the last week or so and lots of talk that this was rushed forward and this was not as damaging to him. they haven't been heard sufficiently for him to win that vote but it's important to have the debate. >> 10.5 hours of debate in parliament yesterday. i wonder if people make the comparison to what happened during the iraq war where tony blair was in power then and making the case for britain to join that coalition. i am wondering if the uk. is thinking is this deja vu once again. corbyn said this is an ill timed rush out to war. >> in people's minds there's a fear that something similar could happen. but one is no ground troops and

the second is a unanimous un resolution ahead of this which was racking with the iraq war and there's much bigger national consensus and the u.k. is coming toward the end of this as opposed to leading at the forefront with the u.s. as in iraq. >> and also does this make the u.k. now a target for isis in the future. >> yeah. i think cameron's argument is we're already a top level target regardless of whether we're taking part in these. we're already bombing isis in iraq and london and new york you'd probably say are the two biggest targets. paris has been attacked most recently but there's been plenty. one in the last six weeks. planned attacks that the u.k. security services have managed to foil. >> it's about solidarity. that's the point. we can't just look away at this point and make sure that we show solidarity with our french partners. >> yeah. okay. we're going to go to break here on worldwide exchange.

still to come on the program, 2016 is almost upon us as we look toward next year. what will be the biggest risk to investors legal and general are here with their predictions. that comes your way next.

>> central banks are calling the shots while fed chair janet yellen sounds her most hawkish tone yet going into next week's anticipated rate hike. >> when the committee begins to normalize the stance of policy, doing so will be a testament also to how far our economy has come in recovering from the effects of the financial crisis and the great recession. >> turkey will regret what it did. strong words from vladimir putin who says the world cannot ignore turkish aiding of terrorists in his state of the nation speech in moscow. >> terrorism has not been ruled out. >> based upon what we have seen and how they were equipped some degree of planning went into this. so i don't think they just ran home and put on these types tactical clothes, grabbed guns

and came back on a spur of the moment thing. we have not ruled out terrorism. >> brazil's lower house improves impeachment proceedings against rousseff. assets moving higher on the news. >> u.k. november services pmi hit the tape, 55.9. it was forecast at 55.0 and last month was 54.9. so quite a strong result there beating expectations. services pmi very important for the u.k. economy around 67% of gdp but hasn't had too much effect on sterling as you can see. we're down about .25% on sterling. below that handle, more based on u.s. dollar strength than sterling weakness of course. the composite coming through unchanged at 55.7 but that services number, 55.9 better than expected. let's also just have a look at

other rates for you as well, the euro trading down lower 10556. on both side of that trade pushing lower with the dollar strength yesterday from yellen's comments in europe awaiting the ecb decision today. >> that's a big come down from the 106 levels we saw yesterday. and yes today is the day. the ecb, the european central bank widely expected monetary easing today. so the street is coming for a deposit rate cut of 10 to 20 basis points extending further into negative deposit rate territory and also looking for extension of asset purchases in the qe program. jp morgan warning while there could be aggressive easing this year, tapering could kick in as soon as 2016. that would be a snap reversal.

let's get straight out to frankfurt and watching the ecb rate decision for us, we have julia standing by, julia. >> thank you, susan. as you quite rightly said a lot of head scratching here. looking at the sheer weight of expectations in the market. how does mario draghi manage to overdeliver here? the best way to look at it is the ubs tape because they looked at what the market is pricing in terms of looking at where bonds are trading. look at where the euro is trading and they say actually 14 basis points of cuts priced in for the deposit rate, there's the expectation of 12 billion euros worth of additional asset purchases per month and three to six month extension to the life of that qe program. the first one we can disregard. he already said look we'll keep this program going until we start to see inflation heading toward that 2% or just

pedestrians low targ below target that they have. it comes down to what they can do as far as the deposit rate is concerned and all the guests this morning are saying it could come down to the interaction of the different policy measures that he uses. so even if he doesn't blind us with the amount of asset purchases he can make or the deposit rate cut ifs he decides to do that too, actual lits the interaction. so perhaps if a bank wants to take money that they can then lend to a bank or lend to a business then they won't be penalized with that negative deposit rate. so it's been very clever about how these things all interact but for me the bigger question is given all the almosts already thrown in the economy. why does what's expected today make any difference? how is he going to make a difference? and what next. i'm sure that's what he will be asked in the press conference later today. >> thank you for that. we look forward to further coverage. especially at the press

conference. we'll continue to update you throughout the day. do check out our live blog on cnbc.com and tune into our special coverage, decision time with myself and carolyn. that starts at 13:30 cet. what will santa draghi pull out of his sack. >> santa draghi now? >> he's such a wonderful man. father christmas. there's a lot of similarities between the two of them. >> not the looks. not the reindeer. >> do you think he would dress up as father christmas? >> you have way too much of a man crush. >> i do. he's like a monetary policy jedi. he can move markets without doing anything. >> he can move markets but he can't bring inflation up or growth up. >> don't spoil my man crush. >> all right. well, the producers are telling us to move on. we got political turmoil when it comes to one of the world's

largest emerging economies. brazil and brazils lower house speaker has given the green light to impeachment proceedings against rousseff. she denied committing any illegal act. gaining as much as 4% on the back of this news and also trading higher. for more on the story, nancy joins us around the desk. why the move when it comes to these brazilian etf on the impeachment proceedings starting against the country's president. >> you think it adds to the uncertainty and the turmoil we have already seen in an economy that's struggling economically as you know but bottom line here is that impeachment is viewed as a buying opportunity and that's what i heard over at ashmore emerging market focus group there and the real feeling is so much bad news is already priced

in so any change in political leadership is seen as a positive which explains the moves we're seeing. however keep in mind this process even if it gets to impeachment which most people say it will not could take months. what we're looking at now that the proceedings have started we need a two third ma2-thirds maje forward and then go to the senate. this would involve a 90 day suspension period and the senate would need it as well. it's fairly unlikely that it would get that far. that does not seem likely if you listen to what she said yesterday in a teleadvised address saying she was indignant. it proves how honest she has been. but keep in mind the charges in question deal with financial issues. basically the charges that she plugged some financial gaps in order to boost her election prospects which you may remember she won very narrowly in quite a tight election and then of course is the question of if it

does get to impeachment who takes over? at the moment it would be her vice president but then if the vice president is found indicted on charges as well you'll see the opposition come in. >> thank you very much for that. right, 14 people have been killed and 17 wounded after a gunman opened fire at a social services agency in south california. speaking in the last couple of hours, san bernardino police chief confirmed two suspects have been killed in a shoot out. he said the motive remained unclear. >> based upon what we have seen and based upon how they were equipped there had to have been some degree of planning that went into this. so i don't think they just ran home, put on these types of tactical clothes and grabbed guns and came back on a spur of the moment thing. we have not ruled out terrorism. >> jay grey joins us live with an update. >> hey, wilfred. yeah, the investigation

continues. police say it's going to continue for quite sometime. at least three locations they are looking into right now. the center behind me aways is the scene where it was carried out. people killed. 17 injured. the home where this couple may have lived and the roadway where the shoot out occurred and they were killed. these two suspects, we are told by family members were married. police won't go that far say theg did have some type of relationship but not saying yet whether they were married. we know they were armed with assault rifles as well as semiautomatic pistols. we know they had explosive devices. at least three found on the scene here and detonated using robotics overnight. this is an investigation that was continuing. i think it was telling the police were the ones that conducted the last investigation with the fbi standing behind them with support but not stepping to the microphones here as they continue to try to find

a motive here it would appear at this point that there was some type of problem at a holiday party and one of the suspects at the party left and came back 20 to 25 minutes later with another suspect and opened fire. is it terrorism? they won't go that far as you just heard. they're not ruling that out but the fbi did not speak at the last press briefing. so if you want to read anything into that, they're allowing the police to continue this investigation not the fbi as the lead agency right now which may speak to the possibility of terrorism here. >> thank you for that update. >> let's check on oil prices. wti and brent crude recovering after the lowest close since august. we're seeing it back above the 40 handle. brent at 43.26. this following a report that saudi arabia and other persian gulf countries may be willing to

cut their oil production as long as other countries participate. let's get out to steve sedgwick. is this the first sign that the saudis are caving in. >> no, no, no. lovely to hear from you this morning. this kind of deal has been on the table forever. saudi has opec for the whole point of having this kind of deal. they have invited the russians here previously. you remember this time last year when we all sat around and he walked out and there was no deal. the people have got to get over this obsession with there's a new deal. saudi would offer this deal any time people get involved. if the non-opec guys and the rest of opec wanted to come together they would offer this deal any time. they have people to obsess about saying there's a new deal. it's just not the case. they would very, very gladly accommodate other producers if other producers calling for

them, the hawks so to speak, the venezuelans are all asking saudi to do everything and they're turning around saying we'll do it but you guy versus to do the same as well. we know this is a change of policy. they have been doing it for 18 months in terms of willing to upset the burden on their own. they said we'll play ball but you have to join in as well. >> it's a change of tone steve and i can't see how the low oil prices are not hurting the economics of saudi arabia because what they need to balance their books is a dramatically higher oil price, closer to 105. >> yeah, balancing the books say real problem but they have a bit of fire power. they can raise money in the bond markets. they have an enormous budget deficit so there's no doubt about it that the finances are being sweet but the problems there for everyone is not just saudi. it's russia, the shale producers

and i have a few words now there's major structural things going on in the world. this isn't just another cycle. there's really big long-term factors going on here. whether it be the instruction of iran and iraq back into the market in a meaningful fashion. i know people are saying iran can't do anything for a long while but don't forget iran and iraq together they have about 300 billion barrels in the ground saudi has over a couple of hundred billion. so that could overwhelm other producers. you have this process, it's like crossing checkpoint charlie going from paris to vienna. not because of any city like that but because the ideology is so different. you have ts over in paris and this hydrocarbon lobby down here in vienna but it does pick up momentum. you heard there could be trillions of dollars of uninvestable assets.

of stranded assets you have four structural factors. there could be a lack of oil demand of 109 billion barrels if the guys in paris do what they promise. 109 billion barrels over the next 20 or 30 years. that's a lot of oil that has to stay on the ground. >> steve thank you for that. i know you're getting ready for a big day tomorrow. steve sedgwick. why don't you head to cnbc.com where i have written about a change in saudi's strategy. a bad year for metals. iron ore is forcing producers to

cut production. meanwhile gold continueso slide hitting a fresh six year low in trade today. >> we're going to go to break here on worldwide exchange but still to come we'll head straight to south africa and we're going to check in on the appeals court. the country's supreme court overturning the original oscar pistorius decision. the details coming your way next. when the flu hits, it's a the aches. the chills. the fever. an even bigger deal? everything you miss out on... family pizza night. the big game. or date night.

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welcome back. the performance of u.s. business is the wildcard it all depends on commodity prices doesn't it? >> that's a key area to analyze for this year. some people would argue it's a symptom of weak underlying demand. our take is different. we can get a positive supply shot. >> so you're not expecting a rebound in commodity prices but maybe that base effects will be dropping too much. >> there's no chance of another

50% drop so that will give a nice up drift to s&p earnings but the effects of that will take time to feed through and they're now starting to show off in terms of lower utility prices and that's part of why the consumer should do better. >> if you're positive on the u.k. are you also positive on the ftse 100 or does that mean you have to play the u.k. in other ways? >> the market is more of a wildca wildcard and resources space. other companies should do well on the back of strong consumer spending. >> and specifically within that, what's the view on sterling? it was very resilient over the summer. it's now softened more significantly, particularly against the dollar as opposed to the euro. where does it go from here? >> we see sterling hovering in between the euro and the dollar. the adjustment in the euro

dollar rate has probably run it's course given the expectations of strong easing from the ecb today and the rate hike coming from the fed in a couple of weeks time. >> i think the theme this week is about monetary policy diver yens around the world. we'll get a hike from the federal reserve and more easing today i'm trying to figure out what they do in reaction to what the ecb is doing. what happens in the u.k.? >> it's probably more similar to the u.s. rather than the euro zone. our labor market is getting quite tight. we see signs of wage inflation and it's quite low and it's effect on commodities will wash through the numbers over the next year. i do think there's a case to begin to gradually tighten rates and a bit more aggressive in terms of the magnitude of hikes next year. >> if we have more easing, where does this money two? does it go into global markets

around the rest of the world? >> it's pushing down the entire yield curve in europe forcing them to search for yield elsewhere so there's an asset price. more generally the ecb has got european's back. it's doing whatever it can to get inflation back toward it's target. >> you like japan. you like the euro zone. what about the u.s.? if the economy is doing better there we're seeing the first rate hike. >> so the u.s. economy is in good shape. household balance sheets have never been better. on the equity side it's quite richly priced and because wages are picking up we do look to some margin as we go through next year. so it's probably not as favorable in the u.s. as in europe. >> thank you so much. >> authorities in switzerland have detained two fifa officials pending expedition to the united states. they were arrested on suspicion

of accepting millions of dollars in bribes. it's the same hotel raided in may and comes as executives meet for two days in the city. >> let's head to south africa because this is a big breaking news story. an appeals court in the country has now sided with the prosecution in the oscar pistorius case and upgraded the conviction to murder. the judge ruled the defense never provided an acceptable explanation for the shooting of his girlfriend reeva steenkamp. he was originally convicted for culpable homicide. the equivalent of manslaughter. it's now passed back to the judge. jeff rosen joins us on the line and like a lot of viewers out there they're wondering how does the court system work in south africa when a man that's been convicted and already done his time for the crime gets reconvicted on a higher charge.

>> it's unprecedented here in south africa so there's a bit of cha chaos. you have a convicted murder oscar pistorius inside a house in a residential neighborhood which would never actually happen. you would be hauled off to prison. he was sentenced to five years. served one year in prison. early release back in october. serving the rest on house arrest in his uncle's mansion here in south africa so now this goes back to the lower courts to resentence him. it's unclear when that will happen but the appeals court scathing against the original judge that let him get away with murder. the appeals court saying fundamental errors were made by that judge. she ignored evidence and her ruling letting oscar get away with it, confusing. and he also called oscar pistorius a noncredible witness because his defense changes so

many times. obviously a bombshell. you have this rags to riches story of oscar pistorius now being brought down again. now a convicted murder. so what happens next? resentencing but it's unclear when. he remains right now inside of his uncle's house. >> what was the reaction on the part of reeva steenkamp's family then. >> she looked stoic. she is not looking for revenge. it's not going to bring reeva back. she told me she wants justice for reeva. i believe that she believes that a murder conviction is justice but also pointing out that she doesn't have a vendetta against oscar pistorius. she is past the revenge stage. she is just still mourning the loss of her daughter tragically taken so young. >> so jeff, just, you know, take us through how this works. are we looking at a retrial here with the same judge in the first trial? >> no, that was one of the things on the table and the

peels court said because of the worldwide media attention and bringing the witnesses back would be too much of a spectacle so there is no retrial. this is final. he is convicted of murder. >> wow. okay. jeff, thank you so much. once again for that. jeff rossen nbc news, joining us on the line from south africa. we're going to go to break here heading into the next hour of worldwide exchange. fed chair janet yellen is sounding mor and more hawkish including yesterday's speech and we'll take a closer look at what to expect from the upcoming central bank meetings and that also includes the ecb one later on today. you can't predict... the market. but at t. rowe price, we can help guide your investments through good times and bad. for over 75 years, our clients have relied on us to bring our best thinking to their investments so in a variety of market conditions...

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welcome to worldwide exchange. i'm susan lee. >> i'm wilfred frost. here are your headlines from around the world. >> today is the day. we're talking about the european central bank. the ecb calling the shots. europe trading cautiously higher ahead of expected easing from the ecb while fed chair janet yellen sounding her most hawkish going into next week's anticipated rate hike. >> when the committee begins to normalize the stance of policy, doing so will be a testament also