It has just gone 6 00 in the morning. The chinese stock market a little less volatile today as a result of some of the government actions. They seem as if they are wanting to take on the speculators in the offshore market. That means the cost of borrowing surged hong kong, that to another record. It seems the intervention by the liquidityaining yuan in the offshore markets. Murderous ins terms of stamping out the speculation. The whole point about this is trying to bring the offshore yuan and the onshore yuan. This is the start of the day, offshore yuan and onshore yuan are coming together. The first time they have been at the same level since october of last year. Lets take a look at your morning market check. Where is the money flowing . It is flowing into the yen. By 2. 8 e yen increased versus the dollar last week. 7. 53. T around 11 today, a little bit stronger for the japanese currency. Manus oil is moving. We are precipitously close to the 30 level. Contract, volumes nearly 50 above the average. Deals overnment bond bond yields, 2. 16 , dropping back to a low. Anna lets get the bloomberg first word news. The cost of borrowing in hong kong surged to a record. The overnight highball client rateed, while the one week jumped to 32. 8 . The bank of china is said to have repeatedly intervened in the offshore yuan market. According to people involved, the central bank has been cracking down on speculators in a move prevented a move aimed at preventing arbitrage. He laid out reasons for why the worlds biggest economy may stay on a path toward higher borrowing costs. Relatively sluggish rate of growth in the United States by historical standards, but it has been enough to drive down the rate of unemployment in the u. S. From about 5. 6 at the start of the year to around 5 by the end of 2015. Our economists expect the gdp growth in 2016 is going to grow between 2. 5 between 2 and 2. 5 . Nejra declines in new york come after a 5. 3 slide on monday. Supplies show crude exacerbating a global glut. Hillary clinton is calling for a tax surcharge on americans making more than 5 million per year. It is a move that will lead to the highest top bracket income rate in the u. S. For 40 years. 1 will apply to just 1 50 of of americans. Manus thank you very much. Lets get out to david inkless. David in place. David the story today not so much in the equity markets. Intervention by the pboc in the offshore markets here in hong kong to drive down dollars. What you guys pointed out already was that this gap between the offshore and the onshore rate disappeared for the first time. That is a sixmonth chart. For the First Time Since october. That is the first time we saw more or less parity. Are the moneyt market rates here in hong kong. In other words, the cost to borrow renminbi here in the city, which has over which has averaged less than 5 over the past few years, is now at 66 , 67 . Pbocntervention from the has driven up supplies of renminbi in the city. Why would you borrow 67 . How do you make money . That is the big story in the offshore market. It has brought some sort of calm in the markets today. Overall, it is a better day. Not that most markets the most flattering of comparisons. Japan is trading for the first had to play a little bit of ketchup due to a sharp selloff we saw on monday. The yen had stronger levels compared to what it was. 225, overall. If you serve japan out, were just about flat on the regional benchmark. With that said, things do look better today, but obviously it is not unbridled optimism. It has been a turbulent start to the year for Chinese Markets. Frequent interventions by policymakers. Manus the countrys economy is set to grow at the slowest pace since 1990. Overall, what we have got, i think, is a divergence in the global economy. In the northern hemisphere, we have concluded deleveraging. , we are atat asia about the start of the deleveraging process. Right now, the market is overly focused on actives. We dont see enough from the fundamental side. Relatively weak, but not shockingly week. The selloff, i think, is not fundamentally driven. The regulators are getting more sophisticated. In theally believe medium to long run that this market will return. I dont think it is cataclysmic for the rest of the world. It is a negative. But we have to remember that china isnt that integrated into the global economy. Get the latest on those interventions with our Shanghai Bureau chief. It is reported that china has now intervening in the offshore yuan market. This is all about the onshore and the offshore and bringing them in line . You have to look at it in context of what happened last week, when the spread between the offshore and the onshore went to a record. Pboc, the central bank, is trying to manage this currency. Last weeks spread sent ripple affect through global markets. This is just another way which they are trying to manage this gradual depreciation of the currency. Or it hit a record. Effects, where is the largest impact going to be . Effect theost most direct impact will be on the sales of bonds inside of hong kong, the offshore yenden ominated bond market. With such high rates, it is spiraling down. What will the effect be on new issues . The yen depreciation over the past few months has shrunk the market. If this current reversal of the spread, the drying up of it may have an increased negative affect on the market in hong kong. Manus thank you very much. Anna our next guest says he continues to see renminbi depreciation in the coming months. Talk about your calls on the currency. These things are very much tied up with weight with what were talking about here, the central bank trying to stop speculators from shortselling the currency in the offshore markets. Do you think that the government will want to see a weaker currency . Why do you still think so . They have protested against that, having thing . Havent they . Fundamentals suggest that the yuan should be weaker than it is now. We think that the fair value of the yuan is probably around 690 or so, so you still have some room. The government has always been preventthe past to any speculation on the currency and would rather see a move that would be gradual. Manus it is interesting in terms of the spillover effects. This has ramifications for other Central Banks in the region. For the aussies, for the taiwan. There is a lovely line from Richard Nixons treasury chief in 1971, the u. S. Attitude toward nations it is our currency, it is your problem. Anna that was a long time ago. Lets you get such a big currency and big economy, it matters. It doesnt matter for other asian Central Banks because they look at the currency as a basket. In my change slightly their thinking. , theyample, in the rba have to take into account the tradeweighted index. Anna we spoke with one official saying that the large decline in the yuan being ridiculous. It is probably more something that would be small and gradual. That is probably what the aim of the authority in china, that is their aim right now. They dont want to see a sudden move in the currency. A course between what their aim isand the reality of what happening in terms of the global repercussions. Seeing andou are undoing of autonomics of abenomics. The spillover effects for other Central Banks is huge in terms of the ecb, the bank of japan, and the fed, isnt it . It has some impact. The fact that the yen has been appreciating so much will probably have some impact on the thinking of the boj. Theboj remains focused on focus domestically rather than the currency. They have been working a lot more closely. Anna when you see charts like that, i am returning i am referring to the one on the terminal here, does that scare you . Does that look like something frightening is going on or just currency intervention . We sent a clear signal to speculators do not shorten the yuan. But the question is, what will be the spillover effect . Could be a change in some of the business borrowing. Manus we have a lot more to discuss. Banks ght central 66 to borrow money overnight . Anna charles, thank you very much. Busy day ahead. Manus we look at france. They hold a policy conference packed with big speakers. Semifisher, and of course christine lagarde. Time,then, at 9 30 u. K. Manufacturing production. Tonight, president obama delivers his final state of the Union Address in washington dc. That is 2 00 a. M. In the morning. Talkinge will be newusively with the governor of the bank of france. A seat at the top of the bank at france. Still to come, were joined by the Aberdeen Asset management ceo. Up next, anna the price of ensuring debt. All the details to come. Anna welcome back, this is countdown. Said sales last quarter dropped 18 as it reported a net loss of . 39 per share. The impact of costcutting efforts at the new yorkbased company. The profit excluding items related to smelting closures. Asias richest man is poised to become the First Chinese person to control a hollywood film company. Legendaryd to by entertainment for 3. 5 billion in cash. Endarys credits accrued credits include Jurassic World and godzilla. 21 decline in the firms incomes last quarter. Managed 6. 3 billion as of december the 31st, down from 8 billion in september. For more on those stories manus dallas fed president Robert Kaplan has said oil woes will continue into 2016, so demand could increase amid low prices. 2016 is going to be another very challenging year for oil producers. Low oil prices translate into lower gasoline prices for consumers, and those lower prices helped to generate much stronger driving activity. We think there is going to be Strong Demand this next year. Lets bring back into the conversation charles, senior economist. You are listening to Robert Kaplan, he was in favor of the Interest Rate hike in december and he says it is important to continue along that path of normalization that has now been started, you know he is concerned about china. How many hikes you see from the fed in the year ahead . I think they will be able to do two hikes this year. One in june, another in december. It will depend on how inflation happens going into this year. Le view, in terms of what happens next with the fed and the dollar that is running on slightly shaking ground slightly shaky ground, isnt it . We caught up with one of the economists at ubs, and he said it is all about the flow of capital. Capital from southern from Sovereign Wealth Fund stopping, do we need to think about the global flow of money . In a way, having an economy in the u. S. That is slightly outperforming other economies you look globally, it is probably the economy where you have the most positive outlook of the big economies. It will continue to attract capital. The issue there is that we know the fed will react to further appreciation of the u. S. Dollar. They are concerned about the impact on the exports and inflation. If you have too much appreciation, it could actually slow down the hikes. Anna you say you know they will act if the delegates to strong. Manus hitting the pause button. Anna where oil comes into this conversation, i know you have been doing some work. You ran some numbers in november that talked about how factor we would get goinglateauing oil prices into 2016. We are looking at that kind of conversation anymore, are we . U. S. , you probably have headline inflation going towards 1 or so early in this year, so probably peaking early in january. You could be a zero, maybe slightly negative. Two . Did you say what the market is expecting. We also have to keep in mind that the fed doesnt focus on headline inflation. They focus on core inflation. You cant always say that it will be temporary. It should be. What happened this year, the basis rate we are expecting in 2015. Everybody before christmas was saying, get ready in january. Bloomberg. Com, we had Morgan Stanley joining other voices pritikin oil at 20. A shift from 70 to 50 was predicated on oversupply and questions and demand. This next one is being driven by dollaroil heading to 20 by boyles by Morgan Stanley on dollar strength. It will be very important for a lot of countries. It willike canada, matter quite significantly for their economy. Is, if that decline , itil prices is compensated doesnt change the revenues in local currencies. That has been happening in a lot of countries, the fact that the currency depreciated about 25 last year. Anna how does that play into the opec conversation . We just saw some conversations coming in from the nigerian opec team talking about how they think opec will look to convene some kind of meeting soon. This will have an impact on their budgets. Arabian cbs has climbed to the highest since 2009. Does that seem sensible to you . It is starting to be concerning for a lot of countries. Youre getting to the point where a lot of Oil Production is not suitable anymore. The question becomes, who blinks and stops continuing production . At some point, supply will have to be reduced. Gas oneked one guest last week the nigerians just building on that. The nigerians actually expect a 40 to 50 oil price band. They are hoping for the saudi price at the same level. Anna charles, thank you so much for joining us this morning. Manus still coming up on countdown, we had a cracker for you. Exquisite conversation. The only way to get better is to challenge yourself, and thats what were doing at xfinity. We are challenging ourselves to improve every aspect of your experience. And this includes our commitment to being on time. Every time. Thats why if were ever late for an appointment, well credit your account 20. Its our promise to you. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Manus it is 6 30 here in london. Lets get to number word news with nejra cehic. Surgedthe cost of banks bank bys chinas central is raining supply off the currency. Declined 53 Percentage Points while the oneweek rate just 22. 6 Percentage Points to 33. 8 . The peoples bank of china is the u. N. Ntervene in market since yesterday. The yuan market since yesterday. Painting a Stable Currency and preventing arbitrage. Has default and york came after a slight on monday. That comes before u. S. Government data which is forecast to show crude supplies expanded, exacerbating a global glut. Hillary clinton is calling for a text search on americans, making more than 5 million a year. Wages, as much as 43. 6 would apply to one 50th of 1 of americans. That is bloombergs first word news. Anna stay with us, as you have been watching the markets. A lot going on. Marketss you say equity , we are seeing trading more steady. We are seeing declines of the asiapacific index, a benchmark for the region. 1. 5 . E that down the shanghai composite gaining,. 4 . It has been choppy, that trading. Inhave seen declines as well japanese stocks on the first day of trading as they reopened after a public holiday. Brieflyhe shanghai fog below the 3000 level. Moving want to currency, the big story this morning, both in the yuan. D in the u. N. The the yen has been strengthening against the dollar. Last week in rose the most against the dollar since 2013. Is the most overboard since 2011. In other words, poised to fog fog . To fulco to manus lets talk about china. Says chinas rebalancing presents a challenge for the rest of the world. They have embarked on a transition for an order for a more export based economy. That are all challenges are going to take years to address. These are not cyclical issues. The world is going to have to adjust to the fact that slower chinese growth is going to othery impact economies around the world. Anna joining us is martin gilbert, ceo of averaging assets. Management. Erdeen concedes that what is happening in china is going to take adjusted u. S. Growth. How many hikes do you think the fed will instigate . I am not sure there are in any rush to do anymore hikes. If they did not do the first one, everyone would have thought what did they know that we do not know . Then we would have seen real nervousness in the markets. The currency will strengthen further, slowing growth in the u. S. For ore like two then more than more like to than for. Manus we have seen huge volatility in china. Huge manipulation. As far as emerging markets, is it the fed that is priced in . Or chinas disruption . Martin i think both are priced in two emerging markets. Both the fed hike and china. The key worry is china. How long is it going to take to restructure their economy and the effect it is good to have on emerging markets. It is a tough environment being an emerging market asset manager , because we are paid to manage mark to manage money in the emerging markets. They are still taking money out. Anna gives an update on how quickly that his desk give us an update on a quickly that is happening. Martin i dont think people have gone back to work yet. We have not seen much yet in the first week. People putting money in the first week. It is too early to tell. What sentiment is going to occur in the emerging markets. A lot of people who have money invested in emerging markets have already taken it out, way back in 2013, 2014, 2015. Manus part of those withdrawals were concerned were concerns all across the board. The Fourth Quarter was about 12. 7 billion. We talking about 30 oil now. Expect more can we Sovereign Wealth Fund withdrawals . Is this the bottom . s Morgan Stanley right, is 20 on the table . Martin it could go down from here. The Sovereign Wealth Funds have built up these reserves. They are requiring them now to fund their budget deficits. We have seen some of the middle eastern once. There are reports for the first time that norwegian Sovereign Wealth Fund will be dipping into their reserves as well. Remains, they are going to take more money out of the markets. Manus that was the Fourth Quarter number, 13 million pounds, could get much worse deck of can you put it in perspective . Martin you and i will end up in prison if i answer that question. It is still tough at the moment. Hopefully it will improve from here. Anna how patient are you with emerging markets . D. C. Any opportunities back up do you see any opportunities . Good ones,n the india, are still expensive. It is tough at the moment. Everything is expensive in the world. We like india. We like the companies, they have done very well for us. We are still heavily invested their. Manus martin, youre going to stay with us. Anna how has the slowdown in china affected the carmakers . Dealerships went up 4 in 2015, rising at this lowest pace in three years at their slowest pace in three years. Question that china is hitting some bumps in the road. We had forward are not feeling it. We are doing just fine. Today the yanis week, tomorrow it can be strong today the yuan is weak, tomorrow it can be strong. Enormouscannot grow every year. China is a more normal market. Mueller used the event in detroit to apologize for the scandal. Government officials will come this week. Hans nichols has been tracking this story from the start. What happened . Eler says the company mueller says the Company Still uses the u. S. Tos volkswagen wanted impede thats wanted to compete and why they got into this mess. It turned out not to meet its advertising bill. A testy have here is they think they think this new catalytic converter could convert and satisfy the epa. Still dont know what to do about the rest of them. The them, they passed a couple of weeks. We have a good solution package now. [indiscernible] hans that sounded pretty optimistic. Remember volkswagen is planning to come up with 22 20 new electric hybrids like 2020. By 2020. S he opened up the possibility of buying back some 50,000 vehicles , putting them on volkswagen books. 20. 6 million cars in china, that is a lot of new drivers. Anna, we know you are one of the test drivers one of the best drivers in london. All of the new drivers are going to need your expertise, especially in parking. Anna absolutely. That is the company we will set up. s nichols, thank you very much. Hans nichols, thank you very much. Mustread. We got an interesting story. Will continuethey to press even if the u. K. Votes to leave the eu. Tells the company would still be there to open in the year 2090 which is where he says this. Said that ifo anything had to change or reconsider, it will be all about theytegy in terms produce 10 of the u. K. Car industry. It was set up under thatcher. Ofwas about the rejuvenation Foreign Investment when this country was on its knees. Their, toyotan does acknowledge that there might need to be some reassessment. Get to martin gilbert. He is still with us. Is this something that preoccupies you when you are running your business . Do you look at brexit and try line to thedraw a question of scottish and been tests Scottish Independence tackle martin Scottish Independence . It would not be too disastrous because Fund Management groups run their european operations out of luxembourg. Hub. Our hope our some of them try to sell it u. K. Registered funds into europe. It would not have a disastrous effect. Anna do you draw that line back oh line . A heard theink, as next leader of the liberal party say, if britain does exit, scotland is more proeuropean then perhaps england might be perceived to be. It could lead to another referendum vote. With irving is gearing up t martin with cameron with what cameron is good to come back with. What you want him to come back with with a solid proposal . If he could get any fundamental change, it would be great. A stream of legislation coming out of europe that would sort of we dont like as an industry. If there could be any stop to that, that would be great. Economistcitigroup saying a brexit would be disaster because the 27 countries would get together to make trade very difficult. Of yourr specific industry, it sounds that youre not talking about that. Our luxembourg operations which really insulate us to a certain extent. That is us. Some other groups that are more u. K. Centric would find it inconvenient. Manus martin, stay in the seat. We got a lot more to get through. Anna up next, digging deep. Martin gilbert stays with us. We will talk about the Mining Industry and anything else on his mind. Anna welcome back. You are watching countdown. Lets get to first word news. Sales droppedsess sales droppedays 18 . Taxes that phil 4 share. The First Chinese person to control a hollywood film company. Buy Legendary Entertainment for the. 5 lien dollars in cash. 43. 5 lien dollars in cash. Avenue management has seen investors pull money from its equity fund contributing to its decline last quarter. It to the rare step of freezing redemptions and a distressed debt mutual fund. Sequoia Fund Advisors are being sued by a group of investors. A violation of agreedupon policy. Yesterday at 85 and . 45. 85. 45. Manus thank you very much. Martin gilbert is to with this. Martin lets get into some of your big strategic views. Few thats holds doesntyou have big that deal still make sense at 30 . Would you support that . Martin we publicly said we would supported. In longterm it does. Clearly it makes sense. Sector at the the moment. That all thestic Oil Companies in the u. K. Market cap is now below that. One of them used to be the same market cap. In thisly makes sense environment to seek consolidation in that sector. Anna is there any price that you withdraw support . Martin i dont think so at the moment. Obviously, 10, the shell board might reconsider. They got more information than we do. Manus theyve got to get the support of investors. Martin we publicly said we would support management. Manus lets talk about the miners. We wrote the story recently that would you support capital raisings for m a . Miners makesm a in sense . Martin i think it does. They are reasonably strong. They are lowcost producers in the sector. It was an opportunity to validate, yeah, it would make sense. They would probably use a bit of paper and cash if they were to. We would be supportive. Anna what about dividend policies . Some of the Mining Companies are changing the dividend policy where the oil sector doesnt seem so willing to go down that road. Our dividends for oil majors still sacrosanct . Martin i think bp or shell would want to keep the dividend. I dont know if they have ever , even thoughidend i have been in this job for long time. Bp obviously had when they had their difficulty. It will be a last resort for shell. Manus we had a couple of people say this is an uncomfortable period for commodities. Did the Fund Managers come to you and say it is time to scale in . Isnt there an opportunity there . Is this the smart way to play this . Martin they feel as if theyre getting toward the bottom. Dividendo maintain the , it is better than having money in the bank. So yeah, i would be dipping my toe in probably, but as i have got it wrong so far, i would not listen to me. Of hese a lot like us. He buys longterm value. Anna talking about having money in the banks. Soon going to decide on their headquarters. Do you think it is likely than it used to be that they will stay in london . Think thewould logistics of moving their headquarters out of london are so vast that i suspect as much as they might want to move, they probably will stay here. Of anyno knowledge decision made by the board. Logistically, very difficult. Manus there is a board that you have been buying. You have been busy. You but a hedge fund in arden. You bought a hedge fund in arden. Talk to me about the strategy. How far are you going to diversify away from it . Be . Is aberdeen going to are you going to go for more hedge funds . Martin i hope we are a bit more like the tobacco companies. Tobacco is theo, main state . I hope that emerging markets will have recovered by then. It will be the biggest bit of our business. Really we just took the view that we had three other bits of the business that were subscale. Equities were a big part of the business. It wasnt diversification. It was trying to build the three businesses. The bigger in bonds, property. Anna there are reports that youre looking at etfs. Martin iont know dont know where that story came from. Somebody big banks cant make money out of etfs. We are of the view that we cannot either. Manus for we let you go, we need to know two things. Ustouched on it, give it to again a bit more clarity. Martin everyone misses india which is growing nicely. It has great companies. India would be my big call in emerging markets. Anna modi delivering . Martin i think it is like when obama came into power. It was too difficult to deliver in a country the size of india. I think he is doing all of the right things slower than people want. Manus thank you so much for your time. Martin gilbert, the ceo of Aberdeen Asset management. Again tona steps and save the currency. We are live in beijing. The markets looking a little more stable over in asia. Japan was out, playing catchup today. Chinese markets looking better than it did yesterday. Manus oil down 3 . Manus bears beware. China steps up yuan intervention. Currency is destined to fail. Kaplan says the world needs to adjust to a slower china that will weigh on u. S. Growth. Manus oil grinds lower as crude hits a fresh 12 year low. Wti dipped below 30 for the First Time Since 2003. You are welcome. It is countdown. Im manus cranny. Anna it is 7 00 here in london. We have a slightly calmer session in asia. Most of it is closed. The japanese market is playing catchup from yesterday. The Chinese Markets looking firmer then they did over the last few sessions. A slightly more stable forecast for the start of European Equity trading. Manus we are going to get from our Tour De Force around the world. Equity finches does equity futures set to open higher. Equity futures set to open ander unit Goldman Sachs the stoxx 600 could rally 18 in the next 12 months. Anna they have potential in the markets. Some of these interbank markets. The cost of borrowing from the yuan. Over 66 . On because the peak years he is trying to stop people from speculating against their currency. Chile check in on how the markets are doing . Manus lets have a look again. We have oil. 1. 1736. We have seen the yen at the most 117. 36. Oard levels we have seen the yen at the most levels. Anna we are watching to see if that does assess 30 a barrel. Bonds as you say. Lets get to bloombergs first word news. On snaggles. Hans nichols. Fresh record amid speculation, currency intervention by chinas interbank is draining the supply of currency. 66. 82 goodhats the oneweek rate jumps 22. 6 to 33. 8 . The peoples bank of china is said to intervene with the offshore yuan market since yesterday, according to people familiar with the matter. These interbank has been cracking down on speculators in a move on maintaining a stable market. Oil has extended declines on the lowest close in more than 12 years. The drop in new york comes after a 5. 3 slide on monday. They comes before u. S. Government data its is forecast to show crude supply expanded, exacerbating a global glut. Hillary clinton is calling for a 4 tax surcharge on americans making more than 5 million a year. It is a move that would lead to the top highest tax rate in years. As much as 43. 6 would apply to 1 5 of the percent of americans. For more on that story, customers in head to manus beautifully read. Lets check in on the markets. Either to gain in the shanghai . Easy itink it is is easy to say yes. I had to throw my script out a few times over the past few hours. Yes, a little bit of gains. The rest of asia is looking like this. Slightly better in that the margins markets are lower. Japan is trading for the first time this week. Obviously, there is a downward adjustment. The japanese yen trading much stronger compared to when japan was last open on friday. South korea is doing destined big story has been in the currency space. Intervention again. Sources tell us several times. What happened was the gap between the onshore rates, which is see in white, and the as dide which comes off the red or purple. That hasnt disappeared for the First Time Since october. What happened though is several of these pboc officials became more vocal in warning that dont short. Speculators shouldve listened. The money market rates here actually spiking to record levels. From an average of 3 or 4 . That is a side effect which will continue to impact the story. It isnt done yet. Not a lot of consumers tied to offshore remedy here in hong kong. Inglis in hong kong. Lets stick with what is happening in china. The latest on those estate interventions in china it tom or beijing. Tom, good to see you. We are reporting that china is intervening in the offshore yuan market. Remind us why they are doing this. Is this about getting a message out that they dont want people to bet against the currency . Tom china is trying to do a couple of things. Achieve. Trying to on the one hand, they want to shift from government control of the exchange rate. On the other hand, they only want the market to drive the moderate control depreciation of the currency. What we have seen in the last week is the shift from government control to market control. What we saw is when the market took over, pretty extreme pessimism. The yuan fell more sharply than the pboc was culpable with. Combine that with plummeting equity markets. It really contributed to a sense of panic. Extreme pessimism about china, the growth outlook. That is why the pboc waiting back into the currency market. Both of the offshore market, also in the onshore market, sending a stronger sure sending a stronger verbal support. Policymakers out in force talking about how it is we did was to bet against strong yuan depreciation. Manus do not bet against those Central Banks. We got Mike Osullivan. He has flown in from the day. Broad help us make sense. 66 overnight, borrowing costs in the remedy of offshore. What is going on here . Officials are saying dont bet against us. This is volatility at a new scale. Mike this is a signal. The chinese realize there volatility is reading a negative feedback loop of lack of confidence. Some people questioning their competence. A lot of people questioning their communication ability policies. To an extent we are being harsh on the chinese. In the west we have this culture last year the story of volatility spurred bankers. They are not alone. The fact that they recognize the problem is welcome. If a chinese Civil Servant hadnt imposed the Circuit Breaker role, this week it would be completely different. Market theock stock market is driven by we can investors. The Housing Market is much more important in terms of impact. That has been relatively stable. The currency is important. Less and financial terms, but more as a read on what is happening inside china. Anna you join between an evolving you draw a line between an evolving market. Line between what we are seeing there and what we are seeing in the currency markets. Currency market moves would not have taken up as much. Mike the currency move was quite small. If you take a look at what ecbened with the yen, the have been praised by the stock markets. The reason we are not in the same in china is a lack of understanding. Lack of transparency. It is hard to get granule data. In china there are so many moving parts. As you assembled for a five different economists, you get six views on china. The copper profit outlook is quite weak. They lifestyle sector is quite strong. Unlike the u. S. , the Manufacturing Sector is pretty weak. We have a lack of temptation, so we lack a theory relative. Manus are you ready for bigger moves by other Central Banks . I am referring to rba and singapore. One is at a fiveyear low. Theres a lot of pressure. I get the point, set the equities to one side. Majorrrency has gotten repercussions in terms of flow. Mike it depends on how the other Central Banks read the slight weakness we have seen in the yuan. If they read the chinese do not want either other regions to devalue the currency, they may take a different step. That is maybe a reason why the yuan is why the yen is strengthening. Manus money is piling in. Mike but only for the past two months. There is quite a bit to go. Time the yenfirst is not playing a safe haven role in the region. Thinks what the bank of japan wont do. The meeting next week with the ecb. We have a miss calibration in december. I suspect the talk will be very dovish. The miss calibration, we libration, weca want to pick up on that. Manus give us your view in terms of the yen. Extranot doing anything is now priced in. There is room for a surprise the other way. The rest of us here, the emphasis in japan would be much more on the fiscal side. And ago we hear that and regions. Mike , think you very much anna we hear that in a few regions. Mike, thank you very much. Manus this is what it looks like. I go france policy Conference Bank of france, policy conference. Mark carney, christine lagarde, they are all there. A. M. Kicksa 30 off at 8 30 a. M. Anna tonight, president obama delivers his last state of the Union Address. Manus weve got an exclusive conversation with the bank of france. Nowhere else will you hear the opinion except here on bloomberg. Anna the Oil Slump Continues to slide. How much further will it go . Anna welcome back. This is countdown. Lets get to bloombergs business flash. Here is hans nichols. Job 18 . Oa sales that as falling Aluminum Prices build profit excluding onetime items relating to smelser closings was four cents a share. Man is poised to become the First Chinese person to control a hollywood film company. By two agreed to buy Legendary Entertainment. Legendarys production included dressing world, dark night and godzilla. Third avenue management saw conjuring to a decline in its assets last quarter. It took the step of freezing redemptions. Third avenue managed 6. 3 million million, down3 from 8 million. Sequoia is being sued. For more on those stores, terminal customers can head to anna . Manus . The demand for oil could increase amid low prices. 2016 is going to be under the very challenging year. Low oil price is not all bad. Prices have generated much stronger driving activity. Auto sales are at record levels. We think they are going to be Strong Demand there is good to be Strong Demand next year. Anna Mike Osullivan is still here with us. Out . We areplaying watching to see if we cross below 30. Down 17 in two days. That is the price that only the limits commentators were saying last year. Manus Mike Osullivan is good to help us after this russian. Are we at the after this question. Are we at the point of capitulation . Analects the five minute version. This is brent. We have not seen a move like this since 2004 levels. We are falling for seven days in a row. We havent seen that since december the 14th, of this year. Are we capitulating in oil . The price of oil has nothing to do with oil in the sense that supply and demand of the market is heavily oversupplied. Ited off the picture drifted off the picture in the last couple of weeks. Up and anna up in the 150 days. Mike the etf taurus. That is what people in the is becoming driven by Financial Markets. Oil is a risk proxy. You look at the way the correlation in emerging markets has intensified, it is a proxy for risk appetite. I think we are getting there. Oil is now beginning to cause pain for the oil producers. If you look at the changes to the fiscal situation in many of the gulf countries. You look the pressure on the saudi currency. Some of the opec countries calling for it is beginning to calls real fear. Manus weve got a clacking graphic, talking about pitching two paul at the same level. Does that were you . Does that worry you . You are not talking about a huge sway and saudi debt. Mike you look the volume in those markets. The same people are attracted drive up the test drive up saudi. Drive up saudi. Speculative, we have seen it last year with the mining stocks. Is Financial Market pressure. There is real world pressure, real geopolitical pressure. Anna we have heard a little bit from the nigerians saying they are think they think an early meeting with opec is going to be call. To opec members have requested an early meeting. Is that Wishful Thinking . Will opec members are going to be so much pain right now. They want to change the policy at the end of the day. Youre only going to get a change of policy if saudi arabia. S going to change 20s of oil gets into the 20s, opec is a national player. Thes we caught up with Aberdeen Asset management ceo saying that the yuan is likely to that shell is likely to keep its dividend. How do you look at that prism . Comments on the mining sector. Are looking with caution because it is it was so volatile last year. Stocks look more attractive. What we need in terms of all of these very risky assets is a capitalist. Many look quite stretched. We require a capitalist spark. Andreas what is your oil call at the moment . Anna what is your oil call at the moment . It is Financial Market driven. Someonee of its a would say 30 oil this year. Manus meikle, always great to give always great to get your conversation. Artin anna lets get a look at the equity markets. Things looking a little mixed. The ftse 100 getting the better of the gains. That market opening up a little bit. The euro market the euro stocks flat. All seem weaker at the start of the european trading day. Manus we got a nice story. Mays made fog more fall more. They speculate is going to rally by 18 . And the currency markets. What is happening with the yen. We saw the risk even trade around the yen this year. Weve got the yen the most overboard since 2011. Once a 23 back in november, now 117. November,23 back in now it is 117. Medical now youre seeing money going to the treasury yields. Now you are seeing money going into the treasury yields. Global disinflation trade is critical in terms of flow. We caught up with ubs in terms ubs in china. It is coming out of the dollars. That sets up nicely for on the move. We are half an hour away from European Equity trading. On the move will be taking you through anything you need to know. They will be talking to the bank of frances new governor. And of course the domestic situation here it manus the day is getting longer situation. The day is getting longer. See you folks tomorrow. We live in a pick and choose world. Choose, choose, choose. But at bedtime . Why settle for this . Enter sleep number, and the lowest prices of the season. Sleepiq technology tells you how well you slept and what adjustments you can make. You like the bed soft. Hes more hardcore. So your sleep goes from good to great to wow only at a sleep number store. Find the lowest prices of the season, going on now. Save 600 on the 1 rated i8 bed. Know better sleep with sleep number. Anna welcome to on the move. 7 30 in london, and we are counting down to the european open. Im caroline hyde, here is your morning brief. China intervenes. The state steps in to stabilize the yuan, the risk aversion remains. Oil grinds lower as crude hits 12 year lows. Will we see wti dip below 30 for the First Time Since 2003 . We will speak to the new governor of the ecb in his first interview since taking the role