Wealth management this morning and the message was clear. They talked about no default as the best case scenario. That is what they discussed. No default for them. The ruble may go lower. Moves withrabolic the dollar and ruble. No definition as to where it could go to. Have a note out saying that it on the ruble. 62 on the dollarruble. Russia is the story and is driving all of the other equity stories. Equity markets break two days of declines. I think the story of apple is phenomenal. If this holds, it could change the view of technology. 40 million was right off wiped off in 60 seconds because of a report coming out this morning. They will be requiring to deliver universal service all the way around the United Kingdom. On it,ts some costs relative to the group. The holdings are down. To the left hand side, you have it rising. Aviva is doing the deal. Tom running out of things say. Can i ever run out of things to say . Can either of us run out of things to say . This gives the ceo access to cash to regenerate the dividends and the price hike for the life group. The stock has dropped. The deal could take place. It is down and gaining back some life at 1. 8 . It is down 2. 75 on the back of the readings. Quite a u. K. Centric report. Talk about the dollar ruble and the index. You have a nice push of the upside. You have the unemployment report on friday. You have one of the strongest year since 2008. Ubs wealthock and managements. Wealth management. It is one of the strongest plays against the yen. Year isa trade for next the long dollar against the euro and on sterling. That is our report. 88. 12 is where we are. Manus will never run out of things to say. It could happen. We are bringing you breaking news for spanish unemployment. Fallingclaims are 15,000 for the month of november, better than expected. The survey was for a rise of jobless claims. Pain. Is better news ofor s lets talk the big things with a little bit of perspective on all of the top stories. The chiefned by senior equity strategist at goldman sachs. Great to have you with us. Im going to the chart of the next five minutes. It is the outlooks year and be on. Beyond. Ok next year and we are looking for a 12 pop next year. I dig down deeper and i see a forecast for economic stagnation in the euro zone and weakened growth. What is starting this . We have Profit Growths year and you are right. It is better than what we have seen this year. It is a little bit better. It looks like things are improving for europe and it looks like a Global Growth will get better. Ecb act see the decisively. You will see it be helpful. And, i think the euro will continue to come down. We have the euro falling. Forecast a about the month ago and it has been revised. Up, actually based on the fact that goldman thinks it is likely we will get qe from the ecb. How does that help the fundamentals . It is a signal, more than anything else. In terms of the economic impact, i think we are skeptical, like many others. It is a signal that will help markets. I think it will help keep the euro lower and will improve investment. At the margin, it will be an improvement. I think that european equities will respond. Drop toan sachs will parodity. Feed into the earnings . It is early to see it in earnings and a lot of companies hedge. They do not hedge all of the earnings. It will come through next year. You look at the European Company sales and half are outside of the area. E expect a transition benefit you translate that back and it will be beneficial. Hit in the because European Growth has been so weak recently. You will get a week or you are euro. Weaker lets talk about the fixed income and the credit market yields that are low on the prospect that we may get action from the European Central bank, even with apple coming over here. The other thing i want to bring up is the dividends yield. Stands out for you right now . We have found that, historically, if you go back to the 1990s, you find a few Companies Offering dividend yields better than you can get on the Corporate Bond market. You are not buying a stock in order to get the dividends. You want the capital and the growth. You do not have Companies Offering a good yield. Now, two thirds of the stock market offers a better dividend on yields because bond yields are incredibly low, at the moment. It has been very attractive, compared to other asset classes. Even at a low growth or stagnating environment, it offers so much with yields. I look at the chart and i see it is below 10 . Are we getting a reversal . We have seen a trend. Do. Little bit may it is not unusual to see it start and bonds rise a little bit beyond that. We may see them. The low growth stands out. Of companies has been conservative and the cashtoasset ratios are tight. We will talk about that after the break. You also have a big call on assets. The u. K. Regulator says they see no need to regulate competition in britain. The universal Service Obligation is not impeded by competition. We will have what the market thinks of that. We will talk after the break. Is the price of oil good for the Global Economy . That is what christine look are says. Legarde says. The ftse 100 is up. We are back in two minutes. Welcome back. I am jonathan pharaoh. I know you are bored of hearing it. Lets talk about oil and the financial crisis in 2000 eight. The managing director of the imf talked up the positive impacts and says the decline in oil prices translates to a boost for Global Growth for most of advanced economies. Markets . D for equity lets bring back goldman sachs. Andlook at the equity index they are dominated by energy companies. It is difficult. The Global Growth is key. It is a positive overall. You are right about the large weight and the mining companies, as well as. Commodity prices are coming down. It is a risk to equities. There will be another week year of earnings. Mining is coming down. The oil sector is down 10 . It will move in the next few days and weeks. . Is that one of the biggest i know we are throwing numbers out there. We have a drop like that. There is an impact on earnings. Price, youthe oil think it would come down further. Ultimately, it will take time to come through and it will be a hit to earnings. It may be positive for 2016 or beyond. With Oil Prices Going fast, you have expectations in oil prices and, if they continue to fall, expectations may come down matter ifd it may not the expectations are running at 3 4 . They are running lower and are deflation expectations. That can be a concern. It will push the tension and inflation. I see Credit Suisse and banks and insurers. It is a bet on financials. The views are in the sectors. We have financials on the one hand. The economy could improve next year and i think they will benefit from that. There is also more monetary easing. And ie the rates low think the rates i think that would be beneficial for the banks. After earnings downgrades, you may see earnings. The banks will benefit. The biggest head wind of the banks is the economy. You are looking at Profit Growth to come from financials. Do you see it easing . It would be softer on the banks. You need the banks to stimulate economic growth. They are trying to get the banks to start lending again. They need the additional regulation and capital requirements. Forestalling the recovery. We have been through the stress test and most of the banks have passed it reasonably well. I want to finish on this. 10 above the level of 2007. People talk about the bubble in the equity markets. That is not far from 20 years. It is pretty poor. In the context of the return, you had incredible volatility. With something from the middle, europe is stagnating with growth. Sharon, thank you for joining us this morning. The senior equity strategist at goldman sachs. People you dorom not want to miss. We will get a view from the after head of fx strategy the break. We are back in two minutes. Stay with us. Welcome back. Lets bring you up to speed. Properties from blackstone. They built the Industrial Real Estate company in 2010. They created opportunities to purchase assets. They say the purchase is expected to close. Strikes increased today and expanded to longhaul flights. 150,000 passengers. The as many hit with a series of strikes that has shaved profits. They are on track for their first return in years. Problems continued to mount. The vietnamese have ruled that the service is illegal and the setback is the latest for the who areiabased uber, facing roadblocks from germany and thailand. Keeping it on corporate stories, the deal is here. A in the insurance sector in 15 years. Creating a giants in the particular sector in the United Kingdom. Is as we expected and they will create a 21 billion pound powerhouse, overall. We have learned that they will emerge. This is december 19. They think things out and they have. It looks like they will push with this and the half. They have. 16 million people. Starting to challenge the legal and general, in terms of how many pension assets. This is coming in the longer term for an was an investors. This isnvestors coming in the longer term for analysts and investors. It makes and a norms acquisition in the United Kingdom and you have many questioning the rationale saying that cash is king and that, if you give me cash, i can give you a dividend. The rationale for the deal is costsaving. We talk about the ability to save costs. How difficult will it be to achieve . They are questioning it. You look at the background of these companies and it is phenomenal. It is light and out for bets soup. Alphabet soup. They created the union and their art lots of the issues going on to make it a clear strategic company. You look at the life in 2011 and the amalgamation of management groups. All of these companies have been forced together. How do you streamline them, john . There will be a busy man, george osborne. In march, he unveiled a shock to the entire system. Retire, youand i can buy a flashy car. You do not have to be careful. You do not have to buy and annuity. This trove the deal. Drove the deal. They have a lot of cash and they do not know had a keep on driving the overall growth. It ise likes of aviva, assets under management and that is how they offset the annuities they do not want. Politics shapes business. Sterling it could get a pounding in the new year. Sterling could get a pounding in the new year. Join oz after the break for that. Join us after the break for that. Welcome back to on the move. 30 minutes into the trading day and this is how things are shaping up. Dropped 1 yesterday and a little bit of a rebound. Stoxx 600 up. 5 and the dax at. 1 . Some great u. K. Stock stories as well. Ofim giving a little flavor post. Today we have some massive news all related to post come up mail and packages. The worst performer on the stoxx 600, this is the very of mailroomsupplier equipment. We are starting to hear this again and again talking about earning season and they are ,aying of all the performance Mail Solutions in france they are exposed to the deteriorating conditions in economy. That would be may have lowered their target. 15 lower. That is the worst since 2007. So mail just got sexy and getting sexy in the u. K. Royal mail down by almost 2 . We injection of competition are thinking about will not be a problem for you, you have to get over it. They had concerns over the opening up of postal market reform. The universal Postal Service has to deliver across the entire country mail should it need to. Rivals are now a lot to apply for licenses to deliver your mail that they are saying they will cherry pick the easiest bits. We are not thinking that. Analyzing but a bit of a disappointment to the shareholders. 15 deal has come through a premium and friends life shares on the up from that m a this morning. Those of the stocks on the move this morning. Europes role in becoming a source of heated exchange. An exclusive interview with shadow chancellor ed walls over his concern with the british exit from the eu. Oure need to make sure economy is growing at a strong and stable way and to do that we need to say a member of the european union. Reform but to to walk away from the largest Single Market on our doorstep would be a disaster for british jobs and investors will have to win the argument with the public and open International Trading economy. What are the chances of the u. K. Leaving the eu . It is a real risk. If you have them committed to a referendum by 2017 when there is little or no prospect of reform at a time when the eurozone is in a sluggish state that is a dangerous thing. We want to win the argument with the publics of being in europe is good for jobs and investment. We need reforms to make that happen across a wide range of areas. I think the David Cameron proposal the 2017 referendum speaks more to his weakness and division in the conservative party than anything to do with the British National interest. I think is this and labor are on the same side saying it will be really dangerous for britains future. Have you in speaking to leaders in berlin and paris and what do they say . I guess we have on hearsay it is a huge risk. Our partners in europe want to stay. They have their own problems to deal with and the eurozone but they have also shown through the years that they want to find solutions which work for all of europe including britain so they dont want us to leave and they know we and they need reform. I find it hugely frustrating because it always looks to European Partners like the current government is making this about only shortterm british politics and when David Cameron stormed out of the pack summit a couple of years ago he did something that margaret thatcher, tony blair and john major had never done, to walk away. This blackmail politics is not something we want to be part of. We need to reset our relationship. We can do firm partner and a good partner. In a constructive way. I dont think it is possible for David Cameron to be that Prime Minister for britain. The best way one would argue to keep the u. K. Within the eu is for the e to grow, one will that happen . As any ofnot as fast us want as we move from the crisis phrase it feels like a long and drawn out chronic. Of slow growth. Chronic period of slow growth. I sat at my desk yesterday and watched a whole host of Research Notes pouring own on u. K. Political uncertainty and how it was set to drag down the value of the pound. Much lower. Im happy to say one of the authors of those notes joins us right now, hans reddick at morgan stanley. Great to have you with us. And you yourrecast forecast aced largely on developments in u. K. Politics, my first question for you is why now . We had a few months ahead of the general election in this need to look at the position of the two major parties. Labour and conservative. When you look at the current government in the position concerning the eu there is a risk involved concerning the invert investment. This debate about leaving the eu would i tens of intensify. Over the year we have a potential for hightech regime which is not supportive for the Exchange Rate during for the next regime Exchange Rate. We have a Political Risk premium and lamented to sterling and now 4000 on theng at table. Due to overalls u. S. Dollar strength so not only the sterling weakness but the political environment in sterling is a negative one. There are other factors on top of that which is the straight relationship to a weaker european union. You look at investments for invert investments which have been strong at record yields and there seems to be signs of slowing down on that side. You some that up and you come to the conclusion that sterling has to decline. Well a factor as of additional sterling risk. Lets talk about the u. K. Eu debate. Where moving to a place conservatives are headed in the polls and make a referendum on the u. K. Membership more likely and therefore conservatives conservatives ahead and you punish sterling, is that where you are going . I was pointing out the alternative. Be fiscal plans would supportive for sterling. Looking at this change in u. K. Politics and what this new government is going to look like and the choice seems to be a type of the regular conservative government taking our negative attitude concerning europe and a labor government taking a negative attitude concerning business. These two factors are equally negative so i would not point any preference to a political party. , if as talk timing conservative led government is bad for the pound and a labor lead government is bad for the pound, when does this really start to enter the market psyche . I guess it has already started and we look in july we were trading at levels above 1. 170, we got into the debate and saw this weakening of Economic Activity spilling over and we have to consider one very important top ic which is a decline in british expectation. That is not only a topical. 4 euro length and sweden and switzerland that expectations are declining radically and that in thisat grates country are too high and a negative factor of huge gross prospects of the economy not being supported by adequate rear rates. That is an additional factor. Why want to do here is that all it takes are praying in but no pressure to the left or the right and those that are running in respect of the Exchange Rate are a profile which is not supportive for currency. Lets finish things by talking about Monetary Policy. You talked to climbing inflation expectations. You and i sat here four month ago talking about a rate hike at the end of this year and everybody is talking next year now, is that the place we are at and another factor for a weaker pound . You can see the expectations concerning rate hikes that have been declining everywhere on this low po