Well talk about what is happening with the shipping story. Global trade, a little bit later on as well. Looking forward to that conversation. Then we get to Deutsche Bank. A big story. Jonathan in the news once again. The management is the bank is solid. Thewe understand that management is considering a bond buyback. The damage has been done. You wonder whether that can last. Guy i think there is a lot of communication that needs to happen. These guys will be spending amounted over the next couple of weeks. Trying to figure out exactly where they stand and where the future lies. That will be a big feature of the Banking Sector. Versed, lets get to Caroline Hyde. Caroline the antiestablishment candidates have claimed victory in the New Hampshire primary. Easily over Hillary Clinton which means the democrats can be heading for a long nomination fight. A crowded republican field with john kasich in second place. 2016 goldmanto sachs has abandoned five of its six recommended top traits. The bank was long on the dollar versus the euro. It was wrong on u. S. Inflation expectations and more. That underscores the volatility that has beset to global markets. Fund boosted its holdings of related debt. That is as a rush for the latest security send treasuries surging to the number one spot. The u. S. Is attracting investment with 10 year yields of 1. 7 . Compare that to 1. 2 in japan. Global news 24 hours of day powered by 2400 journalists and more than 150 news bureaus around the world. 27 minutes away from the European Equity market open. Let me give you a quick heads up on what we think stocks will finish. 2 down for most european markets. We have much more a positive effect. We callls you that higher at this point. Wall street a little more mixed. It does look like we could see positive start in europe. But, this happened yesterday. Jonathan november of 22 of low of the ftse 100. The damage has been done. Guy the buying lasted about 30 minutes yesterday. Jonathan a lack of conviction, it seems. Japanese equities down by over 2 . Lets put it up on the board. The market did not have the conviction to take heart. Likewise, brent crude was exactly where we were today did finish the day much lower. Sincelmost 8 , the most september. The trend is still your friend of the dollar yen. Haven,k off mode, safe japanese yen benefiting for that. Strongest sent october, a much stronger euro over the last couple of weeks. 0. 0 year Government Bond at 25 , the lowest since the crazy times of last april. We have talking banks last couple of weeks. It is been a punishing year for european banks. We have been speaking to the top names in banking and government about the recent downturn. In particular, the situation with which bank. Listen. Deutsche bank. Listen. People are selling. Looking for some signal to go back to liquidity market, theyre looking toward central banks. Ofthe one thing i am proud at Goldman Sachs almost all of u. S. Banks we took our medicine early. We went out and raised capital really early in the process. Then we went out and raised capital a second time. We did that for years and years ago. We really built our Balance Sheet up. We really do you leveraged ourselves. We built enormous excess liquidity. We made ourselves as financially secure as we could. They also the best wealth management. Credit sweeps are probably in a better position than Deutsche Bank. It will take them longer to get there. They have to get there risk it down, and so what they can. I dont think they will go out and raise more. I dont have concerns at Deutsche Bank. Comments come as Deutsche Bank is considering buying back some of its bonds. What a selloff it has been. 26th, the bumblebee speech as you call it. Just look at the move compared to 2012 versus where we are. Guy this is the european Banking Sector. This is what were looking at. That roundtrip effectively for the european Banking Sector driven by draghi initially and the central bank. Intoive policy is coming play. A big factor in what is happening. Hard to make money when you regulators on your back. Look at the german curve, look at what is happening here. Lets talk to a guy in as little bit about deutsche. Nick georges out of frankfurt. Joins us out of frankfurt. Talk to us about what Deutsche Bank could be doing with this buyback. Very i wantis to point out it is a very preliminary consideration for the bank. It makes complete sense for them to be considering this. But, there are a lot of uncertainties which they have to weigh. Not least of which is what happens with janet yellen on the hill today. The logic behind it would be Deutsche Bank is shrinking its Balance Sheet. Which means it has more available liquidity. Workp at that liquidity to why not put that liquidity to work . You could buy bonds. Ward port of the would allow them to book gains because these markets are trading below. At 95,buy that it back 85 then you book that gain. That adds to your capital. Reasons, for technical it makes sense. The calculations make sense. You mention whether this solves the problems for Deutsche Bank. Is this a signaling of what they are about to do . Is that important as well . Isk lets face it, this showing a bit of strength. It may make business sense. It is saying to the market we have sufficient liquidity. We could go out and do this. If they go out and do it they can say were in a good position. Goldmant forget, we had sachs saying yesterday the european banks do have sufficient liquidity. They should be playing to that effect as well. Midto longterm, does it solve problems . Absolutely not. They have this big litigation overhang were seeing. They must settle a lot of outstanding big cases. Could be higher expenses on top of the results they have in place. Will they be able to make enough revenue in that the core business of the trading . Going on the start of the year, it looks like a pretty tough time. By no means is this a magic bullet. You with great to have us i program this morning, thank you for joining us from frankfurt. Considering potentially a bond buyback, the stock of this morning in european trading maybe janet yellen decides the ultimate direction of Deutsche Bank and the whole market. That is your main event today. It is all about the fed today and janet yellen as she delivers testimony before the House Financial Services committee. That kicks off at 3 00 p. M. U. K. Time guy i cant wait to hear what she has to say. Every syllable take a look at the expectations. This is athis work function. The get you an idea where the market is pricing. This is the relative story. January the first seems like such a distant memory. Look at how things have changed in terms of the look ahead. Yellow is orange, look at that change. It is fallen off a cliff. Grasping at why were seeing what we are seeing. Why have we seen such regressive pricing . One of the interesting thing that i will be listening for in her speech is does she share the concerns that mr. Dudley highlighted last week . This tightening of financial conditions is weighing on the u. S. Of the fallen equity markets and the flight to safety, is this something she is concerned about . Order she remain up eat as she was in december . That is something we have to get some insight on. Jonathan the market moved to one side, the narrative hasnt change radically. Changed radically. There, themuch market has turned the volume up on the debate that existed back in december. The ultimate question is she more concerned about the International Bank dropped versus the labor market . ,ichard i think the thing is the september statement had a bigger emphasis on these international headwinds. December, less so. Were seeing these things come to the fore. Just look at equity chart and that flights to havens. It is plain to see. Guy the market has been a lot of tightening. If you look at what has happened, it has done some of the tightening. What i am seeing here is the equivalent of four fed rate h ikes. Think aboute to that effect. Richard absolutely. But the market doing that tightening, the bond market has done loosening. Really, where do we stand now . Does she think that tightening of financial conditions is done work for them . Is there still more to do . Jonathan what is the incentive to push against this market . That she have one doesnt she have one . You could take him what has changed since middecember as you said, what has changed since middecember . Guy a credibility issue here, isnt there . We seen this huge repricing of risk. Will be admit that we are wrong . Sensible people change with the facts change. Have the facts really changed . Is there credibility question that she will have to get around and work out . The fed cant have the shadows cast upon it. Jonathan the fed has been dead wrong for years now. Protecting move back to target on inflation over the next two years, they predicted that were Interest Rate hike for years. The fed has had the market down for a long time now. A credibility issue now. Maybe shouldve been years ago. They have tapered, they started hiking rates. I bring up that now because people are talking about it. People are saying that was a policy mistake. If they admit now they want hike for the rest of the year, the first hike will be called into question. Rich jones joining us from bloomberg. Up next, how low crude prices have effect the shipping business. Remember that we need to have a i will bring ap, the charts up in just a minute. We will look at the share prices. Guy welcome back, youre watching on the move. John, before we get to nils andersen, but for the where stock anderson, lets take a look at where stocks are. And thisn maersk, gives you this chart. For the yellow line, that is the price target which is currently at 10,900. That the white line is what we currently sit at the moment. A fairly significant spread between with the market thinks the share price is going, and where it is now. Een number of buys has b going up. The number of sells has been going down. Jonathan you mentioned that spread. Over 33 based on that. Analysts have come down. Everyone is asking it have they come down enough . Given today, i suspect a lot of analysts will be going out there looking at the models. Looking at a few different numbers. The container business is suffering. And the crude business which most people dont think about. Clearly, the analysts do. Really. Doublewhammy, it costs less to move those huge container ships around the world. Jonathan a little bit of upset. We will aboute will talk to nils that recently. Use Caroline Hyde with the business flash. Caroline 2016 sales may be below the median term goal. A geopolitical and managerial uncertainty. That also reported the slowest sales growth. The paris terrorist attack led to a drop in spending. Heineken had profit in line with analysts expectations. It sees organic revenue and product growth of this year. Meanwhile, carlsberg says earnings will rise this year helped but markets in asia. It will rise by a low singledigit percentage. That news comes as copenhagenbased beer maker reported fourthquarter earnings and eat forecasts. The chief executive will be 0 05 local u. K. Time. Underlying resulted for the 60 moving below last years 3. 1 billion. Maersk has been hurt by the oil a route saying it is breaking crude prices at 45 a barrel. It hasnt been that high since december. That is a Bloomberg Business flash. I think this is really interesting. Justu say, i spoke to nils a couple weeks ago to talk about how the Balance Sheet was prepared for 30 crude. If a break even prices far north of that, we havent been there for a number of weeks now. Guy also interesting, the bulk of the we talked to at Goldman Sachs yesterday we heard from a number of people have the price someone around 40. That seems to be the consensus for the end of the year. We have tow at to watch carefully to see if that gets chipped down. Jonathan the other points to he talked about the increased volatility. The volatility being a function of what was happening with storage on oil specifically. Dark about he talked about sharp moves to Storage Capacity. Just after he says that yesterday, 8 bang. Crude down. We were just starting to break Storage Capacity and you have these fishes moves vicious moves. Best to go below cash cost to force it. There is nowhere for the crew to go. What happened with electricity. You can extrapolate to that. That isnstantaneous, not true. The Energy Component of the commodity complex is much closer to that with things like metal. This greater volatility. The only upside to the conversation was as a result, the shift and a balancing of the market coming a little bit sooner. Positive a shortterm negative, jonathan a lot of people be using the earnings. Will look at what is going on in the rest of the world. 2016, it could be significant below 2015. For a number of years we looked at the shipping industry in general and talk abut overcapacity. We havent talked a lot about the man. We wonder if that is coming more to the forefront of the conversation now. Wondering what is happening with the Luxury Consumer in china that isnt pretty either. Guy you wonder whether that is just a china specific story being transposed into the fact that people are buying handbags in paris rather than beijing. That doesnt seem to indicate at this stage the upper and suffering at this moment. People talk about this spread. Low end the stuff and the high and the stuff and what is getting squeeze. Nervous. Y be getting do you want to go buy a new handbag when these markets are doing what theyre doing . We are seeing that wealth getting eroded on a daily basis. Jonathan yesterday we caught up with gary to talk about with crude specifically. Take a look at what he had to say. In anwhere clearly Oversupply Oil market. That has to clear itself up. We believe that will clear itself up as we get into the spring turnaround season. We think we will get to a more rational balance oil picture. That was the Goldman Sachs president and ceo talking about the crude market. Rebound in the crude market, if you listen to what jeff had to say could happen quicker than mining and metals. Guy a longer, and painful road. Run to the stocks to watch in just a moment. I wonder, relating back into peak apple. Well show you those moments in a few minutes time. Caroline i want you to keep an eye on we already saw the results out. This stock could drop of analysts are predicting at the moment. It could drop to about 5 8 . Then numbers for 2015 are actually banging a line back in line with estimates. We see 2016 going to have the headwinds of economic geopolitical monetary uncertainty. This is the reality of what is happening in the market. Clearly, it will be falling. We have a key chief executive interview right now. Guy lets get more from those numbers. Joins usils anderson now. Great to have you with us this morning. Talk me to the guidance for 2016. It has been abut overcapacity for a long time. As you see things now, is a demand issue at the forefront . We expecteal relatively low growth for 2016 from an oil gdp level. We think the growth in shipping will be slightly higher than it was last year. With somel struggling oversupply in the market. Rates are low at the moment, and it will much lower than expected. We start from a difficult place. We feelaid that, betrayed is probably picking up. In particular, for europe during this year. Were slightly optimistic. The starting point is quite difficult. Guy you were down significantly for your oil business. Have you been gradually raising expectations of how big the number is going to have to be . How aggressive have you had to be with those assets . Reasone didnt see any to not the i wouldnt say aggressive, but not to be conservative in the forecast Going Forward. Are using a slightly Lower Oil Price and the consensus in the market. We haveation is offshore deepwater assets on our books. We have said it is not realistic that they will come on the market unless the Oil Price Goes up significantly. We have brought them down to zero. Weve taken offshore projects were were producing now and maybe close to end of life. We just say with the present outlook we will not make the money on those fields that we expected. We have taken them down as well. If an quite aggressive. We have been quite aggressive. Guy what number have you plugged in on the oil price . Nils Going Forward . Expect ayear, we do pickup. We dont believe the present oil price is sustainable. That it couldare be that in the shortterm oil price could stay word is. We think towards the end of the year that we should see some pickup from where we are now. Definitely not the best in the world to predict that. We just have proven that with the drop in our fourth quarter. More specifically come we talked a number of times about making acquisitions based on the numbers. Theres that take the potential for acquisitions in 2016 off the table . Nikls not at all. We still have a low debt level. We made 3 billion last year, so we have plenty of capacity to make acquisitions. Of course, it is important to are that the acquisitions creative. We will continue to monitor the market. If we find the right fit, we would be very interested. Briefly, talk about monitoring the market. Anything out there that you see that you like right now . Do opportunities present themselves more frequently now . Opportunitiesthe in all the areas that we do business, just make sure your longterm forecasters is solid. We see opportunities both in oil. Guy thank you very much. Welcome to on the move, im Jonathan Ferro at European Headquarters in the city of london. Moments away from the start of european trading. Guy johnson, you have ou