Headline low. This is todays Worldwide Exchange. Im ross westgate. Here with your headlines from around the world. The dollar treasury yields continue to prove surprisingly hawkish among concerns of some about the bank qe program. That may add more to todays strange jobs report which led to spectacular hiring growth. Meanwhile, here in europe, composite pmi shows manufacturing in contraction territory. Well look ahead to uk services pmi in under half an hour. This after the hsbc in china shows a slowdown the lowest since august 2011. Warm welcome to you. 47. 8, services pmi. It marked a fivemonth high. That mean the composite number has picked up slightly. The final composite number confirmed at 47. 2, a little weaker than 47. 3 flash, 46. 5 in november. It is nevertheless the high since march. Perhaps some tentative signs emerging that the eurozone economy may have passed the worst of its downturn, although recovery still looks months away. The december Services Business expectations up 52. 5. It was 52. 6 in the flash to slightly weaker on that particular point. Lets get Immediate Reaction to what this may mean. Christine is with us for the first hour of the program today. Chris, happy new year. Happy new year to you. Good to see you today. This survey up to multi month high necessary all four of the largest euro area countries, just in the rate of decline, easing in france, easing in spain, situation stabilizing in germany. What does that mean for investors . We get two flashes, we get the flash and the final. So not only are we getting an indication of the progression month to month, but were getting this sort of update. So the market feels they have momentum. Since july, really, its the commitment from mario draghi to do whatever it takes to save the eurozone. The uncertainty that dominated the fist part of 2012 was all about what happens if the currency situation collapses. I think this positive momentum that weve begun to see in all the major indices, which is when i will theyre showing below 50, this Shows Confidence is returning in both the manufacturing and Services Sector across the larger economy. Its telling us that the directional bias is the more positive one. People are committing further out in terms of their own anticipation expectations. So the detail, if you dig down into it in germany and france is affirming the message that companies are beginning to be more openminded about upside in 2013 rather than risk in 2013 that things are going to be getting worse. And thats from as you suggest from those words that draghi, believe me, it will be enough. So are we getting into a more selffulfilling virtuous state as opposed to a negative downward side . Weve seen this on both sides. The minute policymakers threaten to call destabilize of the nom, whether it was going over that physical cliff in the states or indeed the idea that there could be a break apart of eurozone currencies, people start thinking, oh, i can make my Investment Decisions across borders. Theyre thinking, i have to close ranks and consolidate domestically in case theres exterior shops. The removal of that euro risk, a potential decline in a relative eurozone currencies has been enough for investors i think in the corporate sector to start thinking, again, about being part of europe rather than batten down the hatches and minimizing their expansion. So i think that was the mark both from a market point of view and from a corporate point of view of the shift back to its going to be okay if the central bank stays on side. And that really is why were seeing an evolution through the last four to six months, so these kind of pmi indicators weve got now. Were not at expansion. Were not at the point where were thinking everything arrived and everything is rosy. Risk has consistently been coming down for investment decisionmakers in the nonfinancial sector. In other words, the industrial sector, and that is enough, i think, to make investors on a broader basis say, okay, europe is now somewhere where we can look to get investment returns from in a way that we were going to other direction. Well pause there. Pmi is in focus in china. Lets get an update on what that has meant to asian markets. Li sish win joins us right now. Japan stole the show here in asia. The nikkei finally got a chance to react to the u. S. Budget deal. The index finished nearly 3 higher to a 22month peak, boosted by, you guessed it, the weak yen. Automakers were on hire with toyota shares hitting their highest level since november 2008. More on that coming up later in the show. The kospi finished lower by. 4 . Elsewhere, shares eased by about the same as fomc sentiments weighed on sentiment. In hong kong, weakness in mill and blue chips dragged the hang seng lower by. 3 . The shanghai composite failed to impress on its 2013 debut. Around 2. 2 trillion yuan worth of shares will access their lockup here in 2013 raising liquidity concerns. The latest pmi data says chinas Services Sector continued to grow last month, but at its slowest pace in more than a year. Understand uses sensex is still on the move by. 1 . Sixuan, thank you very much, indeed. The ftse made gains yesterday, close to a fresh 52week high. Still above 6,000. The dax is pulling away from its recent highs. Down 8 points tt moment. The cac down a 1 percent yesterday. The real move, though, there was discussion about whether the fed should stop some members expressing whether they should stop continuing buying assets this year. A bit of consternation. Had a big impact on the dollar and treasury yields. Treasury yields hitting an 8month high. 11. 92 . Were above that at the moment. Gilt yields moving higher this morning. Over 2 yesterday. Eightmonth highs for those. Italy, slightly higher and in spain, as well. On the currency market, the big move has been dollar yen, 87. 95 is where weve been. 88. 31 at the moment. So weve continued to move higher, the 2 1 2 year high on friday. Expectations now the bank of japan will ado want dopt more aggressive easing while those minutes suggest the u. S. May stop sooner than expected. Euro dollar, down to 1. 30. The aussie dollar is weaker is sterling is also down against the greenback. We were proep probing above 1. 63 a couple of minutes ago. They said so the fed comments pretty much dominating todays market session. Speaking earlier, principal investor jim corcoran suggested that qe hasnt been particularly effective. What we are actually seeing now, i think in terms of the fed comments is, you know, within a year or so we might start buying bonds, we might not need to put any qe into the economy. I doubt whether qe created the growth in the u. S. Economy. I think it was a turn in the Housing Market. It was cheap energy and an improvement in u. S. Manufacturing. But nevertheless, i think you are seeing for fundamental reasons have pretty good strength in the u. S. Well, that was jims view. Chris, what do you take away from the minutes yesterday . It had a big impact on the dollar, pushing benchmark yields higher, as well. I think we have to be contextualizing what comes out for minute statements compared with headlines. And i think that the real issue has been the fed has decided in the last six months to start actively talking about policy as part of the policy, if you like. Its the giving voice to whats going on. And weve heard a lot more from the fed about what its anticipating doing in 2013 14. The idea that theres probably a relatively even balance, bear in mind we have new fed members coming in this year, theres a relatively even balance between people that think you should do more accommodate than not. It takes take away the weapons the fed was already working with until we saw the unemployment level coming down to the kind of levels where the fed felt policy victory could be declared. In other words, you were seeing a number down in the low 7 , 7 1 2 area. In that sense, i dont think theres any new year. I think theres a lot of noise around the idea that the fed isnt having to react to be more negative. There isnt greater uncertainty. Theres a difference between, you know, stopping buying the purchases and going to tightening. Absolutely. And i think the point about what the fed has been doing, has been inter convenienting not just in government bonds, but also in mortgage markets. That is a bhig step change. The Housing Market turn around, the key energy have been factors helping to drive the economy. Quantitative easing hasnt harmed the situation. Thats clear. But the dynamic that were seeing from the fed is well remain rel ofly accommodative. But were not thinking well have to jump again. You mentioned their targeting employment. Lets mention the december forecast. This is the dow jones from employment. 146,000. Some think the Unemployment Rate may pick up, 7. 8 , as well. Bearing in mind those minutes, it puts even more focus on them if we didnt already have it on the monthly jobs report. Presumably, if we get a better number than consensus, well see a much better number heading even higher. Theres never a month in the markets where people havent thought this months unemployment numbers important. We had to get through the Hurricane Sandy issue in terms of what impact that may have had. So people always make adjustments. It could be seasonal, seasonal employment numbers up or down, concerns about but will todays number be seen through the prism of the yesterday . I think not only through the prism of the comments of the fed coming through but against the backdrop of what weve been going through with the post president ial election, rejuvenated focus on whats going to have to happen. The concerns about the negative impacts of tightening of tax environment and spending cuts will be put against that context of whats going on in the growth environment. Weve been acting as if growth has to follow behind whats been a very stimulus government both fiscally and mourn tearily and that any tightening is putting that at risk. I think any strength coming through in the unemployment numbers that we see today will perhaps take the edge off those concerns and it would be against that back drop i would emphasize it. It will be seen as the good news that it should be raerchb the negative news it could be. Absolutely, yeah. The state of the union speech is going to be full of a lot of optimistic commentary. And if youve got some Stronger Economic data to put that platform on, thats going to be the back drop of the message hes going to be pursuing. Thats something we yoont miss with the numbers. So it is all about jobs and fed minutes, as well. To get more of that, make sure you stay tuned, 1 00 p. M. Eastern, 7 00 p. M. Eastern europe time. You dont want to miss that interview. The u. S. Jobs report today says jobs were raised. What do you think the number will be . Send us your estimates. Still to come, 2013 might not be the best year for european automakers. Is now the time to drive away from all those stocks in europe . Well talk about that when we come back. Pmi in china and europe and well get them in the uk. Weve had a jump in the orders given indias sessions. Gaston broker has the details from mumbai. Hi. Hi. Well, before we started the data point, its important to point out that we looked at this data point closely. One because the fleet is relatively young and the other, youve had some anecdotal readings in the past that suggests its not reflecting what the ground picture is. But its difficult to neglect this data point. Activity index jumped from 52. 1 to 55. 6. Also, the new business index has gone up from 57. 1 to 54. 9. That pulled up the composite for manufacturing and services to a near tenmonth high at about 56. 3 from 50. 2. The other encouraging thing was the figures or the input price figure was lower. That came in about 53. 9, about 55 and its lower than the historical average. So just some head room for the central bank of the country. The other point to mention here is its enough for two months of a lull because we have a Festive Season called the valley in november and october months. That led to a lower readling than the last two months and this could be an improvement to that. What youre seeing in the index could be a reflection of that pick up and the underlying sentiment is strong. All of this leading up to the big event, the january policy on the 29th. But it looks like the rbi has the gun out of the hoster so its likely to pull out the trigger and its expecting a 25 business point rate cut. Lets see what happens on that. Galvin, thanks for that. Good to see you. Other news today, transocean shares are lower after the company agreed to pay a 1. 4 billion fine for its role in the gulf of mexico oil spill. The group claims partial responsibility for one of the worst disasters in u. S. History will pay 1 billion in civil penalty and 400 million in criminal penalty. A shell drilling ship having run aground in the coast of alaska has suffered damage, but there are no signs that the 155,000 gallons on board have leaked. Shells Emergency Response coordinator said the vessel is stable, but offered no details on the impact the grounding would have on the companys future drilling plans. Fiat is looking to buy a stake in chrysler. Trust has yet to respond publicly to the offer. What do you do with stocks like this . Chris, the italian new car registration is down at a 33year low. These are relative opportunities that we are looking at in the european auto market. In fear underperformed what was the best sector last year, which is the auto sector. We are seeing the market getting extremely carried away with some of the big headline stocks. The stocks like bmw has gone to valuation levels. Really difficult to justify the maintaining exposure, too. The problem that we have is if you are want to go maintain a rising equity environment and youre looking for rotation, weve learned in the past that getting out of stocks going up on the momentum can cost you from a full point of view. But if you are seeing laggards where the story has been a sentiment one as opposed to a valuation story, then a return to more normal valuation from something lie fiat is imminently possible against the back drop of the improving Economic Conditions we were talking about slightly earlier. Its a relative call that we were looking for on a shortterm basis than, say, Something Like bmw. If in your view, that is a value sfp. There is a value. What happens with stocks like bmw is they lead those concerns and people are afraid of getting out of them. Fiat has been a stock where people are claiming the short side relatively well against the long in other stocks in the sector. Tun wind of that trade is the kind of opportunity that we would just flag up to people to say, dont keep yourself short of a fiat against a bmw when a reverse in bmw, youll see it relatively undervalued. What does per shah come out in the stock of the middle of this, very weak Registration Data . Peugeot is not a stock we have any confidence in. It structurally has major problems. But the market has been rewarding peugeot on a relative basis against what the back drop of this being almost an uninvestble business from an equities standpoint. We would continue to sell peugeot. Its pulling out some of those stocks and individual performers. It shows you how specific a world weve become. Absolutely. That is three months and peugeot down 4 . Its a 35, 36point different l differential. I think what we have to recognize is the idea of rotating one part of the market to the other or the idea of those rising with the tide. This isnt the environment were in any more. We have that rally from the summer we were discussing earlier, the draghi comments in europe. A lot of stocks have gone up in line with the market or above the market. But there have been some real stellar outperformers. Those are the ones we are flagging up now saying dont think these things are going up forever. Theyve been a beneficiary of the recovery driving sentiment. But the laggards are often lagereds for a reason. So the adjustments that come back arent all of those go up, all of those go down. We are finding it difficult to find the sector themes in the shortterm and were very much going into single stock ideas. Yeah. This is probably the wrong question bearing in mind what you just said, because i was going to talk about the dax as a perform, up 311 by the time we got to the first day of trading this year in a 12month period. Youve talked about conversion. Its whats been driving the dax in the second half of 2012. We did have the trade to sxoegz your to german bunch and people shorting the dax futures. That was a middle of the year story. That was gaining exposure. Thats been dragging the whole market up. Thats been very tail wagging the dog if you like. The index funds driving the rally in the dax. The relative argument in favor of the german exporters is being constrained by the fact that we are beginning to see expectations that the euro has reached a low and weve seen whats happening to the yen and the impact that that has had, for example, on the korean stocks from a wealth of competitiveness point of view. The export sector in germany knot is not going to about leading the charge again in 2013 because of a weak currency opportunity and i think that is going to be the overhang for what has been the driving stocks in the market. It has been the export sectors in the main and its in the dax rather than the broad market. Thanks for that. Weve got to say. Services pmi continues to tick a little higher into expansion territory for britain. Well find out in just a few moments. Dollar and treasury yields continue to grow higher amid policy concerns about the banks qe program. We could see more strain today from the jobs numbers. Expect to show another month as steady and spectacular hiring growth. Also, a sign the currency block may have reached a turning point in its crisis. December spent the lowest since august 2011. And a Disappointing Services pmi number coming in at 48. 9. It was expected to pick up to 50. 5. The new business index at a low 49. 4 and 49. 6. That has dragged the composite pmi down 49. 9 in december. We had a surprisingly Strong Manufacturing number on two days ago. The q4 average, the low in 3 1 2 years. The market is saying that the composite pmi for december, if you add it altogether for november and october, points to a. 2 full in q4 gdp. So that first in the Services Sector for two years raising the likelihood that the uk economy has slipped back into recession. No surprise to see sterling hitting its weakest of the session against the dollar at 1. 6042. Daniel mccormick is head of