The takata recall widens internationally, sending takata shares sharply lower. And a very warm welcome to the show. We are awaiting a speech by Vladimir Putin in moscow. Youre looking at live pictures of the kremlin palace where hes due to start speaking. The nation addresses to the duma any minute now. We will bring you pictures of that and the headlines of the speech if and when it comes. The speech comes as relations between the u. S. And russia remain strained. The u. S. President barack obama has laid the blame firmly at the door of the kremlin. Im less optimistic about russia. I have a very direct and blunt businesslike relationship with putin. We had a very productive relationship when medicine very was approximat medev was president. Partly because he was been integrating himself into a nationalist backwardlooking approach to russian politics. Its scaring the heck out of his neighbors and badly damaging his economy. Sanctions are having a big bite on their economy. Chris is joining us now. Great to have you here this morning. Thank you. Lets talk about what putin is likely to say. Does the fact that the ruble has weakened significantly, that the russian economy is going to be declining next year, does that strengthen the wests Bargaining Power against him or does it make him even more resolute . Well, i think that the sanctions will work in the sense that there will be more determined peacemaking efforts on the ground in ukraine. Thats an ambitious thing to say. The russians would deny it. You can see there are more constructive things going on on the ground which is not, by the way, being widely reported. But that is a detail. The russian view will be that were pursuing our interest and were not going to be browbeaten by any sanctions. But i think that president obama has a point there in your clip just now. It is concentrating minds, no question. And this speech could come at a critical time in russias economy. A number of challenges facing the russian economy right now, the drop in the price of oil, the weakening ruble and those imposed sanctions. Do you think putin will address all of these challenges in todays speech . Its the annual state of the nation address to the parliament. Its designed to set out the broad lines of foreign and domestic policy. The speech will, at a rhetorical level, fought be a response to the crisis. This will be the leader just laying out the plan for the country, not giving the impression that the country, everything is in the grip of the geopolitical crisis or the shortterm drop by the oil price. Underneath, everyone knows the reality. Its not things that count. Do you think youll be able to ease any of the fears right now . I think there will be strong signals that theyre going to go for a settlement in ukraine, that they want a new strategic accommodation, that theyre going to have responsible policies in the face of the external shock from oil, etcetera. All right, chris, thank you so much. And youre staying with us to talk about broader europe in just a second. Speaking of europe, take a look at the euro slip to go a twoyear low ahead of the ecb meeting which could lay the groundwork for a sovereign Bond Buying Program next year. The central bank is set to release the latest round of a staff projection later this afternoon. Its been suggested that further cuts could build a stronger case for qe. Annette is in frankfurt with the latest. Yes. That is very much the case. Also, we get for the First Time Ever staff projection for the First Time Ever. We get gdp growth for 2017. Those projections at the later end of the curve, so say for 2016 or 2017, they deviate strongly from the target of the ecb to have an inflation rate of close to but below 2 . That might be actually laying the groundwork for more action in the First Quarter. Also, you needs to explain how he is going to boost the Balance Sheet to levels last seen in march 20112 with its current policy to buy covered bonds in abs. Its because both programs have not really started with a big bang. So i think mario draghi is increasingly under pressure to do more, but at the same time, he also needs to wait until those measure, taking leak the teltro wsh will actually bear fruit and show some effect on the market. So recent comments from the governing counsel are suggesting that the governing council will not decide bold measures today. They will rather wait until the First Quarter that the taken or implemented instruments will have time to render some effects on inflation rate. We talked to constancio, who was saying clearly last week that the ecb will wait until the First Quarter of 2015, will look at how things look like ie inflation, the inflation outlook and then also would react and would consider buying sovereign bonds. He mentioned some details on how the ecb might actually buy those bonds. That would be according to their capital ratio. That is triggering analysts saying that even german bunch must have lower yields next year. With that, back to you. Annette, thank you very much for that. You can see russian president putin is delivering his annual state of the nation address to parliament. The speech is expected to address ongoing tensions with the west. Investors will be looking for any reaction from the ruble and the headlines. Well bring you reaction as the morning goes on. We heard from president obama earlier and we know kerry has been in brussels over the last couple of days, particularly to talk about this topic. But is this a problem with any further development between the west and russia as a whole . U. S. And european interests are very, very different. I think, wilfred, that that is going to become the most important question in the next few months. This is not widely recognized at the moment, certainly not by financial markets. Namely, should the west address the root causes of this confrontation or should you just left russia rough, teach it a good lesson, oil price res continuing to fall and that can come to their senses. I think its going to be different views on that in europe. The United States is probably less inclined, less at stake. That is probably more than anything the russian president can do, it could be the decisive driver. And its more than and nato specifically than ukraines desire to join the european union, for example . Im personally absolutely convinced of that. You can argue until the cows come home. Its the enlaurnlgment of nato is my view. Another big event is the ecb policy meeting. Joining us now is peter to help us about what to expect today from the ecb. What do you think mario will deliver . Im not 100 sure market is expecting sovereign bond buying today. What is very clear to me is that the market expects sovereign bond buying at some point in the future, likely in q1. For today, i dont think that is the most likely expectation or more likely outcome. What do we expect for today . I think that would be premature. Secondly, strong statements, however, in that Something Like this might be coming out going into next year. Its probably contingent on some of the outcomes and the operations that theyve rolled out such as the abss. So in a nutshell, hes going to tell us if the Current Program will deliver what the ecb will expect, they will do more. If youre not expecting him to announce any type of sovereign bond buying today, when do you think that announcement will come . Whats the timeline . We have some very strong indications. Take all the data we have available and wivens thats available, take it forward from there. I think that is a perfectly reasonable timeline for any increases of the bond purchase. Should they include sovereigns or should they not . If we look at the sovereigns across europe, they are record low levels. Surely that suggests if mario draghi in q1 or whenever it will be, it should be focused more to the corporate sector rather than the sovereign sector, these yields are already so, so low. I guess you could extend that very same argument. If you look at the Corporate Bond sector or the Corporate Bond market, most of the companies that come to the Corporate Bond market tend to be the highly rated blue chiptype Stocks Companies coming to the market. And those yields levels are also low. But i think youre raising a very good point. Its not necessarily about driving the yields significantly lower. Its about increasing the size of the Balance Sheet. So its a very different approach then with the credit easing that it has been. Whats your recommendation to investors ahead of both todays meeting and potential bond buying in q1 . For today, going into the shortterm, there is a potential of a small disappointment given the expectation that something will be happening is certainly to some degree priced in. Having said that, if that comes, be it on the corporate side or be it on the corporate side should continue to perform. The question is whether those are to the short maturity bonds. If you believe the flip side will be coming and if it dont move and the Interest Rate is set higher, as has been suggested by some in the market, surely that would mean even the spanish bonds have room to perform, no doubt. Peter, from rbc capital yap markets, thank you for that. President putin delivering his annual state of the Union Address. Russias president said he will respect ukraine of a Brotherly Company and crimea is a Second Brother for russia forever. He said russia has become a stronger country because of its people, so a nationalistic speech thus far from president putin. We will get you more from that state of the Union Address as they come out. Lets have a look at european markets. Weve kicked off december with a couple of small up days in european markets. It looks like we might have another one of those today. We did open about 4. 3 down on the stoxx 600. Weve gathered a little bit of momentum since then. We are up 0. 1 . Lets have a look at the individual markets. Where is that strength coming from . The ftse 100 is the laggard against what has been so far in december. Some people pointing to the fact that its heavily weighted towards commodities. And weve got the mpc, the uk bank of england meeting today, as well. The ftse 100 flat today. Germany is up 0. 3 . France 0. 16 and italy 0. 17 . Overall, markets are muted ahead of Mario Draghis coming later today. Tui travel reported an annual underlying profit of 54 Million Pounds beating expectations. The British Travel group which is in the process of merging with tui in germany said pricing was strong relative to last year. Its up 3. 1 so far. Speaking first to cnbc earlier, the ceo peter long highlighted weakness in the french market. I think in terms of the for us, theres two aspects in terms of france. One, the destinations that most customers go to which is predominantly north africa locations which is where the demand has been weak and secondly the overall weakness of the economy and that translates in terms of weak consumer confidence. Ryan air, big move up, 9. 2 has raised its full year guidance on the back of strong passenger numbers. And the eu is set to approve the merger between wholesome and lafarge. In order to clear competition rules, the two firms have sold assets worth around 12 of revenue. Sky is up about 1 . Its selling its controlling stake. The group will keep a position of about 20 in the gambling business and retain a position on the companys board. Now, the story, the back end of last month, the story so far in december has been a little bit of movement the other way, a little bit of profit taking. But nonetheless, the move over the last month as a whole has been one of yield compression. In europe, we have seen very low yields. People now expecting at some point well see bond buying and the yields coming down off the back of that. Italy just below 2 . The uk and italy, similar yields from a tenyear Government Bond run. That does highlight the expectation of more easing in europe than were likely to get in the uk. Lets look at forex. The u. S. Dollar continuing on an upward trend in december. Paused a bit in december, but thats not the case any more. The broader index has hit a fresh fiveyear high. It will hit a fresh twoyear low earlier in trade but it has recovered. Its back above 1. 23. The yen did hit a fresh sevenyear low and is teetering on the 120 mark. 1 19. 96 right now. The aussie dollar weakening, 0. 36 . What is crude doing today . Well, its up and that is why the ruble is up, as well. Crude, 67. 75. Brent is back above 70. Its a bull market for oil. Of course, that doesnt tell the whole story. Now lets get an update on markets in asia. Sri jegarajah is standing by in singapore, as ever. Sri. Thank you, will. The main nd side of the market just continues unabated. 2,900 on the knows on the shanghai comp. So youre looking at the biggest percentage days, its biggest daily percentage gain since 2012. This is the strongest close since 2011, mid 201 1. Why the catalyst seems to be the market continuing to front run the idea that we are going to see more stimulus, possibly in the form of a cut by the pboc sooner rather than later. A lot of people are saying its not a question of if, its a question of when. The property developers, the banks, the brokerages did very well, as well. You can see the gains on the hang accepting. The benchmark composite down by almost 1 , down by 0. 8 . That is because the eastern philippines is bracing for yet another super price the year after typhoon yolan devastated the eastern provinces. This time we are hearing may strengthen to a category 5 store and is expected to make landfall today before noon. Thats one of the seasons why the markets in the philippine res down sharply. Underperforming overall a very strong session in asia led by the Mainland China markets. Will, back to you. Sri, thank you very much. Vladimir putin has said he blames the west for pure cynicism in its approach. Well bring you more headlines in a few minutes. Coming up on the show, boris becker gets in the financial game. The tennis hall of famer teams up with top investors to promote funding for sports and entertainment startups. He joins us at 11 30 cet. Dont miss it. And theres no gold at the end of this bridge as San Francisco says no so hedge funds. We ask if your pension money should be allocated to alternative investment. Is there life on mars . Nasa is due to launch a space capsule called orion in less than three hours. Were live to previe the flight. Russian president putin is delivering his annual state of the Union Address to parliament. Lets recap, he says russia has become a stronger nation because of its people. With respect to ukraine, he described it as a, quote, brotherly country. He blames the west for, quote, pure cynicism in its approach to the ukraine and he says sanctions are harmful for all countries. He says its meaningless to talk to russia from the position of force. The ruble did open around 1. 5 . It is now flat, the ruble. Its off the back of some of putins comments. Lets bring in chris granville, and talk about the ruble. Its all being blamed on the oil price, but the ruble needs to increase rates to protect the ruble, as well. That is the bottom line, wilfred. The financial sanctions are i think a lot massive giant. The rubls had a huge fall already. Why . Because russian banks and Companies Need to horde foreign exchange. Theyve got external loans which are maturing. So that plaque hole of uncertainty created by sanctions is a powerful driver. These circumstances with inflation going up, as well, central bank, 150 basis points end of october. The ruble has to be more worthwhile holding. Its that spread between ruble and i think that, you know, with the nationalist rhetoric coming out of putins speech, clearly thats some sentiment effect, but it underlines drivers which i would draw to. Do you think the nationalistic statements will reaffirm the forces in supporting further sanctions on russia and what does that do to its economy in 2013 . Well, i certainly agree that that would be yet another negative factor for russian markets. I dont think rhetoric and decorations are going to be the driver. The criterion will be whats happening on the ground in ukraine. And the theres not enough additional bad stuff happening, i think, to persuade certainly germany and the other european governments that now is the time to increase sanctions further. Theyre not ready to lift it, either. On a trade basis, if we see hikened rates again, would that say that the ruble is a buying opportunity, even if the micex might want be . Absolutely. I think this becomes more. More interesting. I mentioned earlier on the show that the situation on the ground in southeastern ukraine is actually improving, relative. Obviously, in humanitarian terms, its still desperate. But there are steps to resolve the conflict. Meanwhile, oil has had its fall. Who is to say that there would be further action. But clearly, some kind of market derivative seems to be found. Meanwhile, the central bank in europe is pumping out liquidity. The european union, especially turkey, but russia is waiting there with a fantastic rates trade if the drivers allow it. Chris thanks very much for joining us, as ever. Lets have a quick look at the micex and the ruble. Micex up 0. 5 . Ruble strengthened 0. 2 having been up more than that earlier in trade. The euro hovers near a twoyear low. Vladimir putin strikes out at the west for cynicism over ukraine saying harmful to his annual address to parliament. It sends the ruble lower, reversing gains. The takata recall widens internationally over faulty air bags, sending takata shares once again lower. And a catalyst that could likely move stocks is the is the ecb meeting. Will mario draghi suggest further commentary that could push stocks higher and the euro lower . That, of course, will be the question. Right now, we are looking at stocks higher ahead of the ecb announcement. Taking a look at bonds, we are seeing them move lower. Yields could move lower on the expectation that we will get some action from the ecb. A little bit of profit taking in bonds over the last two or three trading sessions. Nonetheless, very l