Avoiding the energy space. Its definitely a time to hook energy. Any business with the price of your only product goes down by 55 in six months its going to cause it but probably not for us. The economy is facing a 45 billion hit if oil prices average 50 adding that its likely moscow will be downgraded to junk status. Youre watching Worldwide Exchange. Bringing you Business News from around the globe. Italy in focus with italian inflation data coming out. Coming in at 0. 0 for the month of december but it did come into negative territory year over year so a sign of deflation given the fact that we did get euro zone inflation data last week that did show euro zone inflation dipping into negative territory. Thats the First Time Since the financial crisis in 2009. A lot of focus on the low inflation. Will he in fact be now pushed to unveil full blown quantitative easing. The conversation has changed from will he unveil further easing measures to when and how much. Absolutely. People continue to focus on how exactly it might be in force if and when it comes whether its based on rating and the size of Central Bank Balance sheets. Thats a debate well continue having. Lets get a quick comment from the chief european columnist. Lets talk about the french number that came out. The french number is better than expected but it just confirms where we are. The key thing is we got the final break down. Well go into the data and see what is in overall deflation. If thats considered rising then that will put more pressure. Theres of course talk about the president stepping down. How much of a concern is that to you given that the Prime Minister rnezi doesnt need political uncertainty. He needs to focus on reform. The key thing was mario saying he wouldnt take the job. He would basically step down from the ecb and move over and he made it quite clear hes not going to do that so thats good news for markets. Thats one of the things he was highlighting earlier this morning. Italy needs reforms and so forth. Im sure overtime it will get it. More in just a second but first lets get you a Market Update update. Now european markets have actually bucked the trend so far this week having gains in the last couple of days despite the sell off weve seen on Commodity Prices. That wasnt the case today as markets open. Particularly the copper price weighing on sentiments. The stock 600 was down as much as 1. 6 . Its allied to be around session highs down only 1 after we got that decision saying that omt would be illegal. It would be within the provisions of european i dont know union law paving the way for mario to act at the next central bank meeting. Lets have a look at the individual european markets quickly. Its quite a broad based sell off across all of the main continental markets but Continental Europe is out weighing the ftse 100. But lets move on from the countries to the sectors because it tells a fuller story for us. Basic resources down 5. 7 getting absolutely hit by this continued route in Commodity Prices and i said its moved on today to be focused into copper in particular. Out performer just below flat. Also near the bottom but only down 2 relative to the near 6 decline in basic resources. Why as i said Commodity Prices . Lets have a look at those. In particular we have wti and brent continue both around 45. Interesting convergence in the two prices. Both off 1. 5 today. Gold managing to stay around the 1230 level. 1230 was a point it has struggled to got past. Copper of course down 6. 7 . That has caused a big sell off in the miners focused in the ftse 100. Youll see how those stocks are moving. Down 14 anglos down and down 10. 6 . Lets also focus down 6. 2 . Not really because of the sell off of course in copper prices. Thats because it has said it expects a 300 million impairment charge on some of its assets due to the weak crude prices and expects to reduce its spending by 600 million. Thats about 40 on planned projects this year. Another suffer from the fallen oil prices. Moving on bill ackman discussed the overall benefits of low oil prices but explained why his firm was avoiding commodities. Were a concentrated investor. We have ten investment. Large investment is almost 30 of the capital of the firm. When you invest with that concentration you want to avoid industry where is the value can be effected dramatically by factors you have not control. We have done no commodity investment since the beginning of the firm. Energy prices coming down is very positive. Much businesses are gdp correlated. Its a nice positive so its an interesting time to look at energy because any business where the price of your only product goes down by 55 in six months its going to cause a lot of disarray but its probably not for us. Now lets look at bonds. A 10 year auction yesterday in the u. S. Wasnt in fact that well covered but yields stay below 1. 9 . In the last half an hour or so weve seen a little bit of bond buying following that ecj ruling. Were around 0. 46 in germany and fields in italy at 1. 76 . Lets have a quick look as well because the aussie dollar is hit by the fall in prices. Now the dollar had rahal will illied a little bit. Its fallen further today against the yen. The yen being seen as a safe haven trade even against the u. S. Dollar in these moments of high commodity volatility. Its up 1 against the u. S. Dollar today. Back at 116. Of course that 121 that we hit in the middle of december seeming a long way away at the moment. This is a look at the ruble. That follows the economy minister saying that a further downgrade in its Sovereign Rating to junk is likely and saying that budget cuts are coming for the russian economy. 65. 75. Lets get an update on equity markets in asia. Sri is standing by in singapore as ever. Good morning, that you were referring to in the broader commodities complex, that started in oil and its now effecting copper as you mentioned its really hitting some of the commodity sencentric markets. Australia is a case and point at indonesia. Similar story there as well. Losses offer more than 1 . Remember thats the miners that suffered. They were down by 2. 5 . You were talking about the currency, the stronger yen weighing on the nikkei. We also have a record Budget Approved by the Japanese Parliament but theres skepticism as to whether that will reinvigorate the japanese economy. Bucking the trend up by more than 1 . 1. 2 at the close and the world bank projecting that the philippine economy is going to grow at 6. 5 over the next two years. That will make it the Fastest Growing economy. Also helps that there is very limited resources exposure on the philippine main board plus theres a two day holiday around the corner in the philippines and the pope is visiting. Whats there not to like in the philippine market. The exception rather than the rule today. Otherwise pretty grim in asia. 6. 5 growth. That will be something to watch. 70 consumption. Great demographics and net lender of u. S. Dollars to the economy. Great story. Thank you for keeping us up to date. Back to europe a victory for the European Central bank as the European Court of justice advisors says the ecbs omt program is legal and necessary. The bond buying scheme was legitimate provided there was no direct involvement in state aid. So more on this story. What does this mean Going Forward ahead of the highly anticipated january 22nd meet something shes live with us. Of course the big question is about that European Court of justice ruling does mean for a potential qe program. There was a lot of speculation that if the court was to say that its not possible to buy an unlimited amount of bonds that would curtail a potential qe program even before it even started so now thats clear what the ecj is saying essentially is the European Central bank is allowed to buy sovereign debt on the secondary market but of course it needs to be cautious when doing so and it needs to explain itself why its doing it also to the general public. That is the main disclaimer here from the European Court of justice referring to the omt theyre also saying its clearly legal. Its proportionate and it was needed. At least the announcement was needed and if it ever has to be activated the ecb must have involvement in program and explain why its doing. So its a clear victory probably for the European Central bank. As we said earlier its a legal opinion only for now but its a legal opinion which has a huge weight for the final wording after European Court of justice which we will weigh in three to six months time. With that back to you. Thank you so much. Lets get some market perspective from david owen. Chief european economists at jeffreys. Do you see this as a victory for the ecb . Top judges in europe saying the own program is legal and necessary. Its obviously helpful for the ecb and is what they announced back in 2012 but lets be clear. In terms of what the ecb is going to do or not do on the 22nd of january this decision had little baring. At the end of the day, full blown qe its very different from what the omt was set up to achieve. Were just looking at certain sovereigns with issues. So this is very different in a sense. The ecb would have always worked around what the eu have done. So its helpful. It also removes one actual risk which some people were speculating that on the 22nd they would announce full blown qe and then say we need to save legal judgment on this. Its more difficult for germany to throw spatter into the works but at the end of the day qe is coming. Its just a question of when. Its not just a question of when but surely a question of how much and how exactly its did deployed. Thats right. The easiest way is a couple of paid in shares itself and the number that everyone is anchoring around which i think is a sensible number to work with is 500 billion euro. Pretty much the same sort of figures the bank of england kicks off in 2009. Also they will not be buying largely from banks. Theyll be buying down the curve. If you want to create money in the system you target nonbanks youre lifting bonds from secondary markets. It will be down the curve. What we dont know is whether theyll come out with an actual figure or whether well find out overtime. But is that also not precisely the problem. If theyre not buying it from banks how will it spur banks on to lending because its not going to change the desire to lend because theres no demand on the other side anyway. Lets be clear, the hope that it spurs bank lend as good low. Theyve done an awful lot of work on this highlighting the quan tif easing in the u. K. But the important thing is to print money. If you buy a bond from a bank what youre doing is changing the competition in the banking sectors balance sheet. You have more hope of driving down the Exchange Rate. But the Exchange Rate is already moving down. Its trading at a 9. 5 year low against the u. S. Dollar. Its down about 5 . Its trade wager which matters and the euro zone as a block is like the uk Exchange Rate is a pourerful figure. They need the euro down 20 . So its got to go down further. Lets touch on the u. K. As well because both European Union and u. K. Are facing these lower inflation prints except whether thats a good thing or not is quite different in term of yesterday were seeing most of the u. K. Press things. So why is it that difference of opinion . I think really when they raise rates it hasnt actually changed. We saw there was going to be a rate rise later this year. Probably november. Could even come as early as august. The fact that you have inflation of. 5 going low still actually ruling comes make it more likely on a two to three year view. So if youll signal the mpc, are you going to have a rate rise this year . In fact yes. Thats the way to view it. When inflation was above target was he raising rates . No more monetary easing. Actually the u. K. Was good news. David thank you very much for joining us. Chief european economist at squef ri jeffreys. Coming up on Worldwide Exchange were covering a lot of data. The countdown is underway for jp morgans results. We break down what investors should watch for with hours to go before that release. And as more and more executives work on the move we speak to one company capitalizing on the push into cloud. Thats coming up. Plus hollywood takes another crack at the financial crisis. Stay tuned for the details on the latest novel that is hitting the big screen. Charlie hebdo today releases its first issues since the gunman attacked its offices in paris last week. They may print up to 3 million print copies. The front cover features the prophet prophet holding a sign saying all is forgiven. Benjamin net kwaanyahu was in attendance. Angela merkel marched among thousands yesterday in honor of the paris victims. The vigil came a day after 25,000 antiislam demonstrators marched in eastern germany. The chancellor says germany will use all means to fight intolerance. The italian president is expected to formally design by delivering letters to the house and senate. The 89yearolds residencegnation will kick off a tricky process to finding a successor. Give us an update on whats ahead. Is it as tricky as the process faced in greece . No it isnt but its a great point that you make wilfred in terms of the contrast between the two. Whats going to happen now were expecting to see a formal resignation from the president around 12 00 local time and then theres a 14 day process where the Electoral College comes together. They vote on the next president. There are three votes in similar to what we saw in greece where twothirds majority is needed. In greece they do snap elections. Here in italy the voting process continues. So good you dont get to see the political instability as far as greece is concerned but it can be a labored process and that drags on when reforms are essential in this country and when it pushes back into march time it impacts negotiations between brussels and italys in their reforms. What i heard from talking to people this morning and theyre expecting to see around four votes. Once we go past those initial three it goes down to a simple majority and the hope here is that renzi can get his choice of candidates selected. Who is his choice . Theres no one announced so far. We have the finance ministers name. No one here is talking about the prospect of mario coming back to italy to be president of this country but the expectation is hell go for somebody less high profile. Perhaps the cultural minister is one name also being thrown into the ring right now. So plenty of uncertainty out there over who the candidate is going to be. He needs someone that is bipartisan, that can be voted for by both sides of the political spectrum here. He needs someone that will support his reforms but also someone in sympathy with him if he does decide to call early elections if and when he gets his electoral and constitutional reform through. First stop of course is the formal resignation expected at 12 00 cet. Thank you. David, he came out this morning to say he wasnt interested presumably for europeans out side of italy thats a good thing. That was the market chatter that he might announce qe and then announce he was moving over to italy and markets will face this huge uncertainty about what happens next. Who is going to take over the presidency of the ecb. Hes ruled that out so thats good news. Going forward looking five to ten years out do you think thats a role that he would consider . Some leadership role in italy . Again people suggest something he would want. I dont know but maybe its a nice thing to do once youve done everything else. Exactly. We want to get your take david also on whats happening in the commodity world because Commodity Prices coming under fresh pressure after the world bank cut its Global Growth forecast. The washington based institution said euro zone stagnation and market volatility were behind the move and Global Economy is too reliant on u. S. Strength. Earlier on cnbc the author gave her outlook for the u. S. Economy. We also expect the u. S. Recovery to be gaining momentum. On the order and three and a quarter per cent and seems to be a lot of internal momentum even if the rest of the world is fairly weak but even once the first Interest Rate hike comes we expect Interest Rates to be raised very very gradually so for most of the year and into 2016 costs will remain low for most countries. Were not just seeing a move in oil prices. Gas prices are also moving to the down side. David i want to get your thoughts on this because shortterm positive for the consumer they have more income they can allocate toward retail or other areas. Do you think well actually see that feed through to the consumer and if so when. The economists stop responses. This should make organizations more realistic. Organizations like the imf and world bank have always been forced to continue revising down their gdp forecast globals. World trade is slow to pick up. Going into last year world trade started accelerating. Looking at this data going into the first quarter, q 2 of this year we may see world Bank Actually revising up their gdp forecast in the next six months or year or so. Lets talk about what that means for europes economy. Given that it is facing deflation fears does that make it a bad thing for the european economy where as for the u. K. Economy its positive. In portugal its a negative cpi good or bad for you . They say its good. Given a boost it makes more likely that portugal actually recovers Going Forward since 2016. So it is also a net positive for gdp. Exchange rate is more palpable than the oil price but should be raising expectations of where europe is going to be over the next 12 months or so. How much lower do you see Oil Prices Falling from here . When do we see t