He was going to have to do something. Quite a uturn. A lot of internal politics going on within the asc. Lets did you uptodate with everything you need to know. Here is caroline hyde. Caroline the rbs achieve a of saying the restructuring of the bank is going well advanced. Returning to profit within four years. Hes coutu manus cranny and an exclusive interview. Quest the work in the work in the bank will be done by the end of this year. The restructuring of the front end will pretty much be done right end of this year. Which is a very, very good outcome. Caroline there has been a rant rebound after jacob zuma named his second finance minister in four days. The man who is the held the post between 2009 and 2014. Francis fars right frances far right failed to win any national assemblies. Hollande performed better than predicted. Back to you guys. Friday a guy shocker for global equities. What are we doing . A bit a little bit of a bounceback. A failed value calculation thats a fair value conclusion that is not a great response considering what we saw friday. It could do a little more momentum but it is fed week. An awful lot to think about. Guy, talk about a bounceback. Have a quick look at the dollar. President zuma started messing around with who should be the countrys finance minister. He change his mind over the weekend. They ran that strengthens it a big pop for the dollar rant the dollar rand. The biggest move lower since 2008. It is called the zuma flipflop. Of 1. 10. Ust south , 37 a barrel. Jonathan there is only one store in town, it is all about the fed. On wednesday we find out if the u. S. Central bank will raise rates for the first time in almost a decade. Lets bring in our guest, antonin juliette did antonin, an easy one eared what stops the fed from hiking this week . Antonin not much. It is not good to play a role at this time around. Expectations is the expectation 90 . Above 90 eared this more of important, the most a highly dependent. We are going to start watching data very closely in q2 of next year. Jonathan which data specifically . Are we going to be paying close attention to inflation . Antonin theres an argument to say inflation could pick up just on mechanical changes. The latest moves will tell you that is not the case anymore. Inflation on one side. Guy what is gradual mean for the fed . Spread over the next year . Antonin the year is coming after. Are you on a path to renewal allies in the next 12 three normalize in the next 12 to 18 months. To expectations are not increase over the next two years. Is it going to be Something Back to the normal 2 and then flatlining . Jonathan priced in. Last week, we are going to talk about the credit markets in crude. The market is doing a lot of the tightening for the federal reserve. Is there anyway they can hike in at the same time, easing thats easing some easing some respect as well echo as well. Go the big question is what happens to the dollar in the context of euro and japan. Guy what does the dollar than . Muchin there is so positioning that you can get some breathing room. Equal, they may have been bullish for risk assets. Wider as going lower. One lever, then you got three to consider. Jonathan the dax since the draghi News Conference is down 8 . And ecb, fx trade. Is that all it is . A lot of the way the qe trade expressed itself is via currency. It is down a couple of percent. Think about it as a dollar asset. Guy a lot of ground some to cover eared antonin, thank you very much. Antonin juliette staying with us. Credit concerns. Top Bond Investors say there is more trouble ahead for highyield investors. What we have learned from 3rd avenue management. Jonathan good morning and welcome to on the move. 20 minutes away from the open. Futures here in london up by 5. 5 points after the worst week of asses since august and on sevenday losing streak. Lets move away from the markets and lets get over to caroline hyde. Caroline shares plunged as it resumed trading in hong kong today. The companys president confirmed over the weekend it is been in said has been assisting with an investigation. The ceo of rbs says the restructuring is very well advanced and sees returning to profit in four years. That interview, he said she spoke about the issue of the bankers pay. You need the right people and the right jobs. You need to pay them enough to get them to do the job. The thing that is been important is to build a culture of this organization. It is about doing the right thing. Boughte alibaba has the two edges six 6 million deal includes the childs death includes the south China Morning post. Jonathan, back to you. Jonathan it is time for your morning mustread. , nineg for Bloomberg View lessons from third avenues travail. Greaterumber eight, the the dislocation of the asset class, the higher of risk to spill over to other types of investment, starting with the Asset Classes share the same characteristics. The credit, the liquidity risks. A big topic friday. Guy some big names coming out. There is trouble ahead. We are not done with the story yet. I guess that goes to a lot of the Asset Classes when you look at them and see what is happening and you say, maybe this is not just oil. Maybe that is where it is starting. Some of the characteristics are isolated to that. You get liquidity concerns. Jonathan the quote this it out is this being material and energy. Guy it has been a long time coming. Etf. Is the barclays this is all the way through 2014 in the third 2015. That is where we are at the backend. Were getting into frightening territory. This is a story that has been running. Lets get some more commentary from antonin julia antonin julia. Simon, to that point, we are in a situation where this is been running for a long while but it now feels like were going to get an acceleration. Simon were getting to the point where the fed lifts Interest Rate for the first time in over a decade. Risks, continue to buy but were getting this perfect storm. We got all until the inequity and commodity prices. The far east and story. We got the fed, and now weve got these unwind of these etfs. The lack of liquidity. Market turnshe more bearish. Jonathan last summer, the spread between investing great in highyield was the highest it has been in years. We didnt snap back. Likeis starting to look what it is meant to be, junk. The question to simons point, is there a big fat story here that is not about crude or energy . Antonin the market is good as pressing a single event. It is made it a lot freakier to have a single view on markets. Currencies moving and the cnh moving. There are too many questions at a time when you got one last week of liquidity before expiring. The last two weeks will be extremely quiet. The credit market has been working on pricing an increase of Interest Rates in the u. S. Has it is still so well choreographed. Default rate going up. Everything is starting to move. Guy im trying to understand chicken and egg eared how much of the volatility we have seen is because of what we have seen with the fed. How much does the fed exacerbate that story . What the key question is yellen says along with the rate rise on thursday. If we found anything more than a very measured pace sign guy gradual. Simon the rate rises coming because they are improving. If you get a hawkish rhetoric and you fear inflationary pressures pick me up. That is going to spook the markets further. Can take an early rise with the right language. We can take an early rise with the right language. It could make or break investor sentiment. Jonathan when we say gradual, we know what gradual is eared is. At next year and look back at 2007, the bnp paribas operatingre is a fund in the distressed and of the. Arket you can almost predict they are going to have problems getting out when they need to. The question is, whether that is a bigger issue, from the distressed to the investment grade, does this become a bigger problem . It what if it triggers an unwind . Yes, it could trigger something bigger. It will be slightly less sanguine. 2007, times were a lot easier. The amount of confidence which had to be reversed, had to be a lot higher. If you get banks, the level was a lot lower. Is it a moment which is important . Yes. Jonathan dont get ahead of the curve here. The world is better prepared, but as is is highlighted, it will trigger to the lesser classes. Jonathan antonin, stay with us as we will talk about what it means to the equity markets as well. Just a couple of minutes away from the open. 13 minutes to be precise. We will look at the corporate including the bg deal which receives the green light. Ahead of the open, 12 minutes away. Futures ahead in london. Guy it is 7 51 in london. Very close to the European Equity market open. Here are the stocks you need to be aware of. Caroline hyde. Caroline we are expecting a cautious rally. One stock on the upside is bg group. Over thecoaster ride last 12 months, white . Shell came out why . Shell came out with an offer to buy bg. Concern about whether to get regulatory approval. The final hurdle in terms of the rate latest. Chinese minister of commerce has given the final approval. It is up to the shareholders to say yes. Shot al expects that that stock to jump on the open. It was hit so hard by the. Lummeting South African rand the fact that weve seen a bounce in a rant, means their revenue from the rand coming investuth africa today bullish overall. [indiscernible] guy thank you very much indeed. Ets bring back antonin julia i want to draw a line about can i jar line between one or the other . Should i worry about the fact that one of the credits should not be antonin should not be there . Because of european qe, you would expect it to outperform u. S. Credit. Actually increasing. Andou look at 30 companies are up 15 , this can be good news. Earnings were quite disappointing the last time around. It will be important to watch the new q4 the beginning of next year. The credit issue here in europe. It has been rising over the last 12 months. And you switch gears . Or does become more difficult for the asset class . Antonin it will go a bit wider because the u. S. Goes wider. Qe, it of the drivers, should not go too much wider. I am giving you 5050. [laughter] i am highly aware of that. Guy was the correlation going to be between the euro and European Equitys . What is the correlation going to be between the euro and european equities . Antonin you can go for the mystic recovery. For the domestic recovery. The big move we have seen in the euro is a normalization. We would rather focus on the recovery in europe as well as some of the financials which should be interesting. The longerterm direction of the euro will be and underpin to these exporter stories. Jonathan tutees up the next segment, the story that could overshadow is what happened to the chinese currency. Antonin the question is we innot know starting august, announcement of mistakes around the time. [indiscernible] the market can absorb it. Were going back to the argument. 11 asset class grows when one asset class grows, the others are with it. Therefore what are they willing to do are not with the currency. The iowas we will live. Think you very much indeed. We will leave it there. Jonathan good morning and welcome to on the move. We are moments away from the start of european trading. Guy johnson has your morning brief. Guy economists expect yellen to hike rates. It is the first time anyone has done so since 2006. Commodity contagion. Brent is sticking to a fresh seven year low. The South African president has named his second primates finance minister. The brand has a search on that news. Jonathan we have the worst week of losses since august. Caroline hyde has the open. Caroline what a week it was last week. Billion wiped out from global stocks. It was a significantly bad day. Sayingn Capital Group is london Capital Group is saying the scent of volatility is in the air. The 5100 is pushing up 1 10 of 1 . Up 1 10 of 1 . Lower because the dollar is back on. The dollar is rising, as we anticipate a rate hike wednesday o. Lights as togreen why we would see a rate hike. Everybody is talking about this currency. The dollar is losing value against the South African rand. We see a uturn. We are talking about oil. Look at crude, it went up 3 10 of 1 . A look at some of those stocks to watch. We have got some interesting news, focusing on oil and the rand. N thee a rebound int he rand. Up 2 . P has oil deals for shell to buy. 3 10 of 1 . Up the deal could be one to watch. To you. Guy thank you, caroline. Anglo is up. A little bit of press fight for that sector. What is the day look like . What is monday look like out in asia . Reporter good morning, a pretty ugly start for the investors in asia. The regional benchmark is having its biggest fall since late september. Every sector is having trouble ahead of the expected fed move this week. You can see once again, the oil and gas players were heavily sold off. We did see weakness coming through in most of the market. Have a look at the bright spot of china, a bit of an anomaly. It finished higher by 2. 5 . That is despite a widespread selling across the rest of the region. The nikkei is down by 1. 8 . Is hit hard by the commodities route. 2 andex is down by selling in new zealand is also down by 1 . Have a look at the picture on the shanghai composite. The misspelling encouraging data with signs of stabilization over the weekend, there was encouraging data with the signs of stabilization over the weekend. This is the lunch break here. Her hubs some questions will be asked once again. Is shanghai composite backing the trend rising by 2. 5 . We three minutes into n. E session in londo here is what is happening over the next 60 minutes on this program. First up, we have data out of asia. You through the numbers and then we speak with first minister. How scotland copes with oil at 35 in oil and the rand roller coaster. The South African president zuma sends the rand on a ride. First minister. Guy jon was just saying. Japan, the Business Confidence measure unexpectedly held up. Live. E malcolm joining us malcolm, people are talking about stabilization when they look at this data. Is that the correct interpretation . Reporter it looks to be. Stabilization and continued accelerates nation. It resulted in the best gain this year, 11. 2 . That has been a pillar that has kept the chinese economy around the growth target of 7 this year. Driversgrowth snapped back nicely. So, some stabilization in the old and renewed vigor in the new. I will bring you into the conversation. Japanese business is a pivotal part. Are they feeling confident . The numbers today were pretty good. The index of large manufacturers showed that this held up at 12 . That shows there is more optimists than pessimists. The march number is seven percent, which is still in the optimistic category. Gdps on the heels of good and Capital Investment numbers lately. Jonathan malcolm, back to do. Currency continues to weaken in china. We getting a few clues from the pboc. Pboc is trying to change the mentality that we are changing quickness in the yuan. It is still up against most of the currencies. It is up against 12th of the worlds biggest currencies. It is because of this very Close Association between the yuan and the u. S. Dollar that the pboc is saying, we are not necessarily weakening our currency against the u. S. Dollar, which has been strong this year. Sure, we are a little bit weaker , but we are actually stronger against the others. Lets have a look at the yuan. Not always just against the greenback. Guy lets look at the yuan against the currency basket. The japanese yen is a lot stronger against the chinese currency. What does that mean for the bank of japan . Well, it is potentially a problem. The bank of japan is really at this point not expected to change policy. Not in the short run. They are still looking at inflation targets and they are meeting later this week. Theyxpectation is that will hold firm and not change policy at this point. Guy jodi, were going to wrap it up there. Thank you malcolm as well in hong kong. Lets bring in antonin jullier. About china. What i want to do is talk about it from the european perspective. How critical is what happens in china to what draghi has to do next . It is more of a rate of decline. China is slowing down, we know that. It has been documented and talked about. The question is, how fast will it happen. The stability of the currency. If it is a gradual devaluation against the dollar, it is ok. We can absorb it. If it starts jumping around, it creates too big a risk. Jonathan devaluation versus depreciation. Do have a view on that and does it matter . It sounds very similar if u. S. Me. If you ask me. It depends on how much you print you print it. Rinere the interesting aspect of europe is there have been some improvements and we are seeing it. I am smiling because we keep talking about these bounds. This is highly consistent with a volatile market. If there is one thing we do expect to happen this week is volatility. We are trying to search for for what closing levels we will end the year at. The investors will square the books as we get to friday. Wes is not the last time will see it up or down during the week. It will keep popping around. Keep hopping around. Jonathan how do you trade with that, then . A lot of guys have closed their books. Is that the right move, then . Tends to create worries. We can see this category growing quieter. Growing wider. Snapped back now between now and midjanuary . Absolutely. Jonathan many have heard you talk about a value snap back. Do you feel the same about the ftse . Yes, absolutely. ,i ambig disclaimer talking about the technical snap back. Jonathan you see those bets in the crude market as well. Is great toier, it have you with us this morning. Up next on this program, as low. Flirts with a jonathan 8 13 in london. The markets are trading a little bit higher, minus the bouncing back. That is not surprising given the week they had last week. Guest,alk to our next nicola sturgeon. She is joining us for our first interview of the day. Good morning and thank you for taking the time to be with us. The first question is, why are you ringing the bell . i am heregeon promoting a range of Scottish Companies with great Growth Potential and demonstrating what these companies have to offer for potential investors. We are publishing new figures successful. Er was a in scotland in terms of attracting early stage risk capital. This is part of our determination to get the scottish economy to make sure we are focusing on investment, innovation, and internationalizing the scottish economy. Jonathan . Do you need to do that . You need to transition the scottish economy away from its independence on oil. The price of crude is crashing as of late. What can you do to soften that blow . this is noton just for scotland or the u. K. What we are working to do right now is support the industry. We will prove we are focused on making sure we dont see early decommissioning, given the asin. Ity of thatbas b our economy is not dependent upon oil and gas. I amis one of the things demonstrating here today. Scotland has real strength and debt in some of the key economic sectors of the moment. I look for the example with digital and Life SciencesRenewable Energy. Actually, if you take gas, power output is broadly similar to the u. K. Average. We havepast 30 years generated more tax receipts for head of population. We have a Strong Economy and a diverse economy and that is what we are determined to build on. Oilthan looking at where trading, does the experience of scotland identify some of the benefits of being part of a broader union. You are less exposed to the oil story than you would be if you were on your own. Nicola sturgeon i am not sure that is the case. You take norway, it is an old country that is challenged by the price of oil right now. Independent for any country gives you the maximum ability to shape your economy and make the decisions that grow and develop your economy. I dont accept the logic of that argument. As the Scottish Government, we have a big drop to do right now the economy and up our efforts to make sure we do have been economy that is diverse and focused on growing. We are lucky in that we do have these keyghts inths in Economic Growth sectors. Jonathan do accept that the old story was overplayed . Price sturgeon the oil that was projected was not one that was being formally projected by the s p or the Scottish Government. Secondly, and perhaps it is something that we have to reflect on because maybe we did not make this argument strongly enough. It was never part of the argument for scotland being independent. I guess the Scottish Government and s p grad great pains to draw attention to the other strengths of the scottish economy. Oil and gas is important and i hope it will continue to be important for many years to come. Allis not the be all and end of the scottish economy. Guy cannot extrapolate from that, minister, that there is no relationship from you made be thinking about having another crack at it and the prices of oil. Those two things are independent . Nicola sturgeon absolutely. Pensively, it will depend upon the point of view, the opinion of people in scotland. It will not come down to just what i. S. First minister think about that matter. We are focused on right now is making sure we build on the economy and continue to diversify it and continue to support a number of different sectors. Employment in scotland right now is higher than it is across the u. K. We have a Strong Performance in female employment. I think scotland will become an independent country. When that happens, it will be down to the majority of people in scotland. Guy you have just returned from paris. As you look at what is happening with the energy industry, do you foresee a situation where you can use those powers to use that money to invest in Sustainable Energy elsewhere in the scottish economy . Besta sturgeon we do the to support the renewable sector. The powers that are about to come to scotland are limited to income tax. We are still arguing for a range economicwers and levers that will allowed us to maximize our potential. It was a recognition that one it comes to using Carbon Emissions scotland is not perfect. Moste perhaps, the ambitious Climate Change targets. Renewable strains is one of the key advantages we have. The agreement struck over the weekend in paris was very positive. That governments across the weld return that ambition into reality. Bond raising power, is that going to be an area in which you would use that authority . Use that money to invest in the kind of big Infrastructure Projects that maybe some of that kind of Renewable Energy required. Is that something you can see yourself doing . Your government doing . Nicola sturgeon of course. We will come down to decisions about what we think is in our best interest in terms of our economic interests and the issue of bond issuing is something that will go down, the in the discussions. If you look at the record of the Scottish Government when my predecessor was first minister, we put a very strong emphasis on capital infrastructure, theicularly during recession. The scottish a sector is doing well because of that. Much iso invest as possible to support jobs and the economy. That also two major we have the transport infrastructure and the Digital Infrastructure our economy needs. The emphasis is on infrastructure investment. Go back to the independence issue, do you see that featuring in your next manifest, though . Nicola sturgeon we made it clear that we would seek to take an approach that says scotland will have another independence referendum when there is majority support. That is very much the essence of this argument. I want scotland to be independent, everybody in scotland knows that. I am not the sole decision maker. In the meantime, we will continue to focus on trying to make scotland a greater country. We put inclusive growth at the heart of our economic strategy. The arguments for greater powers in scotland are inextricably linked with the economic argument. Luck with the rest of the day and thank you very much. First minister of scotland. Iled as, it is being ha betweenement struck many nations. Jonathan welcome back. We are talking about Climate Change. Fresh seven year low, creeping back up to 38 a barrel. Njera. O over to njera there has been a brand rand rebound. Uturn follows market turmoil that said the rand to record l ows. Zuma replaced the finance minister. Hollandehs performed better than he thought to be expected. For more, go to the bloomberg terminal at bloomberg. Com. Jonathan close to 200 nations have committed to capping Global Temperatures at less than two degrees celsius. Caroline hyde has been at cop21 in paris. She joins us now. Lets deal with the winners and losers in a bit. The real news is the voluntary aspect of this. That is the Sticking Point for many. Caroline many hoped it would be the first global, actually together tong reduce global emissions, but it is not legally binding. The United States would not be able to pass it through the government. Jonathan it would not have happened through that. There is no way it would have gotten through congress. This is all we could have hoped for. Caroline this is pragmatism. The french are still calling for a legally binding agreement. Recalculate your footprints. Caroline the rest of the Global Leaders came in on monday as well. Guy it came down to the word should versus shall. L ended up with shal should. Caroline overall, the money is being invested already. We will see more renewables. Developing nations will not be monitored as strictly. There are those who desire to see a bigger agreement. Trillion invested in renewables is not that much, versus the rest of the energy. Jonathan up next, we are talking about the rand roller coaster. Jonathan you are watching on the move. You are looking at a positive story. Please keep in mind that the context of friday. We are bouncing back. Guy a horrible session friday and a horrible week on the ftse. Switch up the board. Brent on a sevenday losing streak. Brent crude traded approaching 38 a barrel. A sevenyear low. The head of the fed, eurodollar morning byro this 1 4 of 1 . Flop. Astly, the zuma flip in to the indexes. Lets get caroline hyde. Caroline that South African story plays into the equity spectrum as well. Move forhe biggest investec since 2009. But nowh african born, u. K. Traded economy is benefiting from a search bacurgn the rand. Investec is the best performer on the stoxx 600 at 11 . Up almost 3 , vestas. It was named by barclays as the top wehner of that particular deal. It will bring in more renewables investments. Meanwhile, shire is down by 1. 8 . The Pharmaceuticals Company says it will be holding talks. It could lead to a purchase. It is looking to expand into rare diseases. Preparing for is a cash offer. That influx means a little bit of a concern for the equities. Guy thank you, caroline. As you have heard, the rand zumad as president reappointed his finance minister again. The formernow, governor of the south African Reserve bank. Thank you for your time this morning. How much damage has been done to the South African economy over the past few days . Reporter good morning i think a tremendous amount of damage has been done. The Stock Exchange has lost a lot of value. The government pension fund, actually. The banks lost a lot of money last week. Structural,ing to a recession in my view. Months,ext three to six things were looking rather grim. We are in a very difficult position. Jonathan it is jonathan here in london. Zuma, doesop iwith it change anything for you . Me be very honest. I think the president has handled the situation for a badly. Situation very badly. Confidence intore the markets. Fortunately, the president has reappointedpeed and the minister of finance yesterday. I know him very well. He is a sound fellow. Africanhe south services very well and became minister of finance. I have all of the confidence in him and that we will get this ship back on track and get confidence back in the economy. To the course of the day i expect confidence to return, but it will take a bit of time before we can get back all that we have lost. Jonathan he had a press n, at 1 00, gordha today. What does he need to say . Reporter he needs to say five things. Personally, that we are getting back to our fiscal projects. That all of the commitments made in the medium budget statement will be at herdhered to. We are going to do all we can to makes her the debts dont go over 45 . He must communicate that he is going to insist that state owned Companies Must align with governance principles. Nobody will be allowed to take g for granted. Thateds to indicate although this is intangible, these are independent institutions. His international obligations. That is what we need. Thethan just looking at situation. If he were back at the south African Central Bank running Monetary Policy, how would you handle this as it transpires . How would you set Monetary Policy . Reporter i would probably forecast immediately today, ensuring that the African Banking system is safe and stable. That would be my primary issue at the moment, to make sure that we do everything we can to make sure our banks function anderly, wellcapitalized, it is the ability of the banking system. That translates into the stability of the financial system. That is very important. The days when the central bank talked about the primary objective are over. The genie is out of the bottle. I know my colleagues will not like what i have just said, but know and accept privately what i have just sent. Ok, lets get some interaction with your central bank and the federal reserve. This could not have come at a worse time, given the fact that hiking ratesbe this week. I remember talking to private gordhan and he was very worried about this. How worried should he be . How worried should the south African Central Bank be about what is about to happen in washington . Reporter that is very, very important. We live in a interconnected, global world. The fed does has an impact in london, just as it does in johannesburg. Based on that, we will make a determination. Question is very difficult for them. As a retired central banker, i must not say things like this, otherwise i will be accused of trying to govern from the grave. Which i do not want to do. Jonathan not at all, tito. From what i sense from you, emerging markets Central Banks went to the imf meetings practically pleading for the fed to get on with it. From what i sense from you, it is not a get on with it. Would you prefer the fed to hold off . Reporter the fed needs to implement what they have communicated and what they have communicated is that they will be tightening the monetary conditions. I think they should get on with get on with our lives. This indecisiveness is not helping the Global Financial system. It is not helpful for the Global Economy at all. I think the fed must get on with it. Jonathan tito, a great pleasure. They give for your time and candor. Get on with it. Guy he was not mincing his words. Whoever was advising president Zuma Jonathan who was advising him . Many people were debating over the week as to whether or not it was just him. Guy i think part of it was the market, but obviously, zuma was under political pressure internally to get it sorted out quickly. European head of Global Markets research is joining us now. As a man that used to sit there and manage the fx research at this bank, what happened the weekend . Surely, this is not positive for the longterm for the South African assets . No, i think the volatility is the real killer and of course, the political uncertainty. One of the attractive features of going into south africa ahs that relative to some other places, politically, things were not as bad as elsewhere. For it thangoing some of the other emerging markets. Adn has been shot to pieces situation where the credibility of the political establishment is in question. Guy harvey done yet in terms yet . Are we done how bad does it get . He has probably done the right thing. Lets not forget that. He went through a recession and was liked by the market. It is a good step. We have retraced about 70 of the move from last week. That to me, is pretty good. I dont think we will retrace the full move. Going forward from here, in our view, it is one of the most vulnerable currencies. What happens in the aftermath of the fed . There are many out there who think the who think yellen will pull the magic out of the hat wednesday. Perhaps she will and the shortterm, but going into next year, the pressure will return. Guy up next, more from our conversation with the ceo of rbs. Find out how the bank is coping. Jonathan good morning and welcome back to on the move. By 35 points this morning. Thank you, john. Shall has taken over the bg group. This paves the way for a shareholder vote on the deal ncompletion is expecte on the deal and completion is expected next year. The Company President confirmed over the weekend that guo has been assisting quiz an investigation. Bought the newspaper pledging to maintain editorial freedom. The 260 million deal includes the south China Morning post, esquire, elle, and other magazines. For more, go to the bloomberg terminal on bloomberg. Com. Jonathan manus cranny spoke exclusively to the rbs chief executive about the sliding oil prices if the bank continues to settle assets. Downstream at what the impact is. We did that earlier in the first half. We decided we did not need to make provisions at that time. Showed it would not have a big impact on us. A fact that we sold our in American Park early on in the here had quite a few organizations talking about oil subsidiary companies. We have loosened our exposure quite dramatically. We are in a reasonably good position, but we are in the position of making risks. You have to be been interested for doing so you have to be able to do that. Manus what was the worst scenario for the oil price . Ross no one predicted it would go down to 50. Now we are down to 40. It is changing its shape very quickly. If you years ago it was at a much lower price than it is today. Jonathan that is ross mcewan talking to manus cranny. Does about one thing this week, the fed. T i have been leaning toward that. There are leaning expectations toyellen doing all she can downplay what is coming. The bar is very high. The momentum is for a higher euro. After what had happened with draghi, there has been a position squeeze. By the end of the year, we could re we arearound whe at the moment. Into 2015 andome every guest under the sun will sit at this desk. It isinto 2016 though, not that obvious what happens elsewhere. It is a lot more uncertain. Pullave a pretty big regarding the japanese yen. Talk to us about that. Iswe think the dollaryen looking for marable. There are a lot of variables that are looking to change. Had two months of lows flows we look at. There has been a dramatic drop in equity purchases in the past couple months. Fhat tells me that the gpi diversification story has come to an end. Dont forget, the amount of assets has been ballooned in terms of yen terms. The income on those investments is coming back. Alone, that is 4 of gdp. That is changing the flows on the outside. And the top of that, you have an undervalued currency. It all points to the potential for the yen to regain lost ground. Guy that is great news for draghi. About theeople talk fx channel being the one on which they operate. I would have some said that the if he were to talk about it on a trade basis for the ecb. They have mentioned in past, the rule of thumb with the change. Jonathan where inflation is of the moment, it is a lot. It helps, for sure. It is definitely one of the factors. Advancing, is not the overall effect is pretty limited. Ek will stay with us. What could this weeks fed decision impact . Ftse is up by 28 points. Jonathan there is one store in town this week. It is all about the fed. On wednesday we found out if rates will be raised for the first time in a decade. Why does the fed matter . Mattersnk the fed because whether they like it or not, they are the worlds central bank. Guy i get all of that. We have been pushing toward this moment for ages. Jonathan dangerous words there, guy. Guy why does it matter . Of what theyve deliver or dont deliver on wednesday, there are a lot of different moving parts across every single asset class. I dont think everyone can sit here and say it is exactly how we will react. There is a lot of uncertainty. Guy two we know if the mechanism do we know if the mechanism even works. We are getting an increase in the range. And then we have this rrp program. How effective is that going to be . The middle,to be in where everybody assumes. Or, is it going to be at the lower end . Dont forget, this is the most complicated time of the year to do this. Dollar funding is always very much in demand at the turn of the year. This year will be particularly interesting. The fed is tinkering with the dynamics of how you shift those. Drops. N the headline how do you trade the dollar . It is about any kind of hints from yellen. I say that reluctantly. Whatever she says, it is still going to be dependent on data. Jonathan that story has not changed. Here. D jones is and from myself and guy johnson, stay with bloomberg. The pulse is next. Francine welcome to the poulse. Countdown to the fed. An expected rate hike this week. Return to profit in exclusive interview. A restructuring of the Investment Bank will turn a profit within four years. And the South African currency surges as the president bows to the market and reverses course on his finance minister appointment. The fed decides. Welcome to the pulse in