From next month. And the selling intensifies shares drop by another 12 in the asia session hitting a 6 year low after the Company Warns of a record annual loss. Does she know this is the start of winter officially. Really. I always forget it because the weather is so mild in december. I always anticipate it is going to be super cold and it hasnt been. Except yesterday. It was raining yesterday. What are the odds of a White Christmas . 0 . Or 0. 1 . Ill bet you a really lovely dinner with champagne and lobster that we dont get snow here on christmas. Thats a pretty safe bet for you. Exactly. Its the longest day in the year in new zealand. The sun due to set early and we have seen the asian equity markets and oil markets. Its all good. Its all very good. The shortest day of the year though here. So what do you do with that day . What do you do with that day . Do you kind of write it off or do you say im going to make something out of it. Do you go christmas shop something is it the panic tuesday . If youre out there and youre actually trading actually yesterday was the shortest day. Theyre saying it was yesterday. I got it completely wrong. Same, same. If you are working out there and if you are sitting on a trading floor, if youre trading from home, what are you trading . As volumes drop. Are you shorting anything. Youre going to be talking more like shorting on the show. You can write us here at the top of the show and get involved nice and early. Chalooking at the markets, t stoxx europe 600 a little bit higher at the moment. We were called up a tad this morning. Wall street closing higher. Yesterday a bounce in apple and microsoft among others. A bit of a pull back here in europe. A drop in spanish stocks on the back of an inconclusive future for spain. Uncertainty about how nobody has a clear period governing in spain. Also want to show you what the asian equity markets are doing. Volume dropping some what. The nikkei is down just a touch at the close off by 0. 2 . In part because toshiba is down in todays trading session off by 12 . Thats after announcing that massive loss in yesterdays session but elsewhere some of these markets have a strong gain in part because of the stabilization in Commodity Prices, and speaking of, tle recovering some what. Wti 36. 15. Brent crude 36. 60 after the 11 year low yesterday. A lot of people are saying theres no change really in the fundamentals but a rollover of the contracts and the start of the winter demand season. Lets see if it gets any colder. I know. It will come back in late january, february, march, snow in april. Short selling activity has reached multiyear highs according to markets with commodity players being the main target. It was the best performing short with Anglo American also making the list. They do have the extended qe programs welcome, simon, good morning. Thanks for having me on. Really interesting pointers you sent through talking about how much short selling we have seen over the course of last year and what could come next year. Lets just split the conversation in two and talk about why were seeing so much and where the activity is. The first factor is that the market doesnt have this bull run that weve seen in previous years. When a market is up 20 or 25 its hard for a short seller to have a High Conviction about it and you can make so much money on the long side. When the market does lose momentum you see rising Short Interest so we have seen that really kick into high gear in the u. S. And then in the u. K. Now its closer to 3 . So a big jump in that level. How about the u. K. , europe, in comparison, japan. The u. K. And europe, people treat them as the same but if you look at it you have the Monetary Policy and different paths and short sells take to the u. K. Market while really steering clear of the european euro zone market. The euro stoxx 50 is averaged on the year and weve seen a 50 jump year to date so the short sellers preferring to stay clear of quantitative easing and on to the market. Just again looking to raise Interest Rates much like what we have seen in the states. You take a look at the most successful shorts this year its intuitive to say it was related to the commodity sector. Shares fell by 99 but some of the high profile stories, glencore, some investors missed out on that. We saw shorts quite late to the party. So its now about 6 . If you take 3 as the critical level that only reached that level a couple of months ago. But that tells you that many of the investors are behind dufsh. Does it usually tell you when a stock has performed so badly its still worth sorting the stock now . Its hard to tell. The commodity story is a narrative they get behind. Theyre very exposed companies. You have large debt piles so you have the Monetary Policy moving against them and these are the scenarios where you see them continue. What does that mean for the companies . Does it give the management added incentive to turn around the business . Does it change anythingsor the added pressure of the share price decline, is that not helping things . It shows you that theres a lot of questions being asked about the equity portion of the Balance Sheet theres a growing consensus toward the down side of the equity value. You see that again with glencore. People questioning whether or not the equity is worth anything. Now were only starting to see the short sellers. You have a list with a couple of names to watch. The name were watching in the u. S. Is game core. So we have the Holiday Shopping period in north america and what were seeing game stop, sorry. Game stop. Again its kind of a bricks and more to retailer. If you look at the retailing environment now theres a lot more content being delivered through these games. An outerwall you mention at the same. Very same. It runs kiosk, red box retailing. That used to be quite popular. But now its come full circle and now we have got content being delivered through mobile networks. So that cuts the loop. Swatch group has struggling china sales. We have known about that for awhile now. Im just curious about why it would be included in that list. Because theres so much support coming from the retail and the institutional investor. Theres about 20 of swatch shop again. Its a massive name. Stoxx 600. So not exactly what you do see the levels for interest and again you have china, the swiss watch industry is down for the first year in five years in overall volumes and on top of that you have the rise of the smart watch coming in. Im seeing an increasing number of people wearing the apple iwatch and these are luxury pieces able to compete and you can take the growth away from these. Its the down side this year. Historically when we see such a big interest overall, what we see sometimes toward the end of the year or when conditions improve is a massive Short Covering rally. Do you think well see that at some point in early 2016. Its the change in the underlying fundamentals. What youre seeing is the u. K. Retailers were heavily shorted into september earnings. These are less negative than a lot of people are expecting but we have the new Christmas Shopping period and theyre looking back and seeing further market share erosion and the short sellers have really added back to their position. You mention morrisons. Let me also just ask briefly, people missed out on glencore last year and youre saying theres a lot of interest in glencore and same goes for noble group as well. Yeah. They see much more shorter high interest than glencore and there were a lot of questions asked earlier on. He was busy with the muddy waters there so it looks like the short case for them was a lot more developed by than glencore. So its been much more profitable for short sellers. Thank you very much. Interesting to get the names you think we should be watching. Thanks a lot. Happy holidays as well. Thanks a lot. Get involved. What will you short next year. Are you also worried about commodity stocks . Will you continue to be . That was this years short. Maybe its Something Else next year. Do you see this slow down in tech as well . How about the retailers . Let us know if you want to join the conversation. Or twitter as well. I forgot my own twitter handle. Oil prices ticked up from multiyear lows but no change in the trend is expected. In addition to a global oversupply traders believe it will heat more downward pressure on the cost of barrel. Morgan brennan spoke to the ceo asking him where he saw prices heading in 2016. He is the ceo of luke oil which is the number two oil company in russia and accounts for 2 of global production. Now on a day when the price of brent has fallen to an 11 year low, this is his forecast for oil in 2016. So somewhere in between 40 and 50 barrel is where the price will sustain during 2016. Because the current prices taking place in the industry do not incentivize projects. It will be going down and its price will be climbing back but that will happen during the mean term in order to achieve dramatic changes in the situation. We require decisions from the country which is make up opec, which would stabilize our price. So hes hopeful that when western sanctions of iran are lifted they can regulate production volumes to, quote, undermine the oil and gas markets. Theyre also in discussions to reinvest in certain oil fields there as well. The company has a 7. 6 billion investment in the oil field in the south of iraq. He calls that a quote very stable social situation. Not in an active combat zone. Not one effected by terrorist attacks as we have seen in other parts of the country. Luke oil is focused on reducing investments and driving down Service Costs that only dropped 25 but the one bright spot in all of this, the devaluations of the russian ruble down 18 . That has cut costs on operations and equipment produced in russia. Now, after lining up for days to buy tickets, the big day has finally arrived for spaniards. Yes, the el gordo lottery is taking place later. It translates as the fat one. More than 2. 2 billion euros will be paid out to lucky winners. But with thousands of Winning Tickets, most of the individual pay outs wont all be enormous. Although 160 people across the country will win 4 million euro top prize. But it will also mean an early christmas present. Have you ever won anything . No. I do the little scratch cards and most i have won. The other day i won 10 pounds. Not quite el gordo. I once one a nail and i was a child. I bought that scratch things exactly. And i think looking back. Did it change my life . Yes it did. Tell us what you won so far. Have you ever participated in el gordo if youre living in spain . Isnt there one village that does really well. Youre right. Why is that . We need to crack down on that. I dont know. 2thirds of people win that play. Twha thats where producers told us. Thats brilliant. Probably. Why dont we do that here . Lets do that here. Later on in the show were getting into the holiday spirit here on Worldwide Exchange. We will be crossing out live to the north poll later. Yes, you heard me right. To hear about santas last minute prep from his busy weekend and the real business behind christmas. Thats one story you dont want to miss. Welcome back, everybody. Youre still watching Worldwide Exchange this morning. The sleigh bells are almost ringing. Youre just waking up in new york to this if you havent been outside yet. Thats the live shot from rockerfeller plaza. It doesnt look all that christmasy in terms of the weather but the decorations are there. Were heading in the right direction. Hopefully. Meantime lets look at some of europes biggest stock movers today. They received the green light for one of its treatments. The fda has given approval for the treatment for high Blood Pressure to come to the market. It will be available for you as consumers from january onward. Shares up by 1. 3 . Bg group also trending higher to the tune of 2. 2 . As the firm nears completion of its deal with shell, Court Approval documents for shareholder vote on the mega merger are expected to be filed today. Meantime marks and spencer is trading lower. Off by roughly 1 . Thats a pretty weak reading on u. K. Retail sales. The Business Lobby Group warned that sales growth in december was weaker than expected adding that the outlook for january isnt that strong either. Well, shares in toshiba have continued their slide losing over 12 in tokyo and falling to the lowest level since march of 2009. Now over 2 billion has been wiped off the japanese c conglomerants market cap. The company is planning to ax almost 5 of its work force as it reels from 1. 3 billion accounting scandal. Interest paid on your dollar denominated requires reserves following the feds lift off. This is to get the grip on rising inflation. Lets talk about the outlook. So more divergence expected for 2016. What we have right now is a fairly dovish fed but a fairly hawkish ecb. I would disagree completely. Why . I think that the fed was more hawkish last week than expected. Its clearly pencilling in rate rises next year. So i think the fed will be more hawkish than the markets are thinking and ecb, draghi would love to be more dovish. But he cant. I think theres a clear arbitrage. Youre able to be paid to borrow money by the ecb and its very nice. Whats the risk that the first hike by the fed last week was actually a big policy mistake . What if the u. S. Economy actually flounders. A small minority believe it could slide back into recession. How difficult will it be for the fed to backtrack on what they have done and start easing again . Yeah, i think it will be weak and its not tremendous. All the manufacturing data are weak and services are slowing down. The fed is in a very difficult economy. I think its appropriate and you have a very high hurdle out for the fed to turn that ground and say oh no we need to be easing again. If there is a slow down in the u. S. There isnt a policy for quite sometime. How good or how bad is this going to translate through to the equity markets . Are we going to see a massive reaction next year if the fed continues hiking . You had seven years of unbelievably easy Monetary Policy and thats valuations of all Financial Assets in the u. S. And thats been the monetary easing that boosted valuations and i think thats reversed now and therefore valuations have to ri rise. Its funny because at this stage after we had lift off from the fed you have people saying theres no way theyre going to be able to hike even twice next year. We just dont have that many hikes and then we have the other camp saying they went to 6 or 5 or 6 and would be a lot faster than what we expect and are we really that far apart on the u. S. Economy Global Economy . I think so. Theres people that dont want to see the fed hiking because they dont think its necessary, their views of stagnation. Its just not necessary and you have others that think were back in a normal cycle in which case the fed is far too easy and if the economy does strengthen next year and inflation starts to appear you could see a need for six or so. Is the price of oil going to throw everything off kilter . We had a massive drop in oil. You see the impact of oil on inflation. You can see whats underlying and in terms of growth. But the u. S. Consumer is happy to spend a lot more next year because theyre coming through. So you ought to have a stronger real economy. In fact, you ought to have it now but were not seeing it now and therefore if you do get that its not so clear whether its down to the oil price or fundamental stronger use economy. Jeremy, i think theres really some underappreciation of two major trends at the moment. The fact that at some point the ecb is going to taper its bond purchases. I know theyre going to continue a little bit longer than we all forecast at the start of the year but then also the pboc at some point when the economy recovers will become more hawkish. What happens to volatility then . What happens to Global Growth then . Because we saw what happened when the fed was getting ready to taper and to tighten. Im sure youll have reactions in those local markets. Were quite a long way away from them actually happening though. I dont see those happening next year but you might just begin to start worrying about it toward the second half of next year, i suppose. But globally we had an amazingly easy policy. Supportive financial markets. Not huge for the real economy but whenever they reverse those policies it will be bad for markets. The boe is caught between the fed and the ecob. Whats it going to do . They raise second half of next year. I think the big wildcard next year is the referendum. Theres a chance the u. K. Is going to vote to leave the eu. Sterling is going to be very weak. Thats typically a 4 down move in sterling is the equivalent to 1 on rates. So if sterling is very rate, the bank of england may feel it has to raise rates to counter act that. Jeredmy, thank you your for insight. We just spoke about a couple of moments ago the el gordo lottery is being drawn right now in madrid. Live pictures of that. The excitement. But this usually lasts hours and hours. Looking at that last year. We need a bit more emotion from the girls there. But 2. 2 billion euros or 2. 14 billion dollars in prize money will be given out to the Winning Ticket owners. Unlike lotteries, they handout a variety of winnings on thousands and thousands of ticket holders. Good luck to everyone. Yeah. Oh, look. There is some movement, you know. Youre right. Anyway, we might check back in on this wonderful happening here within the next two hours. Still to come on the show, shares in nasdaq magnegas fell sharply yesterday. We have an exclusive interview with the ceo at 11 00 a. M. Cet. Join us here on Worldwide Exchange. European stocks kick off trade in positive territory. This as crude prices pick up from multiyear low. Shares rallying as the mega deal with shell reaches the home stretch. Vote on the merger is expected to come today. Swiss drug maker trading higher after getting the green light for its new Blood Pressure drug. U. S. Regulators say the treatment can come to market from next month. And the selling in toshiba intensifies. Shares drop by another 12 in the asia session hitting a six year low after the Company Warns of a record annual loss. I have u. K. Data to share with you. 14. 2 billion pounds. Thats versus an expectation of 11. 7 billion pounds and thats up from 12. 9 billion pouns a year ago. So slightly higher number than what people are anticipating. The budget deficit widening in november is bigger than forecast. Quick look at the sterling dollar. 148. 95. Well below the 150 level but higher on the day up by 0. 1 . Glancing on our European Equity markets were a little bit lower. We were called a tad bit higher initially this morning and we saw some green but we just changed tack just a little bit over the last half an hour or so. The ftse hanging on to slight gains after the dax, the cac and ftse mib all down by a tad. When it comes to stoxx 50 you have stoxx 50 off a little bit lower as anticipated. Not too much happening in the bond space. Values are getting quiter. A mixed picture there for yields. The ten year treasury note yield at 2. 18 . All eyes on the data out of the u. S. Today. Part of that is housing stats. We also get the third print of Third Quarter gdp and tomorrow the goods numbers. 10 year gilt yield at 1. 8 . In the currency markets the dollar index is pretty much unchanged today. The euro dollar is the 109. 28 but the dollar index is still off the two week highs that we saw in last week trading session. Its because of the Commodity Prices. And now the economic backdrop remains supportive of fundamentals in the high yield market and high yield issuers are in a solid Financial Condition overall. Thats the outlook for speculative grade bonds. He is the cio of european high yie yield. The high yield funds, though have been holding up relatively well co well co well come comparitivly speaking. Just overleveraged generally in that sector that has had contagion, particularly recently into the rest of the u. S. High yield bond market. European high yield significantly out performed largely because you dont have those issues within europe. There isnt a commodity and Energy Sector and european corporates continue to do well but this is an isolated sector problem within the u. S. High yield market. It dragged a lot of things wider and as a result theres a lot of attractive assets within that if you look at the energy x commodity space. Do you anticipate this trend to continue over into next year or are we going to see a shift ought of some of the sectors that you mention. Energy and commodities are tough to call given whats happened to the oil price. A lot of companies hedged until next summer at much higher levels and i think if we stay around the 40 mark i think youll have problems in the second half of next year as some of these hedges roll off and these companies dont have the cash flow to support their debt. We dont think weve seen the heights of defaults youre likely to see in the energy and commodity space but its creating opportunities elsewhere because everybody has seen the headlines in energy and selling high yield and it results in companies benefitting from a low oil price. Why is it seen as a safe haven for so many investors . Is it because of the default rates . Or is it really Monetary Policy . Is it the ecb . A lot of it has been qe driven. When you saw what happened to bunds, youre seeing investors now looking for yield and european high yield has not been an asset class thats been hugely allocated to by institutions and we think thats changing. But spreads are very, very wide. You can buy single european high yield bonds so this is not an Interest Rate sensitive asset class. Its all about credit risk and very benign at the moment. The default rate for europe. I saw a recent report. Versus 3. 3 in the u. S. 3. 3 in the u. S. Thats largely down to the Energy Sector, isnt it . Now that we have seen a sell off and the subsequent stabilization on the back of a fed hike, how attractive are yields . How attractive is it for investors to come back in and do some bargain hunting . The index yields are misleading. So the high yield market now is at 9 because you have so much distressed credit. Its been dominated by Energy Commodities and its likely to continue to be dominated by commodities and we think 2 is your normal rate outside of those sectors and thats far too widespread. Just wondering, is there an argument that were in a bubble in some areas . I mean, especially when looking at some of the energy areas as well . I dont know. I think we were in a bubble. I mean, i think there was a lot of were risk on high yield is theres a lot of frustrated equity analysts that end up in high yield and theres never any cash flow and i think we have seen lending standards hold up in the last two years like we should have done and i think in terms of energy there are theres going to be winners and we think theres some attractive names within the energy space and a bit of throwing out the baby with the bath water at the moment but i think we havent seen the height of the problems in terms of the sector. Zach, finally, lets talk m a because we saw mega mergers and its been so high in the high yield space in part because of the merger activity. 2016, are we going to see more of that . Its really the time to buy. We have seen some deals really struggle. It was an indication, 5 billion in debt. That didnt get away. That great to risk aversion at banks and the new deals well see getting underwritten are going to be better quality. This is the best time when everybody doesnt like high yield. All right. Thank you so much for that. Cio of european high yield. Now with just over a week left of 2015, what does next year have in store for everybody . We asked paul donovan for his 2016 out look. In his opinion the economies which have done the most deleveraging are the ones that are going to be looking at the biggest pick up in growth next year. Take a listen. The focus for growth is going to be on the u. S. And europe. Thats important because markets emphasize u. S. Data very strongly. If you look at what data markets care about its u. S. Number 1, 2, 3, 4, and 5. Thats the dominant issue so this creates a more upbeat perspective from the markets that tend to view the world through the prism of the United States and countries like germany but the second thing and i think this is a longer term issues that investors need to look at, what are we seeing is perhaps a degree of a narrowing of the gap between emerging markets and developed economies growth as a trend. So as you know for a number of year emerging markets have strongly out performed by several percent and thats been one of the traits since 97 and 98 in the asian crisis. Now were getting more beleveraging from asia and that gap between emerging market and developed economy growth is starting to narrow back in and thats going to be a more sustained play and raises questions about what should we expect from emerging market ifs the economy is going to be growing maybe 1 or 2 stronger than developed economies. Well, apple has bitten back at u. K. Surveillance plans. Can we take a picture of this. Can we just show adam . Hes running. Catch him. There he snchis. We have producers Walking Around between the shots. He brought us a glass of water. Thats what happens behind the scenes, right . We were talking about apple. It frees up. Its access to u. K. Citizens internet without the need for permission. Crucially the new laws they would demand u. K. Access today at a held in other countries. Its understood that apples concern is shared by other tech titans including google, facebook and twitter. Its the course of 2015 and calendar year in the red. And first stop for the global credit crisis. Apple watchers highlighted fears over slowing demand for the firms main product. The iphone. Its quite aggressive to try to catch up with apple. Theres still a long way between apple and whoever. Apple is the victim of its own success. Especially when it comes to iphones. That makes up 50 or 60 of the overall revenues now and thats why they have been under so much pressure. Share prices down 10 . Higher market territory up from the record levels that we saw in april because theres concerns that iphone sales could miss estimates. But shares last year, its going to be so difficult for apple to beat that and obviously with it comes a little bit of disappointment. Its a very widely held stock and it could end the year down. Shares off some 4. 1 . But we say its going to be hard for apple to beat whatever last years sales were for whatever device and time and time and time again they proved us wrong. Its true. Even if they have come out with a device where theres been some problems and they have gotten it and come back with the upgraded device and after that they have done a phenomenal job so far. Maybe the watch, the apple pay, maybe thats going to be hard. And they see apple and its up 2 in china. Its not all bad for apple. On many other devices, many of us use the little emojis, well, now something new kimojis are here. Kim kardashian unveiled a range of emojis in her latest digital stunt. He unveiled them to her instagram followers and promptly crashed the apple store. She has 55 million followers. 2 per app and it crashed the store. Do the app. In true kardashian style there are a few pretty racy emojis out there. Theres a bum. Theres a couple of bums actually on there. You had a hair dryer. A hair flicking emoji as well. This is massive. You know, in terms of what she is doing in the Digital Space as a business. Its huge and even she herself is surprised at how much traction this has gained and the app is being fixed after thousands and thousands of complaints. How many other times has the app store crashed . And because of what . Im guessing not a lot of times. I dont remember any incidents. No, i dont remember either. But she has lips on there. You see hips. She tweeted and said im sorry i broke your app store. Theres a donut. Breasts where part of it is kind of hidden ill bet. But yeah, anyway, if youre a super star of this magnitude, you can run with it, right . Yeah. Its kind of different. Maybe we should launch some apps. I dont think thats a good idea. Business news apps. It wouldnt gain as much traction as the Kim Kardashian emojis. I doubt it. Its sad. Anyway. Let us know what you think. What do you think of the kimojis and what are you shorting . A number of you read in with your short suggestions and read out the emails or tweets later. And meantime as we head for a quick break. Take a look at these very beautiful shots. The Christmas Tree. Its on now. The Christmas Tree is now lit and all kinds of colors. Its only two or three days to christmas depending where you are. Well be back after the short break. The flu virus hits big. With aches, chills, and fever, theres no such thing as a little flu. And it needs a big solution an antiviral. So when the flu hits, call your doctor right away and up the ante with antiviral tamiflu. Prescription tamiflu is an antiviral that attacks the flu virus at its source and helps stop it from spreading in the body. Tamiflu is fda approved to treat the flu in people two weeks of age and older whose flu symptoms started within the last two days. Before taking tamiflu, tell your doctor if youre pregnant, nursing, have Serious Health conditions, or take other medicines. If you develop an allergic reaction, a severe rash, or signs of unusual behavior, stop taking tamiflu and call your doctor immediately. Children and adolescents in particular may be at an increased risk of seizures, confusion, or abnormal behavior. The most common side effects are mild to moderate nausea and vomiting. Antiflu . Go antiviral with tamiflu. However, inflation is still expected to fall short over the next two years. The chinese yuan is trading firmer against the dollar. Authorities say they will seek to make Monetary Policy more deficit. But how will chinas economy fair in 2016 . That was the question that we put to the head of global em and fx strategy at Rbc Capital Markets. Take a listen to his forecast. China has accumulated lots of debt over the past few years and a lot of it is dollar based. So there is a currency risk there that they need to be very cautious of and as a result i wouldnt see the dollar depreciation that much. Which side do you want to play in china . The debt or the equities side . Theyre trying to convince us to take a look at the debt as they open up the market to international investors. But is it still too risky . I would be more interested in the equity side and the reason is because china is still growing faster than the rest of the world and they are ease heing. So they are injecting liquidity. After such an extraordinary year if you take a look at the chart it looks like ski slope. I know youre going skiing over christmas where you have to chair the lift up to the top and you ski down the slope. Thats the curve from about february right through to october. It was very alpine looking. It will be closing up negative. Even the winners have had them and basically a lot of volatility. What does the Japanese Corporate do . Theyre pretty much out of it where its supposed to go. It was vague to see the contrast. Japan with the yen above 120 is cheap. The yen is undervalued at current levels so its great for corporate japan. Its funny you say that because this is meant to be the year of 2016 where Japanese Corporates unlock more money to employees. They pay out more of the profitability to those that they hire which is to cause a consumption effect across japan. If the good times are suddenly over with the currency depreciating a little bit, how are they meant to be feeling enthusiastic about more of their profits when theyre getting squeezed on the currency and where they may not necessarily have the growth. As people point out inflation may be more challenging to achieve than first thought. Youre going to see a transition toward exporters. Theyre gaining in dollars because their revenues is in foreign currency, theyll do outgoing forward. So you need to look into sector exposures rather than the overall corporate japan. There will be a transition away from those that profit more from a weak yen going forward. And that was the head of the global emerging market and fx strategist at Rbc Capital Markets speaking to us earlier this month. The European Union has extended economic sanctions on russia which were implemented in july 2014 on the back of military involvement in ukraine. Along with a recent slump in Commodity Prices the move is expected to delay russias economy going further in 2016. Joining us now to discuss all things russia is tom. Good morning to you. Look the ruble lost roughly 15 against the u. S. Dollar over the last two or three months. This is as brent prices dropped some 30 so the ruble has been resilient. Theres not a one to one correlation here is there . Thats correct. Those that look into the details slightly more will see that the ruble has been quite resilient to the fall in oil prices. When we look at it, ruble stands out there over the course of the year as being the most tightly connected to the oil price. So theres the reason to be resilient. So if we take a look at how the russian ruble faired against the dollar over the course of the year it hasnt done so badly. Its actually risen some what. We were at, what, 80 levels in december of last year and since then we have seen all the forecasts about the economy sliding deeper into a recession. Massive capital outflows. That didnt quite materialize. Why not . The first thing we have to say is the ruble remains volatile. Throughout most of this year its been the most volatile currency out there. But people are beginning to say whats priced into the market. A lot of the negative stories regarding russia are wellknown to the market. And those capital outflows already occurred. When you look at next year maybe thats where the other emerging market currencies havent gone through. But also keeping in mind that we havent had the sanctions put on russia the year before. So some are arguing that a lot of it is priced in before because of the sanctions that we kind of got that volatility out of the way and then in round two with the oil price which is had an impact on russia but they were more weathered to take it on. Absolutely. A year ago russia went through the perfect storm. It had a central bank which was forced to move its currencies. From a managed currency regime, that was unexpected. The oil price was slumping and people look ahead now and say thats well priced. For example, the sanctions extension, well priced by the markets. So why arent we seeing more of an impact from the fed rate hiking cycle on the russian ruble . Why isnt there a feed through . Shouldnt we treat it as an emerging market as well . We should but first of all the ruble is almost entirely correlated to the oil price as we already said t. Capital outflows already occurred because of a domestic story in russia but equally a lot of the currencies that are very vulnerable are countries that operate large current account deficits. And they simply dont do that. It has the same problems. Theyre different from the other ones. Lets talk about the geo political issues over the last couple of weeks or so. We have the flight bands from egypt for example. To what extent is that propping up the ruble . They are due to go on holiday in egypt and to turkey. How big of a factor is it . Its a factor and another part of why the ruble is resilient to the price of oil prices. Russia is in a recession so a lot of people arent traveling and also the two most popular foreign destinations are off the list. And that redemption schedule and thats another reason. Thank you very much. Thank you for joining us and also just to mention, they may sign the deal in the First Quarter where they could provide 5 billion in a load to iran in 2016. That comes by ira. Still to come, shares in nasdaq listed. Magnegas dropped shortly. We have an exclusive interview with the ceo after this break. Court approval for shareholder vote on the merger is expected to come today. The u. S. Disease center investigates a new strain of e. Coli linked to chipotle saying its unclear whether it