To an end. The rout continues. Guy we will be answering that question throughout the show. The two to bloombergs first word news. Caroline the eye and or collapse has put subsidies to the brink of survival. Chief a state says many are hanging on by their fingernails. I and or fell below 38 per metric last week. Below 38 perl metric last week. Of 30, it wont physically work. From the 30 you to take by those trailer if you are shipping from australia. 15 trade if you are shipping from brazil. About an fabg price of 25 from australia. There is a lot of highcost not going tot are pass at that sort of price range. It is not sustainable. It is fantasyland at that level. Australias weaker global and the mystic growth. Scott morrison says this financial cash deficit will expand to 37. 4 billion australian dollars. Gdp growth has arrived down to 2. 5 . The south africas new finance minister he will shore up public finances to regain market trust. And show Credit Rating companies that the government is serious. He is speaking after jacob zuma appointed him. We hear their concerns. We will take them into account. Action. Demonstrate an they must give us an opportunity. Caroline that is your first word news. Guy . Guy under a half to go until the European Equity open. We have had some very negative sessions. Today it looks like we are going to open in the green. We are up by 1. 3 on the euro stoxx 600. It is right on the precipice of being down by 1. 10 . Butties have been falling it looks like we may get a solid rebound this morning. Jonathan the ftse 100 on an eightday losing streak. The board, brent crude, struggling to geek out and again yesterday struggling to eke out a gain yesterday. 1. 1046. Lar cable at dollar 51 1. 51. Guy we will look for it around my 30. The fed begins its twoday meeting. If a selloff in high yields has caught your attention, perhaps oil at 35 a barrel. Or if you look at european equities are down 10 . Lets talk about all of this. What does it mean . Lets talk to charles newsom. Also joining us, simon bellard. Simon, friday into monday, horrible for credit. Monday into tuesday, what are we looking at . Simon we are calming down. We have been looking at redemptions coming through some of these etf higher risk funds over the last several months as we approach fed liftoff potentially tomorrow evening. Businesseel this theres very little buying coming in. It is like catching a falling knife at this juncture. We got very low oil prices subtle in etfs. Equities are up small this morning. Fairly decent at the moment. Germany on the fixed income side jonathan some call it a falling chainsaw. Liquidity, to guys point, is it real. When you have a look at what is happening. It is the end of the year. Is it real as far as youre concerned . Is there a message here . Charles it is in the price, therefore it is real. There is a lack of liquidity as you get 20 end of the year. Books as you get to the end of the year. People squaring books. Clearly, investment banks have pulled back pretty heavily. That is going to tell. Jonathan it is telling. The one thing i will say is i was sitting around with guy and we dug through that 3rd avenue fund. Had a look at some of the notes they were buying. These are some drillers. This is stuff nobody should be touching. The question i would be asking, look at the numbers, the issuance of high yields from 2012 to 2015. Easing money coming to an end . Simon i think it is. We came we became overly dependent on an overly commodity of there was a liquid risk which etfs are supposed to give that Liquidity Provision is not there. That is what we are seeing. Guy when everybody is back at the desk and funds are back open and the liquidity story starts to improve, how will we view what happened in december . Charles i dont think will be as worried about what we have seen here. The markets have done so well in a long period of time. We are overdue a corrective peridod. Where we are, it is difficult to tell. I suspect it will last six to nine months. We had eight down days in a row. Update. Tse, we had one we are seeing a small rally. We could see a little bit of a rally toward the year and year end. Jonathan percent close rally. Is a question. Jonathan the santa claus rally, heres a question. The year ended story the lack of liquidity is not true for equities. I sit here and shrug and say here we go again. We get the rally in december. The liquidity yearend story doesnt hold true for the equity markets, does it echo is it about Central Banks . Is it about the fed . Is it about realizing the era of easing money is coming to an end . It is a falling chainsaw. It is going to go much lower. Isnt that the story . Simon we are moving in a very small way Interest Rates. There is going to be great argument from here about what happens next. I think we need to think very about what is good to happen with Interest Rates over the next six to 12 months. I cannot see them going up very much from here. Wholesale selloffs and commodities. Oil particularly. That is at a major impact on equity prices. Guy and into the highyield story as well. You are pointing at a but nine outlook for Interest Rates. It is almost one and done. How musty have priced into the fed . ; i would to see what happens from there. The case for moving on interest with the fed if it hasnt box itself into the given what is happening in the emerging markets . Jonathan if it happened all over again, the probably would not be hiking tomorrow. Youve got to get it done. They are going to go up sooner or later. There is an argument that higher rate may improve confidence. Yup. Yet if they are incredibly dovish, the maybe you dont take the confidence away. Atrles people have to look what Janet Yellens going to say very carefully. Guy simon, couldve gotten a little bit more from you. He is going to stay with us. Up next, some miners on the brink of extension. John has spoken break of extension. John has spoken to one of the leaders. Highlights and a moment. Jonathan good morning. Welcome back to on the move. 70 minutes away from the open. Futures higher. Lets cross over to Caroline Hyde with bloombergs business flash. Caroline volkswagen has suffered its biggest decline since the admissions scandal emerged. Punch. 5 of new cartridge 20. 5 of new car registration. A leader rollout of its next generation camera rollout. Hasmberg sources say apple opened a Production Laboratory in northern taiwan. Has 50 people creating new screens. Devices including iphones and ipads. Jon, back to you. Jonathan i spoke to rio tinto ceo who says some miners on the brink of extinction. Heres your morning must listen. I suspect we need to see a bit more pain and reality. A miner Interest Rate adjustment could actually be a Tipping Point for some people. We are sitting on quite comfortable. We have our own internal growth projects. Jonathan charles newsom, divisional director at asset wealth investment joins us now. I sat in front of him yesterday with a confident man. Not the man you would expect when the stocks are down some 40 . What are your thoughts that go charles once . Charles i cant help thinking they need to cut their dividends from here. Just be a little more conservative with their cash. Who knows where these Commodity Prices are going to be . We haveseem to me supply that is going to last for a long time. Paying out these high dividends seems like poor Capital Allocation. When we look at this is, we look at management and how they are allocating. Paying dividends is disappointing. Guy theyre going to raise funds. They feel by they may thats by the time that make the investment, the copper cycle by the time they have made the investment, the copper cycle would have turned. Charles lets look back at what money spent already which is a large amount of it over sustained. Oftime a sustained period time. Now, isg more money that sensible . I suspect not. Jonathan is he too optimistic to what could happen to his rivals . Is he too confident about what could happen in 2016, that they could wash out echo wash out . Charles it comes down to investor ability to give more money to these highcost producers. I suspect sooner or later they wont. Where i would be more interested is thinking to myself, perhaps he should be trying to buy some of these assets. Seen a load ofve divestments. Theres can be a flood of assets in the market. Tierone assets , they are not on sale yet. He wants more pain before people are forced to sell the stuff they dont want to sell. Going to have to take a little bit longer for that to come around . Is a viableience commodity in this market. Later. D wait to buy these copper mines could wait as well. Jumbotron newsom, he is stay with us. Talks takeover talks. But the futures ahead of the open up 58 points off the back of it a day losing streak back of a eight day losing streak. Guy eight minutes until the equity open. Here are the stocks need to watch with Caroline Hyde. Caroline of eva has to be on your watchlist. No longer in a deal with snyder electric could expect this stock to fall. This is on the back of that deal that snyder electric will no longer take control of aviva by combining their software units. 30 inop of 32 the stock. Due to do diligence, they cannot understand how to do a deal. Stock, aviva. K. Chipmaker,any, casting their fourthquarter revenue outlook. They will manage to get out about 40 million. Much below what analysts have been estimating. Why echo you to a weaker demand why . Due to a weaker demand. Watch across the board. I am seeing pretrade down 16 . Outlooklie gloomy this morning. Missing analysts estimates. Unseasonably mild weather. They eat out they eat out a mild growth. Exclusive talks to swatch assets worth 18 billion euros. Guy caroline, thank you very much indeed. Moreompany deal that is no this morning, another deal that is falling through. This is a company that is saying in the world we are living in, we dont want to allocate capital in this direction. The snyder deal off. Fascinating. Charles we will have to see what the reasons are when they talk about it later. Jonathan were going to talk about stocks now. The sectors that you hate. We could all do that. What you like next year echo charles next year . Charles some of them have done it really very well, like insurance, travel and leisure, media, general retailers are coming off the top little bit. Care, i dontalth really like that sector. Jonathan expand on that. Charles they are not finding the drugs they need to. They spend a lot of shareholders money to find the drugs. Think youve got more downside than upside. It could be one of those sectors think it turned out to be a lot more than people expected. Insurance, media. They have all done very well. You can begin to feel that one of the reasons why they are a few sectors doing quite well is people are being forced out of other sectors by oils and miners. They have done quite badly. The market getting quite thin. Guy we have plenty more we need to be talking about. Coming up, the market open. We need to be focused on what is happening here. Around 8 on the futures. A pop for european equities coming up. The only way to get better is to challenge yourself, and thats what were doing at xfinity. We are challenging ourselves to improve every aspect of your experience. And this includes our commitment to being on time. Every time. Thats why if were ever late for an appointment, well credit your account 20. Its our promise to you. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Jonathan good morning and welcome to on the move. Im jonathan ferro. Moments away from the start of european trading. Can we break the losing streak on the ftse . Guy johnson has your morning brief. Guy a big couple of days. We are counting down to the fed, the worlds most highly anticipated Rate Decision coming out the back end of tomorrow. Bloombergceo tells fed hike could be the Tipping Point for son. For some. They are heading toward their first annual loss since 2008, is the era of easy money coming to an end . 15 seconds away from the open here in london, and eight day losing streak. Futures indicate we could break that the open. Caroline hyde has the market open. Caroline eight days down on the ftse, five days down on the stoxx 600. But today, a bounceback. The nervousness is there ahead of the two day meeting at the Federal Reserve tomorrow. We get that allimportant Rate Decision where we could see the first rate hike in almost a decade. Green, weg into the are expecting bigger gains across the board. We saw a rebound with the dollar on the lower side, warming up at 1. 1 . Certainly there is some Risk Appetite in the equity market, or is it just suddenly we are starting to see the opportunities . Trading is up 5 10 of 1 with the dollar on the downside coming off after much. The dollar has been on that winning streak. We are seeing the Movement Ahead in the market. Meanwhile, oil is continuing to by eighter, brent off Straight Days now. Gold is on the green side ahead of the potential rate hike, but metals are having a downward day. Copper is off by more than 1 . Lets see how stocks start performing. It is slow to open but we are expecting it to follow with snyder electric no longer combining with this company. We see a slowdown in the mobile area with the biggest competitor, and agent and down as we sales down below analyst estimates. Back to you. Jonathan give the market of chance, it is christmas. Lets lett with her asian trade did with Juliette Saly. Tte stocks closed in the red for a sixth consecutive session. This is the height of the equity route. The shanghai market closed lower by one third of 1 , redeeming trait for the First Time Since august 10 on the back of that news of the merger that the Chinese Government announced yesterday. We did see the index rebound from sixyear lows reached yesterday and a stronger yen is impacting. Despite a fairly positive start to todays trade on back of a rally in oil producers, australias asx 200 closed at its lowest july, 2013. That was after the forecast was bigger than expected for the current financial year. Japan on reports of the Parent Company planning on selling a 50 stake in the company. Qantas is expecting firsthalf profit to do quite well. Caltex is leading in the oil region, and there were reports today that apple has started its own laboratory to develop new , providers doing strongly in the region today. In a downright spot day here in the asiapacific region. Jonathan Juliette Saly in hong kong. Here in europe, if that see in the green, with minors leaving us higher in the early part of the session. Heres whats happening in todays program. Ghost or glut . The impact of iran returning to the oil markets. Then, fantasyland. The chief exec of rio tinto says prices of iron ore are still unsustainable as some miners cling to the edge. And 100 crude. The resignation from angela merkel. Lets get back to the story in relation to the geopolitics. International monitors are expected to close their probe today, paving the way to the ramping up of crude production. Ryan chilcote has more. Caucus through the timetable. Ryan iran has just a couple more things to do, remove you somees, uranium, and then we could see the sanctions removed. People tell us we could get the sanctions as early as january. The first thing you want to watch when that happens is it ran releasing its stockpile. This is 25 kilometers off the coast of the ran and right now we have four tankers off the , wheref heart island iranians keep their crude. Of worldbout two hours so what that tells you is that there is some oil which is preparing to come in the market as soon as the sanctions are removed, but not as much as there was. Some might say that the overhang on the market is less than people might have anticipated. They need a cool 70 billion to do that, and they will sit down with the International Oil companies in london to try and convince them that you ran is a good investment. Jonathan heres a headline for you. U. S. Exporting wont affect oil prices. I wonder what he is talking about that. The big concern is not opec production in the United States as early as thursday. Congress could approve unfettered exports of crude for the First Time Since the 1970s. The reason why they introduce the restrictions, there wasnt enough oil kicking around. Not the situation right now. The one thing to keep in mind is not only is there a glutton the United States but there is a glut globally. The premium between wti and brent is at a record low. It is literally less than a dollar right now but it had been as much as 28. Analysts will tell you that in order for your u. S. Companies to export their crude, they need a premium of about four dollars. This is unlikely to push up the wti price too high right now, that it is definitely something to watch in the future. The worlds biggest producer of oil and gas and it could become the biggest exporter in the future. Francine jonathan thank you very much. Done, fed his one and i want to start think about my emerging investment story. Anything so. I dont think so. There has been a chronic over investment of capital for some period of time, and it takes a long time for that to wash out. When you have over invested allocation tends to get poor at investing their money and it can take some time before we have proper Capital Allocation from these businesses and prices to reflect the risk of emerging markets. Now,ve fallen a long way and i look at the spring back. Markets tend to spring back and then fall again. We could see a spring back in some of them. There is some evidence that one or two emerging markets make try to get from the bottom, but i think its going to be you will have to wait a bit longer yet. Jonathan you mentioned the washout. Balance energy versus material for us. Other,tively versus the which one would it be . Oil. I suspect you have risks