Transcripts For BLOOMBERG On The Move With Rishaad Salamat 20141215

A number of hostages in a popular cafe. Bureau,our Bloomberg Paul allen is covering events for us. What more do we know . There have been a few developments since last we spoke. The police have pushed their street,ack to hunter the block our building is on. You can see the high shot taken out of the window of our building. Building, you can see, is not a cafe. The cafe it self is about a further 100 meters up the road to the left. This is right across the street from the reserve bank of australia and directly across the plaza from channel 7, which has also been evacuated. Hourer development at this is the number of people inside the building. We have been saying it is believed to be up to 20. We have since spoken to the ceo of lindt australia and he said there were 10 working at the time and could be up to 30 customers. There could be up to 40, but that has not been confirmed by the police or any other agency. We have seen pictures of people with their hands up against the window. Two people were holding up a flag, which appears to be the Islamic State flag, but it is not, in fact. That says there is no god but allah. That is what we have for you this hour. Reports of conflicting in a situation like this. The Australian Stock Exchange has been evacuated. Normalill be trading as taking place there as well. A number of other brokerage houses, because it is the Central Business district, being evaluated as well. Do you know any more on this . Hub ofs certainly a business activity. Major banks have their headquarters there. These buildings have been evacuated. We have also heard that the Sydney Opera House has been evacuated after a suspicious package was found. Once again, police have yet to confirm that. But it is a place very much in the heart of the city and the Business District as well. Just getting one flash through at the moment, police morning people near martin place to stay indoors. Have you heard anything about not venturing outside . Well, we are not venturing outside and security in this building has been increased as well. However, it is worth pointing out traffic along macquarie street, just one street over , the traffic is still flowing. So police are obviously relaxed about that part of town. The cordon continues to be pushed out towards us and potentially wider as well. Is very hard to corroborate the information we have been getting at this point. That well,e the count of hostages could be as much as 40, as you mentioned earlier. What have you noticed . I have been to that cafe. To time. E from time the food is very good. It is a popular part of town. More so. Ristmas, even you do have a large number of people within that area. Inis worth pointing out that september, 800 officers were deployed around sydney and rated 25 properties and arrested 15 people. At the time, Prime Minister tony was intent toere commit a terrorist attack. The plan was to kidnap and behead somebody very publicly. They believe that attack had been thwarted, but the fact that this is happening is somewhat chilling. Ray,re going to turn to who is in sydney as well. I understand you have been watching these events unfold and seen some of these hostages with their hands against the windows. What more can you tell us . It was just an awful scene. It is just about 10 meters away, in the center of sydney. We got the call from police running through and we looked across. People were just lined up against the cafe windows, their hands tremor in in terror tremoring in terror. Women, theirounger we ares just so about two gunmen entering inside. Obviously, it is opposite the tv studio. Threw the victims inside a flag across the windows. It was an islamic flag. It is not related to islam state islam state. Just after 9 00 in the morning, no doubt grabbing their coffee before heading to the officers offices. Anyone who has not been to sydney, the reserve bank of australia, where decisions are made on the Interest Rates and it is a that Financial Hub and a very, very chilling event unfolding right now. What about the hostage takers themselves . Seen them . Have you have they made any demands so far . Police are not revealing that much information to us at the moment. One of our cameramen has a clear shot inside. He says that one of the men was sitting down while giving orders to the hostages. They are not being told about what theyre doing. Standby. Been terror raids across sydney. I am getting an update from police. Suburb. Of raids in a that is an update of what is happening right now. We are not actually hearing anything, but we are seeing some new pictures as well. There seems to be a little bit of movement, but we cannot draw any conclusions from that. Things to cause those raids was police listening in to phone calls which had suggested that there was going to be an attempt to kidnap a random person and try to behead them. Where this isis happening right now. Police have not made any links to those certainly, it sends a chill down your spine. What are the authorities saying at the moment . What has been the reaction from the Prime Ministers office . The Prime Minister issued a statement saying he is very concerned seeing what is unfolding. He is saying that he will do everything they can we understand that the Security Officials are meeting right now on the situation to work out a plan. The New South Wales police force is dealing with that situation. You can see the police giving briefings to new officers. We are hearing that the Sydney Harbour bridge has been closed down. Stopped in both directions. The upper house is being the opera house is being evacuated as well. As much as 20 people inside that cafe. And the police themselves keep on increasing the area where it has become a lockdown, havent they . You mentioned Sydney Harbour bridge is one of those and, of course, the opera house, too. It is probably about 400 meters away from the opera house and the harbour bridge. Initially, there was a few hundred meter radius. 52 martin place. That was sent into lockdown. As the hours have gone on, they have extended it further and further, including the harbour. Ridge, the opera house the circular quay being surrounded by police. The city has an underground train station that has been going through there as well. Idea of how big the Police Presence is at the moment. Dozens, are literally from what i can see pit i do not have a specific figure, but from what i can see, i can see snipers, Police Walking around with bulletproof vests, detectives. We are talking dozens and dozens of police. , there arered meters firefighters dressed up, ready to go. The Police Presence is being felt across the city. And see police cars you mentioned that the police are not saying anything about demands, but how did they come to find out about this siege . Who told them and how quickly did they react . [indiscernible] we already have a strong presence, a threat to behead someone in martin place. Across the city, we have had swarms of police guarding those areas. If police were on the scene within seconds, you have to say i think they are still trying to contact the people inside. They have not revealed whether they have made contact with them or not and they are not revealing what demands are being made. My understanding is they are trying to make contact with them. Just keep safe. Thank you so much. Ray is a producer for Channel Seven news, which is adjacent to this cap it cafe. Lindtiege taking place at cafe. Prime minister tony abbott will be speaking in about 15 minutes from now and we will bring you details of that speech. This is on the move. It has just gotten 12 15 in the afternoon in australia. What we know and have learned is from the lindt cafe, the owner of the company saying there could be as many as 40 hostages being taken, 10 staff and 30 customers. We do not know how many hostagetakers there are in the at the moment. Police on the streets of lisbon corner and martin place. Dozens of police around the vicinity. People inside the cafe with their arms up. Just talking to a producer, ray kuka, saying people work with larry were quivering with fear. Tony abbott talking in just under 13 minutes time as well and briefing the nation on what is happening in the Business District in sydney. That is what we have at the moment, these live images. In other news, the japanese Prime Minister is celebrating a resounding election victory. Critics say it is time to deliver. He got the two thirds majority needed to push legislation through and his gamble paid off. Asking what this election was really about. Yes. That is because abe framed it as his bid to get a new mandate from the public to push his through. For given that he got the same number of seats at before the election, some say that it was a waste of time and money. His liberal Democratic Party getting 326 seats. For aers will now gather special session where abe is expected to again be elected as Prime Minister. Overshadowed by a very low voter turnout, the lowest since world war ii. Prime minister abe has acknowledged the challenge is going forward. Listen in. Abenomics is still only halfway through. I think i have shown we can change things. Noticed thatve there are not many changes yet. Sayink the Election Results it is our mission to deliver such change, and we can do that. Despite the discontent with , the Democratic Party of japan failed to capitalize. They only got 73 seats, which is 11 more than the for election, but still well below the leader. Back to you. Thank you. The Prime Minister is certainly under pressure to deliver the goods. Moodys is among those turning negative on the country, cutting its debt rating a notch this morning. Joins us now from singapore. The pressure is on. What does he need to do to read and a great to reinvigorate confidence in his policies . That is the key question. The core of abenomics is the socalled third arrow, revitalization program, where growth can be turned up. The positive news from the , it was onceever said that great injury results from unstable government. Now you have abe going into a multiyear period of government. The Current Administration was marred by unstable government. Japan could not get its act together in terms of policy. Now the field is open and we will see whether abe can pull together a coherent growth strategy. Rating . About your you cut your rating on japans credit worthiness. What was behind that principally . We have it on stable outlook. We cut the rating one notch because of the heightened uncertainty. The governments ability to meet its deficit reduction targets headline actually two numbers and one underlying number that is really important. The government has a goal of reaching a fiscal surplus on a primary basis by 2020. That is a zero. Right now, it is about 3. 8 . The other is to ensure inflation of two point oh of 2 . Bank of japan is halfway there. None of this happens unless japan gets potential growth up. Right now, the rate is. 8 . It has to go up to 2. 5 to achieve this deficit reduction target by 2020. We believe achieving that target will ensure that the japanese bond market remains stable and the government can fund itself at very low rates. Thank you very much. I apologize for not much time with you given the situation in sydney. This is the scene. It is 12 21 in the afternoon near martin place in sydney. We do have this hostage situation taking place. As many as 40 people being held hostage in that cafe, the lindt cafe, with their palms against the window. Prime minister tony abbott will address the nation. He has already convened the cabinets National Security committee. More details on this developing story when we return. Es in hongvid ingl kong. Following shinzo abes victory over the weekend, the markets are reacting by driving up the falling. Dollaryen trade isthe shortterm to strengthen, but the longterm trend is to weaken. The aussie dollars most accurate forecaster agrees that the currency is overvalued. Tosees the aussie sliding . 78 by the end of next year. On top of the 11 drop we have seen since september. Drop in Commodity Prices putting pressure on the aussie currency. Those are the stories driving your forex markets this monday morning. Just getting to these pictures a short while ago coming out of sydney, this ongoing situation with hostages being taken in the Central Business district. This is a developing story. We expect to hear from the Prime Minister, tony abbott, very shortly. We are coming up to half past 12 00 in the afternoon. Ongoing scene is continuing. Up to 40 people believed to be held hostage by reportedly islamic jihadists in the Central Business district. People inside that cafe with their arms rest up against the window, holding that black flag that we have been talking about with white lettering, and islamic flag of some form, at the moment. Officers are attempting to contact those within the cafe. No reports of any contact actually taking place right now. At the moment, the Central Business district is in lockdown. We awful we also have cbdpace diverted around the , but they are still operating on schedule. Area houses companies such as mccoury, the reserve bank of australia is very near as well. Abbott about to address the australian people on the ongoing situation. We also have joe hawking delaying his Midyear Economic and fiscal outlook as well. This is our top story. Lets get more on it. Paul allen, our Bloomberg Bureau is right across the street. What is the situation like . What more do we know . There is one new government just before i took my seat here. It is unconfirmed again, but there is a report that an arrest has been made 200 meters from the scene. An officer has been seen with his foot on top of a small, black handgun. Again, it has not been confirmed. Were just hearing it now. That is the difficulty reporting on this ongoing story. You mentioned that airspace had been closed. There was also a report saying that the harbor bridge has been closed and that is also not true. Traffic continues to flow. We have trains also moving on the harbor bridge in both directions. There is some degree of confusion about how much of the city is under lockdown. The cordon has now addressed all the way to hunter street, which is significant because that is a block that we are on. Ou can see out our window that picture is not of the lindt cafe itself. The cafe is about 100 meters further up and to the left. It is directly up the road from the reserve bank of australia. Across the other side of the pedestrian plaza is the channel 7 building, where a lot of our live pictures have been coming from this morning as well. That building has been evacuated while the siege continues to play out. Just over 2. 5 hours old. Is, as you alluded to, you get a lot of misinformation. Do we know anything about these hostages at all . Do we know if the police have made contact with them . Do we know anything about the demands they are making . Speculation ine the media that police have been attempting to make contact with the men inside the cafe. That is not confirmed. It is not even confirmed how many hostage takers there may be in the cafe. At least one. Saw that person remove a gun from a blue backpack. It is believed there may be a second gunman inside as well. There,who else is in lindt australia has confirmed up to 10 staff and possibly up to 30 estimates. That is an increase on the assumed 20 hostages that were believed to be in the cafe. They have their hands pressed against the windows. Two of them are holding up a flag. He flag that they held up was flag, butamic state another flag often used by jihadist groups. The writing on that flag says, in english, there is no god other than allah. We are waiting for Prime Minister tony abbott to address the american people. We have the Australian Stock Exchange apparently evacuated. Trading going on as normal. Lets get a few more details. There was a statement 15. Inutes that back they say they are closely monitoring the situation with authorities, but the markets are operating normally in a down session, as you can see, all across the region. Volumes are 16 lower compared to what we were seeing about two or three hours into the trading session. It is a story of falling Commodity Prices. Oil is still in focus. What level are we looking at right now for the asx . We did open much lower from fridays close. We are down a further. 9 . Lets take a look at the aussie dollar. Hsbccomments coming out of reiterating what the chief had to say, that it seems overvalued at this point. 8212 is where we are trading right now at the aussie currency. Hsbc says by the end of next . 78 seems to be a more rational level. I will leave it right there. Back to you. Inback to what is going on sydney. Take a look at these images coming through. The scene in canberra is this. We are waiting for tony abbott. He will give the latest on the scene in sydney, where the Central Business district has been locked down as a group of people are being held hostage. As many as 40 being held hostage in sydneys martin place. A black flag with arabic writing in the window as well. They are, at the moment, clearing the c. B. D. The Security Committee was convened for briefings on the siege. Paul allen is right next to the scene. What can you see . At the moment, we are looking. Own castlereagh street obviously not what you are seeing behind me here. A number of Emergency Services vehicles are parked. Place, theo Martin Security presence gets considerably heavier. Is a very significant part of sydney. It is the heart of the financial district. The reserve bank of australia is down there. All of the major banks have headquarters down there. It is filled with shoppers at this time of year as well. Officers were on the plaza of the channel 7 building, which has been evacuated. They had a good shot out of their window on what was going on. Obviously, it would appear that this attack had been planned to raise maximum media interest. The martin place is significant because, back in september, a series of terror raids were conducted. 800 police officers, 25 properties, 15 arrested. It was believed there was an attempt to kidnap somebody at martin place and publicly behead them. It is rather chilling that the epicenter of this particular incident is also in martin place. You mentioned something about an arrest taking place as well. Again, this is not confirmed. At least it was not at that point. Do we know anything more about that . Give us the significance of the area where the seed is taking place. I will address the first part of that question. Still getting mixed reports about that. The stateabc, broadcaster here, reporting that one man has been arrested and people are being evacuated from the area. There is some confusion about whether or not it is connected to the siege here. We wait for the facts to be confirmed. It is very law information which we are bringing raw information which we are bringing to you as we get it. It is unclear if it was connected to the siege. As for the significance of martin place, it is home to many of the major Financial Institutions in sydney. It is a very wellknown plaza. The reserve bank of australia is there. Channel 7 headquarters is right across the street. It is a highprofile part of town indeed. Absolutely. All of these mixed reports coming through. Reports that the harbor bridge was closed, but it is open, of course. We have heard that the opera house has been evacuated and the Australian Stock Exchange has been evacuated, too. The opera house has been evacuated. The reasons why are not entirely clear. That a reporting suspicious package was found in the area. Again, that is unconfirmed. X has been evacuated. But it is like many modern exchanges around the world. Andoes not look Like Exchange used to in the old days. It is a large series of electronic boards. Obviously, there is staff in the building, but most of the trading is done electronically. It is continuing to function as normal. The Prime Minister convened the National Security Committee Early on. He will come out and give us a press conference. He said at the time that this was a deeplyconcerning incident but people should be wellassured that the Law Enforcement people are welltrained. Ivan is joining us as well. You have been confined it to your office, but not evacuated. Is that correct . That is correct. We have been able to state in the building. Busieste of sydneys streets. We are just confined to the building. More onu have any people you have been talking to just talking to a most the Brokerage Services . The treasurer postponed the. Conomic outlook that is the main thing i am aware of from a financial perspective. Absolutely. Give us an idea of what he was going to say. We are talking about joe hawkey. He was talking about the deficit being wider than previously forecast. I think that is right. Verynk it will be unexpected. Big commodityhe prices that are important to australia have fallen very sharply. The economy is growing, but not very quickly. It is really those lower Commodity Prices that affect tax revenues and flow through the budget. Rumored theday was budget deficit this year would be revised up to 40 billion. Over the next four years, it ofl be an extra 40 billion cumulative deficit. Numberse big, scary when you look at them in isolation. If you look at them as a share of the economy, they are not as big. Problem are they a big problem for the australian economy . I do not think so. But it will take longer to get the budget back towards balance balancing our surplus. They are not going to tighten it aggressively, because that would risk the same mistake that europe made, where things are and you have australia austerity on top of that economic situation. Aret something markets worried about . I do not think so. They are much more focused on what is happening in Global Equity markets, what is happening to oil prices. Thank you so much and please keep safe. We are going to get over to another part of sydney, just about a kilometer away from where we are talking to ivan. And theagh street junction with martin place. You cannot actually see the caee where the hostages are being held, but we have a group of 40 hostages being held by islamic jihadists. This is on the move. This is the scene near martin place. Thisolice are surrounding cafe with up to 40 hostages being held. We are waiting for the Prime Minister, tony abbott, to address the australian people. He has already been making some comments, describing the incident as deeply concerning. Saying that people should be assured that the Law Enforcement agencies are welltrained and equipped and responding in a thorough and professional manner. Possible support and assistance from the commonwealth government as well. Moment the scene at the in the Central Business district, which appears to be in lockdown. There is no traffic at the moment. Many of the buildings surrounding that cafe have been evacuated. They include headquarters of the , and these, westpac are images coming from that bureau as we speak. Lets move along and talk about some of the other stories making headlines today. We will get you that statement coming from tony abbott as soon as we do get him. Oil showed no signs of ending its slot slump. U. A. E. Said they do not maintain the decision to revise, but even if it slips below 40 a barrel ben is in melbourne. What do we know . Thanks. You are right. Them. , the comments from makes it look like the balance of market share will continue. The Energy Minister came out and said that opec will maintain their production and will not cut even if crude falls to 40 a barrel. Thatreiterated comments the markets had stabilized. They also said that opec needed to wait at least a quarter before considering prices. This comes amid a weakening outlook for global crude oil. The demand forecast was cut for the fourth time in five months. Forecast increased the for supply outside of opec countries. The smallest amount of demand for their own crude. The outlook for oil at the moment is a bit bleak. Are we seeing any response from these producers . I am not just saying opec producers, but nonopec ones as well. Appear to be any from our opec producers at the moment. U. S. Producers, the last figures showed that producers in the u. S. Are producing oil at the highest rate in three decades. We will have to wait until wednesday to see the latest on that front. The latest data from a Drilling Company shows that drillers are not out of their rigs. Yesterday, we saw the most rigs idle since 2012. That is two years. It ount of rigs running in the u. S. Is the lowest since june. 60 a barrel. Some are forecasting pain. It seems to be taking effect at the moment. Thank you. Ben with the latest on the oil markets. The big story this morning is the siege taking place in the Central Business district of sydney at the moment. Lindt cafe. 40 hostages could be being held by well, no idea of how many there. Could be in we also way for tony abbott to country andstralian the wider world on what is happening. Straight to canberra, where the time is 12 52. Alreadyott has described the situation in downtown sydney as being deeply concerning. We do nott know know whether this is politically motivated, although there are some indications that it could be. We have to appreciate that, even in a society such as ours, there are people who wish to do us harm. That is why we have police and security organizations of the utmost professionalism that are ready and able to respond to a whole range of situations and contingencies, including the situation that we are now seeing in sydney. The whole point of politicallymotivated violence is to scare people out of being themselves. Peaceful, open, and generous society. Nothing should ever change that and that is why i would urge all australians, today, to go about their business as usual. Of course, if anyone does have any suspicions of untoward activity, there is the National Security hotline. 800123400, which i would urge them to call. I can let you know that the National Security committee of the cabinet has been briefed on this incident. I have been in regular contact with the premier over the last couple of hours. Theve been briefed by commissioner of the New South Wales police and the commissioner of the Australian Federal police. This is an unfolding situation. As the situation unfolds, there will be operational updates provided by the New South Wales police. I want to assure people that the ordinary business must go on and it will go on. Hawkey and treasurer finance minister coleman will shortly be releasing their economic and fiscal outlooks as planned. Veryly, this is a disturbing incident. I can understand the concerns and anxieties of the australian people at a time like this. Our thoughts and prayers, most of both all, go out to the individuals who are caught up in this i can think of the most nothing more stressing or terrifying than to get caught up in such a situation. Our hearts go out to those people to to those people. I am going to leave it to the New South Wales police, who are in operational charge of this incident, to provide those kinds of details. Obviously, in a situation like this, all sorts of reports fire out. All sorts of claims are made. Toi do urge everyone exercise caution in their reporting. I will leave all of the operational details to the New South Wales police. I understand they will begin providing operational updates shortly. Tony abbott, the australian Prime Minister, talking about this very disturbing situation in sydney. We have coming from the Reuters News Agency that the u. S. Consulate general has been evacuated. Not surprising. That is actually in martin place. Moment. The scene at the castlereagh street is the one you can see. That is what we have at the moment. This is the scene we had earlier as well. Hostages, 40 of them in the lindt cafe. Some of them holding their hands against the window panes. We had a black flag with arabic writing also against the window. Dozens of Armed Police Officers with helmets and body armor stationed on the corner and around the vicinity. Paul allen, what is the latest that we have so far . One, possibly two. Customers have been seen with their hands pressed up against the window. Two of them are holding a black flag, as we know. One that is often associated with jihadists. There is no god but allah. As the Prime Minister just say, this is an unfolding situation. Also saidbott something fairly curious. We do not know the number of people, the number of hostage takers. He did know the identity of the perpetrator. That is not in the plural. Do we know anything more about that . Unfortunately, he did not give us any more clues on that front. Obviously, it is a significant operation and there is a lot going on. Security forces are not telling us, for fairly obviobvious reasons. Channel 7 directly across the has been evacuated. The very good pictures they had are now shut off. The incident taking place is very serious. We often have difficulty confirming things at these early stages. Tony abbott meant, i guess tony abbott knows the answer. Thanks a lot for that. That is paul allen for us. He is reporting from the scene martiney, near saint square, where there is a block down of the Central Business district. It could be politically motivated according to tony abbott, but they are unsure at the moment and unsure of the identity of the perpetrator. Lets get more from cameron price on the phone from saint martin place. Can you give us an idea of the look of the scene . Ofyes, on him on the corner philip and harper street, about 200 meters from the lindt cafe. We have a direct line of sight to both the front door of the cafe and also the side windows. For much of the siege, for more than three hours now, not long after police arrived, the number of heavily armed tactical officers were positioned along the side of the cafe, one of them holding a large tactical shield up against one of the windows while a number of those heavily armed officers with helmets, balaclavas, and machine guns slung over their shoulders, those officers. Over the top of the tactical shield and into the cafe. In the last 15 minutes, those officers have pulled back and are now out of sight. We are not sure as to the reason for that, but we were under that we understand they were able to look into the cafe to the see the situation as it is unfolding. We believe one hostage taker armed with a shotgun, possibly a , fears that the person might have an explosive device. I can confirm there was a second zone put around the sydney opera. Ouse that exclusion zone has been scaled back. Staff working at the opera house have been allowed back in. The public at this stage has not. One thing which is becoming a bit clearer, for the number of hostage takers involved, and it does seem that tony abbott referred to just one perpetrator, what do you know about that . Right. s earlier, there were reports that as many as two people had gone inside. Consensus is the there is one hostage taker, believed to be a male. I have seen a photograph of the man. He is wearing a scarf, dressed in a white shirt, wearing a black jacket and sunglasses. As for the people inside, we understand the number is 13, staff and people inside the cafe , simply getting their Morning Coffee on a busy sydney morning. Hostages, at those least some of them, were pressed facing the glass with their hands pressed up against the gas the glass. A little while ago, we saw hostages sit down. In the last few minutes, we have seen those people move back away from the glass and out of sight. From our Vantage Point where we are looking directly in the front door of lindt cafe, we are now unable to see the people inside. We dont have a clear idea of the exact number of people inside that cafe, but on top of that, do you have any more on reports that one person had been arrested very near to the scene of this incident, this lindt cafe . It is a very busy part of sydney. This is their busiest Business District. It was a busy monday rush hour. We understand there are 13 people inside. More,e heard reports of but we understand there are 13 staff and patrons. Im afraid im going to have to go. Cameron, thank you very much, cameron price joining us on the whereear the lindt cafe the hostage siege is taking place at the moment, saying it looks like there are 13 hostages, including patrons and members of staff at that cafe. Of course, this whole incident started just over three hours of people being taken hostage in the Central Business district of sydney. Apparently, there is a consensus view that there is just one hostage taker. We have dozens of Armed Police Officers wearing masks, wearing helmets and body armor, stationed just around the corner from the cafe. Ed blocked from this area. Pedestrians blocked from this area. The Sydney Opera House has also been evacuated, but as paul allen says, its unclear as to why that had happened. Just to give you an importance of this area, the mccrary headquarters as they are, and the reserve bank of australia, and jason to this cafe. This is an ongoing situation. Had reports earlier that the australia Stock Exchange had been evacuated, but it is business as usual currently. What sort of price movements are we getting as a consequence of this . It is consistent with what we see across asia. We are looking at the benchmark at a sevenweek low. 5170 two is the level. A volumes are a little bit lower compared to the averages. 20 lower. Whats moving it is really about the mining and commodity stocks. We talked about oil all morning. Down about 1 . You have the miners down close to 2 . Oil and gas were down 1. 2 . Broadbased declines. Terms of the transport and equipment makers, and your explorers, down to 0. 5 . Where are we now as far as prices are concerned . Down 3 for new york crude. 10. Are at 57 both benchmarks, crude and brent, were about 10 11 lower. Another bad week for oil prices. If we take a look at a longerterm chart, we have doubled down on this bear market. June. Wn from the peak in from then, it has fallen a further 20 all the way up until the opec meeting, which was the last week of november, and since then, we are down a further 15 . We are getting deeper into this bear market. You have the three biggest of opec offering big discounts to asia. The latest comment coming from the united arab emirates, and they are saying, opec, we are not going to move. The markets to us is will determine the price. The secretarygeneral of opec coming out and saying, we will wait. Second half of next year, that is when prices will begin to stabilize, and as a group, that is when opec will determine what the reasonable steps are to take. At this point, 57. 1 is your price. Back to you. We will get you updated with this situation in sydney as soon as we can, but lets turn to some other stories we are following. Chinas premier has hit the road, the silk road. Liquor chain is expected to sign cooperation agreements with 10 billion in his visit to kazakhstan. Meanwhile, china may be seeing its lowest growth in decades next year, according to the center bank. Gdp may drop to 7. 1 from this years forecast of 7. 4 . Indeed, out to look for inflation and jobs is remaining stable. The Real Estate Market will continue to drag despite easing measures. We will check on chinas property sector when we get november numbers, and those are out on thursday. Coming up, we will continue coverage of our top story, developing story, as well as the latest on this hostage situation gunman taking over a popular cafe in sydney. From them reports that there are 13 hostages. That is the consensus according to sky News Reporter cameron price. There is only one hostage taker there, as well. Much more coming up on this, and much more coming up on japan. Critics say it is time for shinzo abe to deliver. We will have a look at the challenges he faces ahead. You are watching on the move. Lets get you to what is going on in japan. We had a mandate for Prime Minister shinzo abe, winning 326 seats in this step election that he called, and indeed, that was yesterday. We have that in the mix. Also seeing the yen which has been strengthening. Lets find out what is going on with that in reaction to the election and what is going on in sydney. Lets get over to david inglis. This is what asia is looking like. Sydney, down just about 1 for that market. But we saw on wall street, some of the bigger cells in recent weeks. Lets get back over to asia. At muchstarted the day stronger levels compared to where we are now. We are still down about 1. 3 . If you look at the nikkei 225, we just about at a onemonth low for the japanese benchmark. That is the yen. A little bit stronger we started. Ut since then, of course, we have weakened somewhat. 118. 71. Much stronger levels compared to a week or so back. The nikkei 225, i mentioned that, at a onemonth low more or less. With me get you up to speed. We are still up 7. 5 . We have seen this rally since everyone andised said, yeah, we are going to print more money. Movers in japan, what is happening in tokyo just some changes as far as some analyst ratings. Japan airlines, panasonic, all downgraded. , ubs airlines for example declaring not to be neutral. Mitsubishi cutting that stock to neutral. , down about 8 10 of 1 . Goldman rating the stock neutral. Lets get back to these beer makers, talking about these reforms. We had a report out of japan that perhaps the discussions over tax changes on beer may be beginning. If they do take place or if this does come through, it will be happening in 2018. We do have a few years, seven years, as far as a transition period. What is going to happen, you are looking at regular beer. We could be looking at a tax reduction on regular beer. Attacks fort ¥77 in all of these beers, regular beers. That will be reduced for regular beers and jacked up for the low malt stock. These are the breweries, by the way. A new mandate for shinzo abes economic revival plans. Critics say he has to deliver on what this election was about. Shery ahn is in tokyo for us. This is a question people are scratching their heads over. What are you hearing . Yes, and that is because abe framed this election as a bid to seek a new mandate for his policies, but now that he gained almost the same number of seats as before the election, some people are saying, this election was a waste of time and money. Abe is under more pressure to deliver this time around. Lawmakers will be meeting here at the dyad on december 24 for a special session where abe is expected to be reelected as Prime Minister, but polls are now showing that people are ande disillusioned with abe abenomics, and Prime Minister abe knows about these challenges. Take a listen. Abenomics is still only halfway through. Compared to the dark and stagnant era a few years back, i think i have shown that we can change things. However, i have knowledge that there are many who dont feel those changes yet. I think the election result was the voice of the people saying, it is our mission to deliver such change, and we feel we can do that. Abe now saying that his top priority is the economy, but he also says he will prepare National Security laws to protect the lives of the japanese people. About thing is, what surprises . Were there any in this poll . Not really. We werent really expecting many surprises out of this election. The dpj, the main opposition party, as expected, not able to capitalize on discontent with abe. Seats, which is a 11 more than they had before, but well below the 100 mark. The djp party, not able to hold onto his own seat, media now saying he is expected to resign. One surprise was that the communist party did better than many expected. They won 21 seats, double their preelection strength. It is pacifist, antinuclear, providing a clear opposition to Prime Minister abe. Thank you very much indeed for that, shery ahn. 1 20 inoming to nearly the afternoon in sydney. We have the u. S. Consulate in sydney being evacuated. That is coming through from a spokesperson there. It is on martin place itself, on the 10th floor of a building on martin plays, and it comes as we have had reports of other areas of sydney being evacuated with the Central Business district in lockdown. To leavele not able their offices, those offices including westpac, the reserve bank of australia, as well as the u. S. Consulate. Some other banks offices have not been evacuated. They are preventing people from leaving their desks and ensuring people are keeping safe. Lets also find out what is happening. We will have the latest naturally about this ongoing situation. It is a developing story in sydney. The newto hear from South Wales Police in about 10 minutes time, as well. We will be listening for any further headlines, too. We have an ongoing siege taking place in sydney. While we wait for further headlines, lets check on some other stories that of and making headlines. Vice president of the United States dick cheney and other Senior Bush Administration officials have taken to the talk shows to defend the cias interrogation techniques, that after a Senate Report denounced them as torture. Its release spawned Media Attention and international outrage. Dick cheney rejected it as being a crock. Waterboarding was, in fact, not torture. When you are dealing with terrorists of the likes of isis or al qaeda, i hadnt seen them waterboard anybody. They cut their heads off. What they did to 3000 americans on 9 11, that was brutal, bloody murder. It absolutely cannot be compared with to what we did in our enhanced interrogation program. The search is resuming for at least 76 people missing after a landslide in indonesia. About 2000 people are involved in the operation after a hillside collapsed in central java. 32 people are known to have died. A lack of heavy equipment is hindering the rescue effort. The scramble for territorial rights in the arctic is heating up with denmark laying claim to the north pole. Copenhagen says greenlands Continental Shelf is connected ,o a ridge in the arctic ocean giving denmark the rights to the resources under the ice. That claim will be delivered to a u. N. Panel, which will ultimately decide control of the area. Iang maypremier li keq achieve his 7. 5 growth target this year, after all. That is thanks to a bit of finetuning. S is what me why call might call creative accounting. I will leave it for the viewers to decide, but they are theng a look at the echo latest economic senses. This is the senses of beijing puts out every five years. In thes at services street, over 70,000 small and mediumsize businesses in china. They may help the Chinese Government achieve that 7. 5 gdp growth target this year. In 2013, we may see gdp revised 1 . Rds of that is about 300 billion in additional economic growth, and the 2014 number says growth may be revised upward by about 1 10 20. 3 . It paints a picture of a chinese economy that is growing at the pace the government expects. Is it really . You have to look at the numbers that accompany it. What are the key obstacles for chinas leadership to squeeze out growth . The Property Market, one of the biggest obstacles it is one of the biggest risks to the chinese economy. If you believe what ubs is saying, they name it as a top risk. Other Brokerage Firms say local government debt, in a simple financing we have seen in many of these small and mediumsized cities, the Macro Economy globally, and the peoples bank of china chief economist coming out and saying the growth target next year is likely to be in the low 7 range. Indeed, the government in 6 7 g has said between is what they will be targeting. China facing a Property Market headwind, a debt overhang, but these revised Services Numbers may give some optimism. Thank you very much. We will have the latest on that siege taking place in the Central Business district in sydney. This is the image at the moment coming through. We had hostages pressed up against a window at the lindt cafe in martin place. We will have more on the story next. That is the scene on , the timeh street just coming up to 1 30 in the afternoon in the Central Business district of sydney. We have police surrounding a cafe, the lindt cafe. At least one gunman taking hostages. We have tony abbott speaking a while ago, saying that the siege may be politically motivated. We have already had some of these Television Images showing hostages pressed up against the window in martin place. Art in place, surrounded by important buildings. We have mccoury bank, also, the reserve bank of australia, westpac as well, and the general consulate, the u. S. Consulate, which has been evacuated. Many people have been told to stay at their desks while this continues. We also have our Bloomberg Bureau right around the corner from their. Paul allen has been covering this developing story from the start. What is the latest . We are now into the fourth hour of this incident. Police are calling it an armed incident. A standoff continuing. We had a report 30 minutes ago that a man had been arrested 200 meters away from the lindt cafe where this incident is taking place. Yes, there was an arrest, but the man arrested was not connected with this incident. That has pretty much been the theme of the day. Been claims and counterclaims, fax being released and then denied. For example, it was reported that airspace over sydney closed. That is not true. The airport runs as normal. The reports of the harbor bridge closed, also not true. Most recently, we had reports that cell phone coverage in the area had been shut down. That is also not the case. You can see castlereagh street, which runs through martin place, but the other end of martin place is mccoury street. Traffic continues to flow there. The picture is mixed. What we do know is that weve got better confirmation of who is inside that cafe. Has confirmed there are 10 staff on duty, potentially up to 30 customers inside the store. Maybe up to 40 people in that cafe. As for the perpetrators, we know there is at least one. Eyewitnesses say the man was seen pulling a gun out of the blue backpack. There may be two, but that report at this stage is unconfirmed. Absolutely. The timing, it was the busiest part of the morning when this did occur. If thing is, do we know there have been any demands made by the hostage taker or takers . Well, at this stage, no, but just the fact that we dont know that doesnt mean it hasnt happened. Obviously, there is a significant Police Presence down there. What is being told to the media is being closely guarded. It is known that police are obviously attempting to make contact with those inside. Whether or not they have succeeded is unknown. Whether or not that any demands have been made is unknown. That is certainly a significant site theyve chosen, martin place. Its the Main Financial district. It runs through the heart of sydney cbd. At that busy time of the day, it wouldve been full of people. Is, we have had some inkling that this might happen, havent we . We have had other areas in sydney and their suburbs and the suburbs that have been searched. What do you know about that . There was a report that the Police Operation had gotten underway in the northwest of the city, and arrests have been made. That was again denied. There was an operation this morning in beecroft, northwest sydney. A man was arrested. Its not known if that was connected. What we do know is in september of this year, there was a Significant Police operation, ratedlice across sydney 25 properties and detained 15 people. Is reason they did that because police found in tent for a significant terrorist attack in which the plan was to kidnap somebody in martin place and behead them. The fact that the location, after this incident and that one the police claimed to have sorted, is the same is particularly chilling. We just saw some images of the flag being held. Allah. But it gives an idea that the police of the Police Presence here, too. Police moved in quickly on the area, because they had a sense of that initial terror alert. Police presence is heavy on a normal day. That street is home to the andrve bank of australia, all of australias big four banks have headquarters in martin place. There are a lot of Financial Institutions down there. The Police Presence is high on a regular day. Obviously, it has ramped up significantly. You can see heavily armed police wandering up and down lindt cafe up and down castlereagh street. Yes, the Police Presence is strong. The cordon has been pushed back to hunter street. On whichthe corner this building is in that im sitting. The Police Presence is very heavy. Here we are in the fourth hour of this siege, and we dont seem any closer to getting to the end of it. People at thee bloomberg offices telling you . Have you been kept at your desk . Youve not been evacuated obviously, but of course, not able to leave the building. What about the other banks . We have talked about mccoury, the reserve bank of australia, and westpac, too. The u. S. Consulate has been evacuated, as well. What is going on with the other banks and indeed there at bloomberg . A lot of the banks buildings have been evacuated. Channel 7, the Media Organization directly across the they from the lindt cafe, had some quite extraordinary pictures in the early minutes of this siege before police evacuated the building. People are allowed to arrive at our office. We had a guest arrive a short time ago. Obviously, security has been stepped up. There are additional measures in place. Im not going to broadcast what they are. It coming and going from the office has become more difficult. We have not been evacuated. Keep safe, paul allen. Just around the corner from martin place where this ongoing situation continues, this ongoing siege is continuing with an unnamed number of hostages, and at least one gunman holding them. The Australian Stock Exchange, evacuated, but its brokers have continued trading normally. What have we got there . We are looking at more or the levels weve seen all morning. Down 9 10 of 1 . We do have the siege that we will continue to follow. Looking at the movements in the market basic materials, down 1. 5 for that group. , thatsenergy transport, equipment makers or the guys who drill and take the stuff out of the ground oil prices down as well. , also want to mention australia out with the midyear budget, the economic outlook. A higheroking at Unemployment Rate of 6. 5 . We are looking at a budget deficit about 30 bigger compared to their initial forecast in may. Just over 40 billion aussie dollars is the budget deficit. Forth at about 3 20152016. 60 per prices at about metric ton for the next two years. Australia gets about 20 of its export income from that alone, ironwork. Ore. On aussie dollar, where are we . That,. 822. We see the aussie dollar following 270 eight cents by the end of next year. . 78is what falling to by the end of next year. That is what we are seeing from sydney. Back to you. It has been described as hong kongs highest profile corruption case, the trial of the billionaire brothers. Is expected to begin deliberations today. Roslyn chin is outside the high court with more. What have we got so far . The court will meet at 10 00. The jury is exposed the judge is expected to give the jury some instructions. Some figures who are highprofile. It this way. Basically, hong kongs position ofst government was accused of taking bribes from two of hong kongs richest men. That former official is rafael hui, the chief secretary of hong kong from 20052007. The two businessmen, the kwok of suns, are in charge hung properties. Charges thep the men face, conspiracy to commit misconduct in public office. That is related to more than 4. 5 million in payments and unsecured loans and free housing from thomas and raymond kwok. The prosecutors told the court that they would be the eyes and hung in government. All five men play pleaded not guilty to all the charges. 2012en were arrested in cac,r an investigation by i the hong kong anticorruption agency. It has taken a while to get to this point. The trial has been going on for more than 125 days. Tell us a little bit more about the money, and what did the court here about all of that . Alleged that rafael hui received money in two lumps. Kwoks were alleged to have had an unwritten consulting agreement with him, and they had to keep the agreement a secret at the payments had to be kept a secret from their family. A third brother, he had been kidnapped in 1997, and witnesses told the court that after the kidnapping, he had been paranoid and ill. These secret payments were kept secret because of walter. The court also heard allegations that rafael hui received the money after he retired as chief secretary in 2007. Hui saidl rafael this money came from beijing officials. He said he had been in that before he became chief secretary. He spent his money on fine wine, expensive restaurants. And heyed horseracing, had a mistress. He spent far more than he earned , and he needed this money. His defense lawyer said he never hung sun. Ing for facts have been presented to the jury, and they are expected to start deliberations later today. If they dont decide on a verdict today, that will roll over into tomorrow. Thanks a lot for that, rosalind chain. Weve got to take a break. Weve got the latest on this siege taking place in the Central Business district of australia. Weve got that happening at martin place in sydney. Also, looking at the slumping price of crude. Touch the 55 a barrel mark as close as this week . You are watching on the move. Getting a look at what is going on with the price of crude, fallen below that 60 a barrel level, this coming as opec will resist output cuts even as prices slump. Is there a flock to the price of oil . Our guest is the head of Global Oil Research at Credit Suisse. They are talking about 40 a barrel. They would still not cut out. What gives . Like that little bit scottish play in the theater where you never see the word mac that. You see producers from the gulf talking down crude to 40 a barrel, i think it is clarifying, in case anybody wasnt exactly sure, this is a market share battle, and price is the weapon. Whether we get down to the 40s, numerous producers, the uae oil minister talking about it, an iran oil planner say it prices will be low for 67 months. How low we can go is interesting. Almost more interesting is how low how long we stay if they want to grab market share, theyve got to keep market prices for a while, do not . You would think so. There are other interesting factors at play. If you look at u. S. Producers and their hedges, you will see about 40 of u. S. Production is hedged in 2015. If youve got a marginal well that doesnt work, but it would work back at 80, you are hedged , and you think that crude is going to come back up. Maybe you drill through. There is a lot more uncertainty around the demand and supply picture than weve had for the last three or four years. Who is hurt most by this . Visit countries like russia and it countries like russia and iran . Yes, its all relative. You see these numbers about what the breakeven production costs are for opec members. Im sure they are well constructed, that im sure they are relative rather than absolute. Iran is hurt more. Venezuela is hurt more. Russia is hurt, of course. It is the core gulf producers who have the relative advantage. If you look at the saudi balance sheet, you will see they have 750 billion in liquid assets offshore. When you have a falling oil price, the incentives to cheat become that much greater, do they not . You have a lot more oil on the market than has actually been accounted for. Absolutely. We talk about unity at opec. I suspect unity wouldnt be the description had we been inside the meeting. There is a divergence in opec. It works better at high crude prices then low crude prices. If the tactic of those gulf producers is to overproduce, then maybe if unity breaks down and more of the opec players overproduce, that since the suits ther tactic strategy or tactic. That. Id, continue with do you buy or sell Oil Producers . Ased on how you use it just in our region, we look for the upstream universe, and we had been watching it before the opec meeting and post, in stockriance performance, but on average when crude was down 40 , our universe was only down about 20 . There are a number of players which still havent completely follow the undermining commodity. There have some have been some players who have corrected fully, australian unconventionals. Again, a wide variance. I think its a little early to pick the bottom fish at this point. Absolutely. That was the story we had last week a, people trying to catch oil, which has been seen as a falling knife. For thes this mean other sides of the energy been business . I think there are three key things in lng. Lng follows crude. 15 16 in realizing the last couple of years, youre going to realize 10 11 in 2015. Great for the consuming nations. For japan alone, its import bill will fall by about 15 billion in 2015 as a result. If you lay over crude and the reduction in crude import costs for japan, another 35 billion. Are a producer and an existing producer, opecs costs alone, you will still be cash positive. The real problem comes for greenfield projects looking to get sanctioned. The economics will be difficult to make at this point. David hewitt from Credit Suisse going on about the latest price of crude oil, continuing to tumble below that 60 a barrel level, some suggesting it could hit 55 through the course of this week. Still to come, the latest on the siege in central sydney. We are waiting for a briefing from the New South Wales police and indeed the premiere of New South Wales, as well. You are back with on the. Ve we have the latest on the siege taking place in the Central Business district in sydney. Ahead of that, lets find out what is making what other stories are making headlines so far today. I am in yvonne man. It is monday, december 15, and these are your top stories. Police are on the streets of central sydney after a gunman siege to of hostages at a popular cafe. It is not know what their aims are, but an islamic flood with the slogan there is no god but was held up in a window. Australia raised its terror level alert to its highest decade in september, saying the the Islamic State militant group. Has had a commanding victory at the polls. Aboutalition partners one 326 seats, giving them the two thirds majority needed to push legislation through. However, the pressure is on abe to bring japan out of recession and prove that abenomics will bring change. Opec is not turning despite oils continuing fall. The uae oil minister says the group will not revise its decision to maintain output at 30 Million Barrels a day, even if the price drops to as low as 40. The minister says he expects no emergency meetings for at least three months. The next scheduled opec talks are due in june. Those are the top story this hour. I am in yvonne man in hong kong. I have full confidence in the Police Commissioner and the incredible work of the New South Wales police force. Indeed, they are the worlds best. Today, they acted decisively. They are on top of the situation, and they are doing Everything Possible that needs to be done. We are incredibly lucky to have public. King after the in terms of matters of transport within the city, can i ask everyone to go about their usual manner . Obviously, avoid martin place. There will be transport updates provided on the website, but go about your usual exit from the city as you would, train passes and fairies. Vigilant, and be ensure at all times you are also patient. There could be some disruption as we go about things today. Im asking if you can also be patient. We will get through this. Importantly now, our thoughts and prayers are with those who are caught up in the situation, and we say to them, we are with you. I will ask the commissioner to say a few words. Theadies and gentlemen, as premier has indicated, this is a difficult day for everyone involved in this operation. I can confirm for you that we offender in the premises holding on undisclosed number of hostages in the martin place area. Attendance been in and have controlled the situation from very early this morning, shortly after it was advised. We are at this stage continuing to secure and make sure that we are doing all we can to bring this to a peaceful outcome. We want this matter resolved peacefully, and we will do all we need to to ensure that. What we have also is a number of incidents that people believe this event,cted to and its not the case. We have a lot of people concerned when they see a Police Vehicle drive down their street. They think that their suburb might be involved. That is not the case. We are very contained. We certainly have tight restrictions and tight controls around that location, and we will work as long as we need to to bring this to an outcome. The officers who are there are welltrained and proficient. They know what they are doing. They have trained for this. Im sure they will get through, and this will be an outcome that will be positive. We also are aware that there are many people that have been displaced. Yes, we have evacuated some of the immediate surroundings, and weve done that for a reason. We want to do all we can to make sure people do not get harmed. Transport arrangements have been put into place, and we need to make sure that people can get in and out of the city. The city is still operating and will continue to operate until we need to change that. At this stage, it is well contained. Our thoughts, our prayers go out to those caught up in this. We are doing everything we can to resolve it. There are welltrained officers doing the job. Im sure they will bring this to some conclusion successfully as soon as we possibly can, and transport arrangements, as the premier has indicated, are in place so people can leave the city. At this stage, there will be a full and thorough operational briefing. My briefing has been at a high level to you today. He will do that in the immediate future, as soon as we are ready to go. Im happy to take questions. Are there any suggestions [indiscernible] at this stage, the operational advice ive got is that we are still determining what may be the note of the motivation. Ableis stage, we are not to determine where the individual is from. [indiscernible] have the authorities done enough to prevent this from happening . If you would look at the number of police we have had in the city, the number of officers on standby, and the rapid miss of the response, i would suggest this is as good as you will get anywhere. As the premier has indicated, we are being tested. Im confident the police will deliver what is required of them. Are you considering this a terrorist attack . At this stage, it is not something we are ruling out. We are not tagging it at this stage. We have an armed offender. There are an undisclosed number of hostages in the building. [indiscernible] certainly, we have there is nothing to advise that that would be the case at the stated soviet versus no. At this stage so the advice is no. We are working through that at this stage we have not got extensive medications. We are not extensive communications. It we are not dealing directly. [indiscernible] i am not in a position to thatlose any of. The details you are seeking would be better. What are the operational commanders and we will move to that as soon as weekend