CMC Markets Chief Market Analyst Michael Hewson says sovereign bond-buying will be a hard sell to the Germans when their economy is actually starting to improve and they have record low unemployment.

SHOWS: LONDON, ENGLAND, UK (NOVEMBER 27, 2014) (REUTERS - ACCESS ALL)

1. CMC MARKETS, CHIEF MARKET ANALYST, MICHAEL HEWSON, SAYING:

JOURNALIST ASKING MICHAEL HEWSON: 'Well actually let's just start with the general euro zone feeling. Politically, things look a little bit dodgy. But when we look at the oil price at these levels and other things like sentiment I guess a little bit better, can you feel a little bit more optimistic?'

HEWSON: 'Yeah, I think so, Axel, a little bit more optimistic. I mean obviously the falling oil price is helping but that in itself is actually causing problems for the ECB, you saw in those Spanish CPI figures this morning, -0.5, and it's likely to feed through into the German CPI figures later today. But offsetting that, you're looking at German unemployment. It's at record low. So when you actually factor all of that in, it's going to make it that much more difficult for the ECB to stitch policy together to cater for the whole euro area. It's going to make it much more difficult to sell the concept of sovereign bond-buying to the Germans when their economy is actually starting to improve, record low unemployment. And there is some indication that actually the economy is picking up in Q4. So it's a sort of a double-edged sword.'

JOURNALIST: 'Was Draghi, I mean Draghi came out this morning, was he a little bit less dovish than he's been previously? And what does that indicate about next week?' HEWSON: 'Yeah, I mean absolutely. I mean what he said this morning in Helsinki was that the new stimulus measures need a little bit more time to work, which would seem to suggest to me that we're not going to get any extra measures next week. Now, that could have a slightly bullish effect on euro/dollar. I think it's certainly helping push the DAX higher because I think there's an expectation given Constancio's remarks yesterday that we could well get something in the first quarter. But whether it's going to be enough to actually help the rest of the euro area is a mute point. And I think that, more than anything, is the key obstacle that policymakers need to wrestle with.'

HEWSON: 'Greek strikes of course today, public clearly fed up with being under the Troika's thumb. Do you think it's time to let them go it alone?'

JOURNALIST: 'Well, if Greek bond yields are sort of the yardstick for risk, then the answer to that will be no. There's a huge amount of political risk in 2015 that I don't think the markets are really factoring in at the moment. Greece has got elections next year. Portugal's got elections next year. Spain has got elections next year. So if any of those elections don't go the way of the incumbent parties, then that could introduce some extra political risk into the debate with respect to structural reforms which Mr. Draghi continues to bang on about.'