Transcripts For BLOOMBERG Countdown 20160613

I am anna edwards in london. I am maus cranny in london. This is when it gets more interesting. In toyen, mining going the yen, coming out of the dollar. It tumbled to a twomonth low, all building up on brexit anxiety. Hedge funds doubling their short positions to the most since june 23, and they have had bullish bets on yen, so this is the prism through which markets are looking at risk. Move, butrling on the the biggest move is in dollaryen. That is the prism. We are building up to brexit risk. Central banks will be speaking this week. What will they say . Well they hold . The vote around eu membership for the u. K. On june 23. Lets update viewers on other markets, and fci pacific under pressure. Japanese stocks under water. The yen strength as you really having an impact on stock markets in japan. 10 year bond yields dropping to record lows. The gold price rarely flat, but still at its highest in three weeks on that socalled brexit risk. Saying thatomics. Ould bounce to we are down on the oil price. Lets get more from first word news. Fbi says the gunman who killed 50 people in a florida nightclub had spoken about the socalled Islamic State in a 911 call before the mascara massacre. Was a u. S. Citizen born in new york afghan parents. It is the worst mass shooting in u. S. History, and president obama says it is an act of hate being investigated as terrorism. The place where they were attacked is more than a nightclub. It is a place of solidarity and empowerment, where people had come together to raise awareness, speak their mind, and to advocate for their civil rights. So this is a sobering reminder that attacks on any americans, regardless of race, ethnicity, religion, or Sexual Orientation, is an attack on all of us. The u. S. President ial candidates have been sparring over the Orlando Attack your donald trump says it proves he was right. Really clinton has called for tighter gun control. An killer was armed with Assault Rifle, and the democratic candidate says weapons of war have no place on our streets. Donald trump says president obama should resign for refusing to use the words radical islam in his remarks. David cameron says he is confident the campaign to keep britain in the European Union is working. That is the latest polls say opinion is too close to call. The survey from the Observer Says 44 support remaining, 42 backing brexit. I poll for the sunday times shows 43 want to leave the eu, 42 happy to stay. German chancellor and oh has called for Foreign Investors to have the same rights as local shareholders in china. The german chancellor Anglo American will her trip is being overshadowed by angst in her home country for a german robot maker, kuka. The ceo of Standard Chartered says he undercover to culture where rules were flouted for personal gain. According to a series of memos issued over two months, the lender is cracking down after recent transgressions. Two fixed income powerhouses are at odds as bonds surge this year. Morgan stanley says 2016s were rally has further to run, but Goldman Sachs says yields are poised to jump. Meanwhile, the fed, boj, bank of england, all do to make policy announcements this week. Global news, 24 hours a day, powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. Lets get up to speed with markets. There is a great line this morning, the whole market seem scared, frightened. Thats right. One analyst out of tokyo said that everyone is scared. We are really gearing up for a week of event risks. We do have the boj more uncertain, 30 at last count of economists think the boj might move at this meeting. More think they will move at the end of july, but we have seen the strength in the yen, and thats putting downward pressure on the japanese stocks. To five down, the lowest close in over two months, just risk this is aversion 101. Down, goal up, oil equities down, playing out across the region. Byg kong down i down 6. 2 . We are seeing a lot of these resort heavy stocks, petro china down, data dump coming through from beijing, which was not that bad. Investment was lower, so investment sensitive basic resources stocks doing poorly. Property prices will continue to divert. In terms of the biggest losers, what isnt losing . The msci asiapacific down by close to 2 . Prices these oil tracking losses. The worst off by 6 . Singapore down by another 2 . Not a great way to start off the week. Anna no, indeed. Thank you. Lets talk more about what is going on in china. Thats where we have new information this morning. Output andtory consumption held up as private investment slows. Lets get more with malcom scott. Great to have you on the program. What does this tell us about the state of the economy, steadying seems to be one of the words i have seen used a few times in bloomberg sources morning. That seems to be the overall sentiment. Industrial production, Factory Production, 6 increase in may from a year earlier, in line with what economists were looking for. Steady as she goes on that front. On the retail front, consumption remains a problem, rising 10 , good news there. On the investment front, thats where the weakness came in, fixed Asset Investment up 9. 6 from a year earlier, a cumulative year to date, and that was a big slump in growth in the fixed Asset Investment by private companies, up just 3. 9 . That leaves chinas economy ever more reliant on the state sector. They dont want to stoke a major bubble. What is it mean for policy . How do you think the policy mix will change . Malcolm you get a picture of a study economy. A steady economy. The policy levers seem to be doing their bit, fiscal support is keeping those investment numbers propped up, even though it is slowing. Consumption remains ok. They are reluctant to keep fueling this rampant credit growth so far this year, so economists are saying that while there is room for further monetary easing, if needed. Cut, there is room to it may not happen at the economy hovers around these levels. Anna thank you very much. Malcom scott joining us there. Great to have you on the program this morning. The chinese authorities have expressed reluctance to fuel the lending borrowinglending boom we have seen. Showinga great chart who has been investing in the chinese economy. And white, private investments in fixed assets coming down, and you have what the state has been doing going up. It is clear the government is still in this market. Charlie absolutely. This is about longerterm ambition towards transitioning moreconomy to this consumer orientation. There still a great deal of capacity and china, so the state owned enterprises are bound to be taking up the slack in the near term, but we are still in the transition process. You have to accept that china is moving to a Slower Growth rate. Although the numbers look all right on the face of it, by the end of this year and next year, we will be slowing to a sub 6. 5 base. It is just easing back on the throttle, so to speak. Mark charlie, good morning. Is the scale of the corporate debt and china, over the weekend, the imf warning that if you dont deal with corporate debt, you can risk dangerous detours. What are the consequences. 1. 3 trillion dollars in loans extended to browse who cant cover the payments. A pretty scary set of numbers, isnt it . Charlie it is scary, and the. Evel is a big concern the imf is monitoring the situation. Going forward, we have to the default cycle in china. Thus far, there are a lot of enterprises that probably need at least restructuring, if not going out of business because of the debt overhang they have. They are not being dealt with at , extend and pretend is the way to describe it. We will see a pickup in the default cycle. As long as it is not too extreme , that is not a big concern longerterm, but it is all part of this transitioning to a more balanced economy in the longer term. Anna the number you mentioned around growth, 6. 5 . That is the backstop, isnt it . Charlie we are below that by the end of next year. Showing have a chart policy makers are aiming for 6. 5 . Stable foreen fairly the past year or so. Gdp or a measure of forecasted gdp rather updated monthly based on the most recent data coming out, so what underpins your expectation that they might not meet 6. 5 . Were given a strong credit expansion in the first few months of this year, and that was clearly intended to stabilize growth. You put a bit more fuel in the tank, it supports it in the shortterm, but i preferred to think of it as a glide path in that they are in tension transitioning to this more balanced and slowergrowth economy. They just dont want it to happen too fast, and there are obviously other policy metrics renminbi and moving that to a more marketoriented system. As i said, just a glide path. Manus hold that thought on the glide path. Charles is staying with us throughout this hour. The man suspected of killing 50 people and wondering wounding dozens more was a security guard. This new development has come the light as the fbi reveals omar mateen that talked about Islamic State in a phone call with 911. We now know that omar mateen was employed by a British Security firm, whose clients are in more than 100 countries, including the u. S. Government. Omar mateen was a u. S. Citizen of afghan dissent who declared allegiance to the terrorist group hours before the mass shooting. G4s employee since 2007. They say the company is cooperating with the fbi. The ceo for north america made this statement. A tragedy it is indeed, 50 killed, 53 wounded. This was the worst mass shooting in u. S. History. Looks as if it will play into the president ial election coming up in the autumn. President obama condemned the attack, and the president ial candidates have responded to the killings. What have they been saying . This has touched many nerves in terms of hot button topics in the u. S. At the moment, the control of gun laws, global terrorism, immigration even, and we have had reaction from all sides. Donald trump call this the worst attack in the u. S. Since 9 11 and set president obama should resign because he disgracefully refused to even say the words radical islam in his remarks. Hillary clinton of doing the same and said he predicted such attacks would happen. He tweeted the following. He also said he appreciated the congrats for being right on radical islam and terrorism. Hillary clinton said we need to redouble our efforts to defend our country from threats at home and abroad and keep guns likes the one used last night out of the hands of terrorists or violent criminals. Both clinton and trump are scheduled to give speeches about the shootings today. One thing that clinton and obama agreed on though was that this was a hate crime, because it did take place at a wellknown gay nightclub during a weekend, when many were celebrating gay pride events. Anna thank you very much for the latest of elements there. Lets move back to the market news and tell you what is coming up, a busy week ahead. Biggesters of the four parties holding televised debate ahead of the election there. On tuesday, u. K. Inflation in u. S. Sales of data. On wednesday, the fed Rate Decision. What will they say before the Eu Referendum and the u. K. . On thursday, policy decisions from the bank of japan, the Swiss National bank, and the bank of england. Putinday, president speaks at the Petersburg International form. What is next . Manus up next, relying on your rival. Laborcameron turning to as the Eu Referendum looms. The full story to come. Manus welcome back. Hey haze see hong kongs victoria harbour. The markets are less than hazy. Production, worried about global recession, building protection ahead of brexit. We have your business flash. Good day. Fbi says the gunman who killed 50 people in a had spokenhtclub about Islamic State in a 911 call. 29yearold omar mateen was killed in a shootout with police. He was an american born in new york to afghan parents. President obama says it is an act of hate eating investigated as terrorism. Meanwhile, it has emerged that omar mateen was employed by a British Security firm with clients including the u. S. Government. Will by blue coat systems, financing the deal with expects nett and savings of 150 million a year. The bluecoat ceo will take over the combined corporation in the Third Quarter of this year. Its chinas named chief as ceo of a u. K. Supermarket chain. The announcement could be made this week. Since been walmarts head 2014 and started his career at asda. That is your Bloomberg Business flash. Anna thank you. Days to go until the Eu Referendum, David Cameron has approached his rivals in the labour party to win over voters. Gordon brown will make the case to stay in the 28 nation bloc, and other media events have been moved aside to ensure the former labor leader is heard. They are struggling to break through some other headlines around the story. Charlie to the conversation. Some big moves and sterling. I have a chart showing hedge funds net short and sterling by the most in three years, swinging around on the basis of the latest polling information. Even the pollsters say they dont know exactly whats happening. Charlie the level of and certainty is so high that it makes it difficult, the positioning you are talking about reflected there is the simplest trade, to be short sterling if youre looking for a protective trade against a brexit outcome. Short sterling is the most obvious one. Some people are putting to hedge themselves against the outcome, which even the indian polls the opinion polls is not surprising, so close. Chart,again, another sterlingyen. There is a huge amount of momentum on friday and today in terms of yen rallying. Economistsrvey of 32 , saying the downside in the u. K. Is around 9 , but the , the reward side of this trait is only 5 . For you, is it yen . Where is the biggest prism we should look at the riskreward . Charlie you are in tangling two things. The yen is responding to the overall risk environment, and that makes it a good currency pair, sterlingyen, going into a brexit risk event. If you are is that looking at the betting odds, about a 70 chance remain. On that basis, the more likely predicted outcome is that it is business as usual on that friday morning. If that is the case, the upside will not be so severe. The outcome is much more binary if it is leave. Anna and just in case we get tension in the markets, the bank of england doing extra liquidity operations. They start tomorrow. This should call markets, shouldnt it . Charlie you have to make sure the system is in as good as shape as it can be. Port of call is to put lots of liquidity in the market to avoid unnecessary tension. Anna thank you very much. Stay with us. , calling for an level Playing Field in china. We have more on german chancellor Angela Merkels visit to china. Manus it is just 6 30 in brussels purity in tokyo, it it is to 13. It is to 13. Chinas economy steady in may as production held up. The government offered support against diminishing growth. 6 from a year earlier matching economists estimates. Retail sales climbed 10 and six as it investment just and six was thevestment slowest pace since 2000. The gunman who killed 50 people and eight nightclub has spoken about the Islamic State and a 911 call. Omar mateen was killed in a shootout with police. He was born in new york to afghan parents. It is the worst massacre in new york and im in u. S. History. Than eightre nightclub, it was a place of solidarity, empowerment, where people come together to raise awareness and to advocate for the civil rights. This is a sobering reminder that attacks on any americans, regardless of race, ethnicity, religion or Sexual Orientation is an attack on all of us. Roslyn, donald trump says he is right on islamic extremism. The color was armed with an Assault Rifle. The candidate says the weapons have no role on the streets. Appointment assess latestk that is the whole says opinion is too close to call. The survey for the Observer Says 44 support britain remaining. 42 backing brexit. 43 are wanting to leave the eu with 32 wanting to stay. If we vote to leave and leave the sigel market, that will have economic consequences. There are the experts, governor of the bank of england, all saying the economy will be smaller. Therefore we will have less money to spend on public services. I also think there is common sense here. I want to take a moment. In the single market, we get free access to 500 million consumers. That is crucial to our economy. If we have less good access, which we would if we left, that is going to impact our economy. German Government Bonds are in territory. Says the company which oversees more than 630 billion euro of investment plans to raise its corporate debt holdings. The 10 year bond yields dropped below the record last week. They join japan and having negative yields. And having negative yields. Global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. You can find more stores on the bloomberg at top. Kong Rosalind Chin in hong could asian stocks have tumbled. The pound has sunk to an eight week low in trading amid growing anxiety that the u. K. Will vote to leave the union the European Union. Very much saying risk off in the markets today could we take a look at asian stocks. The index of dropping by the most in two months and were seen a japanese stocks heading for the lowest close in two months. Chinese markets reopening after a holiday. Stocks dropping the most in a month. That is what is happening in equities. Im want to move on to them on markets. We have seen japans 10 year yields dropped to a record. It hit a record low last week. I haveen as much also tracked the u. S. 10 year treasury yield. We see that yield move lower. As well as taiwan. Money moving into bonds with this risk aversion in the markets. A lot of that centered around the fact we have a number of the Central Bank Decisions this week. He is the vote on the Eu Referendum. The referendum that is happening next week concerns growing over what will happen if the u. K. Decides to leave the eu. The pound could fall into a twomonth low, weakening for a fourth day. According to a survey of economists, the day after next weeks referendum, the town will either sink to the lowest level in more than three decades or it will climb toward the highest this year. There is a bit of skewed risk. What we are seeing in currency markets is a yen strengthening. Yen worthe the dollar at about 105. Another safe haven, gold. Gold trading at its highest level. Anna, manus . Manus thank you very much. Nejra cehic with the latest on the markets. New york trade in crude. The number of rigs rose for a second week. What exactly is going on . Iran says it plans 700,000 barrels today. That is the plan over there. Lets get live to upper dobby. Tracy alloway is there. Oil is down for a third day. Small turn in the rig count is it down to the u. S. Numbers . Is it to the iran story . Good it is a very question. On the demand side, things have been holding up well. We have seen the demand from china, india. We have seen u. S. Drivers return to the highways and go on summer road trip vacation. On the supply side, we have two major forces. They are iran and u. S. Shale. When it comes to iran, we have seen them restart production faster than a lot of people expected. They are making 3. 8 Million Barrels a day. That is feeding into supply. I should note there is some debate over the accuracy of this figure. Bear in mind, they come on board faster than a lot of people anticipated. When it comes to u. S. Shale, with oil over 50 a barrel, as it has been, we have seen some of those rigs come back on board. This is a big test case for the theory of u. S. Shale as the new swing producer. It seems like that very is based on the slight uptick in rigs. We have to see that continues. Manus tracy, thank you very much. Tracy alloway with the latest on the oil markets. The key event out of all of the federal banks. The federal reserve. Janet yellen and hurt cohorts will get new estimates and her cohorts will get new estimates. It is all about what weve got here is keeping the gradual at desk gradual phrase alive. Gradual phrase alive. Great to have you with us. Wednesday night, we are going to get a new adjustment in terms of where the fed sees the rates going forward. You . , how does that impact what is your expectation echo are we live for one more hike . Where will he be in terms of terminal rate . It is clear they want to raise rates. They are pretraining the view that the world is normalizing and employment is close to full in the u. S. And to head off longerterm inflation. Policy. T to normalize the problem is the data is not letting them have such an easy route at the moment. Most recent pay off payroll numbers was particularly week. Recovery in the second half. The problem is is most of the signs are growth is going to be slow. Problem. He real anna growth is tepid. Im a to show you a chart. Their expectations and what kind of signal this gives to the economy. The key militant labor Market Conditions and in the red the series of recent the theory of recession going back to 1970s it there suggesting that what we have seen of late could be a signal that there is a recession to come somewhere in the next 17 months. What do you sense is the underlying conditions . Charles it is doing ok. That is literally it. 2 towing, 1. 5 to 2 . A lot of jobs have been created since the financial crisis but they are not necessarily the right kind of jobs. The keynot seen some of aspects that you would normally see in recovery. For example, the credit metrics. That would be the gasoline on the fire that would accelerate recovery. Your matching people being prepared to reload on credit. Andeby the ability to grow for the economy to really accelerate just is not there. Maybe that is partly the bank possibly standards to remain cautious banks standards to remain cautious. We have seen a shift in behavior. People feel they did not want to relevel in the same way they wouldve done in the past. There is no wording on the chart that you have it if you look at time cycles, there is a the fact that we are running over at a time when we should like at a time when we should be rolling over. Manus this is u. S. Household Inflation Expectation hitting record lows. This is a michigan survey. The next five to 10 years is back at levels that we have not seen since 1979. This is the other side of the coin for the fed. If i look at the bond market, the question is should i continue to buy bonds with inflation excitations so savagely low . Are we in a bubble territory in the bond market . You are in an environment where growth is very weak. Growth is in its in the is in the nearterm. If you are taking a longerterm perspective and you set there and thought about it on a threeyear of fiveyear basis, would you think that german 10 year bonds would value. Treasuries at 1. 6 in 10 years value . Probably not. It does not mean that right here right now is the appropriate time. Anna charles, thank you very much. He stays with us on the program. Angela merkel is on a nice trip to china in a decade, on a mission to drum up more business. Lets talk to tony chaska. Angela merkels trips to china have met been that have not been controversial. Have not been controversial i know some of the m a intentions have raised if you i a few eyelids in berlin. Tony one word is cougar who is germany forased in which there is a chinese bid. There is a raising that is raising a lot of concern. That while German Companies have been going to china for years, but here we are getting the same thing in return. There is a lot of domestic politics connected to that that is making Angela Merkels trip more tricky this time. Manus tony, what is the feeling germann about how the chinese trade relations will look as we go forward . It is a global relationship for everybody. It is important for germany. Tony absolutely. You can tell from merkels latest remarks in beijing as she just gave a News Conference that she is trying to sort of avoid being overly confrontational on this issue. The reason is, in so many words, the two countries need each other. That said, we do know that there forwardrn that going this kind of chinese encroachment as the opponent will say it in germany just will see it in germany will get more rather than let will see it in germany will get more rather than less. The feeling persists in germany that chinas Playing Field is not level to Foreign Investors which is a concern that merkel expressed on this trip. Manus tony, thank you so much for running all of that in germany. Up next, what have we got planned . Spanish slowdown showdown. The leaders prepare to go headtohead in a televised debate tonight. Anna welcome back. This is countdown. Youre looking at live shots of new york, monday morning. The rainbow colors as they gay pride flag in connection with the dreadful events we saw over the weekend. Lets get back to business news. Heres a Rosalind Chin. Anna, the fbi says the gunman who killed 50 people in a spoken nightclub has about the Islamic State a 911 call for the massacre. Omar mateen was killed in a shootout with police. He was born in new york to afghan parents. It is the worst mass shooting in u. S. History. President obama says it is a neck of hate that should be investigated as an act of terrorism. British concert include the u. S. Government. Symantec is prevented by the private Security Company for about 4. 65 billion. [indiscernible] 150 million a year. The ceo will take over the combined corporation after the deal is done, probably in the Third Quarter of this year. Walmart is reporting the ready to name the ceo of the supermarket chain. The announcement about shot clocks numeral could be based this week about sean clarks iran saysould be the Oil Contracts still need provisions but it is confident the deal will be signed soon. The country is hoping the new contract will draw as much as one of 250 billion from Million Dollars from investments from local Oil Companies each year. Chin with thed latest headlines. The leaders of spains for biggest Political Parties go headtohead tonight. This is the country is headed for its second election in six been stills joins us from madrid. A good day, good to see you. What are you going to be looking out for . Thing willteresting see how sharp the attacks are against roy. Against roy last time he refused the bank except for the socialist leader. That debate, he was really aggressive and he told rajoy that is not fit to govern. This time around, sanchez has been raining in his criticism of criticism of rajoy. He says that rajoy is being blackmailed. That he is not able to clamp down on desktop down properly. At anna down properly how is this going to affect the campaign and outcome of the vote . Where looking for any substantial changes in the polling we are looking for any substantial changes in the polling, compared to what we saw in december. Have we seen any movement . Beene biggest shift has the steady gains of palermos. They were in fourth place before they sit before the december vote. They have continued to gain due to an alliance with the united left. They are clear and second place within striking distance of rajoy. Leaderlast campaign, the the publics leader was clearly the best debater. There was a moment when he did his address to voters at the end of one of the debates were the kind of captured the moment. Reflected tone which the serious economic problems of many people, but also managed to give a sense of optimism. That was seen as one of the key moments in the last campaign. A lot of people are going to be looking to see whether egg laces can work the magic again. The expectations are him are probably the highest of all of the people going in. Anna ben, thanks so much for joining us. Charlie is so with this. This comes just days after the Eu Referendum in the u. K. Adding to that sense of Political Uncertainty and fragmentation around the european political scene. Charles absolutely. The brexit issue aside, there is a fracturing of the Political Landscape in the eurozone. Spain is a perfect example. Poses big issues, particularly in a country like spain where you have the you can find mirror images of that dotting around all over the eurozone. That is going to add to the level of uncertainty, thereby more onus on the ecb to continue supporting. Really they are the only game in town. The political trap political backdrop. Manus those balloons are the only game in town. I dont like the word bubbles, with that in mind, if the bunds are the only game in town, what does that do to bond spreads . Bonds. Ing junk rated is this an extreme move . Does it shift how you look at the corporate and sovereign world . Charles koch without a doubt. Charles without a doubt. You are faced with an inappropriate allocation of capital. Getting the system and looking at how policymakers are going to dictate how our prices move. Terminology, your you cannot say the two basis points are going to value, they are not. The reality is if the ecb is the only game in town, we could see them become a lot more unrealistic before reality actually strikes. There is so much event risk over the next few weeks and months. It is very hard to see, unless there was some very traumatic turnaround, and the data is hard to see, bond markets capitulating in giving up on current valuations. Anna what we are going to see in boone markets the global bonds market. A generic note to bonds, we see the negative come on the way down to nine years, negative interest rates. 10 year hanging in there at. 02. If we do set that go negative in the triggers a. Charles as i say, i dont think it is good value. I dont think it is a buy at two basis points. Policymaker action such as you get from the ecb. We could get even more extreme variations before insanity kicks in. Anna what are you buying in european bond markets . Charles we do have some breaking positions. Hedge protecting our tail on the inflation side and we do have some flattening trades. We are running broadly in one direction because we think the policy makers are still looking to keep the market [indiscernible] anna charles d blood, thank you very much. Well have the latest on the Economic Data coming out of china as the biggest show factory output well keep in close eye on the german bund this market. Manus the final tenday push. Cameron says he is confident the campaign to keep written in the eu is working. The latest polls saying opinion is too close to call. Chinese economy studies as spending and Factory Production holds and make but investment growth slows to a 16 year low. A nation in mourning. Following the deadliest mass shooting in u. S. History. This investigated as an active terrorism. The president ial candidates spar over gun control. Manus a very good morning. Welcome to countdown. Anna i am anna edwards here in london. But we will see at the start of European Equity trading swimming get there and around an hour. Futures will be weaker at the start of trading. Anybody who has been keeping an eye on asian sessions, my not be surprised could risk aversion coming through. Runny money out of the pound. Focus on what is going on in the pound as we head toward the 23rd of june. Take us through some of the elements to this weeks story, manus. Manus yet anna, it is all but the yen. It is all about fx. It is all about hunkering down. You have seen a dollar yen, money going into the yen. Dollar down 1. 1 . Bullish bets on yen. We have seen that for the first time in seven weeks. You are seeing bullish bets on yen come back to play very aggressively. Youve got sterling yen, that is bere the greatest play is to. You got the bank of japan this week. You also have the bank of england and the federal reserve. Money going into yen. Lets switch it up and have a look at the rest of your risk radar. This is what weve got. Sci, equities are down 2 the much hunkering down in these asian equity markets. A little bit of money going to the gold. Down iran aiming for 700,000 barrels of production over the next five years. There is a little bit of rusher coming into the oil market. You are seeing rakes, the longest winning streak, since august of last year. Rigs, the longest winning streak since august of last year. Anna the yields on the german 10 year going negative. Charlie said he would not be surprised if it were to go negative because of all of the focus on Government Bond markets. The appetite for Government Bond markets that we have seen. He was talking about whether this is a bubble. Lets get to some breaking news. Whatst some news about hotels which is a is is which we have been talking about about test talking about a potential ipo story. Talking about a potential ipo story. The worlds biggest so far this year for its hotel units after widening investigations push the south korean conglomerate deeper into crisis. They with job there by pure canceled their remaining schedule for the offering. This is according to the companys regulatory filing. It is an ipo that was highly weighted weighted. Lets get to bloombergs first word news. The gunman they killed 50 people in a florida nightclub have called i talked about the Islamic State doing a call to 911. The omar mateen was a u. S. Citizen born to afghan parents. It is the worst massive shooting mass shooting in u. S. History. A place where they were attacked is more than a nightclub, it is a place of solidarity, empowerment, where people come together to raise awareness, speak their minds and advocate for the civil rights. This is a sobering reminder that a tax on any americans, regardless of race, ethnicity, religion, or Sexual Orientation, is an attack on all of us. The u. S. President ial candidates have been sparring over the Orlando Attacks. Hillaryp says clinton has called for tighter gun control. The democrat candidates say weapons of war have no place on our streets. Trump meanwhile says president obama should resign for refusing to use the word radical islam and his comments. David comment David Cameron says he is confident the efforts to keep your destitute the u. K. In the European Union is working the u. K. In the European Union is working. A new poll for the sunday times chose 43 wanting to leave the eu with 42 happy to stay. If we booked to leave the vote to union if we leave the European Union, that will have economic consequences. All saying our economy would be smaller so would have less money to spend on public services. Want to take a moment in the single market, we get free access to 500 million consumers. That is crucial for our economy, almost half of what we sow goes. If we have less good access, that is going to impact our economy. E german chancellor the german chancellor Angela Merkel calls for meeting the premier, she says she would be the truth is being overshadowed by angst in our own. Ountry at views of powerhouses are as bonds surged this year. Morgan stanley says the rally has started to run but Goldman Sachs thinks benchmark yields may be poised to jump. The u. K. Debate over leaving the European Union drives demand for the safest assets. Are poised tod make announcements this week. The company which oversees more than 630 billion euros of investments plan to raise its corporate debt holding. The german 10 year bond yield drops below 0. 01 last week, the lowest on record. Germany joined japan and switzerland and having negative yields. Global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. You can find more stores on the bloomberg at top. Anna . Manus . Much. Thank you very lets get up to speed on the markets. As fairly tough session. Haidi lun has all of the news. There are a couple of things at play. The bank of japan, you got money going into the yen, gold. Haidi it seems like a convergence of all of these. Investorsers driving to sell. Some really steep losses driven by japan with that summer yen continuing to be a thorn in the size of policymakers. Also these exporters are so sensitive. The nikkei 225 closing down by 3. 5 . Japanese stocks hitting their lowest levels since april. We are seeing weakness right across the board. It is concern over the brexit. The fed, although although were not expecting a move from janet yellen this week, the boj making a 30 chance that there will be some sort of expanded stimulus. It is that classic risk off scenario we are seeing. Were getting demand into yen. Our sovereigns other sovereigns doing poorly today. Take a look at some of the other biggest losers chinese listed stocks in hong kong snapping the longest winning streak in nine years. We are seeing a lot of these investment sensitive stocks doing badly after the investment number coming out of beijing. About theurces land same after the government says property prices in china will continue to diverge. We have been seeing this recovery. Shanghai also extending losses into the afternoon, down by 1. 5 . The sense of these names also saying selling coming through as well. Regionally, we are down 2 on this monday session. Quickly before i go, the biggest loser coming in from tokyo. The yen story. Doubling down the losses. Sex Company Continues to battle this. Sacks Company Continuing to battle this. Anna factory output and consumption held up even as private investment flowed. Lets get more with malcolm scott. He judges from hong kong. Tell us the big he joins us from hong kong. Toast the big picture there. Malcolm you through all of the big numbers together and not much has changed in the month of may. Lets break it down. On the factory floor we had production up 6 . That was right in line with the month earlier and what economists have been expecting. Sales up 10 in may from a year earlier. That in line with a month earlier and what economists were looking for. A big sliding growth in private investment. That is a worry. It suggests that investors are not buying into this story. Government investment picking up some of the slack with 23 . All in all, throw it together and you can get closer to 6. 9 according to bloombergs gdp tracker. Anna malcolm, thank you. Lets turn to things are happening things that are happening in the u. K. The british Prime Minister David Cameron has turned to his rivals to win over undecided voters. Todaywill make the case to stay in the 28 nation bloc. Other media events have been moved aside to ensure that labor leader is heard. Lets bring in our guest, is stephen macklowsmith is partner at jpmorgan asset management. Good to have you here to go through the details on the brexit story. The Eu Referendum story good lets talk about the polling story. Took about the polling. In your world, are all of these worlds all of these polls created equal. Sayolm it is fair to theres been any consistency about stephen it is fair to say that theres been an inconsistency about the polls. The poll that came out on friday was an online poll. Even within individual polling agencies, they come up with different results. [indiscernible] i think we have to look for other indicators of what is likely to happen. Financial markets in my mind are a reasonable indicator. Our since given what is happened to hearing euro sterling. Remain will lead. Anna manus . Manus good morning and what ive got for you is one of those idiosyncrasies. This is danish lending rates relative to the united states. Money is going into switzerland, the danish market. There are many Financial Markets Financial Market perversions. This is the most extreme. When it comes to protection. That is essentially what some people are saying. Where do you look for protection with the amount of risk you have in the world . This is a perverted market when you got danish lending rates, even in some cases going negative . Stephen perverted is your word. There is enormous amount of physical risk in the market. What we look for to is on the 24th of june, all of these 0 to 100 . We will know what happens and we will can and we can make our positions. Taking too much risk into portfolios. Resultsdguess what the are going to be is probably misguided. Anna i was interested to see the other finance minister talking in the german press on friday, talking about the implications he was raising the questions about what will the netherlands do next . There is a push in the netherlands, the Freedom Party, has been gaining in popularity. Will that be the focus if we see a vote of brexit . Stephen the big Political Risk would be a vote to leave by the united kingdom. You mentioned the netherlands. That is the obvious answer because of the Freedom Party is ahead in the opinion polls. The netherlands is a member of the eurozone, so we need to have a situation where the netherlands would have a referendum, then you start to question the integrity of your. Integrity of europe. That is the absolute worst case scenario. There are other countries where eurosceptic parties manus stephen, you are going to stay with us. Whats more to get through in the rest of countdown. Central banks take center stage. We look at the huge week of policy decisions and we got the fed, the boj, the boe and the smb. Anna welcome back. This is countdown. It is 7 19. The pound is weaker. We headed toward the 23rd of june and all of that. Lets move on and we get to hong kong. Here is haidi lun. Anna could be fbi says he gunman who killed 50 people and a florida nightclub has spoken about the Islamic State in a 911 call for the massacre. Omar mateen was killed in a shootout with police. He was a u. S. Citizen, born in new york to afghan parents. It is the worst mass shooting in u. S. History. President obama says it is an act of hate and being investigated as terrorism. Than one ofn more the countries included the u. S. Government. [indiscernible] 4. 5 billion ipo. Been scrapped after widening investigations into allegations of slush funds pushing south korean conglomerate. Symantec is preparing to buy the 4. 65ty company for about billion. 2. 8 billion of new debt. A savings of 150 million a year. Overeo is compared to take in the Third Quarter of this year. The Bloomberg Business flash, anna . Manus . Anna the men suspected the man accused this new development has come to light as the fbi reveals omar mateen talked about Islamic State in a nine long call before the a 911 call before the attack. Caroline hyde joins us with the latest developments. Caroline particular he worrying for the fbi. They investigated this to clippers and twice before the attacks. The investigations were dropped. Bys may have not been known the employer of the 29yearold omar mateen. He was employed since 2007. They have more than 600,000 employees. Presence in the united states, prisons, ports. They put out their own statement saying that we are shocked and saddened i the tragic events. And saddened by the tragic events. It is an unspeakable tragedy. This is thought to be the largest mass shooting in u. S. History, 50 killed, 50 wounded. Mateen taking an Assault Rifle and handgun into the club. Beautifully heartwrenching for the lgbt community. This is supposed be a weekend of ride, solidarity and celebration. Anna a point that was made by president obama. The president ial candidates have been responding. What have they been saying . Caroline donald trump taken to twitter saying of course, that very man obama saying he should in fact reside as he disgracefully refused to say the donaldradical islam. Trump saying that if we deny to tough and smart real fast, we are not going to have a country anymore. He is trying to take the upper presumed rival who is of course hillary clinton. She spoke out saying we need to run double redouble our assets to defend our country from threats at home and abroad. This entire event has wound together the key concerns for the united states, gun control, global terrorism, immigration. Obama to the stage and called it an attack on all of us. Many of our thoughts and prayers go to the affected in the tragic picture affected as the tragic pictures shows us now. Manus lets take a look at the events that is going to set up a fairly busy week in terms of central banks. We get the leaders of spain, the four biggest Political Parties are going to hold a televised debate ahead of the election on tuesday. We did the u. K. Inflation. Fed all aboard Rate Decision and their new estimate. That is what we are focused on thursday and we get policy decisions from the bank of japan, bank of england. Inday, Vladimir Putin speaks an International Economic forum. Stephen macklow is our managing director of European Equity strategies over at j. P. Morgan asset management. He is still with us. We look at all of those events that i just outlined. Brexit is one of the most important ones. I read a couple of reports that the equity story in europe could 24 ined by as much as the event of a brexit. What is the biggest risk and reward in europe from your perspective . Risk, clearlyical that is an obvious issue. You got the u. K. Referendum. We are not sure how things will move in the event of a leave vote as we were talking about. That countries like the netherlands youve got countries like the netherlands. The underlying financials in europe have been improving for the last two years. We seeing growth recovering led by domestic growth. Simmer confidence is high. Consumer confidence is high. Earnings growth is very pedestrian around consensus expecting europe exiting the u. K. Growth expected in about 1. 5 . If we leave the Political Risk to one side, one of the biggest questions is to whether they can generate inflation. You see it on the horizon. Contacts hasof our a price tag which looks at prices on the internet for millions [indiscernible] the indication is that there is recovery. From prices have recovered the lows Commodity Prices have recovered from the lows. Line to ce is in there are signs of recovering and that would be good news. Anna every cap on oil prices. Wti down. Thank you very much for joining us today on the program. We appreciate you spending time with us. We have seen what is happened in the asian section asian sect in. A guy welcome to on the move. We are counting you down to the european open. What we are watching this morning. The bojs brexit problem. Yields have fresh record low as traders seek safety ahead of the u. K. Referendum. Will the bank of japan asked this week . With 10 days to go, the pound continues to feel the pressure and the polls tighten. Traders say it could