Transcripts For BLOOMBERG Countdown 20160622

Volkswagen hopes to clear the air, since the cheating scandal emerged in september. A very warm welcome to the program. This is countdown. Live from london, i am anna edwards. Manus and i am manus cranny live in dubai. You have a chart. Anna when we need the keep an eye on of course. This is the implied probability of the betting market of brexit. , 25. 68 . Down at 26 last week we went as high as over 40 on this particular measure of whether it was likely or not we would see a brexit. Of course last night, manus was dominated, the heated exchanges at wembley arena, maurice a holding pop concerts, but that was the faceoff between the remain and leave campaigners. It seems that we have some big moves on monday, slightly smaller than yesterday. Now just pausing for thoughts, manus seems to be the way we describe this morning. Manus we are, indeed. The riska look at radar. I think it is fascinating. We have done a little bit of that isour pound index, what you want to look at. What you have here, 146. 84, the bloomberg pound index is up 2. 3 . The biggest search since 2009 with a five month high. But of course, more than just cable, if you look at the pound index, 35 is against the dollar. 8. 5 against the yen. And it is really all about moving that in terms of the probability odds. Oil above 50. The ability to grow 50 msci, global perspective, or the msci asiapacific index. Asian equities outside of japan reaching gains for the fourth day. As a bit of a reprieve. Not much, but i can muster up a good story. Anna absolutely, the pound index is weighted, a measure of the pound based on trade flows, we will talk about that during the program. This is a bloomberg special. That is to the bloomberg first word news. Uks membership of the eu hangs in the balance as politicians enter the final day of campaigning ahead of the vote. The current mayor of london, sparred in a debate last month over an impact of debate in britain. I think the countries around the world, more than 60 of the worlds companies, sony, aig insurance, bloomberg, have offices here. Broioris i think we had an amag amount of running down. The astonishing thing i think underestimate our ability to do better deals if we are not to do it on our own. Businesses to Small Businesses, Labour Party Mps argued leaving the eu is for the better. The bank of england as said that 10 has a suppression of 2 on wages, but Small Businesses are better off to take back control from leaving. Hong kongs richest man has told bloomberg that corporate taxes should be raised to help tackle wealth inequality. He says that a height of 2 can be used, though he opposes higher taxes on individuals. 13 economists polled by bloomberg to be the next entry in Central Bank Governor, he is typically the finance ministry. Been on the dovish side, holding the current governor, stepping down in september. And the bill and hillary and Chelsea Clinton foundation will by hackers. D those from the Democratic Party and Hillary Clinton campaign compound security concerns about the digital security. That is as the fbi continues to investigate the use of personal email server as he was secretary of state. Global news 24 hours a day, powered by more than 2600 journalists and analysts and more than 130 companies. You can find more on the bloomberg top. Nna roslyn, thank you standing by with us. We have gains coming through in the asian session. That in fact, just wiped out, entirely unfazed by the msci asiapacific. Pausing for breath ahead of the referendum tomorrow in the u. K. . Di anna looks as if we have a bit of a problem with the microphone. Sorry about that, haidi. Asian equity markets pretty much unchanged when you saw the 100pacific just eking out of the percentage point of the game. A bit of a pause as we head towards the brexit, or bremain vote. We have the u. S. Dollar against again at 104. 52 this morning. And we have the pound against the dollar at 146. 82. Lets move on to something Bigger Picture on a macro front. Of course it all comes back to brexit this week. Janet yellen has a cautious and uncertain view of the was economy. In the first of two days of testimony to lawmakers, the fed chair said he sees near and longterm factors clouding the outlook. She also warned of possible fallout if the britains vote to leave the eu. Janet yellen this has no close parallel. It is hard to know what consequences would be. Of course there is always particularly globally. We operate in an uncertain environment. Anna meanwhile, mario draghi said ecb has plans in place in case the outcome sparks market turmoil. Mario we are trying to be ready to cope with all possible contingencies. It would be very, very difficult to be more precise than that. I think we have done all of the preparations necessary now. Our guest in the studio with anna is alan hagan. He is the ceo at coutts. These marketshow have pulled himself back. Let us check in on the bloomberg pound index. Of course, this is about understanding the real risk of brexit. Alan, we had this bounce, checkers set 79 is the risk. Sterling is a fivemonth high. What is the riskreward for sterling if we remain . Alan good morning. Yet, i had a look at your pound index. It does round with your odds checker indexes. You have to go i think with the central scenario, notwithstanding what we had last week, is remain. And the cost of protecting yourself, in terms of options, if you try expenses, for my mind some of that is unwinding. Seeing sterling strength, we have done is celso cell phone or dollar assets. We sold some gold, some u. S. Equities in the low one 40s, and come back into sterling because if you look at the really longterm graph of sterlingdollar, not many pounds below 140. So there is a value in terms of an version here. Anna talk to me about the level of risk, or the perception of risk at the moment in the markets. I know that you like this particular barometer of fear, alan. Barometer,ses fear you can see that low touch there we spiked up once again. What is this telling you, what are you fearing . Alan this is similar to what i was talking about in terms of currency. In general, options against risky events are becoming exclusively expensive. If you want downside protection, if you want to buy an option, is historically very, very expensive. On the bloomberg, if you click the fiveyear chart, you will see it on the top left, im putting you under pressure and na, if we take a longerterm perspective to the bull market, people are willing to pay more and more for downside protection. And of course, as people do that, globally it is the bull market, the wall of fear. And therefore market contingencies arise. Just looking at now, you can see fear is really, really prevalent in the u. S. From our perspective it means go against it, fight the fear, do not fear the reaper. And stay with risk assets. , i will see you and raise you. You have a spike involved. I will give you that. This is running the risk of brexit, and the risk, ok, but i will explode this out to maximum capacity. I see you and raise you and say, posh. There is no real risk. I had a researcher here with me and set it is not a lehmanesqqu, referring to the spikes of 2008. Alan, brave man . Alan i am not telling high enough, but when you get these real big spikes of volatility, that is when you sell. This i think if you look at the fear barometer, it is very specific. It is telling you less about the general level, but how expensive put options are in particular to protect your portfolio, compared to call options. A little bit geeky. But it just tells you about the ongoing pledges of protection. Ifis a relative barometer, you like. But i do not quite agree with you there, manus. For general selling, you want to do that, the ideal time to sell is spiking. I would add that though you do have a nice roll down, getting technical this early in the morning, that would slow the curve. And it is quite a nice trade, even and called environment to be selling long. But your entry point may be better. Manus alan, i want to channel my inner geek. It is never too early for a bloomberg audience to talk about vol trade in what you want to do. Higgins. Lan hagan we will bring you interviews with ryanair Ceo Michael Oleary and conservative mp john redwood. Here is your day ahead. Anna . Anna midday u. K. Time we get mortgage applications. Euro area Consumer Confidence on the eve of the Eu Referendum. The Prime Minister speaks in brussels, and of course 4 30 u. K. Time, we hold that final tv debate before the big day. That will be at 8 00 this evening. Withxt on the program, just one day to go until the Eu Referendum, we get the view from the heart of the eu. We are live in brussels, next. Manus welcome back. You are looking at a very bright and cheery Victoria Harbour in hong kong, hang seng trading, up 3 10 of 1 . Rosalind chin is with us. Good morning. Beautiful day in hong kong. Mitsubishi motors has forecasted a loss of 4. 4 billion. The fuel scandal will cost 2 billion this year, including major clients nissan and major supplier. It will be the major loss in four years, after they admitted to falsifying tests as far back as 1991. Volkswagen will face investors theis first meeting since emissions scandal brokerage and lawsuit filed in germany on the half of a California Pension Fund and other Institutional Investors over losses. The share price is down almost 24 , since cheating on emissions test last september. And instagram has passed half a billion users. With growth outpacing the photo sharing at, 300 million of those people use it everyday. Which is double that of twitter and snapchat. Facebook bought instagram for 750 million in 2012. Growing outside of the u. S. Was interesting about growth right now is that it is happening mostly overseas. Because you are seeing countries like up in the same way that the estate did very early on. You are seeing android take a lot more share as well of instagram. So it is definitely a more global growth. I think what you end up seeing there is a Global Diversity of interest. Chefs in japan. Amazing people doing arts and crafts in france. You see such a Diverse Group of interest. Rosalind that is your Bloomberg Business flash. Anna rosalind, thank you very much. The u. K. Prime David Cameron has made a lastditch attempt to stave off a brexit. An impassioned plea, he urged remain in a referendum, that there were be no going back if the u. K. Voted to leave the eu. Prime minister cameron it is about our economy. It will be stronger if we stay. It will be weaker if we leave. And that is a huge risk to britain, to british families, to british jobs, and it is irreversible. In euRyan Chilcote is heartland of brussels this morning for us. Ryan, but have you on the program. What is the brexit sentiment like the last day of the campaigning here in the u. K. . Or there in brussels . Ryan good morning. I would say they are anxious, but they are not showing it. I think the real move is that they are hoping that a brexit, or the threat of a brexit, will just blow over. The main event here in brussels yesterday was Mario Draghis appearance at hearing before members of parliament. He was asked about brexit, in fact the very first question. He said that the ecb is doing everything it can to prepare for all contingencies. And that is about it. Have a listen. Mario we are trying to be ready to cope with all possibility of contingencies. At this point, it will be very, very difficult to be more precise than that. That we have done all of the preparations that are necessary now. Ryan in the past, mario draghi has said it is the ecbs preference for britain to remain in the European Union. He has said that he brings it will be a downside risk. But yesterday was not going anywhere near that, simply saying that we are preparing for everything. We do not have a plan in place do have we extensive consultation with the imf and other Central Banks. Manus and ryan, what is the plan amongst eu leaders if the brexit actually happens and we wake up, all of a sudden, central bankers are holding from the political elite, what are we expecting . Ryan look, we know the eu leaders, the head of parliament, the eu commission, the president of the eu itself, they will get together and watch the results of the referendum together. I guess the real question manus, that you are asking, what are the constituent countries that the eu relies for leadership . What are they going to do, minus britain . We have a great story on the eu terminal saying not a lot. In fact we learned that Angela Merkel and france while aland have met. And a lot of the analysts we have met said that we have an llandewhere ho would strengthen the euro zone, focus on refugee. Angela merkel like to see more the focus throughout the European Union. So there is a lot of concern amongst people who watch thesels, that, you know, concerted response you need from the politicians is of the you syntel weget, cap have elections in germany and in france and 2017 and beyond. Anna Ryan Chilcote life for us in brussels. Coutts isns from still with us. We heard from janet yellen today. We heard mario draghi, as ryan was pointing out. Mario draghi saying they are ready to respond to brexit turmoil. Janet yellen also warning not to exaggerate the reaction you may see in the market. This ties into what i read on the bloomberg yesterday, princeton professor saying that now the job of the Central Banks now is to calm any fear. How do you view that thought . Alan i agree with that, but that is more likely on friday the calling is going to come in. To exaggerate the Market Impact is right. In fact, our thinking, we have johnson are thinking, should there be an exit and a likely sharp fall on the 100, we are likely to be a buyer. Because life does go on for the u. K. Or protector. Notwithstanding likely a shortterm recession bear. And the market will likely over discount the pain. So you will get markets go against, should there be brexit. And i think similarly on currency , you begin the likes of j. P. Morgan and goldman sachs, anything from 120130 sterling on the dollar. I think you will see buyers. I think you see people going against the market there. Manus you are feeding into the market, do not hold your breath. Which is good, alan. Let us go to bonds. We have touched on this a couple of times. What i have for you is a new chart, which is a 10 year Government Bond yield in the u. K. This is bonds in the u. K. Actually turning up versus italy, the white line is the u. K. At the this, im looking mighty return, alan, in the event that we wake up for a brexit, does the world turn against the longerterm . Alan manus, good question. A tough one. I think the initial reaction will be a flight to safety. You will see rally in treasury, bund. I know mark carney said we depend on the kindness of strangers, foreign capital flows. But the guild yields will be lower. Maybe some risk premium building in. There was gilt yields higher, but a risk premium, i think initial trade is lower. Anna what about the rest of the bond markets . You mentioned the response you aght see to a brexit, potential brexit. But here is the question away from the immediacy of the brexit debate. I have a graphic here that talks about the size of the negative yielding debt market right now. The amount of negative, debt negative yielding debt, now exceeding the entire Corporate Bond market. As somebody who has many years of experience in the Corporate Bond world, alan, you wouldve seen that one coming. This does not change particularly, does it, no matter what happens on friday . Alan no it doesnt. If you come into my shoes or anyone else in the Wealth Management shoes building classically, what we do about bond markets . What is the alternative . What youre seeing in the industry is a big focus on Market Neutral funds. Because you cannot just buy, keep buying equity risk. There are selected Corporate Bonds you can buy to get a positive yield. But again, you are starting to take on equity. And it is very hard now to kind of if you like calm the performing o portfolio down. Coutts is looking hard at quite neutral funds, in old turns, hedge funds. But the usage of daily liquidity in the world. Anna alan, thank you very much. Manus, go ahead. Manus i was just going to say and 20 seconds, when is a first rate hike if we remain . You have 20 seconds to go. Alan 2017, march. That is right. Anna we will keep that one on record. Alan, thank you very much. Manus anna, more referendum countdown, as both sides debate brexit. And make the final picture, and we speak to the leading voice on the leave side of the campaign. Okay, ready . Whoa [ explosion ] nothing should get in the way of the things you love. Get americas fastest internet. Only from xfinity. By switching to xfinity x1. Rio Olympic Games show me gymnastics. X1 lets you search by sport, watch nbcs highlights and catch every live event on your tv with nbc sports live extra. Im getting ready. Are you . X1 will change the way you experience nbcuniversals coverage of the rio Olympic Games. Call or go online today to switch to x1. Anna welcome back. 6 30 in london. 9 30 in dubai. As in the first word news. Here is Rosalind Chin. Rosalind volkswagen will face investors in its first meeting since the emissions scandal though. A lawsuit filed in germany this week on the half of a California Pension Fund and other investor losses. Share prices down almost 24 since admitting to cheating on emissions test last september. Hong kongs richest man has told bloomberg that corporate taxes should be raised to help tackle wealth inequality. He says a height of 2 can be used to help the poor, although he opposes higher taxes on individuals. Seven out of 13 economists say they bloomberg know the Central Bank Governor of india. He is currently the divisor of the finest. He is considered to be on the dovish side of the policy spectrum. Current r. B. I. Governor will step down in september. And the bill, hillary, and Chelsea Clinton foundation was among the organizations breached by suspected russian hackers, according to three people familiar with the matter. The attack on the network, as well as those of the Democratic Party, as well as Hillary Clintons campaign, compound questions about her digital security. As the fbi continues to investigate or use of personal email server while she was secretary of state. Global news 24 hours a day, powered by more than 2600 journalists and analysts and more than 120 countries. You can find more on the bloomberg top. Aanna . Manus rosalind, thank you very much. Asian equity markets outside of japan seeing gains for the fourth day in a row. All as sterling strengthens ahead of the Eu Referendum. We have nejra breaking down the market. It is my word of the week. Least forrieve, at asian stocks outside of japan. The msci asiapacific index excluding japan up 3 10 of 1 . Energy stocks leading the gains on this index with the oil price rising. The msciurse, overall pretty flat, if you include those losses that we are seeing on the topics and the nikkei. In just over 24 hours, polls open in the u. K. Birtons will vote whether to remain or stay in the eu. We see sterling gaining against the dollar, approaching a fivemonth high. 1. 47. Nt above the i want to show you the bloomberg british pound index, this is brandnew, the eurodollar, aussie dollar, chinese currency, 12 years of daily history. I distracted so far. This year, at the end of the chart it is heading higher. We are see sterling gaining higher. But elsewhere in other fx markets, you see a bit of risk in the sense we are seeing higheryielding currencies gaining against the dollar. New zealand dollar, the canadian dollar, the aussie dollar theyre all up. Euro slightly higher, too. But the yen also up 2 10 of 1 against the dollar. We are still seeing that move into the safe haven of the yen. And speaking of safe havens, i tracked the 10 year treasury yields against gold over five days. We are seeing treasuries holding a fourday decline, the longest since april. The 10 year yield coming down as you can see from a twoweek high. Gold pretty much unchanged after a twoday slum. But whatever the outcome of the referendum, bet on a jump in gold volatility. Anna . Manus we love a little bit of volatility. Jra, figure much. The uks membership in the European Union really does hang in the balance as politicians had to the final day of campaigning ahead of the vote. The current mayor of london and his predecessor sparred on tv overinvestment in britain. I speak to companies around the world, more than 60 of the companies, sony, bloomberg, have European Headquarters here in london. Why do you suddenly change her mind . Boris we have heard an amazing amount of running down our country. Thingy the astonishing that they underestimate the remain side, our ability to do better deals if we are left to do it on our own. Manus from big business to Small Businesses, labour party eu wased leaving the for the better. The bank of england has said that every 10 you have a suppression of 2 on wages, just as Small Businesses take back the growth and leave. Manus our next guest is the biggest individual on the leave eu campaign. It is peter hargreaves, the cofounder of the investment manager hargreaves lansdowne. He joins us from bristol. Thank you very much. We are in the last round, the last 24 hours. Peter, i was just looking around the city. That was where you were born and bred, where you make money. That is where i broke my past 30 years. I am looking at the counter. Uks dollar position with dollar position, under threat if we leave. Would you argue against that . Would we lose market share . Is that a real risk, peter . Peter i think the most important thing to bear in mind is that it be very, very difficult to rebuild the city of london in any other place. For instance, london transport delivered every day, the city of frankfurt, which is often expected to the place where the eu would run the financial center, only has a population of 700,000. It is not of a similar size to bristol. The thought of moving the city of london to bristol is complete manus. Those enormous dealing rooms, all the communications, those are dedicated fiber optic lines between wall street, it would be impossible. The other thing you have to remember about london is the time zone. It is the most Perfect Place for the world time zones. All of those companies that are investing in london, there are not going to move because we are no longer in the eu. In fact, and might even encourage more people to come across it would be easier for those to deal with the rest of the world, not just the eu. I hear what you are saying about infrastructure that already exists around london. The timezone argument maybe applies fairly equally to frankfurt. How do you square your thoughts therewith, as we heard from the ceos of banks like jpmorgan and others who already question if they will invest as they do right now in london, if it is no longer within the eu . Peter well, those are not british organizations feared and i think the americans do not like to rock the boat. In other words, they have invested in london. And anything that might just change their status qu is of concern to them. There is nothing for them to worry about. But clearly, because they are not british, they feel, well, we invested in london because london is in the eu. We rather it stay there. Im sure if we do decide to leave the eu there will still be realizeand they will their slight worry was of no concern at all. Obviously you are the single biggest donor to believe campaign. You believe in is wholeheartedly. To the Business Community out there that youre talking to this morning, what are you promising . What do you feel you can promise them from the lead campaign, that would so materially change their businesses that they would want to be encouraged to vote with you to leave . Peter well, there are some a things that are happening in brussels, so much regulation and legislation. And a lot of legislation and regulation about Financial Services, of which they have little concern. The main concern of Financial Service regulation is britain, because it is one of our main industry feared and i believe if we can regulate, that ourselves we would make a better job of that. And it would be more appropriate for our Financial Services. The regulations coming from brussels, in many cases it is completely inappropriate. People do not understand the industry. The businesses i built up manus could i really just interrupt you there, sir, a lot of people has said to anna and i, on radio and television, the great deal of regulation and city landscape was born in london. And it to spread to the rest of your. Would you disagree with that . Is that wrong . Peter in the business that i built up over the years, some of the crazy things we had to do that came from brussels, and our own government said we will protect you from these things, and of course they did not. They are mad. Some of the things we had to do, were just crazy, we had to send literature to clients, pages on pages on pages, that a, they would understand. Sure theyve are wouldnt rate. I cannot believe that people really, really think that the regulation from brussels is appropriate. Anna peter, broadening this out little bit. I know that you said in the past that the eu will disintegrate if the u. K. Leaves. Does that sound like a good thing to happen to our biggest trading partner . Peter yes, i think it is. As i personally believe if we left, a lot of other countries in europe i would imagine that several European Countries would result in leaving the eu. And i think it would actually make brussels realize that what we should have is a free trade area, which is what we entered when we voted to remain in the eu in 1975. That is really what we are asking for, free trade union. The political unit is crazy. You cannot have a Political Union of such disparate. Anna thank you so much for joining us, peter hargreaves, lead eu donor and investment manager at hargreaves lansdowne. A reminder that Eu Referendum to get morelive go details on the ongoing referendum as we count you down to the vote tomorrow. Up next, clearing the air, volkswagen will face shareholders, since the cheating scandal first emerged. Manus you are looking at the beautiful shot of the city that never sleeps, new york. Empire state even, the city the never slaves. I just did. Unchanged on futures, from brexit, janet yellen referring to that in her testimony yesterday evening. 9 45 in dubai. Let us get the Bloomberg Business five. Rosalind chin is with us. The day to you. Rosalind manus ok, looks like we will get back to rosalind in just a moment. Anna, today, we are 24 hours to go until i get that ballot box. I cannot wait. I think it is fascinating. I had a conversation with largesth rule, the wealth fund, well talk about this couple of times, the volatility were talking about with alan higgins, and if we voted for brexit, he said this was not at the level. The world would continue. He was more concerned about 50 oil, and why we were not growing more on that front. Ok, looks like we have rosalind back with us. Let us figure Bloomberg Business flash. Roslyn, take us. U. K. Ind manus, the membership in the eu hangs in the balance, as politicians into the final day of campaigning ahead of the vote. The current mayor of london and his predecessors part in a tv debate last night over the impacts of investment in britain. Diq more than 60 of the companys leading, bloomberg, sony, have an quarters in london. Boris, why you suddenly change your mind . Boris we have had an amazing amount of running down of our city and our country. Diq we are proud. Boris the remain side continually underestimates our ability to do better deals, inflicted on our own. Rosalind from big business to small business, labour party mp argues leaving is for the better. The bank of england has said that for every 10 you have a suppression of 2 of wages. Small businesses are better off to take back control. Rosalind considering a bid to acquire a company, italys biggest utility firm shifting away from fossil fuel generation towards Renewable Energy and distribution. Bloomberg about a potential deal and express concerns about a postbrexit european economy. At the troubled area. Something difficult to comprehend, something where the future is unsecure. And any case, going to be modified somehow. They will pull out. We do not like investors to pull out money. Rosalind Mitsubishi Motors has forecasted a for your loss of 1. 4 billion. The company says the field testing scandal will cost 2 billion this year, including payments to major clients. It will be the carmakers first loss in eight years, coming after it admitted to falsifying tests as far back as 1991. Volkswagen will face investors in the first meeting since the emissions scandal broke this past week lawsuit was filed in germany on the half of the California Pension Fund and other Institutional Investors over losses. The share price is down almost 24 since it admitted to cheating on emissions test last september. And a tesla motors has been firm in which a elon musk is the biggest shareholder. It could be worth as much as 2. 9 billion, according to musk, they would return to homes powered by the rooftop systems. An energy stored in tesla batteries to be used to recharge the car. And instagram has passed half a billion users, with growth fast outpacing rivals. The photo sharing app says 300 million of the people who use it everyday is double that of twitter and staff cap. Facebook bought instagram for 750 million in 2012. It is succeeding in growing global reach outside the u. S. What is interesting about growth rate right now is that it is happening mostly overseas, because you are seeing countries light up in the same way that the usas did very early on. You are seeing android take a lot more share as well in instagram, so it is definitely a more global growth. I think when you end up seeing their is a Global Diversity of interest. You wind up seeing sushi chefs in japan, you see amazing people doing arts and crafts in france. You see such a Diverse Group of interests. And that is what is cool about the growth that is happening. Rosalind and that is your Bloomberg Business flash. Anna, manus . Anna Rosalind Chin there. Volkswagen may have made progress in moving on to some extent, but there is one group it has yet to express, the investors feared that is the end today when they hold their first meeting since the crisis first broke. Vw share price is down almost 24 since admitting to cheating, back in september of course. Joining us now on the line is Hans Christoph hirst. He is a shareholder in the vw csae. Ase. What do you want to hear management say . Hasn good morning. The first opportunity for investors that we represent to make this point that you had this really big scandal, the emissions scandal, 11 million cars. 4 billion loss, the share price dropping but nobody has really talk about the underlying reasons, being the Corporate Governance of volkswagen beard we want to ensure today that this is very firmly put to the supervising board members, and that changes forthcoming for the future. Manus hans, good morning. It is manus, in dubai. The latest or we have is that volkswagen, an investigation executive, vw chief martin winterkorn, is under investigation. The diesel problem, and then you have the bondholders, u. S. Bondholders have sued as well. It doesnt strike me as a crisis which is passing and fading. It sounds like one that is escalating. Is that a fair judgment . Hans probably right of the last few days we have seen additional andment here in germany some in the u. S. Coming out and saying that they are taking litigation. But i think what we are focusing on here today is really looking forward, trying to prevent a similar situation like this again in a few years tim and that is where we seee. Change need to start. It needs to be more independent for our relevant and competent expertise, someone who can really move volkswagen forward in china and the u. S. So that is really the focus here today, trying to change the company for the future, less so on litigation. But as you say, this is really just starting. Anna you say that we need to see change at the supervisory board, the management then in your view, still needs looking at . Hans, we dont have the perfect team here. I want to ask you other brands chief, herbet, there have been pros opened up into him. Who has to go from the leadership of vw . The exit will be very quickly in september, the former ceo, martin winterkorn, investigating of a german prosecutors, he left. He is really the only person of the management board, that has left related to the crisis. The former ceo to become the chairman, that is again one of the controversial issues here being discussed today. Some really, no change on the supervisory board. And they elevated the former cfo to the chair position on the supervisory board. Which is a very move against jorm german Corporate Governance. We would anticipate a change, particular starting in the supervisory board, because that is really the body representing shareholders. And the change really start there. Manus hans, i am just about to use my group ranked return. The performance yeartodate in the auto industry, you hold this stock, hans. What does it take . What is the moment to say enough . I am out of volkswagen. These are the auto performances. Year to date vw is number eight. Down some 8 . What does it take for you to say enough is enough . I do not want to own the stock. I want to bail. Hans representing a group of there arenvestors, many reasons why they invest in volkswagen, it is not a question i can generally answer. I am afraid, i think the key investors will really be the details of a new strategy, they have an allowance of last week, but we will go into more details in the autumn. At that point, many investors will take a view. Assess and look again at the investment in volkswagen. Anna vw, hans, it is a business that wants to move on. It is trying to move on. It may be too son. Theyre trying to turn the page and look to technology, to the new wave of vehicles around much more efficient vehicles and hybrids and the like. Are they on the right track in terms of the overall strategy for the business . Is it right for you and the shareholders you represent . Hans it certainly talking about the right industries, talking about efficiencies, electric cars, autonomous driving, digitalization of batteries. They make all the right noises and talking the right topics. But you dont really have the details to assess the new strategy, strategy 2025. A very high level at that point, but nothing on the details. I think that is probably the next point in the autumn. Hirt,Hans Christoph coceo of hermes. Manus, let us talk about the odds of a brexit, 26 . It was as high as the mid 40s last week. Anna, i have the bloomberg pound index. We Just Launched it today. Of course, this is all about the future of the town. I can tell you the pound index against seven major currencies is up 2. 3 . The biggest weekly job so far since 2009. Cable trading at 146. 83. Up next we will talk to the man that runs ryanair, michael oleary. E manus the final rallying cry ahead of tomorrows historic referendum. Prime minister David Cameron calls for the u. K. To vote for staying in the European Union in an address to the nation. Our extraordinary country has made it since florence felt not by walking away its influence felt not by walking away from the world but by engaging in it. Brits dont quit. Manus on the leave side, former london mayor Boris Johnson argues britain to reclaim its independence. If we vote leave and take back control, i believe that thursday could be our countrys independence day. Air, hoping to clear the facing shareholders for the first ag m since the omissions cheating scandal emerged in september. Welcome to countdown. I am manus cranny in dubai. Anna i am anna edwards in london. Just past 7 00 in the morning in london. We may be one day until the Eu Referendum, but weve got Corporate News to get to. H m, the retailer of clothing, swedishbased but operates globally secondquarter pretax profit coming in at 7 billion krone, a little bit below the estimate. The estimate was for 7. 23. The growth margin has come in at 57. 6. That is a touch of the estimate. Their sales rose 7 in the period. They are talking about their plans for Opening Stores in 2017. H m plans to open stores in four to five new markets, clearly still talking about expansion at this business. Back to the profit and loss, secondquarter net income, 5. 3 6 billion. That is below the estimate. The pretext level and net income, coming in below estimates. Sales increased in march and april, significantly below the plan, according to h m. We know some of these numbers already because we have had some of the monthly updates, but they are talking about how that was significantly below the plan for them. Pretax profits, below estimates. That is one corporate story. Putting that along with many others and the global macro themes, lets look at how the equity markets look set to open. The asian session, we saw some gains coming through, but really quite modest. We are expecting to be stronger trade, up byof 9 10 of a percent of 1 on the stoxx 600. It looks likely to be stronger at the start of trade on t minus one day. Manus t minus one. If i look at global stocks, they have rallied the past three days. The odds checker on brexit, the odds of a brexit are dissipating. That is with the odds checker is saying. Lets look at our risk data, bang in the middle of that. There is your odds checker, 35. 4 . 33. 54 . We are having the best week since 2009, i should say, on the pound. If you go to the pound index, go on your bloomberg. Weekly surgebest since 2009. 1. 55 is possible on the upside. You have the msci asiapacific. We had a nicer bit of a rally. We are up for the fourth day of gains. Nymex crude, 50. 20. The dollar down. This trade is more about your concern about the dollar and janet yellen stepping back from the new wantss of what she is we had a nicer bit of a rally. Uances of what she is same. Anybody for little bit of bond action . You have money going into stocks, fairly flat on the bonds. 10year bonds, 1. 69 . Where do we go with the fed stepping back . Do you buy bonds . German bund yields, up two ti cks. Rosalind chin is standing by. She has her bloomberg first word news. Good day. Rosalind the uks membership of the European Union hangs in the balance as politicians enter their final day of campaigning ahead of the vote. The current mayor of london and his right assessor sparred a tv debate over the impact on investment in britain. I speak to companies around the world. More than 60 of the worlds leading companies, sony, bloomberg, have European Headquarters guess where . Here in london. Boris, why have you changed your mind . I think we are running down our city and country. We are proud of our city. We are proud of our country. The astonishing thing is they underestimate the remain campaign underestimate our ability to do better deals if we do it on our own. Rosalind from big business to mpsl business, labour party argue leaving the eu is for the better. The bank of england has said every tending percent, youve got a suppression of 2 on wages. Her Small Businesses, youre better to take back control and leave. Rosalind hong kongs richest man has told bloomberg that corporate taxes should be raised to help tackle wealth inequality. 1 or 2 couldof be used to help the poor. Seven out of 13 economists polled by bloomberg have selected to be the next centralbank governor. He is considered to be on the dovish side of the policy spectrum, according to notes from numeral holdings. Nomura holdings. The bill, hillary, and Chelsea Clinton foundation was an organization breached by russian hackers. That is according to three people familiar with the matter. The attacks on the network as well as those of the Democratic Party and Hillary Clintons president ial campaign compound concerns about digital security, that as the fbi continues to investigate her use of a personnel email server personal email server. Global news 24 hours a day powered by more than 2600 journalists and analysts in 120 countries, you can find more stories on the bloomberg at top. You very Rosalind Chin with the latest headlines. Haidi lun is standing by. The msci outside of japan just had. Back the blip it haidi we are flat at the moment if you are talking about the region. We are seeing some put a good spots of buying. It has been a bit topsyturvy. Investors are still trying to h what the next day holds in terms of your side of the world. Hong kong, we are reversing the earlier falls. Energy, tech stocks, coal miners in china doing very well. 1 nghais also up by 6 10 of. It was lower early on. Singapore stocks, leading those gains by 7 10 of 1 . Japanese stocks, falling for the first time in four days. A slightly stronger yen today. We are seeing some volume going into safe havens, yen and gold weighing on japanese exporters. In terms of chinese markets, it will be interesting to see where we go. Volatility for shanghai is sitting at 18month lows. There is a sense that domestic investors are waiting for the next big thing. Out the region, we did see sydney stocks oscillating between gains and losses, then edging to hold onto about 0. 25 managing to hold on to about 0. 25 . The tokyo session, the biggest decline was tokyo gas, leading this downward session we are seeing what it comes to materials. Automakers, suzuki got an upgrade from goldman. Mitsubishi motors, despite announcing its first annual loss in eight years, to the tune of 1. 4 billion on account of the fuel efficiency scandal, still seeing the upside of about two. 5 . Softbank, we have been watching. He stock it is seeing an upside of about 2. 6 . We are also looking at gold miners in australia. Weve seen a little bit of a recovery after a twoday slump in gold. Anna thank you very much. Gave her cautious and uncertain view for the u. S. Economy. In the first of two days of testimony, the fed chair says she sees near and longterm factors cloud in the possible leaves thebritain European Union. This is a unique event. Parallel. Close it is hard to know what the consequences would be. Of course, there is always uncertainty domestically and globally. We operate in an uncertain environment. Anna mario draghi says the ecb has plans in place in case the outcome of tomorrows referendum sparks turmoil. Ready to trying to be cope with all possible contingencies. At this point, it would be very difficult to be more precise than that. I think we have done all the preparation that is necessary now. Anna mario draghi. The countdown clock telling me we are 23 hours and 48 minutes and 50 seconds until the opening of the polls in the referendum. Oleary. E, michael he has campaigned for the remains side on this Eu Referendum. Great to have you in the studio this morning. You have been running promotional activity around flying people back. We are trying to work out with the turnout is going to be. What kind of appetite have you had . Michael we were doing a special offer back for people remaining. Anna they can but whichever way they can. Michael i think there is a big spike in younger people flying back to the u. K. Weve noticed that younger people are coming back to the u. K. I suspect that will help the remains side. Manus good morning. It is manus in dubai. i came from Northern Ireland last night. Manus absolutely. I wont be flying on ryanair. You havent started that route yet. On a more serious level, if we wake up on friday morning, and this country has decided to exit , or stay, does it change for you as a businessman fundamentally how you look at the u. K. . If it comes in close to the poll, what does it do for you as the ceo of a Major Business in the u. K. . Do you say, i cant go through again . Sk michael i dont think so. I cant imagine most of the u. K. Population would want to do this thing again. If theres a neck that, there will be chaos an exit, there will be chaos. If there is a remain, i think the good thing about the debate in the u. K. Is that there is a much better awareness in the u. K. That there needs to be reform. Theres going to be a much stronger force in brussels. Regardless of the outcome, it has been a very good process in teaching those people in brussels a lesson. Anna you are the most unlikely torchbearer for the brussels campaign, i suppose. You must see some sense of the leave campaigns arguments around regulation. You have railed against some excessive intervention. Michael i dont have any sense arguments. E sides you cant reform by legion by leaving. The only way to reform is by staying in. Theres an appetite for reform in germany. There is an appetite for reform among the eastern European Countries. The idea the u. K. Is powering ahead strongly, its poised to grow very strongly against weaker competitors like france and italy, the idea that you would pick that time to leave is insanely crazy. Have you held back from make any decisions . You and i sat down for a half hour together at the start of this campaign. Not doing morem hedging. Where are you are you one big Capital Expenditure plans the echo have you delayed anything . Have you reconsidered anything . Michael as you know, our decisions are set out for the next eight or 10 years. The question is, what would the allocations be . There is no doubt in my mind we will allocate fewer aircraft of u. K. In the next couple years if they vote to leave the European Union. Some of the aircraft and jobs we have based across our 26 airports will move to other european airports. Not all, but some will move. There will be less jobs created by ryanair in the u. K. More jobs will be created if they stay. If they stay, the u. K. Economy will do better over the next two to three years. We will continue to invest in and lead the development of tourism and job creation. Anna have you considered what would happen if a decision by the u. K. , should this come to pass, to brexit, what that would do to the rest of europe, whether there would be a domino effect, other countries voting does that put your Business Model at risk . Michael i dont think it puts themichael Business Model at risk, but uncertainty threatens us for the next two or three years. If you go over 510 years, whatever happens, businesses and economies will adjust. Over the next 23 years, it would create uncertainty. If the u. K. Leaves, it is inevitable that that is the end of the european project. There will be further departures, and it will be hard to keep the European Union together, or the peripheral countries together with the germans, the dutch, the belgians , and the french would continue to go along. The European Union would be fatally damaged. You must have been shopping from Northern Ireland last night. Good lad. I know we didnt win. Michael anybody but england, manus. Manus we have to be careful, mr. Oleary. Ive got to see passports. I want to keep both of them. [laughter] you knocked the question right out of my head. In terms of europe and in terms of cameron as a leader, you are the leader of a business. Do you think that the remains side, your campaign, played a folly in threatening this dreadful tax hike, the osborne hole do pound you think there was folly in terms of where the campaign got . Michael it ultimately depends on the result. If the remain side wins, it will be a good campaign. If the exit side wins, the remaining campaign will prove to be a failure. If you look back last year on the general election, it was thought the tories ran a week campaign, and yet the tories emerged with the majority. History will be written by the winners. It depends on the outcome tomorrow. The important thing is there is big turnout, particularly for young people to turn out to vote. Theres no doubt about it that young people are much more proeuropean. They have traveled all of for europe. They are much more proeuropean than their elders in the u. K. I will be confident that remain will win. Anna thank you for joining us. Its good to see you on set here in london. Manus good to see you, michael. Anna michael oleary, the ceo of ryanair. Lets get the news on the other side of the debate. Conservative mp john redwood is backing the brexit and joins us on the phone from westminster. Very good to have you on the program. I am reading a report in a french newspaper that is quoting jonathan hill, the eu Financial Services commissioner, and it says some of the antieu advocates and the uks referendum have deployed the tactics of present for candidate donald trump. They talk about a Fear Campaign. Do you think you have been wielding a Fear Campaign . No, i certainly havent. I want britain to be an independent, self govern a selfgoverning democracy, the fifthlargest economy in the world. We are free to make our own laws, impose our own taxes, spend our own money. We are globalists. We have a much better, more thetive vision than dreadful remain campaign who have been so negative, and they. Eep on threatening us manus very good morning. It is manus speaking to you from dubai. Part of our audience is very much involved in the Financial Markets, and many of them have said, we would reconsider job allocations. I dimon of jpmorgan know its an American Institution would disagree with you wholeheartedly. Your campaign suggested you would create jobs by exiting the European Union. You bet we will. We are going to spend 10 billion of our money on extra jobs in the u. K. It will be so much better. Manus will you borrow that 10 billion pounds . That is the money we sent to brussels and dont get back. They take our money and spend it elsewhere. We want to spend it at home on our nurses and doctors and scientists. I have been in Financial Markets on and off all my life. Im an investment professional. I find it extraordinary that people think the fact that the pound might go down for a few days and up again is what we should decide this on. The pound has gone up and down. Being in the European Union hasnt stopped it going down. Im sure it will go up and down when we are out of the European Union. The issue is whether we should be a selfgoverning democracy. Anna there are many economists who say that the u. K. Economy would suffer if we leave the European Union. Some say recession. Some say not quite recession. The treasury isnt the only body talking about the possibility of a recession if we leave. Why do you think that wont happen . Ive done a lot of economics and investment forecasting over my life, and i forecast the recession before. I forecast the disaster the euro would be for a number of the countries that cant keep up with germany, and i forecast the banking crash. There is nothing in brexit that will lead britain into a recession. Brexit itself will not do any damage to the u. K. Economy. Very quickly, one last one for you in this 24 hours, what does it take from both sides what do you think the focus is going to be . Immigration,round and its been a tawdry fare from both sides in that regard, hasnt it . It hasnt been tawdry at all. All that vote leave have rightfully said is we need to welcome people into our country, but we need to control the numbers so they can enjoy decent housing, school placements, and we are unable at the moment to keep up with the huge demand. Part of the reason, of course, is the comprehensive failure of parts of the euro area driving people into unemployment and misery and purse waiting them they should go somewhere else in europe. Anna thank you very much for joining us, john redwood, conservative mp joining us from westminster. The uks membership in the eu hangs in the balance. The latest polls, still too close to call. We had a point yesterday that put the remain camp ahead of. Eave by 1 a 11 of people questioned said they dont know where they will go. In Professor John runs nd the man who Professor John curtis and the man who runs many polls. I guess its still too early for you to call any kind of result. What is your latest prediction . I think the truth is anyone who wants to call this referendum with confidence is extremely foolish. The truth is, as you have just indicated, the polls are suggesting we are looking at a 50 50 . Ery close to if you take the last halfdozen pulls over the internet, they have the leave campaign ahead. Over the phone, they remain slightly ahead. The remain is slightly ahead. So far at least, the expectation is during the course of the last week we would see a gradual Movement Towards remain as voters assess the risk. So far, the evidence of that is not in place. There were four opinion polls that came out yesterday, and in each and every case, there was a slight easing of the remain position compared to when the last poll was conducted. Thats the opposite of what we might be expecting if the question of risk was going to prove decisive for remain. That is the reason we are on a knifes edge. We are on the cusp of a great decision. Michael oleary talked about getting young people to turn out and vote. Is that going to be the deciding factor this morning . We are very close to 50 50 . Pretty much anything you could think of will be decisive. Its true that one of the persistent problems the remain voters are younger reluctant to participate in this referendum. Its a general truth that Younger Voters are unlikely to turn out and vote. That is what most of the polling suggests. Unusuallyesterday did suggest that remain voters may finally be getting the point that this matters and will turn out to vote. It has to be said that is just one poll, and it is not corroborated by the other poll yesterday that was giving us the other way. Anna can i ask you about exit polls . I know there have been no official exit polls, but in the private sector, a number of polls have been commission. Will they find the light of day when polls closed, or will we be in for a rough ride through the evening as some of this data comes to light . Should we rely on it . Who is doing a negative . An exit . We should distinguish between exit polls, which are people standing outside polling , whichs, and day polls are polls whereby people are running up and asking, what have you done . One internet poll is going to be published by yougov. It will be up to the financial organizations that have allegedly commissioned these other polls as to whether the get published. Nobody has revealed they are doing it. Anna im sorry to interrupt you. We are out of time. That will do it for guy . On the move is next. Guy welcome to on the move. 7 30 in london. Caroline hyde is sitting next to me. Welcome to countdown. Im guy johnson, and im alongside caroline hyde. We are watching the final countdown. The bookies on the fx market are betting on remain, but the polls put it in the end. Who has it right yet co yellen leads the retreat. A subtle change puts a dovish outlook