Transcripts For BLOOMBERG Countdown 20160606

Lets get straight to the pound story. We have seen a great deal of volatility which we need to communicate to you. One month volatility getting a sevenweek high. The panel itself hitting a threeweek low. ,his is implied volatility bracing for the Eu Referendum which will take place on june 23. We have had a couple of polls over the weekend that seem to have put some moves into currency markets. 45 leave, 41 remain. Poll, 41 believe, 41 remain. We have to be a bit careful of the polls were the field work was done during periods of school holidays. Thought people who were younger and more affluent could be away during that period. It doesnt change the fact that the currency markets have been reacting to these polls. Lets move on to all risk radar. The nonfarm payrolls number the lowest in almost six years. We have got the Malaysian Ringgit surging the most in nine weeks. A move of more than 1 against the u. S. Dollar. Have the dollar against the chinese currency as well. Jack lew is in china. 6. 56 is where we are for the chinese yuan. Dollar at the lowest it has since 2013 versus a basket of peers. We will talk about the conversations between the u. S. And china in a moment. Crude. Saying macys 60 it jumped 2. 7 . Stocks continue to move gently away from their loads. Lets get our first look news. Debate is heating up with the former mayor of london they are johnson london Boris Johnson. Said there was something worryingly undemocratic about the eu. They both spoke to bbc. They have begun campaigning and tried to feed out to the british people a whole galaxy of inaccurate and frankly untrue information. Is telly have not done us what would be the position if we were to vote to leave. I think it would be chaotic and damaging and the people who would suffer the most would be the ordinary everyday man and woman in the street. Lives arepects of our now controlled through the eu from brussels in a way that i think is antidemocratic. For me, this is a question of democracy. It is about public consent and explaining to people. The moment we dont have at the moment, we dont have any power to control our immigration. Germany takes on an increasingly large role in the communicatet policies. The jack lew added that chinas economy is in a much better place than what it appears to be. Robust andcrude is stateowned saudi aramco has raised prices to asia and the u. S. Prices could hit 60 per barrel. Todayelieve the oil price i think 60 could happen but it will all depend on going forward. Rosalind Hillary Clinton has won puerto ricos democratic primary. Few votes short of achieving the nomination, something she could achieve tomorrow when voters go to the polls. The chinese retail giant expected to announce later today that it is buying Italian Football Club into a line. Has scheduledpany a soccer related announcement. They have been moving closer to buying between 60 and 70 of the club, value madea q 700 million euros. Global news 24 hours a day, powered by 2400 journalists around the world. You can find more stories on the. Manus, you are with us this morning. Little bit ofa extra heat at the beginning of ramadan. You have a volatility chart. Have a look at this. , the themend coin for the next week next three weeks. We have the pound, the you want of the issuesall around foreign exchange. Anna lets see him and times we can use it between now and june 23. Manus lets get out to david english. He has the asian market reaction. David today is one of those days were the bond and currency markets are very much in focus. The picture across asia, much better when it comes down to this rally. Japan still leaving the losses, down. 7 . A better graphic that i think sums up better what were seeing across the region. This is asiapacific. You take japan out and things look much better. They tend to do better than developed markets. Shockingly low. It begs the question, is this trade still alive and kicking. Answer, a resounding yes. Emerging across markets in Southeast Asia. ,ustralian goldmining stocks gold obviously leaving the game across the entire space. With that being said, doubledigit percentage gains. Just to show you how extreme these moves are. Let me move on to currency. Rupiah, have a look at this extreme move. Againstn, the dollar the indonesian currency. It is also reflective of the extreme moves were seeing, especially across Southeast Asia , like the Malaysian Ringgit. Let me just wrapped things up with a quick look at the bond markets. Australia, 2. 16 . David, thank you. As we have heard, markets have been hit by fridays nonfarm payrolls. It added a few is johns last month it almost six years. Hadmberg economists surveyed 160,000 as we discussed on friday. The data all but eliminated the possibility that fed officials will raise Interest Rates this month, with futures pricing in the chance of a hike. Now doesnt only get above now dont get above 50 until december. Simon french joins us on set. Good morning to you. Recalibrating at warp speed it seems. We had a quick read think of where we go this summer. Simon those had rebounded the previous week following comments from fed members, all pointing to a rate rise. The caveat to all of that was that the fed remains in data dependent mode. Fridays data was sufficient, i think, certainly to put june off the table. July looks deeply uncertain, especially with the rising of a brexit vote, or the remain vote, the opportunity for a lot of turbulence. I think there is no real reason. Think,a was, i fascinating from the perspective that it came after the beige book data. Increase in the amount of people who are parttime workers. Simon, a very good morning to you. Global bond markets are reaching record lows. The word is nervous. When i look at this, there are a lot of dollar traders who are very nervous. We were so ready for this june and july hike. If the dollar rally in tatters . Surely, that is good news for the fed, because they were preoccupied by a strong dollar. You look at the u. S. Dollar. In a way, it has been locked up following comments from fed members. It almost becomes selffulfilling in doing exactly the opposite. It will provide some relief to those people who are on the wrong side of that dollar trade, but i dont think it is the end upwards trajectory. It is the u. S. Economy in the context of a World Economy that remains weaker than the u. S. Underlying resilience rather than strength of the u. S. Economy that i think will push the dollar higher. Anna janet yellen set to speak later today. What are we looking for . What can she tell us . First, the information from fed officials and now this week data on the jobless front. What can she say to explain all of this . Simon i expected janet yellen to look through fridays data and look through something that doesnt fit their core narrative. Probably improving over the last 30 days. Fly in thehe ointment was the nonfarm payroll numbers. I think she would still want to keep consistent with previous comments. Just over 10 days ago about something being eminent. Anna even before the jobs report, the beige book was moderate. The language wasnt about an economy that was really inflating. Simon the challenge of the is on the was that it basis of rate rises in the u. S. Economy. She rolled a long way back, trying to recalibrate expectations. Lews funny to hear jack talking about the chinese being sort of more transparent with their forward guidance. I think there are a lot of chinese commentators who would look with a raised eyebrow. We are going to talk a little bit more about china later on. The bloomberg sovereign bond index record low. Japan is at a record low. How close are we . One more bad set of farm payrolls, how close are we to quantitative easing from the u. S. Or a recession from the u. S. . Are perhapsnk you searching the headlines at the moment. Qed, we know when there is a developing consensus that we are reaching the extent of qe. In those jockeys were qe is going and only the game in town, i think the u. S. Is not going to add to there is a problem with lack of confidence in growth. If wek what we will see saw a response to a market payrolls,in nonfarm lets say julys are poor, we would get those noises we have heard from draghi, from janet yellen about the role of fiscal policy, they will just be ramped up a couple of notches. That will have to be the response. Anna simon, thank you. Here are some highlights for your week ahead. Fed chair janet yellen addresses the World Affairs council of philadelphia. There are primaries tomorrow in new jersey, new mexico, south dakota. Thursday, ecb president mario draghi opens the brussels economic forum. We round off the week with german chancellor Angela Merkel speaking in berlin on the eu future. ,anus up next on countdown jack lew says the pboc needs to be clearer. Talk kick off in beijing. Manus you are looking at a little bit of a gray skies line across pictorial harbor in hong kong. Harbour. Victoria lets talk about chinas president , she jinping. He said the country and the u. S. Should talk more often in order to reduce tensions and build trust. Being at the opening of the annual meeting of top officials of the worlds two biggest economies, he went on to say that the pacific should not be a battlefield. Tom mackenzie is at the talks. Many positive messages from the president. Tom it was conciliatory words xim she jinping from jinping. Obviously, there are some big Economic Issues that the u. S. And china want to address. The tension in the South China Sea and some of their most heightened levels we have seen in many years. Paying changing president xi saying that Peaceful Development was key for him. China and the u. S. Need to increase communication and cooperation over the asiapacific. The vast pacific should be a stage for inclusive cooperation, not an arena for competition. The tone of president xi jinpings speech will be welcomed by the u. S. And allies in the region. Some close calls in may. Chinese fighter jets came close to a u. S. Surveillance plane. Over the weekend, u. S. Defense secretary Ashton Carter said that china risked erecting a great wall with the South China Sea policies. They hope the focus will shift to some of the Economic Issues on the table. Anna that really underlines the u. S. Priorities here, i suppose. We heard from jack lew about what china needs to do in terms of communicating economic policy. Tom we had a fascinating conversation with the u. S. Treasury secretary yesterday, laying out u. S. Priorities during this talks. Mitigation is key. He said that back in august, he was on location, and he picked up his phone to his chinese counterpart asking what happened with the depreciation of the renminbi. That shows the closed as the relationship to some degree. Other priorities of the u. S. Are opening Chinese Markets to u. S. Firms who are very much closed off in areas like finance, telecoms, logistics. He wants some answers from the chinese as to the progress of the reform agenda. Particularly concerned about overcapacity in Industries Like steel and aluminium. A distortedays that Global Market would erode chinas future growth potential. In thent some terrorists u. S. Imposed on their steel exports remove. They also want the market economy status they think they owed. Are that is some progress that the chinese are looking for. Anna Tom Mackenzie joining us from beijing. Lets get simon french back into the conversation. Lots of themes coming out of china this week. Jack lew said the focus steeltedly will be on industry but also on the currency market. What are you expecting to be the take away from these meetings . Simon cooperation or attempted cooperation regarding the path of the u. S. Dollar and the yuan. What you are looking for is some guidance toward a strategy which markets can be confident on. You have the weakness of the yuan against a broader basket of currencies, but it doesnt always move the u. S. Dollar. I think the key take away from this will be whether the political tensions in the South China Sea can be put to one side , the issues of the steel side, and ifo one they can come up with something more workable. To reflectst want back on the chart that and has on her touchscreen and i have here. This is the basket of currencies we have. The market was hysterical in january when the renminbi moved. There was this real sense of global concern. Here we are. Near that level, the lowest level since 2014, and there is no sense of panic or urgency or global concern. What has changed . Simon i think very little has fatigue with than current competitive devaluations going on. The people who will be most concerned by that chart, they will be sitting in tokyo, they will be sitting in frankfurt, they will be worried about the implications a week or a has, which is an export related recovery. Goes againstan other baskets and maintain strength against the dollar, that just tightens the vices. Anna how weak or strong is it . Jack lew suggesting that the lack of communication last year led people to conclude that the chinese growth picture was actually weaker than it was. We had those moments of markets associated with china. Of conclusivece data on the strength of the chinese economy led to speculation which isnt really matched by the underlying data regarding world trade volumes, that in termsnk of the underlying performance of the chinese economy, significantly weaker than what we got. But of course, there is big stimulus going into the economy. Manus we have a lot more to get through. Simon french, chief economist at penn your gordon. Are seen, u. K. Voters favoring leaving the eu. What does it mean for markets . . C sv anna welcome back. Jack lew is over in china right now. Hes in a zheng speaking at the strategic and economic dialogue. Hes the u. S. Treasury secretary commitmentsna has to its important economic reform. For in this this is wonder if they are welcome in china and he calls on china to liberalize their investment rules. Keeping an eye on everything thats coming out of the conversations between china and the u. S. To bring the latest to you. More from jack lew. On an increasingly large role in the global economy. He told bloomberg that the attempt to devalue the yen was confusing and not well communicated. There are fears that chinas than whatis worse economists perceived to be. Hillary clinton has a one a democratic primary just a few short of clinching the president ial nomination, if each she could get tomorrow as voters go to the polls in california, new mexico. On track to become the first female mayor of rome. She is part of the antiestablishment fivestar movement. Her win would be a blow to the Prime Minister trying to convince italians he can make making an end of stagnation. Expecting to announce today that they are buying into milan. It they has scheduled a briefing at their headquarters. Been close to between buying 60 70 of the club. Global news 24 hours a day powered by our 2400 journalists in 150 news bureaus around the world. Rosalind chin with the very latest thank you with the global headlines. Disappointing number with the jobs report, how are the markets absorbing this . Caroline hyde has the 40 eightour response. Where will begin with bonds, fx, equities 48hour response . The japanese stock market is feeling the pain up 0. 7 after the tremendous rally we saw on the yen from the back of the numbers coming from the United States. Down goes the dollar, up goes the yen. Today, a little bit of a recovery with the dollar index up about 0. 25 . Commodities a little bit higher. 5 but giving up in the United States on the twoyear. Lets dig into this particular move. The british pound not so great today off by 0. 9 , the worst performer on the currency index. Keep an eye on wcrf. Clearly, money coming out of the pound. Anna has a great chart on volatility sparking spiking the most since 2009 on the back of new polls. Choosing to leave them those who remain. Lets look at the onslaught after the u. S. Jobs number. A 38,000 a painful number. Michael saying there is no Silver Lining to this number. Usuallythe number the see in july, the probability we will see a rate hike tumbling to 27 . It was above 50 before the jobs number came out. 4 is the likelihood of a move in june a. This is the Bloomberg Globally index. Ed a sovereign yields are tumbling to a record low since the records began in 2010. The search for safety and mid the u. S. With the jobs number looming. Rexit saudi arabia has a raised pricing on oil grades to sale after saying that demand was robust. They stuck to the policy at opec as the price rally supported optimism that they are improving and that is the subject of our chart of the hour. Manus, you have more details for us . That they are all playing for market share and the share of rent and wci, up. Abu dhabi has 6 of the overall global out to and they are output and they are a prominent member. You have to question whether they are talking about their own but the global surface will contract. The global surface will drop to faster than the market has expected. I sat down with a guest yesterday and we talked oil. Todayelieve the oil price 55 think a range between dollars 60 can happen but it depends on the Economic Outlook going forward. Manus lets bring in tracy from a abu dhabi. 60 as theeking price on the table. What are the real headwinds . Theyre going after market share and positioning. What are the biggest headwinds . Addendum to your fantastic interview, manus, i would add one of the big ones in the reason region has to be iran. Theyve risen a lot more than people have anticipated at the highest level since 2011 producing Something Like 2 Million Barrels per day now that the sanctions have been lifted. They are aiming to lift that almost 5n quota up to Million Barrels per day over the next five years. That in itself is a huge regional tailwind. Manus talk to me about the share producers. 60 per share the riskreport is shale comes back on board. Is there a shift in the index . A shift in what we are seeing in the u. S. . Thats exactly right. We have already seen some oil analyst saying now that oil is rrel, itat 50 per ba will test shale. Will we see a lot of oil rigs come back online . The idea is with the new Shale Technology you can turn them off and on relatively quickly. We saw some signs of that last week. Oil rig data was up for only the second time this year, Something Like nine rigs added. We have Morgan Stanley analyst saying you should not look at prices to see if its coming online. They say actually if you look at the most oilrich areas in the the midland, texas, in odessa Permian Basin its coming back online much faster which suggests the biggest producers are coming back online relatively quickly. Manus its all about going under the skin of the headline numbers. Tracy, thank you. Tracy alloway for us in abu dhabi. Lets get back to the Eu Referendum story. The pound has fallen to a threeweek low as new polls suggest more britons favor leaving the european union. Votersy found 45 of would choose to leave and 41 would remain. Another poll show the leave. Ampaign ahead 43 to 41 the race has tightened spooking some investors who bet that the remaining camp what eventually win. Meanwhile, the former british Prime Minister john major and former mayor of Boris Johnson have traded blows on the issue. They both spoke with andrew mott. Is feedthey have done out to the british people a whole galaxy of an accurate and, frankly, untrue information. What they have not done is tell us what would be the position if we were to vote to leave. I think it would be chaotic and damaging. I think the people who would suffer most would see the ordinary, everyday man and woman on the street. Invisibly, many aspects of our life are now controlled from the eu from brussels and a way that i think is antidemocratic. Coming to the second big charge against us, that we are talking too much about immigration and all of that, this is a push of democracy, about public consent, that weng to people have no power. Lets bring back in our guest, simon french. You look at these polls day by day on the markets move. Do these polls convince you of a different outcome . Are you looking at the polls from a few weeks ago that had the remaining camp ahead . Can you just not say it . Aren the recent polls driving the pound on a daily basis. Its almost the single factor of shortterm volatility. Outcome, i the final think there are two factors that will not be playing out in any of these opinion polls that we need to look at the likelihood of turnout among Younger Voters who are much more but were also looking for indications that in the last couple of weeks the small conservative british voters, on mainstream and social media who do not make a lot of noise but who are inherently antibig change in the u. K. Economy, we saw this with the Scottish Referendum and the 2015 general election. We do not sense the revolutionary mood is really out there. See indications that they started to swing back to the status quote which, in this case, is remain. The one thing the bank of england and all of us are trying to do is to define how much of First Quarter and Second Quarter growth is expected to drop. A lot of people are trying to work out how much of the slowdown is a global story, how much is supposed to do with brexit . These are some of the weakest numbers in three years. One in three businesses believe. Hat brexit simon brexit is a side issue with pmi projections into q2. And hasreally peaked been declining ever since. There are a number of factors driving Slower Growth in the u. K. And its continuing to embark on the most aggressive Fiscal Consolidation anywhere in the g7 looking to balance its budget from a current deficit of more than 4 of gdp. You also have a series of policy initiatives in the u. K. Designed to increase the burden on employers to fund some of the government priorities on apprenticeships, low pay elements through the National Living wage, and you are also seeing in the Housing Market specific taxation measures which has been a key driver with the wealth affected and transactions into that sector. They are all cooling. Story, in that context, is a sideshow. Anna looking at some of the charts this morning, it is something that stands out. The other pmi is bouncing a little bit but construction pmi has been very negative throughout 2016 so far. After june results 23, what happens then . Simon looking specifically at construction, that will be the one to bounce should we get a remain vote. The commercial real estate sector has been very weak. Weighedwhere brexit has on sentiment. You see that in the commercial development and the pmi, therefore there is some pentup capacity with people just deferring programs and projects until after the 23rd of june. You expect those to come through in the second half, but it is such a small component to the u. K. Gdp that it will not change the projection of growth. Simon, lets try to circle this back to a market conversation. We are well acquainted with silver volatility. Its one of the most read stories on bloomberg terminal. These are comparing the stock volatility, significantly lower, with the white line versus the sterling volatility. I get it. I understand it absolutely. Do you think equity markets are underpricing the rest . These all rolled up, but markets from inequity perspective are much more laissezfaire. It is also an indicative effect that they are much more diversified in terms of trade of u. K. Risk. It is sometimes difficult particularly when you are based in london to look yonder the borders to see the other stories impacting Global Markets and potential for Earnings Growth in the second half of the year and next year which ultimately will drive valuation on equities. Be broadly will vote. Cted by the brexit its just not simply reflective of the much bigger issues going on the global stage. Thank youn french, for joining us. He is staying with us a little bit longer. Stay with bloomberg for more on the Brexit Debate. Nigel wilson and labor mp arguing the cases of leave and remain respectively. Will notats a day you want to miss. Up next with anna and i, ready for liftoff . We speak to a farm in nassau chief nasa chief exploring the ways recognition recognition. Ce anna welcome back. 1 49 a. M. In new york but in london than it is 6 49 a. M. Lets get the Bloomberg Business flash. Expandingnestle offering in china with the bets on ecommerce. They have unveiled 67 products new to the china market on the platform. They are not available in shops. Bentley andler of bugatti in the uae is closer to the ipo thats been in the works since 2000. The ceo spoke exclusively to bloomberg tv. We are closer, but we spoke about it a few weeks ago. We have all of the comments are ready and all we need to do now is it all the information. Some of the projects that we have in our ipo are still not finished. We are finished and ready so that will be a plus for investors to look at it. Finishy look at the revenuegenerating project. Rosalind suffering its biggest intraday decline in foreign half years after they said they were ceasing coverage and noble group is looking to raise money. The ceo quit last week and they are tailing as the chairman says he will step down within a year. North korea group is going to see delays with its hotel unit an executive will be facing charges. Hopes that it will raise as much as 4. 9 billion. That is your Bloomberg Business flash. Usa Rosalind Chin joining from hong kong. Our next guest went from being the longest serving chief of and his companynasa launches today after 10 years in Stealth Development the longestserving chief of nasa. Are us a bit about what you launching today, a Neural Computing Technology come at a. We intend to transform how people interact with technology not just with voice but a new generation of computer chips that will power everything. It will allow us to do things we dream of. Even individuals in their homes that business will be able to do things and we will empower a whole new generation. Your own a service spot . Manus this conjures the images movie i,d of the robot. Take me through this evolution journey in terms of the capital that youve raised in where you are now. How can this interactive my life right now daniel had 20 million worth of sales. We wanted to get all of the bugs out and get it right so when we launch our first products for voice and computation we have new silica and. Our Christmas Present was new he chip. Nd te you develop the International Space station. Does running a business compared to that . Nol two words bureaucracy. [laughter] college, weuated went to work for other people. What are my friends started a business. It took me until now, at age 65, to launch a business. I see what the own people are doing and there is still juice left in may. Manus this gives me hope. Now i can there be a forthcoming. We know there have been three. Why did you raise your money outside Silicon Valley. Maybe a should not go there to raise money. What drove your Decision Making . The cycle time to go from raising money to having a product is two or three years. I knew this would take a decade. Money, peoplent who are patient to the fundamental transformation. I located in san diego for that reason and i sought out people who had incredible business ,kills, understood technology and wanted to have a major impact. The time ieel, at started the company, that the Silicon Valley model was good for what we are doing. But we assure you. A lot of the young people in Silicon Valley have wrought wonderful things to the world. Anna you tend to do things differently. You keep your teams, something youve taken from your nasa days. Are ableexperience you to bring into this business. A hard timele have learning that failure is ok. Its really him orton 20 large wanting to push the boundaries and make things happen its really important, wanting to push the boundaries. If you get zero out of 10 successes you are a loser to use a popular word in america. If you get 10 out of 10 you are wasting money. One or two out of 10 is perfect. Helping people understand that its ok to fail when you try to do big things in transform is tough. They understand now. Daniel, tell me this. You served under three president s two republicans and one democrat. A piece of advice for donald trump . Daniel sorry to correct you but i served under two republicans. Nd one democrat, manus i have always sought to search out the best in people. Im political but not partisan. One or two things that are right for the American People, if you think about serving the American People and the american president is key to the world, i would have a bigger view in terms of how i would go at it. Anna thank you very much daniel goldin, knuedge ceo, former chief of nasa. Next, the pound down and how the week u. S. Numbers and brexit pulls dominating the market. All the numbers you need to know in the monday morning session next. Manus speculation of a rate hike in june. Japanese stocks fir. Yellen speaks later today. Sterling slumps to a threeweek low as new polls show more of business favoring an eu exit. And the u. S. Treasury secretary says china must me or adept at policy communication as the countries meet for talks. Were live in beijing. Welcome to countdown. Ai. Manus cranny in duba anna and im anna edwards in london. 2 compared to an estimate of 0. 5 drop. It is not the domestic story that seems to be weaker. It is the global story. Investment demand is increasing for a third consecutive month. Germany factory orders declined in april as demand for investment goes outside the 19 nation eurozone currency region. You may remember the bend its bank cut before you may remember the bank cut the rate. Amongst a strengthening labor market and underpinning domestic spending. Once again, it is the domestic playing against the international and it is they International Story that is found wanting here. Once gain, we have seen substantial revisions to the previous month. What are we expecting to see at the start of the european trading day . U. S. Equities did not fall off the cliff that the result of the job data. We are expecting we will be a little bit stronger on the European Equity markets on the start of mondays trading day. Up by about 0. 5 on the ftse 100. The market is still looking its froms generally, manus, what was a very weak number out on friday. And now, adding in concerns about the pound as well. Manus if you want to understand volatility and i know you love a volatility chart this is it. We are touching levels. This was on friday. We are touching levels we have not seen in nearly sevenyears. We are at a sevenyear high in terms of volatility. Both inching towards a brexit campaign. Says you want to go overweight u. K. Duration. We have touched levels we have ,ot seen since monday february 22. How are we looking elsewhere, anna . Anna lets bring up the risk radar. We have the Malaysian Ringgit on the move quite strongly up against the u. S. Dollar. Aat is just one example of number of emergingmarket currencies doing quite nicely as a result of that data out of the u. S. Taking a june or even july rate hike off of the table. The indonesian ringgit and the peso is in there as well. Jack lew is in china. Dhabi can also see this happening. Manus, the bond markets . Manus lets talk about the bond markets because globally, what we have at the Bloomberg Global index has been touching lows. Yields are up, the price is down. In germany, we are waiting to see more liquidity come through. Fields of course have had a good run. Money going into u. K. Bonds. Global equity global bond markets. Aussis, record low. Japan, record low. Rate hike in june or july . Methinks not anna we are recalibrating now. Now, lets get to the bloomberg first world news. Rosalind the Brexit Debate is heating up with the former mayor of London Trading blows. The leave complain was described as squalor. They both spoke to the bbc. I think what they have done and how they have begun the campaign is to feed out to the british people a whole galaxy of inaccurate and frankly, untrue information. And what they have not done is tell us what would be the position if we were to vote to leave. I think it would be chaotic and damaging and i think the people that would suffer the most would be the ordinary, everyday man and woman on the street. Many aspects of our life are now controlled from the eu, from abroad, from brussels in a way that i think is and the democratic. Think is anti democratic. For me, this is a question of democracy. Public consent and explaining to people. The moment we have absolutely no power to control our immigration. Salind china must improve the Monetary Policy communication as it takes on an increasingly large role in the economy. So says jack lew. He said the decision to devalue was confusing. Chinas economy is in a much weaker place than it appears to be. Saudi arabia says demand for c rude is robust. They have raise prices on most oil grades to the u. S. The chairman of Economic Development has told bloomberg that prices could hit 60 a barrel. I believe the oil price today is not the equilibrium. I think we will raise the price from 55 to 60. Rosalind Hillary Clinton has won puerto ricos democratic primary. People go to the polls in california, new jersey, montana, north dakota, south dakota, and new mexico tomorrow. The first female mayor. She is leading against her closest rival. The two will fight a run of conest on june 19. Her win will be a blow to the Prime Minister. Global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. You can find more stories on the bloomberg at top. Anna, manus . Manus thank you very much, rosalind. Lets check in on the markets. The number is stamped on my mind. Asia is reacting 48 hours. Y. Vid, take it awa david let me get started with the overall picture. Three benchmarks i am going to point out, the overall asian metric, you have the one that excludes japan, and then you have Southeast Asia, which is reflective of the move across the emerging markets. As you can see, we are well into the green at the moment. Well off the lows of the day certainly. A much better picture from where we started out our monday. Japan is one of the few markets underwater. Of course, emerging markets. That is the story across equity markets right now. I guess come along story short, that awesomely bads job number points of view. Emerging markets have a bit more time before we get the second rate hike of the fed. Let me break this down across individual markets. In asia, that is the picture across the Asian Pacific this monday. You can see fairly clearly that the gains are across emerging markets. Here is Southeast Asia and australia. Australia, it is about commodities. You have goldmining leading the game. Gold is trading at 40 to 45 u. S. Dollars higher. In australia, that is where you have all of the mining spots up 5 . Again broadly speaking, it is about money getting back into emerging markets. It is not only equities. Have a look at some of these currencies we were talking about earlier. Anna was pointing out these currencies in Southeast Asia. Indonesia will be up about 1. 5 against the u. S. Dollar. The biggest jump there in several months. This is the same picture you can see across other currencies in Southeast Asia. If he did have to pick a sort of how did asia react to the horribly low number of 38,000 it is emerging markets. Anna thank you very much, david. As we have heard, markets have been reacting to the u. S. Payrolls. Employers adding the fewest jobs last month in all six years, 38,000. Economists had been for a gain of 160,000. The debt all but eliminates the possibility that fed officials will raise Interest Rates this month. Of a hike is just about 40 now. Lets speak with the director of citifinancial. Give us your wise words around the payrolls number from friday. Markets have to adjust really quickly. They are thinking, what happens over the summer . Number one, the verizon strike. That was about 40,000 jobs that should have been included that were not. Of made ay, as i sort general observation. The employment rate did come down and that is because employers continue to leave the marketplace. Participation has been declining for about seven years and he continues to fall. We keep getting these low unemployment number, but actually, a lot of people have left the market. We have a lot of slack in the labor market. We dont think we have, but we do. We have this wonderful conundrum. It is specifically shortages in tehe skilled area. Interest rate rises found entertaining, but i doubt they will happen. Manus there is a lot of slack. Maybe that is a message janet yellen will try to reset the table with when she speaks today. Global bond markets are reacting and we are hitting record lows in bonds. Quite a significant shift in terms of how the u. S. Yield curve actually thinks about where rates are going to be by the end of this journey. The market is pricing in only two rate hikes between now and two years out . Is the market completely deluded in terms of, in two years time, only two fed hikes . It is very difficult to know if the market is deluded or not. In japan, the bank of japan owns about 40 of the market. There is no price discovery. It is very difficult to say, is there value in bonds . Hopefully, there is not. Elds, real yi obviously, they are close to negative, depending on your the way you are looking at it. The problem is the entire world wanting the same direction. The entire world wants lower currencies and wants growth to go from outside. Of thing has really changed. Nothing has really changed. Bonds are reacting to that. It is a highly deflationary environment. We have skill shortages. Profits peaked over a year ago in the u. S. Now. As night follows day, when profits peak, eventually employment gains fade. That is what we are suffering there now. And not just there, but here. It is a weak cycle. Seven years in, that is what happens. Everybody is looking for Interest Rates to kill it. If i hear one more economist say, the event needs to kill the economy, that is just not true. The cycle can still peak. Anna in the midst of this global experiment with negative Interest Rates we also have this big unknown hanging over the u. K. Economy, which is the Eu Referendum that takes place june 23. I have a chart showing the ugly monday for the pound. A couple of polls over the weekend suggested a bigger amount of people int h the leave campaign. Any thoughts going into this week, peter . How boring the referendum is. I cannot believe the eu would go this way, it is horrific. We on the latest ridiculous we all know it is ridiculous to ask anybody this question. Do you know the answer . Based on what, and what we will all see in two terms time. Women 10 to be much more cautious. We hope you are all when you tick the box. Number two, the migrants have been very strong care and will vote to stay. Number three, the population overseas will vote to stay in. Referendum, itsh looked like the s p were going to win, but when push came to shove, absolutely not. It is like being in a golf club. Itll like all of the men, but that is the way it is. Anna i dont know your club. Thank you very much. Manus . Manus i got the tickets, anna. You and i can go and have a little bit of fun. Next, we are going to talk about china and communications. Jack lew says the pboc needs to be clearer about their policy is talks kickoff in beijing. Anna welcome back. It is 7 19 in london. Weve only been up for a few hours. 1. 43, the pound against the dollar right now. Lets go over to china right now. Chinas president says his country and the u. S. Should talk more often to reduce tension and build trust. Speaking at the open of an annual meeting of top officials, he went on to say that the pacific should not be a battlefield for competing views. Corp correspondent joins us now and he is that the talks for us. Great to have you on the program. This am play a positiv message. This sounds like a positive message coming through. Flesh that out a bit. The chinese president gave his open remarks here in beijing. Earlier this morning, they said that peaceful cooperation is key and certainly, a more conciliatory tone from him. Take a listen to what he had to say about this issue earlier today in beijing. China and the u. S. Need to increase communication over the Asian Pacific. The vast pacific should be a stage for the inclusive corporation, not an arena for competition. Those were important comments because many people were concerned that the South China Sea tensions would overshadow important topics to get through over the next few days. L in terms of the south china say with kissing ash carter we have heard ash carter say that china is at risk of building a wall and secretins including and a secludeing themselves. But certainly, the focus here should be on the economy. That is where the delegates want to be focused, and not on these tensions over the south cina sea. Anna so, there is the geopolitics. Prioritiesricas during this meeting, tom . Tom as you know, we sat down with the u. S. Secretary of the treasury, jack lew, yesterday and he went to the priorities for the u. S. In these talks, the economic priorities. And obviously, a big focus is the reform agenda. The u. S. Wants to know what is happening with the reform particularly when it comes to overcapacity within sectors like steel and aluminum. Take a listen to what jack lew had to say. The reason the jury is out is these thiese decisions are not always made by economic advisers. These decisions are highly political decisions in any country. And we have less of a sense of whether there is the commitment to follow through. Tom other priorities that jack lew mentioned were opening the market her ein china so western firms, particularly in sectors like finance, logistics. Also, he wants to get more clarity on the Exchange Rate and clearer communication on beha lf of the pomc. They also want to draw up an investment treaty. Those are the u. S. Priorities as they enter these talks. Manus thank you very much, tom mckenzie with the latest in patient. In beijing. This is all about what jack lew is talking to the leadership about. In other words, make it clear to the world. We have the bloomberg replica. These of the lowest levels since 2014. The question i asked around 6 00 was, but went into this global meltdown earlier over the past year, why every not more reactive now and does it just drift lower . Well, the answer is, it probably has to. One of the issues remains the flowing of the chinese economy. There is a deep manufacturing recession in china. The release mechanisms remains the currency. I think you are right. It is like a markets. They absorb information and get used to it. This places enormous pressure on everybody else competitively. Back to my thesis earlier. Competitive devaluation is the name of the game and nobody wants a strong currency. This is one of the biggest concerns to most of the people i talk to. If that process continues and makes them more competitive. It is obvious this will be a struggle. They are going to break away. The chinese economy is not strong. It is changing, but it is not strong and that is obvious at this stage. So, yeah, it is a nervousness that resonates with a lot of people i speak to. If that continues to weaken, that is a problem. Anna we had the german manufacturing numbers out. They were weak, down 2 . The weakness was in the global picture, not the domestic german picture. This is symptomatic of the slowdown in china. Everything of coming into play here. It is significant. I am not surprised there isnt some domestic strength. Strong currency. Nobody wants this and that is the problem you have got. The pressure on bond yields lower, the pressure on Interest Rates to stay lower, and then the final one you have is currency depreciation. It is a very challenging environment and china is in the heart of that. Manus lets flip it around and talk about the dollar. Rally continues or not, that plays into oil and commodities. We have got oil on the move, gold on the move. I caught up with the Abu Dhabi Team and they are talking about oil around 50. The miners have not come back to play yet. The message is, absolutely not. Oil, no either. In the longterm, i would not go near oil. The world will de carbonize in the next 20 years. Anna just be aware, the fed president is speaking. He says it is important to see if the weak jobs number was a one off. That is one of the first numbers we are getting post that weak number. Countdown. R okay, ready . Whoa [ explosion ] nothing should get in the way of the things you love. Get americas fastest internet. Only from xfinity. Guy welcome to on the move. We are counting you down to the european open. Im guy johnson alongside matt miller. Sterling stumbles. A survey suggests the brexit camp leave accrues several points. A jarring jobs report. The weakest payrolls number in almost six years leaves fed rate expectations and the dollar on the floor. Can yellen rebuild credibility