Transcripts For BLOOMBERG Countdown 20160616

Welcome to countdown. Lots of talk about this morning. Lots of centralbank activity, the bank of japan standing down, as the markets react, and the fed down guiding the pace at least of those. Lots of talk about those. Amongst all of that, we continue to focus on the brexit risk, the u. K. Referendum a week from now, a week in an hour until polls open. Let us try to contact relies the market activity we have seen in recent days, as many voices warning on the global stage about the risk of a brexit. President obama, angela merkel, mario draghi, and others. How tense a market as we run up to the vote. I have the stress index, which actually might be of some comfort, depending on how you are position for this. Talking about whether there is any kind of Systemic Risk. Pimco saying there is no Systemic Risk around the brexit question. You see the measure of Financial Stress in the market, at least on a level, as indicated by this web circle, the oval here. Saw atn as high as we the time of all that concern about the rate cut within the eurozone. And not even at levels we saw earlier on this year on concerns about chinese slower growth. Just a bit of context around market stress. The risk radar, where we have been with various assets over the last 24 hours, where we are right now. This is dollaryen, we have a handle on that. A really big move, 1. 73 . Strong. [no audio] and gold, once again a story this morning, up by 8 10 of 1 this morning. Let us get the bloomberg first word news. Nna, a few Federal Reserve officials now expect the bank to raise rates more than once this year. Policymakers painted a mixed picture of the u. S. Economy, but growth is picking up while job gains slow. Chair janet yellen also cited britains referendum on eu percent next week as one of the uncertainties discussed in a twoday meeting. Upcominglen the decision on whether a not to leave the European Union is something we discussed. And i think it is fair to say that it was one of the factors that factored into todays decision. Campaigners are continuing to protect the governors vision of the proposed gove was one of the House Campaign leaders, criticizing the austerity budget that they remained camped would be necessary to shore up finances if the u. K. Votes to leave. The plan may offer George Osborne a growing rebellion from the tory party, right up to the rejected height and spending cuts. Denmark has unlimited firepower in the form of currency intervention, to ward off any threat to the euro tag, should britain vote to leave. That is according to the governor of the bank we spoke to him in copenhagen. Of course there will be the currency market, we can expect some volatility over financial markets. So, yes, and we are prepared to do what is necessary to counter that situation. car owners and the u. S. Government have given more time to file settlement proposals in the volkswagen emissions scandal. A judge side of the highly technical nature of the negotiations. The new deadline for Draft Agreement has been set for june is and comes as the ceo delivering a new strategy later this morning. Investigators say they have found a main wreck site of 804 witchcraft with 66 people on board. Egypts Aviation Ministry says a search has gotten images, did not specify the location. Global news 24 hours a day, powered by 2400 journalists in around the50 bureaus world. You can find more stories in the bloomberg top. Anna thank you very much. Let us check out alive markets in the asian session. David ingles is standing by. A report on global angst and yesterday session, david we are feeling it once again today. The sellingi think is picking up at the moment. But before i forget, it is just after lunch in hong kong. 30 is when we get the press conference up and running. We will really wait for more lines from the boj, why they chose to wait, why they cannot do any thing at the moment. Because as you can see, it is really getting sold off. The hang seng two points, really getting slapped silly. Sevensses for the week, hours left in trade, the rest of asia getting a cell, with the exceptions of the few bright spots. As you alluded to earlier anna, dollar yen. Have a look at the levels, 104. 16, just to perhaps put this into context as to what happened or what transpired or asian hours, we have seen some strength. In the following, the fed has an extremely dovish trend. Dollar yen plunged to about 104. 53, consolidated at session lows, 104. 18, that takes you all the way back to the chart of august, of 2014. And you do understand why the nikkei did not really sell at the moment, when you see the yen strength like this. The other story before we go, bond deals. It is, thursday but same story. Bond yields across the asiapacific, the japanese 10 year now 20 basis points, anywhere from the five to 40 year in japan. An australian hitting a record low. Anna . Anna david ingles in hong kong. Now the bank of japan has left policy unchanged as we have been saying, keeping the key Interest Rates at 0. 1 . They are maintaining the very stateless. Let us get more from our tokyo economy editor, jodi schneider. Good to have you on the program. Why did the boj take no action analysts had expected further easing. Not and i majority, but something would be done. Jodi that is right . 55 of analysts in the survey said next month. So the question was really what it would be june or july. There was a lot of pressure to ease, but timing was an issue. Thinking among economists weve spoken to is that there is reasons to delay both they arey, given that trying to allow the negative rate policy to gauge the effect of the negative rate policy on the economy. And secondly, there is an election coming up in july here. There is also the Global Market uncertainty. And with the brexit vote next week, there was thinking that if the boj were to ease today, it could be effective, if measures could have been undone by a brexit vote, that then causes the yen to strengthen. There were both reasons on both the internal and Global Market side to delay. Then,and so, market focus focus of any stiglitz conversation shifting to july perhaps. Jodi, was there anything new in with the boj said today . Jodi the only thing new, a statement that there was a deterioration in the immediate outlook for inflation. Basically saying that it is expected to be negative, or slightly negative to zero in the shortterm. We will july meeting, get a longerterm inflation outlook. And one would expect given the statement today, that we would see even more perhaps more delay in trying to reach that target. And more pressure obviously then to ease, given that target remains far off. Anna jodi, thank you very much. Let us bring in our guest for this hour. Lothar is an investment at tacit management. Great to have you on the program. Let us talk about all of this news floating around the Central Banks. It seems we have a big cause button being pressed by the Central Banks. Just over the last 24 hours, they have the brexit question looming on the horizon. The amount of stimulus being put into the market were taken out of the markets but even the fed were the bank of japan. Not a big surprise. Big surprise yesterday evening from janet yellen in her statement. I had expected a little bit more hawkish than it was at the end, quite dovish. Then we on brexit then, might read in the moment, let me see here, once briefly, the focus was on a lackluster u. S. Economy. And that is a little bit of an on and off, isnt it . Just a couple of weeks ago we got all the messages from fomc members the next rate rise was imminent. It looks like this will not happen until perhaps the end of the year. Anna and even if the medium estimate is we get two heights this year, looking at the you can find this, on the bloomberg looking at the dot, the shifting policy for this year. Back in march, we had just won. Fed officials talking only one height this year, now we have six talking only one height this year. This is more dovish then you mentioned. Lothar what i found most notable was the longer and of the dot, how much that has come down. It is starting to become more in line with the market expectation, which that is interesting, but you said cause button earlier on. It does seem to me that the central bank is going to be doing everything to keep things calm, before next week. Vote, we willexit get just to make sure that if something on expected happens, there is not also monetary pressure on the markets at the same time. And 45 minutess until the polls open in fact. Let us move on to the boj. We talked just now to jodi about that. We see strengthening and the yen of course, touching levels we have since september 2014. What is the point of action do you think for the boj . They have to do something if it goes through 100, or is there a magic number to you . Lothar i am not sure there is a magic number on the currency. But i think at the moment, the boj is grappling with two things. Trying to assess the impact on the banks of negative rates, and secondly, if you look at the Macro Economic data flow at the moment, it looks as though that may japan is turning at the moment, maybe turning stronger in the coming months. That is what the boj is looking and waiting for, to assess whether there is any more stimulus is on the horizon. I think what may worry markets at the moment, this whole notion that have Central Banks run out of ideas . Because they just dont know what else to do be on negative rates . And that will obviously be not a very well commented situation. Anna you see something stronger than that, i have a charger showing cpi, showing some achievement under governor kuroda. This goes back to 2011 or so. It shows some achievement on inflation, 1. 5 . But selling positive at least on this measure, excluding fresh food, energy, and tax hikes. But concern seems to be in the japanese market that progress on Consumer Price gains is now being a little bit eroded. Isnt that the danger with the strengthening yen, returning that good work risks being undone. Lothar that is a Rearview Mirror rehab. That is what is currently looking like, but when you look at some of the forward indicators, some of the export numbers, some of the wage numbers, all of that seems to indicate that it could get better. And i think that is what the boj may be hoping for at the moment, why they dont want to jump the gun at the moment. Anna thank you very much. Lothar mentel stays on the program. Here is a look at what is coming up in your day ahead. We get a Rate Decision from the Swiss National bank at 8 30 u. K. Time. And we will be speaking to Thomas Jordan later in the day. Guy johnson will be doing that later this morning. There is more centralbank action at noon of course, the bank of england announcing the policy decision. We get u. S. Consumer prices, and later tonight, the u. K. Chancellor George Osborne is scheduled to make his annual speech at the dinner in london. Mark carney will also be there. Interesting to see how much the u. K. Referendum is mentioned, and how much that the stick to other topics like technology. And we are led to believe that could be a big topic of conversation. Up next, day one at the st. Petersburg Economic Forum. We be talking to the ceo, one of russias most fast this esteloping fast developing retail banks. \ welcome back. 6 18 in london. 1 18 in hong kong, where equity markets are weaker. A lot of talk about the Eu Referendum of course next week, and that showing the markets picking up pace as we go to the afternoon session in asia. Also the fact that the boj did not doing anything, some had expected further stimulus, having a toll on markets today. Let us get the Bloomberg Business flash. Owners andnna, car the u. S. Government have been given more time to file edelman proposals in the volkswagen emissions scandal. A federal judge delayed the filing deadline to june 28, citing the highly technical nature of negotiations. That comes as the ceo is due to present his new strategy later this morning. Deutsche banks chairman has become the latest Global Banking leader to warn about the potential dangers of a brexit. He says it would be an Economic Disaster for the u. K. And a political disaster for the eu. He drew a contrast between Public Opinion polls, which point to a vote to leave the eu, and the odds would reflect a preference to remain. Resort area florida remained closed until further notice after the death of a twoyearold boy who was dragged into a manmade lake by an alligator. He was about a foot away from the shore, when he was snatched and killed at disneys resort and spy in lake buena vista. The main rival in china has said to been valued at 28 billion, people familiar with the matter raisede ridesharing app 4. 5 billion in a round of funding set by apple and domestic investors. The increase on last years valuation of about 16 billion make it the Worlds Largest privately bank company. And that is your Bloomberg Business flash. Anna . Now, to st. Petersburg for the Economic Forum. Bloombergs Ryan Chilcote is there for us. What is the expectation . Excitement there are building up in petersburg . Ryan good morning. The forum is just taking off. I am joined by the ceo of one of russias fastestgrowing bank, the largest private banks name is ruben. Thanks a lot for joining us. I want to talk about what is happening here at the forum, but we cannot not talk about brexit. Because everybody is already talking about a year. What would brexit me for russia . Ruben i think immediately, it should have a huge impact on russia and russian business in the state of affairs. I think the key question is longerterm. Petersburg shows the influence, the european influence, so russia for hundreds of years has been quite integrated into europe, being part of your. We have sanctions right now, and they are so obviously an issue. However longerterm, i dont think russia is interested in a weak euro. And the big question, will it weaken enough . Ryan to what extent is that your personal view. Obviously there is perception out there that Vladimir Putin and the kremlin would just be delighted if the u. K. Was to leave the eu, because it would weaken the eu and a very sanctions you mentioned there would be more difficult to maintain against russia. Ruben i think the key there is that, from what i hear and see, i mean, you have heard some things. There is a huge challenge period, where the Prime Minister and a lot of other people. But i do not think brexit has a key is a key to sanction removals. I think there is going to be something to the sanctions within the next year, something should happen to sanctions within the next year. I dont mean it will be removed, but some adjustments may happen. That is the feeling i have. Ryan you have more than 100 people in london. You wake up on june 24 and realize the u. K. Has exited the do you pull out of london . Ruben i dont think so. Back in 2008 and the crash in 2008, there was a lot of discussion that london will get abandoned by the bankers that will all move. I think the key there is that there is no other european single city which is ready on the workforce point of view, from the real estate point of view, etc. For banks to move out of london, it is going to take years. And for us, i mean we are full of anguish and the u. K. Infrastructure, and there are obsolete people, and all the rest of the things. As far as we are concerned, in terms of that we are relatively small. For us, the key is to look at the people with a voice to see what theyre doing and just follow the lead. Ryan and you like being in london. Ruben we do. From the point of view of the tax, from the point of view of the regulator th, clients like the infrastructure. Yes, we do like being in london. Ryan and would brexit mean the implosion of leningrad, would all the russian start selling their houses . Ruben and going where . The key there is i dont think there is a lot of contrast. If you look at france, particularly their own taxes, the budget, and so forth, i dont think that there is anybody out there who is really waiting for those people. I dont think that is a russian issue. I think it is an issue for the whole international workforce. You do live in london. Ryan that is true. We all he have a minute and a half. Let us talk russian sanctions. You are a private bank. Does that help you gain market share . Ruben no. Fundamental, the key is not a sanction. The fundamental key is what happens to the economy. And as we discussed at some other time, the key in russia, the key problem of the economy is the lack of Structural Reforms. And the russian economy was not doing well, despite the sanctions. And the growth was slowing, and so forth. Russia is one of those economies it needs to grow 5 . And it was not for the last year. In my opinion, that is the more fun little issue, rather than the sanctions. So no, we do not get Additional Market share. We would love to have the Structural Reforms and growth. Ryan we just got a rate cut, 50 basis points. What you see happening the rest of this year . We have like 20 seconds. Ruben in my opinion it will be stable, itll be good for the russian interest. In my opinion, if things stay as they are, we will see more cuts. Otherwise, we will be stable. Much. Ruben, thanks for he was joining us here at the st. Petersburg international forum, our very first guest of a good two dozen. Anna excellent. We look forward to the ball. The potential for the russian economy and the need for reform. Ryan chilcote, thank you very much in st. Petersburg. We will be back with ryan. On the program, we go back to the Economic Forum, where ryan will be joined by dmitry kostygin. That will be all of on spief. Welcome back to countdown. 6 30 in london. I am anna edwards, joined by manus cranny. Manus a very good morning, anna. I am in dubai, 9 34 us. Lindas get to has amin. The day. Haslinda hey, manus. The yen jumps to a 21 month high, extending the losses after the bank of japan refrain from expanding monetary stimulus. That comes as the boj continues to gauge the Economic Impact of the unpopular negative rate policy, ahead of an election next month. The outlook for Global Markets has also given reason to pause. Governor kuroda will hold a News Conference at 7 30 u. K. Time. Bloomberg customers can follow that. The Federal Reserve officials now expect the federal bank to raise Interest Rates more than once this year. Policymakers painted a mixed picture of the u. S. Economy, where growth is picking up on jobs, but they are slow, voting anonymously. Chair janet yellen also cited britains referendum on metrojet next week as one of the things discussed at the twoday meeting. Thet yellen brexit, upcoming u. K. Can decision on whether or not to leave the European Union, is something we discussed. And i think it is fair to say that it was one of the factors that factored into todays decision. Leave campaigners are continuing to attack the governments vision of a proposed brexit. One of the out Campaign Leaders, michael gove, has criticized the austerity budget that remain Campaign Said will be necessary to shore up finances if they voted to leave. Chancellor George Osborne is fighting a growing rebellion and mps from his tory party lineup to reject the spending cuts and hikes. Denmark has unlimited firepower in the form of currency intervention, to ward off any impact should the written vote to leave the eu. That is according to the central bank governor, who we spoke to in copenhagen. Volatility in the currency market, you can expect some volatility in other parts of the financial market. So, yes, we are prepared to do what is necessary to counter that situation. We have done it before, we would do it again. Haslinda global news 24 hours a day, powered by 2400 journalists around than 150 bureaus the world. You can find more on the bloomberg top. Anna thank you very much. Haslinda amin with the news there. The yen surge against the dollar, after the bank of japan did not at any new stimulus. That will slow the advance. Details for a spirit a lot of focus on what the boj did not do today then. Nejra exactly, i mean the majority of people surveyed, economists were expecting action today. Attention now turns to july. We have seen dollaryen push past 105, and of course on the other side of the trade, we are seeing a second day of dollar weakness as the fed of course signals a slower pace of rate hikes next year. And the number of officials year seeing just one hike in greece a couple of things playing in, we 04. 27. E o1 what are people the new abnormal in the new bond markets, we have a new 10 year yield tumbling below 2 . The aussie below 2 for the first time ever. Theyre coming back from the brink now, but these are unprecedented moves we are talking about. South korean bond yields also falling to a record. And of course this low rate environment, we know it has been good for gold. We are seeing gold topping 1003 moment, it ishe on its seventh day of gains. Of course all of this risk aversion, it is the risk of brexit that is underpinning all of this. We heard that it was a factor for the fed decision as well. And traders and analysts surveyed by bloomberg see gold hitting 1350 an ounce, within a week of brexit. If it happens. So a lot of things to keep an eye on here. The Risk Appetite we saw in asian stocks yesterday, well that has really evaporated. We are seeing them slumped today, to the point of the asiapacific index is down now more than 1 . Manus nejra, thank you very much. She has just been talking about those record lows in the bond market. Are longterm bond yields heading for a collision course yousef is 20 be sitting in this chair. I have seven days left, a little bit, and then you will arrive. Before you have a nice time here in the states, tell me about the bond market. Yousef good morning, minutes. I guess time is running out for you. What a weekend it has been for government bonds, continuing to be the focus of what is happening, and with the bund in some cases getting negative yield. And brexit is playing into that. The flight to safety is playing into that. But also there is a good chunk of investors who are trying to escape the negative yield environment. And so what is happening is they are moving to the longer maturities, and pushing those longer. The yield curve is flattening. Let us get some perspective on that with a gorgeous start that i have prepared for you here. You can see the blue line, which is the u. S. Threemonth treasury, three months maturity on that bill in blue. That is against the yield on the bloomberg, global developed sovereign bond index. The average life span, 10 years, including securities from your u. S. , europe, pacific rim. You are paying 2 premium five years ago. That has shrunk, accelerating the last six months to about a quarter of 1 . In a timer we had comments from the u. S. Federal reserve chairman dennis yellen, saying that rates could be depressed by factors that are not going to be rapidly disappearing, talking about a new normal, and that brings up the vocal debate about the implications of the flattening yield curve, perhaps even in the future, and inverted yield curve as well. If you look at the track record of the 20th century for the most part, that has spelled financial turmoil. Manus . Manus financial turmoil also a big one. I just caught up with the head of Sovereign Ratings, we were looking at about 55 probably the. That worries him. Yousef, great job. I will keep the seat warm. Yousef, the new anchor of Bloomberg Markets middle east. Let us get back to st. Petersburg where the annual Economic Forum is underway. Ryan chilcote is our man on the ground. A great guest, who is with you now . Ryan good morning, manus. I am joined by dmitry kostygin. one of the biggest retailers in europe. Thank you very much for joining us. I want to kick it off by asking you about Capital Raising plan. Just a year ago, we were sitting here, and you told me you are inping to shared cells london and moscow with an ipo. You thought you could put off by mark. And here it is a year later, and it hasnt happened. What is the plan now . Dmitry well, we adapt. For the last year, basically for russia, somewhat difficult. Ryan yes. Dmitry and the Exchange Rate approval went down, or went up to like 46 or 47, them back to the 80s. Now it is 65. So for investors, it was difficult for investors to figure out what the return to be expected. Sorry. And basically, we could not get a decent offer. Windowthe next, either or door. Ryan and when do you see that window or door coming . Are you still looking at the idea of an ipo . Or maybe go for a private placement and then ipo . Dmitry private placement most probably to happen first. Ryan yes. Dmitry and public offering. Ryan in terms of the private placement, what kind of company, what kind of investor are you looking for . And what do you think the market is worth right now . Dmitry i would say now i kind of gave up interest. Really, we need at least a quarter of a stable Exchange Rate, and also stable stock exchange. And then, see what will be the investors pay. Werey last year, investors dragged down by 2 . Ryan yeah. And you did not exclude ipo down the road. Everybody in the u. K. Is talking about the possibility that we could have a brexit. If that happens, you wake up on june 24, does london become a less attractive place to raise money down the road . Dmitry well, i guess it would be somewhat irrelevant for the potential public offering. Again iperspective, and am not a for on this issue, but the u. K. Is somewhat insulated anyway. As we see it, not in the eurozone. That . W important is ryan so basically, kind of irrelevant what happens. If the eurozone country leaves, abandoning the euro, that would be different. Dmitry i could get more complex. Ryan you have a window into what is happening through the russian economy obviously, through your business, what is happening . People have less money . Are you seeing recovery . Dmitry my money does not disappear or appear, we manage it all the time. So, i mean, there are several trends. , consolidationds of the industry. Ryan yeah. Dmitry on the one hand, everything that does not kill us makes us feel alive. Ryan yeah. Nevertheless, kind of not exactly weaker, but unfortunately, the particulars of the market, so for those in a better position, it is actually a good opportunity. Ryan i want to ask you what the russian consumer, but since user it popular the industry, you portray yourself as the amazon of russia. Amazon is a real market giant, right . It has a huge market share. And the market in russia, ecommerce sector is very fragmented. Why will you assume that role . In is that how it will play out in russia, one big retailer dominating space . Dmitry absolutely. Russia will fall basically follow basically the same trends internationally. Only one country with an online retailer, which also simultaneously becomes a dominant nation of marketplaces. So russia will not be, i think, different. Ryan and five seconds, describe the state of the russian consumer. Mosty stronger than think. Ryan stronger than most of the world thinks. Thank you, we appreciate it. That was very brief. Thank you. That right there is the chief executive of one of the fastestgrowing and biggest retailers here in russia, a very exciting it comes to ecommerce. A market group of about 50 last year, definitely something to mark. Anna he absolutely did. Ryan chilcote in st. Petersburg. For little more from him, lots more, as we go to the program. Let us get back to lothar mentel. We had lots of comments already this morning from various big figures in st. Petersburg about the brexit subject. Where you focus your attention . I am talking about the markets are ok about being nervous around the referendum, but are they really as nervous about getting a gauge of how nervous markets are. I have this rate chart that suggests the bank of america stress index, not the levels we saw around lehman brothers, but there is no vote yet. But we also saw the levels earlier on in terms of market. Markets arelutely, currently not pricing in or assuming a brexit. But they are waking up to the potential of upset that maybe ahead. Is that area much to me reminding me of the scottish referendum. I have said all along that this has been very interesting for us being in the u. K. , with the rest of the world has really taken no. That is happening now. Therefore, it is going to get a bit uncomfortable as we move closer to the brexit vote. And that is very are at the moment. What we see in the markets, and that is what i hear on the phone when i get calls from worried investors, saying oh my god, what is going to happen here. . I stick with my earlier call that we will not see a brexit. That we have a very vocal leave campaign, the more patriotic and passionate and more interesting thing to say, whereas the remaining people, those who are actually going to be the majority that is a bit more quiet perhaps, they are supporting a case that is more rational. More sensible, less patriotic, less interesting. Manus lothar, good morning. Yeah, one of the things the bank of england has said is they are ready to provide liquidity in this risk of them. We did see a phenomenal take, that make changes we go towards next week. David cameron is at the terminal right now, saying he is deeply concerned that the leave campaign are criticizing the bank of england. My question to you is this, if we do wake up and this risk event happens, in terms of policy response from the banks, could you imagine a scenario where we cut rates immediately . With a hold fire and see what the shock and off market would be . It is smart to do so, what is your scenario plan, in terms of the policy response in the central bank might be . Lothar i would expect that surprise event that we wake up and have a leave a vote, than the bank of england will first react with heavy liquidity injections, rather than with immediate cutting of Interest Rate. But i will be very interested to watch today what mark carney has to say, about brexit and about the risk, about the preparation ever eventuality might hit us. Anna there are civil servants, how much they can speak out. But he does have his job as governor of the bank of england. We will see. Lothar mentel stays with us. More on that conversation, when we come back. We will be talking about cars as well when they come back. Vws ceo will lay out his post emissions scandal, as the government gets more time to file settlement proposal. We are live in berlin, next. Anna welcome back. A shot of new york, 1 50 in the morning. Back at the start of the u. S. Trading day, seeing some weakness in equity markets when we open up there in new york. A long time until we get there. We have european trade do. Let us to the Bloomberg Business flash. Here is haslinda amin. Haslinda deutsche banks chairman has become the latest Global Banking leader to warn of the potential dangers of a brexit. He says it would be an Economic Disaster for the u. K. And a political disaster for the eu, caught between Public Opinion polls which show a vote to leave the eu and the odds would show the remaining go. The main rival in china is valued at 28 billion. People familiar with the matter say the ridesharing app raised 4. 5 billion in a round of funding backed by apple and domestic investors. The increase on last years valuation of about 16 billion would make it the Worlds Largest privately backed young company, surpassing airbnb. Car owners in the u. S. Government have been given more time to file some of the proposals in the volkswagen emissions scandal. A federal judge delayed the filing deadline to june 28, citing the highly technical nature of the negotiations. Willcomes as ceo mueller deliver his new profit strategy later this morning. And that is your Bloomberg Business flash. Anna . Haslinda, thanks very much. I will pick up now. Let us get more on the vw story. Chris, what can we expect from the statement . There is a great deal of y and speculationp what is, today . The ceoell, today is tried to reset the company. He said the terms new vw already in the past. That is what we will see, a very forwardlooking strategy. Earlier, just mentioning the valuation, those kinds of car sharing services, Mobility Service is one of the directions the volkswagen needs to address. How they are going to adjust to those kinds of trends in the market, how they are going to adjust to self driving vehicles, electric vehicles . You know, with that in mind there is would be a lot on the table. But it will be very much a sense of pr campaign the volkswagen saying it is more than the crisis, that the plan for the future goes beyond diesel emissions. Anna while were on the subject of diesel emissions, chris, why the extension in the u. S. . Chris our understanding is that these talks of an going on for quite a long time, a couple of months. Said, they the judge are very technical. A goes down to there are three different generations of diesel engines that are in discussions, multiple model years, cars coming off lease. So it is maybe the calculus of, you know, the details of which owner gets how much money, and those kinds of things. It is really finetuning that. We do not have any expectations that the settlement is falling apart at this point. But not getting the deal done next week, means they have to go face shareholders, which is scheduled for the 22nd of june. Without a deal in hand, that will make that meeting a little more uncomfortable for mueller next week. Manus chris, thank you very much. Had of transport reporting in berlin. Let us bring our guest host, lothar mentel, ceo at tatton. Just listening to chris go to the challenges of vw, you have to ask yourself, at what point do you decide whether the worst is behind vw or whether the risk is in front of me . How you look at it at the moment . Lothar i am not sure we are quite there yet. I think vw has three formidable challenges on hand, rebuilding the cost of the clientbased, settling with the u. S. On the official level, but then also what may be there in the pipeline, in terms of class action claims from u. S. Consumers, who feel emotionally damaged by the whole scandal. We have not or heard much of that. I think, i dont know, i think that bp case is the benchmark for this one, and therefore, i would be very happy if volkswagen was out of the woods. But i am not sure they are. Anna let us move on, lothar, digger thoughts on something else. We talked about how we were in limbo, in the run up to the Eu Referendum, earlier in the program, one of those banks, the fed perhaps citing brexit as one of the things they talked about in deliberations, what about emerging markets . I have a chart showing we have weakness and emergingmarket stocks, in response to the fed release continuing and going back to the trend after we got the decision, but currency is holding the game. Vish is the medium do interestrate hike . Lothar i think we have two things playing out of the moment. I think well have trade today because the fed was more dovish, then we had expected, a bit of bad news is bad news story. Although i think actually the fed and the other Central Banks are blowing up the sort of big air back at the moment, just in case we have an exit vote in the u. K. But that may be decide next week or the week after. The longerterm trend here is that now with the pressure of the strengthening dollar, we have an easing dollar again, that ought to be good news for the emerging markets. The longerterm trend of that is more going to follow the currency trend, as it did in the past, that it may indicate today. Manus lothar, thank you very much feared joining anna and myself the past hour. That is lothar mentel, ceo of tatton. A slower path, the fed, and the brexit vote is a factor. It could interrupt the thinking. Really interesting day in the markets. 105, then breaking nikkei is down 3 . Record low yields in japan. Markets are on the move. And edwards and i will be back very shortly, and taking you right through the futures market, down at the moment. . C sv manus the boj holds negative rate policy while the yanis urges to a 21 month high. The fed yellen signals a slower path of pikes citing uks brexit vote and the factor for the Central Banks decision as flight to safety. Surrounding the Eu Referendum, japanese, australia, south korea, all the bond yields hitting record lows. Were speaking to Business Leaders as russian resident hopes to move investors in their ongoing sanctions. Hopes to woo investors in their ongoing sanctions. Welcome to countdown. I am manus cranny in the by. Anna lets get to the breaking news from the car sector. European carbon shenzhen numbers running through. Car sales up 16 . That is the 33rd month straightly game. Straight monthly gain. More bad news for vw. The vw market share has contacted the most since september. The scandal preventing the carmaker improving sentiment generally among auto buyers. Some people what the ecb has been doing. Kreisler and bmw Getting Better news this month. A fivemonth picture, Volkswagen Group as a whole has amounted to three 23. 9 registration. Managed to keep up with that, liking behind that number at 4. 9 . It looks lets talk about results of the European Growth story and what this 33rd month means for the european economy. Manus. Manus anna, we are going to get into the markets now weve got the opening of our epoch of our equity markets. We have seen a gain of 1 in the european space. Weve got futures. That gain is gone. Checking in on the top of the screen, euro stoxx 50 down. London down 1 . There was a little bit of a reprieve in the market yesterday. This shift into the yen, the asian markets were down. Gold is moving. It is another significant risk off day. And not take us through the risk radar. Amoco very much week amoco reflected in the risk radar anna reflected in the risk radar. He dollar yen up by 1. 7 the bank of japan did nothing. That is what most people in the market expected. There is an increasing shift on what they will do in july. Many of them who expected the boj to act today are now focusing on july. Gdp for the pound against the yen, i really expression of action from the japanese and also concerns around the Eu Referendum. Those being expressed in a 2 gain to the japanese currency. Asiapacific is down by 1 on both of those flows and markets. The boj and the concern about the nikkei. For. Keeping its head, 1300 4. 1300 f manus, big news again and bond markets. Manus you got the more liquidity in the bund. 1. 30 german yields that is from one year out to 10 years. That is going to cause an issue for the ecb. Could it be they are running out of balloons running out of bunds. No action from the central bank in japan. What will corrode at duke next . The boj does not what will kuroda do next . The boj does nothing. The head of Sovereign Rating says we have reached the lower point with where we are with negative rates from japan and possibly from europe. Lets get out to haslinda. Good day. Haslinda hey manus, the yen jumped for a 20 month high and japanese stocks extend losses after the bank of japan refrain from extending a monetary stimulus. This comes as the the unpopular negative rate policy ahead of elections next month. The outlook for Global Markets has given reason for pauls. Given reason for pause. That. Ers can follow the desk tagged the governments michael gold, one of the out Campaign Leaders has criticized the austerity budget that the remain camp says would be necessary to shore up public finances if the u. K. Vote to leaves. The plans may offer is fighting a growing rebellion lineup to reject the hike and cut. Firepoweras unlimited to ward off any threats if britain votes to leave the eu. Copenhagen. Him in of course there will be volatility in the currency market. Incan expect some volatility parts of the financial market. We are prepared to do whatever is necessary to counter that ituation we have done before before. Haslinda kuroda and the u. S. Governor has been given more time to settle proposals. A federal judge delayed the deadline, citing the technical nature of the the new deadline has been set for june 28. Is set to as the ceo deliver this strategy later this morning. Investigators say they found the main wreckage site of egyptair which crashed last month. The Aviation Ministry says the but did not specify the location. Global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. You can find more stores on the bloomberg at the top. Anna. Anna haslinda, thank you very much. The asian market session with david ingles. With that conversation around the brexit it we continue to touch new lows on the 30 year yields, the 20 year yields falling to a new record. It is ongoing, this story. This lower yield story. David at this pace, do not be surprised if the twentyyear touches zero by next week. Were looking at a record low. Record low, everything from the fiveyear up until the 40 year over in japan. Now, it is the time of the day when the thanks are closing up shop. The banks are closing up shop. Watch for news. Why they stamp act on the policy settings for any clues on when the yen at these levels, people are saying we might get some sort of intervention. Not from the boj. Nikkei 225, 3 down. Absolutely slammed today could volumes picked up. Selling momentum picked up as well. You look at how much how many stocks are lower. 225 stocks on the nikkei 225, all but one or two actually pointing south. That is a function of dollar yen. Disappointment. Just to give you a quick rundown what happened. We looked at dollar weakness up until the decision came out. Dollar yen dropped to one of 4. 53. 104. 53, consolidated and then went below 100. That is the market story out of asia. Just about everything in asia down by 1 . Manus david ingles with the very latest on the markets. The federal open Market Committee voted to leave rates steady. That was a given. That was the end of a twoday meeting in washington. Janet yellen noted that next weeks u. K. Referendum was a factor in the Central Banks decision. Brexit, the upcoming u. K. Decision on whether or not to leave the European Union is something we discussed. I think it is fair to say that it was one of the factors. It could have consequences in turn for the u. S. Economic outlook. The state of the labor market is still healthy, but there has been something of a loss of momentum. Should never take too much for example, one job market report. If the incoming data in the coming months were to justify increasesf gradual that we have longed long discussed, i think markets should not be surprised with such decisions. No meeting is out in terms of a possible rate increase. I cannot specify a timetable. Not comfortable to say it is in the next meeting, but it could be. It is not impossible. It is not impossible that by david let see us to believe we are in a perfectly fine course. Keep flying the flag to july as a life meeting for rates. Joining us is bill blain in the studios in london. A strategist at mid partners. Admit partners. In thele thing here shifting of expectations it is the expectations from the fed governors. We are down to one longrange. There is one person listening keeps one hike all the way out. 617 see one hike now between now and december. They trimmed back there 2017 and 2018 pace. This fed is really beginning to sound nervous. It is almost like why kumal. Mole. E whacka the fed is doing the only thing they can do. At the moment, the Global Economy is such a tangled bowl of spaghetti that you really cannot figure out what is going to happen next. Like spaghetti, one should dig into it, it begins to make sense. I love this new expression everyone is starting to use abnormal whenew they talk about bond yields. The effect that the fed is created on the dollar, earlier a guest missing the real effect of pushing back expectations of a rate hike is to push down the dollar. That is great news for the rest of the Global Economy. You get the emergingmarket nations, they start to recover. That boosts growth in the u. S. As well. The next series of numbers are bed that show up horrible may Employment Data was a oneoff. We will see us back on course. I am not worried about the market suddenly saying we are into years and years of new normal low rates. I think we are going to see a continuation of what we have seen for the last two years which is up down, shaken all about. Anna [laughter] nice image you created for us. You think the unemployment report could be a oneoff it off. Ook at a chart when a look at a chart like the one i have in front of me, it talk about japan today in front of me, talk about japan today, this does not scream recession to you . This doesnt trigger those . The key phrase used there was i think. None of us know what is good to happen next. We have to put our thinking hats on and figure out what is most likely the outcome. None of us know what the end result of the brexit vote is going to be. It is all speculation. What do we really think about the Global Economy just now . What is Holding Back Growth . Why is it after so many years of low Interest Rates doesnt the Global Economy seem to be determined to go nowhere . One of the answers that needs to be given is why is it we have such loose monetary policy, but yes but yet such tight Credit Conditions . Surely there is something not working. That is one of the questions global authorities need to be answering. How do we create growth . This low Interest Rate scenario that we have here, it can only go one way at the end of the day. Interest rates cannot go more and more negative. It doesnt make sense. What we are going to see as soon as we get signs of Global Growth, everyone is going to go oh, why am i holding 10 year bonds at 0. 02 trying to get out . That is when we are going to see a big shift. The problem is what do i do that money . Do you pilot into the stock markets. They are overvalued do you pilot it into the stock markets . They are overvalued already. Versus the threemonth yields. This is the perversion of markets. The words i decided to use. Markets. Perverted the risk is rising. What none of this is making sense. My question is are we just in one great big bubble in the equity markets . Are going forrves flat to inverted. The last yearsp of distortion that are resulting in these markets. What we have is Interest Rates so low, unsustainably low, that they are going to be reflected in a selloff in the bond market as soon as we see signs of as soon as we see signs of growth. Remember stock markets were already started by the fact that cash has been out of the bond markets chasing yields for so long. We are going to see a stock rally that is not justified by the pace of Global Growth that we have seen. It means investors have to remain nervous about these traded markets. That means they need to focus more on what are the real ways of getting returns in a noncorrelated basis . That is becoming an increasingly crowded and difficult space to participate in. Anna bill, thank you so much. Up next, we will be talking to the ceo of china electric on day one of the st. Petersburg international Economic Forum. With ryan back there in just a couple of minutes. Anna welcome back. This is countdown. Russias conference kicks off in st. Petersburg. In the wake of the countrys longest recession in two decades. We sent Ryan Chilcote along for the ride. Ryan . Ryan good morning. I am joined by the ceo of Schneider Electric. They have a very big presence. Euros. P 32 billion they have a big presence in the united kingdom. In the u. K. Art because everybody talks about the possibility of a brexit come june 24 when we wake up. What would that mean for your business . I am not a british voter so i cannot just so i can only speak about it from the business point of view. The u. K. Is a very important country. France, we have been for a long time weve got nine factories in the u. K. Weve got a large commercial presence. We have also a financial direction for Oil Companies based out of london to be merged in the city. Integrated europe. The only equation, i do not have the answer our plans for serving the u. K. Market [indiscernible] we are designed for an integrated market. It is difficult to judge as we do not know the terms of the financial brexit. What could be the impact . Ryan is it the impact if the u. K. Were to exit the Single Market or there was some kind of renegotiation, as the men running the business, what the you have to look at . I would have to look at the look at how we see the compound. I would have to look at the relevance of my Financial Guys if london loses. Frankly, in a world where there is enough instability coming i wouldy other factors, like the u. K. To be within europe. As an industry ryan aside from your nine factories in the u. K. , you have a lot of factories inside the Single Market should the u. K. Exit the Single Market. Can you rule out that you might have to move some of your production . I cannot talk about that. Convinced that the u. K. Has a fundamental role to play in europe to more business. Riendly culture ryan one of the byproducts we have seen of uncertainty over the referendum is a weak pound. Some people arguing is good for exporters like yourself. Your great . I would not would you agree . I would not. Products we use in our like the euro, the dollar, speak about telephonics. That would not change very much. Ryan you have been you have been trying to buy the u. K. Company, aveva. We are quite committed to the u. K. [indiscernible] you perspective about aveva. Wiese bent we spent a large part of last year working together in an amicable way with contributeh was to at schneider which wouldve doubled the size of aveva, giving them the unique view diversifying the exposure. , left avevatant as a listed market in the u. K. I and schnider, i had to cordon off because of the new environment of the oil price. Everything was agreed on, the structure. It was the british import structure. It was the acquisition of our business by aveva. Because theontact commission between the teams was very friendly. Last week we came together to formulate an interactive proposal for aveva shareholders last week. That was at the beginning of this week. We still seeing that the strategy is incredibly good. Ryan twice you have been declined . Will you try again . We have declined the first time. Ryan they declined the second. Is three times lucky . We know each other. What a sure from the schneider point of view we keep developing software. S into we are much bigger in the space. Ryan i will take that as a yes, you will try again. You see other part is that there is well. Other partners out there as well . The chief executive of Schneider Electric joining us with his respective on a possible with his perspective on a possible brexit and is failing attempts to acquire aveva. Manus ryan, thank you very much. He give you a lesson in how not to paraphrase as ceo. What the 104 level, five days in a row the yen has been rising. We have not seen that since april this year. Anna welcome to on the move. We have we are counting you down to the european open. I am airline hide with matt miller in berlin. The yen surge. It sorted to a 22 month high. Stocks bonds after the boj refrains from extending monetary policy. The slow path. The feds yellen signals citing the uks referendum is a factor. The final