The centralbank prepares for its last super thursday ahead of the referendum. We will bring you full coverage, live on bloomberg. So we are 28 minutes away from the start of the european trading. It looks likely will see a mildly negative start to the day. Let me show you whats happening. This is the picture at the moment; you need to focus on his missed price column. London looks like it will be down around 3 10 of 1 . Continental markets looking firmer. I would say probably that points to a flat story at the getgo. Caroline yeah. Lets have a look at the asset checks we have on. I want to draw into what has been happening on the oil side, and what has been happening largely on the japanese trading front. Keep an eye on oil. There was a surprise reduction in inventories in the united states; we saw it down to its lowest in september, 2014. Clearly a bounce in oil has been driving it, some japanese bonds to keep a close eye on. Im interested by the fact that 30 year japanese debt sales went on today, another record low yield. Investors are desperate to get their hands on any piece of paper that has a positive yield in japan. So keep an eye on how the japanese debt is trading. And of course the brazilian rial. It seams with the time being, rousseff will have to pack her desk, but will she go through the senate, and willoughby longerterm . Keep a close eye on that, which is trading higher. Lets get onall, to the bloomberg first word news with shery ahn. Shery thanks, caroline. Chairs and Mitsubishi Motors have jumped by more than 16 ; thats after a confirmation in talks with nissan, including a possible capital tie up and that if you will economy scandal that has battered one of japans smallest automakers. People familiar with the matter say nissan is taking a 33 stake in Mitsubishi Motors. The bank of england holds its last socalled super thursday before the Eu Referendum today while all economists in a Bloomberg Survey predicted no change to the Interest Rate. That bank of America Merrill lynch says one or two of the ninemember panel may vote for a rate cut. Reportrterly inflation with governor mark carney will be scoured tonight by both sides of the Brexit Debate amid concerns with recent services and production data. Japanese investors appetites for 30 year bonds has made them, in the words of one manager, the most expensive on earth. Locals say they want more, not maturing in 15 years or more, with the only ones in positive yields. Japan has sold almost ¥800 billion of 30 year securities today and a record low auction yield of 0. 319 . He supports says donald trump for president , and has backed his call for a temporary immigration ban on muslims. Speaking at a conference in las vegas, he said this shery globa global news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. You can find more stories on the bloomberg at top. Guy thank you very much. Lets move back to that top story. President Dilma Rousseff may be entering her final hours in office. Brazil senate is gearing up for a vote on her impeachment; the prevote debate is ongoing. Its already clocked at 18 hours of speeches, and it now looks as if the majority will back a removal. Our emergingmarket managing editor has been watching the story. Justin, give us a timeline when will it come to a head . Well, in a sense, it already has, because now we have the majority of the senators at least declaring their voting intentions. We have a fairly good idea which way the vote will go. That will happen in about an hour and a half. Gets about 2 30 now; we have been going on for, i think, Something Like 18, 19 hours of debate. Each senator so far has had about 15 minutes of speech. Were really in the endgame now. I suspect when we get this vote, Dilma Rousseff will be out of the president ial palace. She will have to step down for 180 days. Her Vice President will step into her shoes and run the show, during which we will have an impeachment trial against dilma and a vote at the end at some stage. Shell be completely and officially removed from office. Anna 180 days is a long time, and we have seen a rally in the runup to this vote. Do we see the rally sustain . Its interesting. We have reached this point at which, i think, the majority of the Investment Community expected we would get to. Weve see the markets rallying on optimism, if you like, that she will be removed from office. Investor stock markets up almost 40 this year in dollar terms, the secondbest emergingmarket stock market this year. At the top rial up of the stacks, the best anywhere in the world. Yesterday we saw the rial moving north, 1 2 of 1 . The stock market fell, that we are now seeing the Exchange Traded funds outside of brazil starting to play some of that optimism, and we are seeing gains on the trade in japan, for example, and london will open in the next few hours. We will keep a close watch on that. I suspect we will season gain. The real work starts now for brazil. This is not a case of us being out of the woods, but really entering the woods, and we have some very serious economic problems to overcome. The budget deficit, fiscal reform. Notwould be president is exactly mr. Popular, himself. He will have some work to do in the months ahead, too. Guy thank you very much indeed. We will continue to monitor the story. Justin kerrigan joining us from brazil. Lets welcome tim grokford. Im not going to ask you directly about the brazilian stocks, but as the european equities guy, and as there are a whole bunch of European Equity fund have exposure there, would you be getting long or short . I think most european stocks that have any significant exposure to brazil now are not discounting much in the way of things improving. We have been very mindful, i think we were getting bad in brazil for a long time. This is one of the worst recessions we have had in decades. Last year was down 4 . This is not new. A lot of the bad news has been priced into shares. What we are looking for now is equities that have a good, fundamental story rooted in europe, driving their earnings forward. But that have some sort of option alley on improvement, not just in brazil. Stock,s a swiss listed now the largest dutyfree operator in the world, having acquired the second and Third Largest players. We dont own it because of brazil, but if you look at what is expected to Going Forward, very little is priced into the share. Actually, that could prove to be quite a nice, positive option now to the earnings Going Forward if brazil does start to recover. However that is a big if. Things are still tricky over there. Guy but you would rather play these stocks im curious. You are playing a european recovery story . For Global Recovery story . Which one is it . Europe is much unloved at the moment by global investors, therefore are you valuing europe, or saying we need to look more globally and take a look at the International Stories . I think what we are saying is we arent playing either Global Recovery or european recovery. What we are looking for is structural longterm themes, that are going to grow regardless of the macro. If Global Growth declines, they will be hit, by to a lesser extent than pure cyclical stocks. Will we are looking for are the midcap growth stories, where you have the stakes its the thats theets, growth and travel from emerging markets. That is the case with many of the stocks we own. We are topping of these positions that are exposed, a little bit of option a la the if they do improve, given that emerging markets have been in a downswing for quite a lot of time. Guy we will come back to you shortly. Tim crawford will stay with us. Up next, a big move for mitsubishi. Shares surge on news that they are in talks with nissan. We are live in tokyo with the details, next. Anna welcome back to a very blue and sunny berlin. We will be taking you across to japan for breaking news, where Mitsubishi Motors is surging because nissan is considering to purchase a 34 stake in the company. Headlines across the bloomberg terminal thats a bc a scandal, up 60 , the best we have seen for the stock. Lets go to david mccombs. Nissan, seeing that mitsubishi is attractive right now what is it seeing . Why does it want to buy this . They had a profitable relationship in that niche, mitsubishi supplying minicars just after announcing the scandal. That is a big problem for nissan. They salted some way by buying a big stake in the company and rescuing them. Mitsubishi also have some very solid electric car technology. Nissan is thought to be a leader in that sector, so they pick up that. Mitsubishi motors is also quite strong in indonesia and thailand. The brand is very well respected, very popular. That could be a big plus. View,or the cash point of this isnt a big deal. My question is how much control can he actually get. He was very successful when he went into nissan, wrestin controlg from the embedded interest. Can he do the same thing at mitsubishi . I think you put your finger on just the bat investors are making. They are saying he has done this before. He went into nissan when he was in deep trouble, and he managed even as a foreigner to mediate that. Mitsubishi motors, a traditionally japanese part of the group, a very strong alliance, of what had people scratching their heads is the fact that the Mitsubishi Group companies are not in a strong position. They have been hit hard by declines in commodities prices. They arent doing as well as they were. The last time they deal doubt there carmaker, they have come in and said it is interesting to see the early reports have 33 , 34 is the level you need to exert control. They are aiming for 34 . They are willing to hand it over. Guy it will be interesting to see if he can repeat his success. Dave, thank you very much. Dave mccombs joining us out of tokyo. Tim crawford, Hermes Investment management, joins us now. You dont like the oens. What you like are the subcomponents. Thats true generally. Reno is our favorite oem. That is why we do it. I think generally speaking, we are seeing that these manufacturers that is pressure to meet commission standards. The balance of power, typically rested completely in oem, is slowly shifting to the parts makers, who are becoming increasingly more valuable. Guy we are getting more details. Caroline yeah. We are seeing more breaking news mitsubishi and nissan to sign an agreement by may 25. Within the end of the month, we are likely to see the stake taken on by nissan, then see shares sale, to be completed around october. It can name four directors to the board. They can also be named on the mmc chairman. Clearly already outlining how this company will be merging. Tim, i want to get your view on m a. You are seeing this trickle of deals, it seems to be ad hoc. Weve heard some of the synergies coming out of tokyo just now. Give us a sense of whether m a is on the right track. We have seen a lot of deals actually being unwound. Yesterday we saw the two deals unravel with a hong kong company. Ever going to see more fall over . Im not so sure about that. The telecoms in particular, there is a very strong Regulatory Regime over there. With regard to looking at whats happening in japan, its no surprise in a low Interest Rate environment, you have a company which has, i think, about 13 billion worth of cash from the Balance Sheets, and i think any company right now who has a lot of cash on the Balance Sheet in a low Interest Rate environment is potentially looking around, sitting around names it could require. Guy can i take you back we were just talking about the car sector. You mentioned that you own read down. Thats your favorite. Why . What are we looking at that you like in this space . Is it because of the emissions story, because there is upside out of france to do more . Walk me through the reason. Its very much about the cost story. This is a company which has been behind the curve in terms of you had vw, which for a long time did very well with a multibrand approach, and by sticking all those brands on a common platform. Renno is starting to do that now. I think it is interesting that if they gain control of mitsubishi they could do that with another manufacturer as well. As we just heard, there is some synergy in small cars, with mitsubishi manufactures. French are forcing through legislation at the moment which will change labor laws. Does that help . Presumably it must do. Any improvement in terms of the neighbor environment in france is only going to be positive. Guy nice to see youguy . You will stay with us. Lets find out what exactly is happening out in asia with the Market Update with shery ahn. A raftedy, disappointing earnings out of japan and the u. S. Down sentiment across asia, but the nikkei did manage to finish in positive territory, gaining 4 10 of 1 , rising. The asx 200 is a different story; it reversed five days of gains, falling 2 10 of 1 . We are seeing iron ore volatility reaching this years high and affecting miners. Bok are down ahead of the policy decision tomorrow where they are expected to keep rates unchanged. Strengthening, affecting exporters. The shanghai composite down 2 10 of 1 , the hang seng down 6 10 of 1 , investors being a bit cautious about the chinese economy. That thereis morning are still downward pressures on the chinese economy. Yen,a look at the japanese which is reversing course after strengthening a tencent 1 yesterday. It is now weakening half a percent, which has helped exporters in japan and helped the stock market turned positive in the last hour of trading. Caroline thank you very much. Lets have a quick look at what stocks are going to be watching ahead of the open here in europe. We looking at some french stocks across the board. Keep an eye on this particular bank; we are seeing it come out with numbers where profitability slumped some 70 , and it is all about the restructuring story. Is chief executive there saying that march and april firstquarter profit did slump. We saw a retail decline because of net interest margins on the downside, but this company is starting to see a turnaround in improvements in march and april. Keep an eye on wholesale lafarge is coming on board, the biggest cement maker. And looked relatively painful. First Quarter Sales up 0. 1 . It was a mess. Seasonality is what it blames; pricing is what a blames as well. The chief executive says , i understand this is where we need to be, but for fullyear they seem to be on target. Then we have to dig into renoo. Keep an eye on the carmakers; that deal with nissan can be buying a Mitsubishi Motors in japan, a 34 stake. That deal could be agreed by may 25, and we could have a deal done by october. Guy looks like it is all moving in that space. Tim crawford still with us. Are you a bit worried about renno . Are you worried about they have a lot of cash, but is this the right way to spend it . On the other hand they are taking up a lot of yield. Exactly. Were longterm holders, and if i were trading in a stock, i wouldnt expect it to react well today. Just thinking about the story here, my first reaction was what are they doing . My second reaction, especially with the fact that they are gaining control, going back to the story i just talked to through, if you can synergize their Manufacturing Capabilities and the story starts to look interesting. Mitsubishi has quite a decent franchise in southeast asia. We need to do some work on it, but i think it looks quite interesting. Guy with a be doing this if they didnt have this huge cash pile . Case of centralbank action having an impact on corporate policy . Absolutely. I think there are a number of things at play here. I think its nissan today, and opportunistic. They announced they were embroiled in the emissions scandal, but i think definitely there is a theme of m a being driven more and more by this money printing we are seeing worldwide. Initially, would still be the stocks that can grow, that have the structural themes that are driving underlying earnings over a long period of time. You are a company that can that has a huge cash pile and can put it to better use by buying something which will increase future earnings, and it is a potentially guy it comes back to the fact that, do you Want Companies to invest in products productively, but on the other hand, the big theme in equities is dividends. Two competing forces at play. It all depends on the returns they can get. With the cost of capital push down, it can as a management board, the cost of capital is low, so we dont need that big a return to justify it to shareholders, but at some stage that is going to change. What we want to see is that a return to the future. Guy the market open is coming up next. Guy good morning, youre watching on the move. In berlin. De is we are moments away from the start of european trading. Desk, as clears her the impeachment debate drags on, looks like it is the president s last day as president of brazil. So what next for brazil . Nissan in the driver see, it will take a 34 stake in Mitsubishi Motors. The central bank prepares for the last super thursday ahead of the referendum to bring you folk of her. On bloomberg television. Lets take into this futures markets. The edge closer to the markets, looks like it will be a down day. But for tenths of a percent. It was a little bit of pain, the beside downward take yesterday, taking of the markets by surprise. We continue to trade above 46. Into Mitsubishi Motors. Asian stocks fall for the first time in three days. Looking at the European Market, the ftse 100 up by. 7 . That is off that almost. 5 . Toll waiting for the dax move any stoxx 600. Lets