1
00:00:03,440 --> 00:00:07,240
Speaker 1: This is Bloomberg Surveillance. We've only Paul coming out. We

2
00:00:07,280 --> 00:00:09,760
Speaker 1: have to bond the rip to I have a Bramin

3
00:00:09,960 --> 00:00:12,200
Speaker 1: or whether of course at the breakfit. If the British

4
00:00:12,240 --> 00:00:14,880
Speaker 1: vote goes in favor of Brexits, that will be another

5
00:00:15,000 --> 00:00:17,880
Speaker 1: sign that you simply there aren't any givens anymore. To me,

6
00:00:18,000 --> 00:00:21,280
Speaker 1: it's kind of stretching things to imagine that the Brexit

7
00:00:21,360 --> 00:00:23,239
Speaker 1: vote is going to have any kind of lasting impact

8
00:00:23,320 --> 00:00:26,920
Speaker 1: on the economy. Bloomberg Surveillance your link to the world

9
00:00:26,920 --> 00:00:32,640
Speaker 1: of economics, finance and investment on Bloomberg Radio. Good morning.

10
00:00:32,640 --> 00:00:35,200
Speaker 1: It is seven am on Wall Street. It is noon

11
00:00:35,280 --> 00:00:38,640
Speaker 1: in the city in London, where I am along with

12
00:00:38,760 --> 00:00:42,560
Speaker 1: Tom Keane for a week of coverage of the Brexit vote.

13
00:00:42,800 --> 00:00:45,360
Speaker 1: Tom and I will be here through the vote on Thursday,

14
00:00:45,360 --> 00:00:49,360
Speaker 1: and we'll wrap up everything in terms of reaction on Friday.

15
00:00:49,479 --> 00:00:52,320
Speaker 1: We also want to note it is seven am in Cleveland.

16
00:00:52,360 --> 00:00:54,560
Speaker 1: The number you need to know there ninety three. That's

17
00:00:54,600 --> 00:00:58,320
Speaker 1: how many points the Cavaliers scored. The Warriors scored only

18
00:00:58,480 --> 00:01:02,840
Speaker 1: eighty nine, and so Bloomberg nine sixty in San Francisco.

19
00:01:03,040 --> 00:01:07,120
Speaker 1: Our sympathies as the Warriors lose in Game seven. But

20
00:01:07,280 --> 00:01:11,120
Speaker 1: congratulations to the people of Cleveland. It has been fifty

21
00:01:11,160 --> 00:01:15,000
Speaker 1: four years since they won a championship in anything. Twenty

22
00:01:15,920 --> 00:01:21,040
Speaker 1: one million or more people watch this extraordinary success. Well,

23
00:01:21,040 --> 00:01:23,479
Speaker 1: there's sixty five million people here in the British Isles

24
00:01:23,480 --> 00:01:26,440
Speaker 1: and those who are of them who are voting age,

25
00:01:26,920 --> 00:01:29,600
Speaker 1: will be choosing on Thursday whether or not they want

26
00:01:29,640 --> 00:01:33,640
Speaker 1: to remain part of the European Union. Over the weekend,

27
00:01:33,680 --> 00:01:36,320
Speaker 1: the momentum seems to have shifted as long as we're

28
00:01:36,319 --> 00:01:39,880
Speaker 1: giving numbers here. Let's look at the Bloomberg Composite poll

29
00:01:40,040 --> 00:01:45,800
Speaker 1: of polls and it shows the remain side now forty percent.

30
00:01:45,959 --> 00:01:52,920
Speaker 1: The Leave side still say they don't know it is

31
00:01:52,960 --> 00:01:55,360
Speaker 1: going to come down to the wire. Pamir Gordon, Chief

32
00:01:55,360 --> 00:01:58,080
Speaker 1: Economy as Simon French has been nice enough to come

33
00:01:58,120 --> 00:02:00,200
Speaker 1: into the studio here in London with us and so

34
00:02:00,400 --> 00:02:03,960
Speaker 1: many it's very easy to to run numbers on both

35
00:02:04,000 --> 00:02:06,400
Speaker 1: sides of the other, but you really don't know how

36
00:02:06,400 --> 00:02:09,400
Speaker 1: the numbers are going to turn out on Thursday Friday

37
00:02:09,400 --> 00:02:13,160
Speaker 1: into Friday morning. Thanks Michael. You can probably break down

38
00:02:13,240 --> 00:02:16,440
Speaker 1: the campaign thus far into three distinct stages, from the

39
00:02:16,440 --> 00:02:19,320
Speaker 1: start of campaigning on the fifteenth of April through to

40
00:02:19,400 --> 00:02:22,720
Speaker 1: about the twenty four period in twi of May, the

41
00:02:22,760 --> 00:02:25,600
Speaker 1: momentum was very much with the remain camp, the economic

42
00:02:25,680 --> 00:02:28,840
Speaker 1: risk arguments with notable contributions from the government, from the

43
00:02:28,880 --> 00:02:30,280
Speaker 1: I M, from the O c D, from the Bank

44
00:02:30,280 --> 00:02:32,799
Speaker 1: of England that really set the momentum and led to

45
00:02:32,840 --> 00:02:34,720
Speaker 1: a significant lead. But then in that twenty four hour

46
00:02:34,840 --> 00:02:38,360
Speaker 1: period you had the migration numbers that really captured the

47
00:02:38,440 --> 00:02:42,320
Speaker 1: public mood and also the government lost the support of

48
00:02:42,360 --> 00:02:44,440
Speaker 1: the civil service something called HERDA here in the UK,

49
00:02:45,040 --> 00:02:47,960
Speaker 1: and the chance of George Osborne, a lot of the

50
00:02:48,080 --> 00:02:50,799
Speaker 1: narrative that he had been clinging to suddenly he didn't

51
00:02:50,800 --> 00:02:54,120
Speaker 1: have that support network. The momentums was really kept until

52
00:02:54,160 --> 00:02:57,760
Speaker 1: Thursday afternoon and we had those tragic incidents regarding Joe Cook.

53
00:02:58,480 --> 00:03:01,200
Speaker 1: And really since that points, I think there's a shop

54
00:03:01,200 --> 00:03:03,760
Speaker 1: of focus now back on the remain camp and that's

55
00:03:03,840 --> 00:03:06,400
Speaker 1: very well much Stage three web momentum is getting into

56
00:03:06,400 --> 00:03:08,720
Speaker 1: the polls. Well, we're seeing it in the markets today

57
00:03:08,760 --> 00:03:11,680
Speaker 1: with markets higher around the world. The foot Seat trading

58
00:03:11,720 --> 00:03:14,160
Speaker 1: up by a hundred and ninety one points three point

59
00:03:14,200 --> 00:03:17,240
Speaker 1: one percent on the day. The stock six hundred is

60
00:03:17,320 --> 00:03:20,440
Speaker 1: up by twelve points three point six percent in the US.

61
00:03:20,639 --> 00:03:23,959
Speaker 1: Futures are higher SMP futures by twenty seven one point

62
00:03:24,040 --> 00:03:26,400
Speaker 1: three percent and one point two percent moved for DAL

63
00:03:26,560 --> 00:03:30,640
Speaker 1: futures and NASDAK futures up fifty seven one point three percent.

64
00:03:30,800 --> 00:03:34,120
Speaker 1: The pound up almost two percent on the day one

65
00:03:34,160 --> 00:03:37,560
Speaker 1: point four six three to the euro at one nine

66
00:03:37,640 --> 00:03:41,480
Speaker 1: also stronger against the dollar by about half a percent.

67
00:03:41,800 --> 00:03:43,680
Speaker 1: Ten year no yield in the US one point six

68
00:03:43,680 --> 00:03:46,720
Speaker 1: seven percent, the five year going for one point one

69
00:03:46,840 --> 00:03:50,400
Speaker 1: seven percent, and the two year at seventy three basis points.

70
00:03:50,440 --> 00:03:54,600
Speaker 1: The German tenure tom solidly back in a positive yield

71
00:03:55,120 --> 00:03:58,160
Speaker 1: five basis points right now. You're you're not going to

72
00:03:58,200 --> 00:04:00,440
Speaker 1: make a whole lot of money clipping those funds, but

73
00:04:00,480 --> 00:04:03,080
Speaker 1: at least you're not paying the German government for the

74
00:04:03,160 --> 00:04:05,920
Speaker 1: right to borrow their money now. So it's amazing to

75
00:04:05,960 --> 00:04:08,720
Speaker 1: see the changes just over the last number of hours

76
00:04:08,720 --> 00:04:11,680
Speaker 1: with Simon French with us who say good morning from London.

77
00:04:12,160 --> 00:04:16,000
Speaker 1: Bloomberg Surveillance is always brought you by Investco. Investco believes

78
00:04:16,040 --> 00:04:19,720
Speaker 1: it's trying to bench the benchmarks to consider active management

79
00:04:20,240 --> 00:04:23,880
Speaker 1: and factor based strategies. Find out more it Investco dot

80
00:04:23,920 --> 00:04:27,880
Speaker 1: com slash high convictions. Simon John Longworth came over from

81
00:04:27,920 --> 00:04:30,440
Speaker 1: Westminster on the other side of the city, and he

82
00:04:30,520 --> 00:04:32,880
Speaker 1: said it took a record amount of time. This city

83
00:04:32,960 --> 00:04:36,599
Speaker 1: is riveted by the debate. Members of Parliament called back

84
00:04:36,640 --> 00:04:40,880
Speaker 1: today for remembrances for Joe Cox. There's an emotion here

85
00:04:41,279 --> 00:04:43,640
Speaker 1: which I guess we knew would be there. But what's

86
00:04:43,720 --> 00:04:45,960
Speaker 1: different just in the last week that you see in

87
00:04:46,000 --> 00:04:50,960
Speaker 1: your London Well, we're seeing a real shift towards the

88
00:04:51,760 --> 00:04:54,520
Speaker 1: I think the acknowledgement of the magnitude of this decision.

89
00:04:54,600 --> 00:04:56,400
Speaker 1: This is a decision last put to the country in

90
00:04:56,480 --> 00:05:00,480
Speaker 1: nineteen so in most people's voting history, they hasn't been

91
00:05:00,480 --> 00:05:03,160
Speaker 1: a choice given to them. I think what we're starting

92
00:05:03,200 --> 00:05:07,080
Speaker 1: to see is people making more of an assessment over

93
00:05:07,240 --> 00:05:12,120
Speaker 1: where the balance between sovereignty and the economics lie. Because

94
00:05:12,160 --> 00:05:14,720
Speaker 1: I think on each side of those debates that's where

95
00:05:15,000 --> 00:05:18,600
Speaker 1: the vote leave strength is, are where the remain strength is,

96
00:05:18,839 --> 00:05:22,719
Speaker 1: and people are coming to a managed conclusion of what

97
00:05:22,960 --> 00:05:25,520
Speaker 1: is important for them taking a more long term view.

98
00:05:27,640 --> 00:05:29,240
Speaker 1: When I when I look at this sign, and we

99
00:05:29,279 --> 00:05:31,440
Speaker 1: do look at the markets, you just assume back and

100
00:05:31,480 --> 00:05:34,120
Speaker 1: forth and back and forth, because we get the Thursday

101
00:05:34,279 --> 00:05:37,680
Speaker 1: or people leaving if they've taken the high ground here.

102
00:05:38,200 --> 00:05:40,760
Speaker 1: I think your description of back and forth is is right.

103
00:05:40,839 --> 00:05:44,480
Speaker 1: Because of the absence of a lot of electoral data

104
00:05:45,600 --> 00:05:48,200
Speaker 1: to to be able to call this election. We've had

105
00:05:48,240 --> 00:05:52,800
Speaker 1: almost three million new registries on the electoral role. That's

106
00:05:52,800 --> 00:05:55,200
Speaker 1: out of electoral roll of forty two million, three million.

107
00:05:55,320 --> 00:06:00,040
Speaker 1: That is a material increase, just increase correct over the

108
00:06:00,120 --> 00:06:03,640
Speaker 1: last thirty days. That is a staggering statistic. There were

109
00:06:03,839 --> 00:06:06,280
Speaker 1: three quarters of a million people registered on a single

110
00:06:06,400 --> 00:06:11,240
Speaker 1: day and Mike on Thursday into Friday morning, Francie McQuaid

111
00:06:11,320 --> 00:06:14,120
Speaker 1: was saying we may not know the vote until one

112
00:06:14,200 --> 00:06:18,920
Speaker 1: or two am UK excuse me, US times Yes, if

113
00:06:18,920 --> 00:06:22,400
Speaker 1: it's indeed that now you're a close interesting difference between

114
00:06:22,760 --> 00:06:26,720
Speaker 1: the US and UK in terms of these referenda. I

115
00:06:26,760 --> 00:06:30,520
Speaker 1: guess there are exit polls for many of the elections,

116
00:06:30,560 --> 00:06:33,159
Speaker 1: but this being a referendum, the BBC and others not

117
00:06:33,240 --> 00:06:36,080
Speaker 1: doing elect exit polls, so we won't have any early

118
00:06:36,200 --> 00:06:39,200
Speaker 1: calls here. We actually have to wait and see people

119
00:06:39,279 --> 00:06:41,960
Speaker 1: voted at what time? Is that absolutely? And we we

120
00:06:42,080 --> 00:06:47,400
Speaker 1: get constituencies breaking down their votes. So typically there's a

121
00:06:47,400 --> 00:06:51,680
Speaker 1: constituency called Sunderland South key indicator of the national mood.

122
00:06:51,720 --> 00:06:54,000
Speaker 1: But then we get those bell weather seats, those seats

123
00:06:54,040 --> 00:06:56,120
Speaker 1: that we start to get a feel of what Middle

124
00:06:56,120 --> 00:06:59,920
Speaker 1: England are feeling, and those ones will come around too

125
00:07:00,080 --> 00:07:04,279
Speaker 1: at two o'clock British summertime. So the type of indication

126
00:07:04,360 --> 00:07:06,640
Speaker 1: what the national mood is. But if it's as tight

127
00:07:06,680 --> 00:07:08,920
Speaker 1: as some of the polls are certainly telling it, then

128
00:07:08,960 --> 00:07:12,200
Speaker 1: we really won't get a indication to almost trading begins

129
00:07:12,240 --> 00:07:15,640
Speaker 1: here in London now. One of the issues that people,

130
00:07:16,120 --> 00:07:19,040
Speaker 1: the statisticians will tell you is that people polls tend

131
00:07:19,080 --> 00:07:22,280
Speaker 1: to break in favor of the status quo, but there

132
00:07:22,360 --> 00:07:26,600
Speaker 1: is still a very large undecided vote. What would influence

133
00:07:26,640 --> 00:07:30,000
Speaker 1: them at this point is it that they're trying to

134
00:07:30,040 --> 00:07:32,520
Speaker 1: make up their mind and they're looking for guidance, or

135
00:07:32,960 --> 00:07:34,440
Speaker 1: they don't know and they want to stay home and

136
00:07:34,480 --> 00:07:37,440
Speaker 1: just forget about the author Well, we know from countries

137
00:07:37,480 --> 00:07:39,680
Speaker 1: that are much more familiar with referenda than us, and

138
00:07:39,680 --> 00:07:42,320
Speaker 1: we look across at Switzerland as the one that holds

139
00:07:42,320 --> 00:07:45,240
Speaker 1: these with great frequency on a two to one basis,

140
00:07:45,240 --> 00:07:47,960
Speaker 1: it tends to be the undecided in the last few

141
00:07:48,040 --> 00:07:50,520
Speaker 1: days go for the status quo, what are they going

142
00:07:50,520 --> 00:07:54,120
Speaker 1: to be influenced by? Well, events are clearly key and

143
00:07:54,440 --> 00:07:56,000
Speaker 1: what we saw at the back end of last week,

144
00:07:56,080 --> 00:07:58,960
Speaker 1: terrible as it is, is, undoubtedly changed the momentum. But

145
00:07:59,160 --> 00:08:03,520
Speaker 1: ultimately it be down to how people perceive their economic circumstances.

146
00:08:03,560 --> 00:08:05,160
Speaker 1: We know that a lot of for a lot of

147
00:08:05,200 --> 00:08:09,360
Speaker 1: floating voters that look out effectively look out of the windows,

148
00:08:09,400 --> 00:08:12,000
Speaker 1: see the economy in front of them and go, do

149
00:08:12,040 --> 00:08:14,040
Speaker 1: I want to take a risk of jump into the

150
00:08:14,120 --> 00:08:18,360
Speaker 1: unknown whatever? John Longworth says, this is uh, you know,

151
00:08:18,720 --> 00:08:22,120
Speaker 1: an uncertain forward position if you can vout to leave.

152
00:08:22,280 --> 00:08:24,320
Speaker 1: Mike I found an extraordinary Charles to him, I hasn't

153
00:08:24,320 --> 00:08:26,559
Speaker 1: made up his mind with Lombard Street research. He's waiting

154
00:08:26,560 --> 00:08:29,200
Speaker 1: for Thursday. Here's the big difference. As you heard Simon

155
00:08:29,240 --> 00:08:32,640
Speaker 1: French speak of British summertime. The sunsets in New York

156
00:08:32,679 --> 00:08:36,720
Speaker 1: at eight thirty tonight, it sets in London make at

157
00:08:36,840 --> 00:08:41,640
Speaker 1: nine twenty one. That is one of the northern that's

158
00:08:41,720 --> 00:08:44,000
Speaker 1: that was the same way in Game of Thrones between

159
00:08:44,080 --> 00:08:47,520
Speaker 1: kings Landing and Western Ross. But it's forty five minutes.

160
00:08:47,559 --> 00:08:50,679
Speaker 1: That's very that's very cool. Yeah, that's over the weekend

161
00:08:51,480 --> 00:08:54,880
Speaker 1: release their delayed report on how this would affect I

162
00:08:54,920 --> 00:08:57,840
Speaker 1: miss that what they said. You'd be surprised to know

163
00:08:58,000 --> 00:09:01,160
Speaker 1: that they warn't of downward economic risks and a recession

164
00:09:01,200 --> 00:09:05,840
Speaker 1: next year should exit prevail. But Simon, does anybody European

165
00:09:05,880 --> 00:09:09,640
Speaker 1: the intent with without influence voters? You know what you have, well,

166
00:09:10,120 --> 00:09:12,920
Speaker 1: I say it won't interdence voters. There is a big

167
00:09:15,080 --> 00:09:18,640
Speaker 1: body of people who are who leaned towards leaving the

168
00:09:18,640 --> 00:09:21,360
Speaker 1: European Union, for whom they don't believe anybody. We had

169
00:09:21,360 --> 00:09:24,400
Speaker 1: some fascinating polling data from you gov last week which

170
00:09:24,400 --> 00:09:26,400
Speaker 1: showed that the experts, and it didn't matter whether they

171
00:09:26,400 --> 00:09:28,920
Speaker 1: came from the church, where they came from, the economics professional,

172
00:09:28,920 --> 00:09:31,360
Speaker 1: when they came from politics, from news, they don't trust

173
00:09:31,400 --> 00:09:35,679
Speaker 1: anybody and therefore, ultimately informed commentary in this space is

174
00:09:35,720 --> 00:09:38,240
Speaker 1: falling on deaf ears. The question of courses and you

175
00:09:38,280 --> 00:09:41,280
Speaker 1: allude to it, how that floating voters and it's anywhere

176
00:09:41,280 --> 00:09:45,080
Speaker 1: between about six to maybe twelve percent of people who

177
00:09:45,160 --> 00:09:48,320
Speaker 1: remain undecided how they will break on the day. And

178
00:09:48,640 --> 00:09:50,640
Speaker 1: you know we talked, you talked about the time that

179
00:09:51,080 --> 00:09:54,280
Speaker 1: the sunset Tom I mean we we it's material what

180
00:09:54,360 --> 00:09:56,160
Speaker 1: the weather is going to be like on Thursday, because

181
00:09:56,280 --> 00:09:59,080
Speaker 1: we know the turnout is very material. The long range

182
00:09:59,120 --> 00:10:02,319
Speaker 1: forecasters suggest storms in the southeast of England that is

183
00:10:02,400 --> 00:10:05,959
Speaker 1: material when turnout is so important regarding calling the outcome here,

184
00:10:05,960 --> 00:10:08,520
Speaker 1: and if we get storms that hit the part of

185
00:10:08,520 --> 00:10:12,520
Speaker 1: the country that is disproportionately pro remain, that could change them.

186
00:10:12,640 --> 00:10:16,560
Speaker 1: I was watching the weather forecast on the Telly this morning,

187
00:10:16,600 --> 00:10:20,880
Speaker 1: and you know they put up the little days and Monday, Tuesday,

188
00:10:20,920 --> 00:10:23,520
Speaker 1: Wednesday and Friday we're all partly cloudy or sunny, and

189
00:10:23,520 --> 00:10:27,040
Speaker 1: it's just Thursday shows to be really coming down. Rage

190
00:10:27,200 --> 00:10:29,720
Speaker 1: Simon French with us to beginner coverage in Bloomberg Radio.

191
00:10:29,720 --> 00:10:33,400
Speaker 1: We're thrilled you're with us worldwide on Bloomberg twelve Boston,

192
00:10:33,880 --> 00:10:38,000
Speaker 1: Bloomberg in Washington, Good Morning, New York eleventh three on,

193
00:10:38,080 --> 00:10:41,240
Speaker 1: and of course early good morning in San Francisco across

194
00:10:41,240 --> 00:10:43,680
Speaker 1: the nation and sirious the next time Channel one nineteen.

195
00:10:43,720 --> 00:10:47,280
Speaker 1: Michael McKee and Tom King from London Futures Boom Up.

196
00:10:51,679 --> 00:10:53,520
Speaker 1: It is Hour of Surveillance brought to you by mont

197
00:10:53,559 --> 00:10:56,080
Speaker 1: Kisco vol Volvo is at mont Kisco Volvo dot com.

198
00:10:56,160 --> 00:10:59,360
Speaker 1: Here's Michael R. With news headlines. Tom, thank you very much.

199
00:10:59,400 --> 00:11:02,920
Speaker 1: The Senate will whole procedural votes today on several gun provisions,

200
00:11:02,960 --> 00:11:05,600
Speaker 1: more than a week after gunman opened fire in a

201
00:11:05,640 --> 00:11:09,160
Speaker 1: gay nightclub in Orlando, killing forty nine people. It comes

202
00:11:09,160 --> 00:11:12,000
Speaker 1: after Democratic Senator Chris Murphy of Connecticut held of hilibuster

203
00:11:12,080 --> 00:11:15,640
Speaker 1: for almost fifteen hours last week demanding votes on tightened

204
00:11:15,800 --> 00:11:19,600
Speaker 1: background checks. Donald Trump says he hates profiling, but Trump

205
00:11:19,679 --> 00:11:22,679
Speaker 1: told CBS his face the nation, the US may have

206
00:11:22,800 --> 00:11:25,959
Speaker 1: no choice when it comes to Muslims. Meanwhile, Hillary Clinton's

207
00:11:26,000 --> 00:11:29,400
Speaker 1: Democratic campaign and it's allies planned to spend forty one

208
00:11:29,440 --> 00:11:33,560
Speaker 1: million dollars on ads and crucial states. Actor Anton Yelchin

209
00:11:33,640 --> 00:11:36,760
Speaker 1: has died at age seven. La played check Off and

210
00:11:36,800 --> 00:11:39,400
Speaker 1: the New Star track Films. Was killed when his own

211
00:11:39,480 --> 00:11:41,520
Speaker 1: car rolled down the steep driveway at his home in

212
00:11:41,600 --> 00:11:44,960
Speaker 1: Los Angeles and penned him against the brick meal box Pillar.

213
00:11:45,440 --> 00:11:49,160
Speaker 1: Global News twenty four hours a day, powered by our journalists.

214
00:11:49,240 --> 00:11:52,040
Speaker 1: I'm Michael Barr, Tom and Michael Barr. Thanks so much

215
00:11:52,080 --> 00:11:53,719
Speaker 1: from London. We are due to a day to check

216
00:11:53,800 --> 00:11:57,800
Speaker 1: with equities, bonds, currencies and commodities yields high are the

217
00:11:57,960 --> 00:12:02,040
Speaker 1: tenure yield point zero five percent of positive point zero

218
00:12:02,160 --> 00:12:08,480
Speaker 1: five Stay with us Bloomberg Surveillance. Bloomberg Surveillance is brought

219
00:12:08,480 --> 00:12:10,559
Speaker 1: to you by your tri State BMW centers. This is

220
00:12:10,600 --> 00:12:13,160
Speaker 1: the online at try State BMW dot com. At BMW

221
00:12:13,360 --> 00:12:22,920
Speaker 1: they make only one thing, the ultimate driving machine. Global

222
00:12:23,000 --> 00:12:26,320
Speaker 1: business news twenty four hours a day at Bloomberg dot com,

223
00:12:26,640 --> 00:12:29,319
Speaker 1: the radio plus mobile act and on your radio. This

224
00:12:29,840 --> 00:12:33,120
Speaker 1: is a Bloomberg Business Flash and I'm current Moscow. This

225
00:12:33,240 --> 00:12:37,040
Speaker 1: updates brought to you by American Arbitration Association. Business disputes

226
00:12:37,040 --> 00:12:41,520
Speaker 1: are inevitable, resolve faster with the American Arbitration Association, a

227
00:12:41,559 --> 00:12:45,200
Speaker 1: global leader and alternative dispute resolution for over eighty five years.

228
00:12:45,640 --> 00:12:48,600
Speaker 1: Learn more at a d R dot org. We're watching

229
00:12:48,640 --> 00:12:51,600
Speaker 1: the markets as global equities rally and the pound strengthens

230
00:12:51,640 --> 00:12:53,880
Speaker 1: the most. Its two thousand eight has pulls signal the

231
00:12:53,920 --> 00:12:56,600
Speaker 1: campaign for the UK to stay in the European Union

232
00:12:56,800 --> 00:12:59,880
Speaker 1: is gaining momentum. But checked the markets every fifteen minutes

233
00:13:00,000 --> 00:13:03,320
Speaker 1: about the trading day on Bloomberg SNP. EMNY futures up

234
00:13:03,320 --> 00:13:06,240
Speaker 1: twenty seven points down, EMNI futures have two hundred ten

235
00:13:06,600 --> 00:13:09,640
Speaker 1: nasadac emedi futures of fifty six. The dacks in Germany's

236
00:13:09,720 --> 00:13:12,360
Speaker 1: up three and a half percent, ten, your treasury down

237
00:13:12,440 --> 00:13:15,280
Speaker 1: seventeen thirty seconds. The yeld one point six six percent

238
00:13:15,640 --> 00:13:18,440
Speaker 1: yield on the two year point seven two percent. Nine

239
00:13:18,559 --> 00:13:20,680
Speaker 1: X screwed oil at one point seven percent or eighty

240
00:13:20,760 --> 00:13:23,280
Speaker 1: three cents to forty eight eighty one. A barrel COMEX

241
00:13:23,400 --> 00:13:26,120
Speaker 1: called down one point one percent or thirteen dollars eighty

242
00:13:26,200 --> 00:13:29,120
Speaker 1: cents to twelve eighty one. Announced the British pound of

243
00:13:29,160 --> 00:13:31,960
Speaker 1: dollar forty six thirty seven, the euro a dollar thirteen

244
00:13:32,000 --> 00:13:34,600
Speaker 1: twenty five. The end one oh four point five eight.

245
00:13:34,880 --> 00:13:37,720
Speaker 1: That's a Bloomberg business flash, Tom and Mike, all right,

246
00:13:37,760 --> 00:13:39,920
Speaker 1: thank you very much. Karen Moscow, Tom Keene and I

247
00:13:40,040 --> 00:13:44,080
Speaker 1: welcome you back to Bloomberg Surveillance from London. From London,

248
00:13:44,280 --> 00:13:46,920
Speaker 1: I had tea yesterday at fort Num and Mason with

249
00:13:47,040 --> 00:13:49,719
Speaker 1: the Sainted One and one of the offsprings. They have

250
00:13:49,800 --> 00:13:53,040
Speaker 1: the Diamond Jubilee Room after the Queen and you go

251
00:13:53,200 --> 00:13:55,319
Speaker 1: in and Mike there's the North Salon and the sal

252
00:13:55,440 --> 00:13:58,840
Speaker 1: Salon and they were splitting them between Brexit and Bromain.

253
00:13:59,520 --> 00:14:02,080
Speaker 1: There were no letting them, you know. The fortnumente mace

254
00:14:02,120 --> 00:14:06,240
Speaker 1: the first time since Queen Anne se seven. They're splitting

255
00:14:06,280 --> 00:14:09,559
Speaker 1: the diamonds. You believe me? Well, that is uh, pretty

256
00:14:09,640 --> 00:14:11,600
Speaker 1: much what we have is split in the country, although

257
00:14:11,640 --> 00:14:14,559
Speaker 1: the Remains side seems to have taken a lead in

258
00:14:14,600 --> 00:14:17,240
Speaker 1: the polls over the weekend. We have four days to go.

259
00:14:17,559 --> 00:14:20,960
Speaker 1: We shall see, but I want to go beyond Thursday.

260
00:14:21,840 --> 00:14:24,880
Speaker 1: And as Simon French, he's the chief economist at Pammir Gordon,

261
00:14:25,800 --> 00:14:30,600
Speaker 1: about where the UK is after that, uh, particularly if

262
00:14:30,880 --> 00:14:33,680
Speaker 1: Remain should win. This has been going on long enough

263
00:14:33,720 --> 00:14:35,640
Speaker 1: and we do salute the British for managing to get

264
00:14:35,720 --> 00:14:37,400
Speaker 1: this all in in a couple of months, unlike the

265
00:14:37,480 --> 00:14:41,200
Speaker 1: United States and it's four years of campaigning. It teams. Uh.

266
00:14:42,120 --> 00:14:45,600
Speaker 1: We lose track of what is going on in the

267
00:14:45,760 --> 00:14:48,760
Speaker 1: UK economy and it's hard to tell from prices because

268
00:14:48,800 --> 00:14:52,800
Speaker 1: they've all been distorted by the polls being up or down.

269
00:14:53,560 --> 00:14:58,480
Speaker 1: Is the UK economy doing better, doing worse? How much

270
00:14:58,520 --> 00:15:01,640
Speaker 1: of an impact has uncertain the over wrecked head on

271
00:15:01,720 --> 00:15:05,840
Speaker 1: the day after. Where are the UK economy peaked? Probably

272
00:15:05,920 --> 00:15:07,960
Speaker 1: in terms of this cycle in Q one last year

273
00:15:09,120 --> 00:15:11,800
Speaker 1: and there's been slowing and you can pick a variety

274
00:15:11,840 --> 00:15:13,640
Speaker 1: of metrics, but let's use the basket of p m

275
00:15:13,680 --> 00:15:16,480
Speaker 1: I indicators. It's been slowing from that point. So I'm

276
00:15:16,520 --> 00:15:19,360
Speaker 1: afraid the corporates that are saying this is Brexit related

277
00:15:19,960 --> 00:15:23,640
Speaker 1: UM worries probably wider the mark. I mean, there's the

278
00:15:23,640 --> 00:15:28,720
Speaker 1: odd subsector commercial real estate, most notably construction, which should

279
00:15:28,760 --> 00:15:32,000
Speaker 1: be I think concredibly make that claim. But I think

280
00:15:32,080 --> 00:15:35,600
Speaker 1: if you look at the UK manufacturing sector construction, they're

281
00:15:35,640 --> 00:15:38,560
Speaker 1: both were in recession in q in Q one. The

282
00:15:38,680 --> 00:15:42,040
Speaker 1: services sector remains strong, but that has been driven by

283
00:15:42,080 --> 00:15:44,960
Speaker 1: a strong labor market story. And what we're looking underneath

284
00:15:45,000 --> 00:15:48,040
Speaker 1: the hood. You look underneathause, there's some significant policy headwinds

285
00:15:48,080 --> 00:15:50,360
Speaker 1: coming into play for the UK labor market, the instruction

286
00:15:50,400 --> 00:15:52,680
Speaker 1: of an apprenticeship labby next year, the instruction of the

287
00:15:52,760 --> 00:15:56,960
Speaker 1: national living wage. There are reasons to think that the

288
00:15:57,080 --> 00:16:00,280
Speaker 1: UK economy is on a slowing trajectory absent or conversations

289
00:16:00,320 --> 00:16:05,520
Speaker 1: about Brexit. Now, of course, slow down rather than a collapse.

290
00:16:05,800 --> 00:16:09,040
Speaker 1: We remain in a situation of a very super accommodative

291
00:16:09,080 --> 00:16:12,200
Speaker 1: monetary policy here in the UK. The counterbalance, of course

292
00:16:12,240 --> 00:16:15,120
Speaker 1: to that is the government has the most aggressive fiscal

293
00:16:15,480 --> 00:16:18,920
Speaker 1: contractionary program of any of the G seven countries which

294
00:16:19,080 --> 00:16:22,080
Speaker 1: keeps keeps the economy in check. I think the real

295
00:16:22,400 --> 00:16:26,120
Speaker 1: forward indicator will come in November when the Chancellor of

296
00:16:26,160 --> 00:16:28,720
Speaker 1: the Exchequer we expected to be George ors Bond but

297
00:16:28,760 --> 00:16:33,680
Speaker 1: not necessarily, will deliver his autumn statement and indicate what

298
00:16:33,840 --> 00:16:36,840
Speaker 1: that fiscal profile is. Will he react with slowing economy

299
00:16:37,120 --> 00:16:39,640
Speaker 1: by loosening the purse strings or will he stick with

300
00:16:39,760 --> 00:16:42,920
Speaker 1: his rhetoric he's held since Mark Kearney and the folks

301
00:16:42,960 --> 00:16:46,000
Speaker 1: of the Monetary Policy Committee were able to basically take

302
00:16:46,040 --> 00:16:47,800
Speaker 1: a vacation these last few months. I think they held

303
00:16:47,840 --> 00:16:50,280
Speaker 1: last week reading in the visa but didn't tell anybody.

304
00:16:51,120 --> 00:16:56,880
Speaker 1: It was the opposite of a US live, meaning if

305
00:16:56,920 --> 00:17:01,240
Speaker 1: the economy is slowing um, it looks like uh Mr

306
00:17:02,160 --> 00:17:04,960
Speaker 1: Kearney can get through his entire term, perhaps without moving

307
00:17:05,040 --> 00:17:07,760
Speaker 1: rates one way or another. I think that's definitely our

308
00:17:07,840 --> 00:17:10,840
Speaker 1: central scenario, which is that there is absolutely no pressure

309
00:17:11,359 --> 00:17:14,520
Speaker 1: coming on Mark Arni to shift interest rates to the upside.

310
00:17:15,080 --> 00:17:17,280
Speaker 1: There has been a lot of conversation about potential moves

311
00:17:17,320 --> 00:17:19,880
Speaker 1: to the downside in the event of a lead vote.

312
00:17:20,160 --> 00:17:21,959
Speaker 1: I think that's why to the Mark myself, I think

313
00:17:22,000 --> 00:17:25,080
Speaker 1: there's a series of liquidity windows which the financial sector

314
00:17:25,119 --> 00:17:28,399
Speaker 1: here in the UK can tap into um but ultimately

315
00:17:28,800 --> 00:17:31,760
Speaker 1: there is a stabilization function which is weaker sterling, which

316
00:17:32,160 --> 00:17:35,600
Speaker 1: will come into play should the UK leave the European Union.

317
00:17:35,920 --> 00:17:39,560
Speaker 1: I think Marcarney conceivably goes through his entire term leaving

318
00:17:39,600 --> 00:17:41,600
Speaker 1: interest rates where they are because he is a price

319
00:17:41,680 --> 00:17:44,280
Speaker 1: taker on international markets. He does not make. It's an

320
00:17:44,359 --> 00:17:48,920
Speaker 1: uncomfortable myth for these central bankers that they control monetary conditions.

321
00:17:48,960 --> 00:17:52,720
Speaker 1: They do not. They are made, unfortunately in Frankfurt. They're

322
00:17:52,760 --> 00:17:54,920
Speaker 1: made in Beijing, they're made in New York, They're not

323
00:17:55,359 --> 00:17:57,680
Speaker 1: made in London. At the moment, how do you respond?

324
00:17:57,760 --> 00:18:03,040
Speaker 1: Olivia Blanchard suggest among others that all the hysterias overdone,

325
00:18:03,680 --> 00:18:08,200
Speaker 1: overwrought life life, Algal what Olivia is absolutely spot on

326
00:18:08,320 --> 00:18:11,600
Speaker 1: in terms of the rhetorical battle that we've seen over

327
00:18:11,640 --> 00:18:14,879
Speaker 1: the last couple of months, completely overblown and actually the

328
00:18:15,400 --> 00:18:18,840
Speaker 1: frustration as someone who has analyzed the situation and thinks

329
00:18:18,880 --> 00:18:21,680
Speaker 1: that the UK is better off within the European Union

330
00:18:22,320 --> 00:18:25,320
Speaker 1: but does not need to resort to a situation of

331
00:18:25,480 --> 00:18:30,120
Speaker 1: of your scaremongering and does not need to abuse economic

332
00:18:30,200 --> 00:18:32,720
Speaker 1: statistics in order to make make its message. I think

333
00:18:32,720 --> 00:18:37,120
Speaker 1: Olivia when he's saying that the this is overblown. Certainly

334
00:18:37,240 --> 00:18:40,399
Speaker 1: some of the people who've been falling over themselves to

335
00:18:40,480 --> 00:18:44,959
Speaker 1: talk about evaluation in sterling, a collapse in UK equities,

336
00:18:45,400 --> 00:18:48,480
Speaker 1: questions over the sustainability of the current account deficit, I

337
00:18:48,520 --> 00:18:53,320
Speaker 1: think they're overplaying the hand. What's the what's the best

338
00:18:53,480 --> 00:18:58,280
Speaker 1: case scenario for the UK economy? Then in two thousands,

339
00:18:58,440 --> 00:19:01,520
Speaker 1: the rest of two thousands sixteen into two thousands seventeen,

340
00:19:01,600 --> 00:19:05,240
Speaker 1: assuming status quo in about thirty seconds move of course,

341
00:19:05,600 --> 00:19:09,439
Speaker 1: assuming status quo, then actually we suddenly have the certainty

342
00:19:10,080 --> 00:19:13,480
Speaker 1: of our relationship with the European Union, which will bring

343
00:19:13,600 --> 00:19:17,080
Speaker 1: back some of the latent investment decisions which have been

344
00:19:17,119 --> 00:19:21,200
Speaker 1: stored up, providing some clarity posted twenty three of June.

345
00:19:21,800 --> 00:19:25,680
Speaker 1: And I think then the UK continues to be supported

346
00:19:25,720 --> 00:19:29,280
Speaker 1: by high levels of population growth, low levels of corporation

347
00:19:29,359 --> 00:19:32,200
Speaker 1: tax and continues to grow fairly strongly, but from a

348
00:19:32,320 --> 00:19:35,680
Speaker 1: slowing trajectory of that additional growth in managed to career

349
00:19:35,720 --> 00:19:38,160
Speaker 1: in early twenty fifteen as a result of the commodity

350
00:19:38,200 --> 00:19:41,520
Speaker 1: price bust. This has been a wonderful Simon French. Thank

351
00:19:41,520 --> 00:19:43,840
Speaker 1: you so much for coming in with Paymer greatly greatly

352
00:19:44,359 --> 00:19:46,920
Speaker 1: appreciate it. We're going to continue our discussion here, trying

353
00:19:46,960 --> 00:19:48,520
Speaker 1: to do it in a balanced way. Are we being

354
00:19:48,600 --> 00:19:52,719
Speaker 1: balanced to make fair and balanced? I think Futures up

355
00:19:52,760 --> 00:19:56,320
Speaker 1: a huge twenty eight points of vixen too point two,

356
00:19:56,440 --> 00:20:00,119
Speaker 1: five points of down. Futures up two from London, Cha

357
00:20:00,240 --> 00:20:07,920
Speaker 1: McKee and Tom Keane Bloomberg Surveillance on Wall Street to

358
00:20:08,000 --> 00:20:10,119
Speaker 1: Bloomberg Surveillance brought to by t TOO Computing, a new

359
00:20:10,200 --> 00:20:13,199
Speaker 1: kind of I T solutions company for workflow, mobility and infrastructure.

360
00:20:13,240 --> 00:20:15,280
Speaker 1: Let them explain how their expertise can help you gain

361
00:20:15,320 --> 00:20:17,960
Speaker 1: greater business value. There's a t to computing dot com

362
00:20:18,040 --> 00:20:18,880
Speaker 1: for more information.