1 00:00:02,200 --> 00:00:05,600 Speaker 1: Bloomboo Business News twenty four hours a day at Bloomberg 2 00:00:05,640 --> 00:00:08,720 Speaker 1: dot com, the Radio plus mobile app, and on your radio. 3 00:00:09,000 --> 00:00:12,520 Speaker 1: This is a Bloomberg Business Flash and good morning. I'm 4 00:00:12,600 --> 00:00:15,320 Speaker 1: John Tucker. Has breaking economic confin used to bring to 5 00:00:15,400 --> 00:00:19,640 Speaker 1: your June Bloomberg Economic Expectations Index that's lower, falling to 6 00:00:19,760 --> 00:00:22,759 Speaker 1: forty one versus a prior rating of forty four and 7 00:00:22,880 --> 00:00:26,400 Speaker 1: a half. Also, the weekly Bloomberg Consumer Comfort Index UH 8 00:00:26,520 --> 00:00:29,560 Speaker 1: coming in lower at forty two point one the previous 9 00:00:29,640 --> 00:00:33,519 Speaker 1: rating at forty three and a half. Essential banks around 10 00:00:33,520 --> 00:00:36,599 Speaker 1: the world to placing their policy on hold. Do they 11 00:00:36,640 --> 00:00:39,280 Speaker 1: know something the rest of us don't. Doug cast Seabreeze 12 00:00:39,280 --> 00:00:42,440 Speaker 1: partners telling Tom a little earlier save your money for 13 00:00:42,440 --> 00:00:46,199 Speaker 1: a rainy day because it's starting to rain. That the 14 00:00:46,280 --> 00:00:49,840 Speaker 1: worry is sending stocks lower and driving money into haven assets. 15 00:00:50,159 --> 00:00:53,360 Speaker 1: With the downtowns of Duster Average extending its losses this 16 00:00:53,400 --> 00:00:56,680 Speaker 1: morning down one one points. That's down seven tenths percent, 17 00:00:56,800 --> 00:01:00,320 Speaker 1: has and P five hundred down fifteen points, That down 18 00:01:00,360 --> 00:01:02,800 Speaker 1: seven tenths and then as DAC is down thirty eight 19 00:01:02,840 --> 00:01:06,120 Speaker 1: points down the eight tenths of a percent you want volatility, 20 00:01:06,240 --> 00:01:09,280 Speaker 1: the vix a measure volatility in the markets up over 21 00:01:09,360 --> 00:01:13,479 Speaker 1: ten percent right now, and those haveing assets like the treasuries, 22 00:01:13,600 --> 00:01:16,480 Speaker 1: the ten year yield that is being pushed lower now 23 00:01:17,120 --> 00:01:20,840 Speaker 1: down to one point five three percent. We also have 24 00:01:20,959 --> 00:01:24,520 Speaker 1: a spot gold right now up eighteen dollars sixty nine 25 00:01:24,520 --> 00:01:28,200 Speaker 1: cents at thirteen forty four. That's a rise of about 26 00:01:28,319 --> 00:01:31,400 Speaker 1: one and a half percent, and the yen is up 27 00:01:31,800 --> 00:01:34,480 Speaker 1: one point nine percent one oh four oh one. We 28 00:01:34,560 --> 00:01:36,480 Speaker 1: check the markets for you every fifteen minutes during the 29 00:01:36,520 --> 00:01:40,880 Speaker 1: trading day. Went here on Bloomberg Radio, back to Tom, Yeah, JN, 30 00:01:40,880 --> 00:01:43,200 Speaker 1: thank you so much. I'm gonna get up right now. 31 00:01:43,240 --> 00:01:46,640 Speaker 1: On the interday chart on dollar yen now busting through 32 00:01:46,680 --> 00:01:49,760 Speaker 1: one oh four to one oh three three am this morning, 33 00:01:50,320 --> 00:01:55,120 Speaker 1: we had a low onion one oh three fifty five, 34 00:01:55,280 --> 00:01:57,680 Speaker 1: so we're not near that, but we're in the vicinity 35 00:01:57,760 --> 00:02:03,800 Speaker 1: Bloomberg surveillance this morning. Rotch by Interactive Brokers Traders University. 36 00:02:04,000 --> 00:02:07,920 Speaker 1: Even experienced traders need to keep learning. Traders University will 37 00:02:07,960 --> 00:02:11,480 Speaker 1: get you up to speed quickly with short videos, webinars, 38 00:02:11,560 --> 00:02:15,520 Speaker 1: courses and more. Visit i b k r B dot 39 00:02:15,560 --> 00:02:21,200 Speaker 1: com slash stay Ahead i b k r B dot 40 00:02:21,200 --> 00:02:27,279 Speaker 1: com slash stay ahead. John Trucker just did a voluminous 41 00:02:27,440 --> 00:02:30,520 Speaker 1: data check. Uh, needless to say, there it is. She 42 00:02:30,600 --> 00:02:34,560 Speaker 1: sees it on her screen, giving us great assistance within 43 00:02:34,600 --> 00:02:37,600 Speaker 1: the turmoil of Brexit, Romain and the rest of the 44 00:02:37,600 --> 00:02:41,880 Speaker 1: global markets. Jane Foley with Robo Bank. Jane, what stands 45 00:02:41,919 --> 00:02:46,839 Speaker 1: out on your Bloomberg screen this morning? I see curve flattening? 46 00:02:47,200 --> 00:02:50,760 Speaker 1: But that's too simple an answer. What sticks out? It 47 00:02:50,880 --> 00:02:53,240 Speaker 1: really is fair and I think a lot of it 48 00:02:53,280 --> 00:02:55,519 Speaker 1: has been reflected and a number of different assets. You 49 00:02:55,800 --> 00:02:58,760 Speaker 1: talk about flattening, you talk about the vix index, but 50 00:02:58,840 --> 00:03:00,919 Speaker 1: I think we just look at the exchange markets and 51 00:03:01,160 --> 00:03:03,200 Speaker 1: you mentioned just now that the yen. Now that is 52 00:03:03,280 --> 00:03:07,400 Speaker 1: all about a flight to safety. Demand for that safe 53 00:03:07,400 --> 00:03:10,240 Speaker 1: have in US at the yen, and quite frankly, we've 54 00:03:10,240 --> 00:03:12,480 Speaker 1: still got one week to go before that Brexit vote. 55 00:03:12,480 --> 00:03:14,920 Speaker 1: The opinion polls are suggesting that the UK will vote 56 00:03:14,960 --> 00:03:17,240 Speaker 1: to leave, and if it does, I think we've got 57 00:03:17,240 --> 00:03:20,079 Speaker 1: a lot further to go in terms of this flight 58 00:03:20,200 --> 00:03:23,040 Speaker 1: towards safe have in usets. A lot further to go 59 00:03:24,400 --> 00:03:29,839 Speaker 1: in policies speak, is to do it within control, our 60 00:03:29,919 --> 00:03:35,440 Speaker 1: policymakers losing control. Well, we've had a lot of comments 61 00:03:35,480 --> 00:03:38,000 Speaker 1: this week. In fact, even just over the last twenty 62 00:03:38,040 --> 00:03:40,800 Speaker 1: four hours we saw yell and talking about the risk 63 00:03:41,040 --> 00:03:46,480 Speaker 1: creative were the miracle of Osborne and Darling on stage together. Indeed, indeed, 64 00:03:46,560 --> 00:03:48,960 Speaker 1: well this is it, it's it's it's that The divisions 65 00:03:49,040 --> 00:03:52,640 Speaker 1: in in UK politics are very interesting right now because 66 00:03:52,680 --> 00:03:56,120 Speaker 1: we have politicians and the left and right coming together 67 00:03:56,160 --> 00:03:59,080 Speaker 1: to argue either for the remain, either for the leave it. 68 00:03:59,320 --> 00:04:02,520 Speaker 1: And what that's jets is that either way, whichever way 69 00:04:02,520 --> 00:04:05,240 Speaker 1: it goes as deep divisions which could potentially take a 70 00:04:05,320 --> 00:04:10,160 Speaker 1: long time to heal in ruling classes. How linked is 71 00:04:10,280 --> 00:04:13,920 Speaker 1: your world to the stock market? We like to think 72 00:04:13,960 --> 00:04:16,760 Speaker 1: that Jane Foley's world is completely removed. I don't buy 73 00:04:16,839 --> 00:04:20,279 Speaker 1: it for a minute. Are the equity markets behind the 74 00:04:20,480 --> 00:04:24,799 Speaker 1: turmoil you see at Reble Bank in effects in debt? 75 00:04:25,560 --> 00:04:27,880 Speaker 1: I think what we learned from the financial crisis is 76 00:04:27,920 --> 00:04:30,839 Speaker 1: that when there is tension, when there is stress out there, 77 00:04:31,000 --> 00:04:34,480 Speaker 1: well there's there are correlations. Correlations spring up between markets everywhere, 78 00:04:34,480 --> 00:04:38,520 Speaker 1: so that when the markets tents, it moves towards safer assets. 79 00:04:38,880 --> 00:04:40,600 Speaker 1: And you see them in stock markets, which are cause 80 00:04:40,640 --> 00:04:42,760 Speaker 1: the risky assets. And you see that in foreign exchange 81 00:04:42,800 --> 00:04:46,360 Speaker 1: to you, and right now the market is very anxious, 82 00:04:46,560 --> 00:04:49,000 Speaker 1: very uneasy, and that means that you're seeing it. They 83 00:04:49,040 --> 00:04:51,560 Speaker 1: push lower in stock markets. You've seen that setting US 84 00:04:51,640 --> 00:04:53,680 Speaker 1: markets since the end of last week, in other markets 85 00:04:53,680 --> 00:04:55,919 Speaker 1: a little a few days before that, and we're seeing 86 00:04:55,920 --> 00:04:58,960 Speaker 1: these same sorts of trends reflected in foreign exchange with 87 00:04:59,040 --> 00:05:01,960 Speaker 1: the movement into say haven currency such as the Swiss frank. 88 00:05:02,040 --> 00:05:05,200 Speaker 1: In the end, how do you balance the polarity of debate. 89 00:05:05,600 --> 00:05:09,000 Speaker 1: This is all about Brexit Bromain and this is all 90 00:05:09,040 --> 00:05:13,240 Speaker 1: about weaker economic growth. Are they separate in discreet or 91 00:05:13,279 --> 00:05:16,719 Speaker 1: can you pull those two thoughts together? I think certainly 92 00:05:16,720 --> 00:05:18,240 Speaker 1: from the point of view of the markets, it's the 93 00:05:18,279 --> 00:05:23,040 Speaker 1: same thing. It's it's related to political uncertainty economic uncertainty. 94 00:05:23,360 --> 00:05:26,920 Speaker 1: The political uncertainty caused a massive economic cloud acause at 95 00:05:26,960 --> 00:05:29,279 Speaker 1: the UK markets. But this is just about the UK. 96 00:05:29,440 --> 00:05:31,720 Speaker 1: The reason that we have Yellen talking about it, the 97 00:05:31,760 --> 00:05:34,800 Speaker 1: reason we have Corona talking about it, is because of 98 00:05:34,839 --> 00:05:38,440 Speaker 1: the potential damage this community European growth. Because you've got 99 00:05:38,440 --> 00:05:41,200 Speaker 1: to remember, it's not just the UK where there's anti 100 00:05:41,279 --> 00:05:44,840 Speaker 1: EU sentiments. There are nationalistic tendencies spreeing up a variety 101 00:05:45,200 --> 00:05:49,320 Speaker 1: of European countries, meaning that the legacy really it's longer 102 00:05:49,320 --> 00:05:52,320 Speaker 1: than than than the next week's vote. And your early 103 00:05:52,400 --> 00:05:56,680 Speaker 1: morning dollar didn't move. It was about other currencies. And 104 00:05:56,720 --> 00:06:00,080 Speaker 1: then seven am or so today New York time, we 105 00:06:00,120 --> 00:06:03,320 Speaker 1: saw d x y give a real pop up. Is 106 00:06:03,360 --> 00:06:07,720 Speaker 1: the great surprise here within Sterling, Yen, all the rest 107 00:06:07,720 --> 00:06:10,640 Speaker 1: of the generations that we're in for a whole another 108 00:06:10,800 --> 00:06:16,200 Speaker 1: bout of legit dollar strength. It's possible because although we 109 00:06:16,240 --> 00:06:17,919 Speaker 1: can look at the the US economy, if you can 110 00:06:17,920 --> 00:06:20,880 Speaker 1: think about US interest rates and take perhaps a softer 111 00:06:21,040 --> 00:06:23,560 Speaker 1: view on the dollar, you've got to think about this 112 00:06:23,600 --> 00:06:26,240 Speaker 1: in the context of safe haven demand. If the market 113 00:06:26,320 --> 00:06:30,280 Speaker 1: is moving out of Sterling clearly, and it's moving potentially 114 00:06:30,279 --> 00:06:33,120 Speaker 1: out of the euro too. If there are more concerns 115 00:06:33,160 --> 00:06:36,400 Speaker 1: about European politics and growth on the back of this voat, well, 116 00:06:36,400 --> 00:06:38,120 Speaker 1: where does the market go. Yes, it might go into 117 00:06:38,160 --> 00:06:39,920 Speaker 1: the the end and to a fact, which is what 118 00:06:39,960 --> 00:06:42,520 Speaker 1: will which is what we've seen. But there will be 119 00:06:42,560 --> 00:06:44,680 Speaker 1: dollar buyers out there on the back of that too. 120 00:06:44,920 --> 00:06:48,560 Speaker 1: And and obviously also you could have more policy easing 121 00:06:48,760 --> 00:06:51,839 Speaker 1: in Europe if there is a brexit. And again, even 122 00:06:51,880 --> 00:06:54,440 Speaker 1: though the set may not be hiking interest rates at 123 00:06:54,440 --> 00:06:58,080 Speaker 1: a fast pace, they're still the least dovish of the 124 00:06:58,120 --> 00:07:00,960 Speaker 1: G ten center back from that made it make that 125 00:07:01,000 --> 00:07:03,400 Speaker 1: don't a look attractive? What I look at, folks, If 126 00:07:03,440 --> 00:07:05,000 Speaker 1: you want to know what we do in the Bloomberg 127 00:07:05,040 --> 00:07:07,719 Speaker 1: and I know miss fully does this rabble bank, we 128 00:07:07,839 --> 00:07:11,720 Speaker 1: do two things. We look at spreads, comparison, comparing contrasts 129 00:07:11,760 --> 00:07:15,480 Speaker 1: between two things, and we also look at the brutality, 130 00:07:15,520 --> 00:07:18,360 Speaker 1: as Trichet would say, of movements, which is measured by 131 00:07:18,440 --> 00:07:23,000 Speaker 1: volatility and standard deviation. I'm looking, Jane at the five 132 00:07:23,120 --> 00:07:27,080 Speaker 1: year five year forward. The guests out five years five 133 00:07:27,160 --> 00:07:31,920 Speaker 1: years forward of inflation, and I'm well out beyond two 134 00:07:31,960 --> 00:07:40,040 Speaker 1: standard deviations of disinflation or deflation. Are we importing disinflation 135 00:07:40,080 --> 00:07:44,240 Speaker 1: and deflation which is dampening economic growth? Well? It obviously 136 00:07:44,240 --> 00:07:46,320 Speaker 1: it depends which country you're looking at it you're thinking 137 00:07:46,320 --> 00:07:49,720 Speaker 1: about you, and that's definitely at the case, certainly if 138 00:07:49,760 --> 00:07:51,960 Speaker 1: you are in a country such as this with Frank 139 00:07:52,000 --> 00:07:55,480 Speaker 1: I mean inflation at the moment in Switzerland down point 140 00:07:55,480 --> 00:07:57,480 Speaker 1: four percent year, and you they have a real problem 141 00:07:57,480 --> 00:08:01,160 Speaker 1: with it, because can say strong you look at the US, Well, 142 00:08:01,280 --> 00:08:03,680 Speaker 1: there was about of dollar strengths at the second half 143 00:08:04,480 --> 00:08:08,120 Speaker 1: into early fifteen, and you could say that that depressive 144 00:08:08,200 --> 00:08:10,640 Speaker 1: inflation then, although cause there's a lot more inflation in 145 00:08:10,680 --> 00:08:14,200 Speaker 1: the US than in Europe generally speaking. But certainly it 146 00:08:14,320 --> 00:08:17,480 Speaker 1: is the case that most economies in the detail world 147 00:08:17,680 --> 00:08:21,480 Speaker 1: do not want currency strengths because they don't have the 148 00:08:21,880 --> 00:08:24,840 Speaker 1: demand there to put up the inflation. We're not on 149 00:08:24,880 --> 00:08:27,040 Speaker 1: a parody watch again, if you're just joining US folks, 150 00:08:27,120 --> 00:08:29,840 Speaker 1: Jane fully robo bank. Let me do a quick data check. 151 00:08:29,880 --> 00:08:33,440 Speaker 1: Equities deteriorate. It's not Jane's fault. Negative one thirty one 152 00:08:33,440 --> 00:08:37,320 Speaker 1: in the Dow seventeen thousand, five hundred ten, the VIX 153 00:08:37,480 --> 00:08:40,680 Speaker 1: up two point to two big figures. That's a huge move, 154 00:08:41,240 --> 00:08:44,199 Speaker 1: and vis call a ten percent move twenty two point 155 00:08:44,240 --> 00:08:46,920 Speaker 1: three six on the VIX. The yield comes in the 156 00:08:46,960 --> 00:08:50,559 Speaker 1: lowest yield since three am this morning, one fifty three 157 00:08:51,200 --> 00:08:55,520 Speaker 1: twenty nine on a tenure uh. European yields have actually 158 00:08:55,559 --> 00:08:59,040 Speaker 1: been pretty quiet late in their session, not really moving. 159 00:08:59,080 --> 00:09:02,240 Speaker 1: I'm sure we'll get more went there in Europe tomorrow morning. 160 00:09:02,640 --> 00:09:04,599 Speaker 1: Dow again one oh four or one. We had a 161 00:09:04,640 --> 00:09:08,680 Speaker 1: one or three handle recently Euros Swissy Jane Folly mentioning 162 00:09:09,000 --> 00:09:13,800 Speaker 1: with decidedly stronger Swiss uh this morning, Jane, is I 163 00:09:13,880 --> 00:09:17,960 Speaker 1: look at the summation of all this activity, what do 164 00:09:18,040 --> 00:09:23,040 Speaker 1: you observe institutions doing. Is its stasis until they see 165 00:09:23,080 --> 00:09:26,600 Speaker 1: the vote or can they actually try to manipulate an 166 00:09:26,679 --> 00:09:29,679 Speaker 1: act as we go to next Thursday. I would say 167 00:09:29,720 --> 00:09:34,360 Speaker 1: at this stage sophisticated investors are staying away. They've probably 168 00:09:34,360 --> 00:09:36,360 Speaker 1: taken their positions and that they're moving away. And I 169 00:09:36,400 --> 00:09:39,080 Speaker 1: think we have got some issues with volumes in some 170 00:09:39,280 --> 00:09:43,480 Speaker 1: of Whether or not the retail investors are smaller houses 171 00:09:43,520 --> 00:09:45,920 Speaker 1: opposition yet, well, that remains to be seen. But I 172 00:09:46,000 --> 00:09:49,200 Speaker 1: would certainly say that a lot of investors that look 173 00:09:49,240 --> 00:09:51,640 Speaker 1: at this full time are going to stay where we 174 00:09:51,800 --> 00:09:55,200 Speaker 1: were instilled, potentially for some very shopping movements in these 175 00:09:56,120 --> 00:09:58,400 Speaker 1: Ahead of that, I thought I knew the answer to that. 176 00:09:58,480 --> 00:10:04,199 Speaker 1: So the setup answer. Can policy makers act intelligently and 177 00:10:04,320 --> 00:10:09,200 Speaker 1: efficients efficiently and with advocacy if there's no vowl on 178 00:10:09,240 --> 00:10:12,920 Speaker 1: the market volume in the market, well, it's going to 179 00:10:12,960 --> 00:10:15,559 Speaker 1: be very difficult for them to take away the potential 180 00:10:15,600 --> 00:10:17,320 Speaker 1: for chopping movements. I mean what they have said, I 181 00:10:17,320 --> 00:10:19,920 Speaker 1: mean if we look at Bank of for England for instance, 182 00:10:19,920 --> 00:10:23,040 Speaker 1: and other central banks. They do have lines out there 183 00:10:23,080 --> 00:10:26,440 Speaker 1: to ensure liquidity. So we had in fact yesterday the 184 00:10:26,480 --> 00:10:31,480 Speaker 1: first extraordinary long term index repair from the Bank of England. 185 00:10:31,640 --> 00:10:34,480 Speaker 1: There wasn't a huge enormous take up from that, but 186 00:10:34,600 --> 00:10:36,560 Speaker 1: it's there, and I thought that I think the fact 187 00:10:36,559 --> 00:10:40,199 Speaker 1: that the central banks are coming up with reassuring comments 188 00:10:40,280 --> 00:10:44,040 Speaker 1: should perhaps help calm some anxiety in the market. But 189 00:10:44,160 --> 00:10:46,960 Speaker 1: even so, this is this is an unprecedented event for 190 00:10:46,960 --> 00:10:49,440 Speaker 1: for recent times. If there is a Brexit next week, 191 00:10:49,720 --> 00:10:53,719 Speaker 1: it would certainly cause a huge amount of uncertainty and volatility. 192 00:10:54,080 --> 00:10:56,079 Speaker 1: Jane for thank yous to the rabble bank. Can you 193 00:10:56,120 --> 00:10:59,559 Speaker 1: see that in the vow of the volatility of sterling 194 00:10:59,679 --> 00:11:02,440 Speaker 1: out of stunning levels when we look at the sophisticated 195 00:11:02,480 --> 00:11:05,800 Speaker 1: currency surfaces on the Bloomberg what you need to know 196 00:11:05,960 --> 00:11:08,160 Speaker 1: right now the down negative one thirty nine, the Vicks 197 00:11:08,480 --> 00:11:12,000 Speaker 1: twenty two point four eight, the yield one point five 198 00:11:13,080 --> 00:11:14,720 Speaker 1: stay with us all day.