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tv   Countdown  Bloomberg  June 24, 2016 1:00am-2:31am EDT

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manus: the bbc projects the u.k. believe the european union. the pound has fallen, while futures point to more than a 7% drop in european trade. financials take the brunt of this. there are tumbles in asian trading. welcome to "come down." i'm anna edwards. manus cranny. we have all locations covered, all bases covered. we have reporters standing by in all the locations across europe,
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and globally. we have been covering the politics and the market reaction all morning. we are catching up with the research coming from the banks. everybody is struggling to work out what is happening. intot will force denmark intervention. if that is not enough, a rate cut could follow. denmark might need qe to fight safe haven flows. simon kennedy was telling us we might the responses from the bank of england, but also global central banks. including some who have been treated as safe havens as of late. manus: the irony is not lost on anybody. guy will take us through the market reactions of the moment. we spoke in japan, suggesting that g-7 was ready to open swap lines, if needed. liquidity will be the key word
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throughout the day. when you look at some of the market commentators, they are s aying they would not sell if eu markets fall the on 15%. this is about market wit interpretation. anna: let's get to the latest results of the referendum. they started coming in around midnight, u.k. time. right out of the gate, it looks like "leave" was going to have a good night and they did. 370 out of 382 areas reporting. to leave and 48.33% to remain. guy johnson has the latest market reaction. guy: it is absolutely sensational this morning. we don't see these kind of moves. you can get an idea at the historical sense by looking back at the almanac. this is just a minor blip compared to the move we
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can see with the british pound, down by 11.22%. this gives us the magnitude of the move. in south korea, it is down by 3.84%. but in terms of the standard deviation moves, a bigger move within the nikkei, down by 8.42%. the asian markets are falling sharply. the british pound is absolutely the standout, and no surprise there. the norwegian currency, absolutely massive in terms of the scale of the moves. the front ednd of the u.s. curve is all the way down. the u.s. five-year move, it is rolling down the curve at the moment. is moving down in terms of basis points. people are bidding for the u.s. curve. you run home to momma in these kinds of situations.
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it is probably the safest place to hide out. the move is now getting really extreme. gold, also a very similar story to that as well. what are we going to hear from the rating agencies? certainly on the move this morning, unsurprising to see that happening. let's run you through how equity markets are going to open later on. no surprise with the ftse. we think it will be down by 8.5%. it is going to be an interesting morning to see how the market deals with of the individual components of the ftse 100. so many of them have external earnings and with the pound down by so much, you could make a case for them doing better rather than worth in terms of reported earnings. the for the 100 is down by 8.5% and we think wall street will open down by 5% this morning. this is what manus was mentioning, regarding to the s&p. a couple ofhem days back.
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they said, we are ready to intervene. he did not rule out further rate cuts. remember, the swiss franc is already in negative territory. the euro is selling off. we obviously remember what happened. we saw that massive move. the snb has clearly learned a lesson from that. this is the other certain want to show you. yesterday i was looking at training debt. for sterling was you just don't see spreads like that. the spread is absolutely massive. you can see the pound-dollar cable rate overnight, volatility hitting a record. will be interesting to see how the market tightens that spread throughout the day. we are trying to get an idea of what will be the ultimate settling point of this pair. but i don't think we are any point close to that at this
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stage. volatility is absolutely massive and the bid offer, absolutely huge. the market is to find a middle ground. and i think that this stage, given what we can see with this cable volatility, we might be some way away from that. back to you. anna: sobering news from the u.k. so says the german foreign minister in a, don twitter this morning. comment on twitter this morning. manus: also what guy and megan greene have been talking about this policy response. the supply probability of the bank of england -- the rate cut rises to 50%. again, the market is getting laser focus on threadneedle street. anna: let's talk about the capital trading in the city of
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london this morning. matt? matt: yes, it is manic here, for sure. i have been talking to a number of the traders. i have been talking to the ceo of the company here. they have been trading all night.s o, they have not slept. they started trading around 8:00 p.m. last night and the first started to get an indication that the "leave" camp might be ahead at midnight. that is when we started to see dips in dax futures and a rise in gold, though not as strong as they expected. youund 2:00 this morning, o got a look at the votes and saw that the "leave" camp had more than one million and started to get up to 1.2 million, whereas aroundmain" camp hung one million even.
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that is when you saw a real movement down in cable and futures. they said that moves were bigger than in 1992, starting right away at 2:00. down 5% in 30 seconds. by the way, u.s. futures are trading down 5%. that is the limit. they can't trade further down at than that. expect to see them hold their an open their. there is a sense of disbelief ont he one hand, but they don't have time to think about it because they are doing so much trading. they said it is possible that on sunday they could open up a special session, like they did after lehman brothers. i asked about that. manus: matt, can i just jump in here and ask you. my question to you is, the flow of money going on behind you, is this people trying to really race out of the market? are there stock moves being executed? are there margin calls being considered?
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we know margins have been raised around the city of london. give us a sense of whether they are exiting the market or saying, it is official, it is happening? matt: right, haven't looked into the trading books, per se. i can ask a few of the traders. but what it looks like is everybody was positioned for a "remain." they then realized 30 the middle of the night that they had to turn around. -- they then realized at the middle of the night that they had to turn around. what is fascinating is that so many people stayed up to trade around the clock. normally they would come in on a friday morning and see a page of trade. right now they are rolling at such a rapid pace that you can barely stopped to read them. it has been going on like that all might long. it is just an amazing amount of activity. the question now is whether the lsd we'll continue to allow the
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-- willng markets continue to allow the underlying market to trade all day. there is talk about this stopping at lunchtime to give people a chance to catch their breath. individual stocks can trade here in london, with the limit down at 5%. but there is no circuit breaker for the broader index. i would say it is a pretty historic day and the moves are bigger than anything these guys here have ever seen, whether it is the financial crisis, lehman brothers, or 1992. anna: the world perhaps, is divided between those who remember 1992 and those who don't. thanks, matt miller. nigel farage has already hailed the victory and called on david cameron to resign. >> look outside of the window.
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just look at it, prime minister. the dawn is coming up on an independent united kingdom, something you did your absolute best to prevent. you did it using every organ of estate available to you. you have lost the trust of the british people. go. go now. member from our u.k. government team is here in the studio. i am not sure how much sleep you have had. not much sleep the place in this country overnight, i think. >> cameron's position is not clear. he can't just leave, however. he is got to study the shift. we hear there might be a statement from the prime minister. there will be a statement this morning at about 9:00 at the very latest. the problem now is of course, talk of succession. this cannot be immediate.
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obviously, boris johnson is in favor of david cameron staying. manus: now that the brexit it's official, cameron's position is untenable. >> the problem is he has got to set up a schedule, even if he does resigned today. he cannot just close the door and go away. he is got to study the shift it makes her the financial markets are steady. he got to have business as usual. you might try to hang on for a few months. the problem with a successor is this vote has unleashed forces in england. a bunch of people who voted to change -- manus: can i interrupt you there? this is only bloomberg news flow. france's calling for a referendum on their position in the eu. anna: the frexit caroline was talking about earlier.
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you can see these dominoes falling, that is one of the questions we have been dealing with for a long time now. but in the short-term, what are the next steps? we have been talking about whether article 50 must be triggered. all of this has to do with the relationship with europe. is this going to be the big focus? is the next thing to work out what the relationship with europe is next? or is there too much tory party infighting? >> that is the thing. we don't know who is going to be leading these negotiations. if cameron stays and tries to see this through, that is one thing. but this party is so deeply divided. not just the tory party. a bunch of these brexit votes were actually from people backing that party. it is an antiestablishment political vote. boris is boris, but he is the establishment. manus: one of the big factors of
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this campaign has been around immigration. at the moment, 50% of the u.k. has voted for the brexit. the real ality of what they were promised, how much of that is deliverable in terms of immigration. anna: they were never promised a number on immigration, where they? >> at the same time, people were promised a better economy. lots of the votes have come from lower income groups. who now think, well, we are on the eve of a better world. this promise will be difficult to deliver. it will be almost impossible to cut these numbers. anna: we will now see what this means and get some details. thank you, svenja of o'donnell. scholzwe had marcia
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saying that we are prepared for the brexit. we're looking at money flowing into bonds, sterling and gold. this is the latest comment. this is the chairman at the ric zurich same they are committed to the u.k. and that market settlement will settle over time. we are going to get a plethora of these notes throughout the day. anna: let's get reaction from the rest of europe now. from europe, caroline hyde is standing by. we have had shop coming through from germany already. -- we have had shock coming through from germany already. caroline: as we speak, the german politician, who is the eu parliament head, he is saying, the u.k. has decided to leave and the eu will deal of it. schulz is saying that overall,
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the u.k. is going down a very difficult economic path. their ishaqi shock and amazement coming from the german politicians here. -- there is shock and amazement coming from the german politicians here. it is a very sobering day he says, set for the eu and the united kingdom. others are coming out saying, "damn, a bad day in your." those are his exact words from twitter. in germany, they also claim that the u.k. needs to remain integrated, as much as possible. he says, this is a defeat for a reason. enemies to shocked the german ministers and political players are. i need to remind you just how important germany is for the u.k. but there are some questions being raised. marco will have a press conference later today in --
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merkel will have a press conference later today in th afternoone. but will we see a speed up from the discussion points from m erkel? the u.k. was a key ally with the european union. already we are having comments coming from france, talking about wanting to call a referendum. the worry is, will this create a domino effect across the eurozone? the euro to want drop like the british pound, that is a message coming from britain. what does all of this mean from a german point of view? there are many german businesses who do business here in the united kingdom who have a huge presence. caroline: exactly and that is why the asking of the government to step in and limit the
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economic damage has occurred. interestingly, the u.k. is more dependent on germany that germany is on the u.k. for example, germany is the u.k.'s number one trading partner, in terms of goods. the u.k. though, is only the third biggest with germany, about 120 billion euros worth of exports go to the united kingdom, about 8% of germany's overall exports. it is the auto sector and pharmaceuticals that will be hit. it is mechanical engineering that we will see hit. look up for the likes of bmw on the open. of course, the travel company is going to be hit by the lack of desire from the united kingdom to go traveling now. ne ofould be hit to the tuen o 2017.n 2
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we could see 50 billion euros. i believe you with one fact. 9% of the dax go to direct sales of exports to the united kingdom. that fact, coming from goldman sachs. anna: caroline, thanks very muc h. sticking with the german scene, london to lose influence as a financial hub as a result of this decision. brexit will not impact insurance as heavily as other markets. economic growth will suffer in the eu to a lesser extent. it will have severe implications on the economy. somebody considering these implications is david cameron. there is number 10, downing street. he will because that are in what this means -- he will be considering what this means for his political career. let's get to the latest results, shall bwe, manus?
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manus: there we go, 57.1% has voted to exit its relationship with the eu. 48.24% has decided to remain. merkelill discuss with how to avoid the domino effect. guy johnson has the latest on the markets. guy: the volatility is absolutely massive, trying to get a price on this one, it is really quite difficult. the charts are lighting up, but the spread, absolutely massive. it looks like table is fighting around the 134 level. we continue to see asian markets getting absolutely dumped this morning. this is the score we work off of. is south korea a bigger mover than the nikkei, which is down by 7.86%? we have seen what is happening
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with the currency there. the market is currently seeking safety this morning. look at what is happening with commodities. you can see the front end of the u.s. curve. in fact, the whole of the u.s. curve is well bid right now. markets are pricing out the possibility of a fed rate hike, which will make janet yellen's life even more difficult. i think this is quite important as well, this chart. this is the cable rate. it puts into perspective the move that we can see this morning. you have got to remember, a few days back the market was very nervous about what the results of this was going to be. i think correctly at that point, it was starting to price in the right idea. we saw a very big rally in cable. when you look at the move over the last few days, and you look at what is happening now, yes, we are starting to find a little bit of firmness coming in.
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remember, the market has traveled a long way in only a few days. if i could zoom in right now, i want to show you what is happening with cable. it does seem that we are maybe, starting to find a little bit of level. roundly 1.34 but it is absolutely colossal out there at the moment. this is what is happening in terms of the equity markets. as matt miller said, we are limited to what is happening in the states. the s&p could open around 5%. it looks like the london market will be called down around 7.6%. watch the banking sector, we have seen charts absolutely pummeled in asia. we have been talking to people over the last few days. the entire european banking sector will be front and and center this morning. the italian banks could be really on the sell list this morning. i want to take you back to this
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chart as well, the pound-dollar cable volatility. it is hitting a record. that should tell you this story, the bid offer is colossal. i watched this last night from a very big provider. they are saying, do not come with us tomorrow morning. we will not want to honor stop losses. if you have to trade, it will be very tough. really, to not try and execute. yhe bid offer remains ver b big. the charts look pretty sensational right now, but the market might take a while to find peace. manus: just picking up on some downinghemes, number 10 street, in terms of liquidity. we have this story and have already heard from the bank of japan governor, saying the country currently heads the g-7.
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they have made these calls before, but korea and india are both reported to have intervened within their for exchange markets. denmark heavily did the same according to analysts. ,ave a look at the krona down 6.4%. ona, downgian kr 6.5%. the markets are preparing for a 50% probability of a rate cut in the u.k. anna: let's get to the business flash now. reporter: yes, there are other stories out there. big u.s. banks have won a thumbs up from the fed. all 33 of them have passed the latest rest test, indicating they would be able to pass a severe economic shock. citigroup performed the best, while morgan stanley trailed its peers. the results mark a second year in a row that all firms past the first phase of the annual exam.
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earlier this week, janet yellen told congress that the stress test progress is about to undergo "meaningful changes." a former jpmorgan private banker has appeared in a u.s. courtroom after eight years on the run in argentina, where he fled to avoid embezzlement and fraud charges. he pleaded not guilty to 15 pounds after being accused of stealing more than $5.3 million from customer accounts at ubs in jpmorgan. he is in pleased all with the government. volkswagen will agree to pay owners of the cars affected by the admissions scandal up to $7,000 and will fund a program to tackle air pollution. people familiar say it is part of a $10 billion settlement being negotiated with the u.s. government, which will be presented to a judge next week. bank has cleared the way for many job cuts. they have struck a deal to eliminate 3000 positions.
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the ceo is laying off workers, scrapping dividends, and selling assets to reverse a shares slump that has demoted 44% of the bank's value over the last year. that is your bloomberg business flash. anna: stephen, thank you so much. of next guest thinks not all the u.k. economic challenges can be reduced to an argument about the eu. marshall is the acting director general. we are now joined on the program. what are your early thoughts as he woke up this morning to see this news? >> my very first thought was for stability. we have seen what is happening with the foreign exchange and futures markets this morning, but stability means something for the wider business here as well. they want to see action from the government and from the bank of england to make sure trading conditions continue to be relatively smith, if if that is possible on a day like this.
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also, really, to make your that in -- to make sure that in the months ahead, they are able to do business. just seen ae headline come in on th bloomberge, one of the first industry responses. this is a foreign owner of businesses here in the united kingdom. moreeo says, setting up centers, out of the question. this is the challenge for british businesses now. i use the metaphor, you need to hold your trade relationships, but we don't know what the landscape will look like. f> well, there is aperiod o inserted day, which is why it is so important for the prime minister to get out there and efine the timeline. well, when will they invoke article 50? anna: or will they? i have had conversations with
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skepticsory euro saying that they don't mean to. what is the logic with leaving the european union and then abiding by their rules? however it is triggered, you want to see trade deals done as soon as they can be. >> absolutely, because so much of our businesses are involved in complex global businesses. we don't want to wait five or 10 years to understand what the rules of trade are. manus: we are dealing with a reality. i mean, no business can survive for that period of time. >> well, many businesses can survive and will. they are resilient and inventive and will look for ways to make sure they hold onto a good share of their market. what businesses are asking for is somebody to come out and help them shore up confidence. that is about a timeline and what kind of plan they will have
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for domestic actions within the u.k. to keep the economy moving. anna: that exploded the leadership and right now there will be people at the top of government asking if they are still at the top of government. who knows what conversations are going on, regarding when people will leave their positions? there are going to be some very short-term concerns that are nothing to do unfortunately, with the business environment. >> one thing that worries me is if we engage over the next few days and i ignore the fact that we have an economy to manage, that worries me. there is a need for short-term stability. we want to see action on some things that would shore up business confidence. cutting business costs, etc. creating a business environment relatively swiftly, i think he will be a positive response.
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anna: they said, take back control. there are things that businesses want to do. they will say, ok taking back control. do these. what would you like to see? adam: there are things that westminster has provided and not done to improve the business environment in the u.k. if ever there was a time for with mr. to do those things -- westminster to do those things, whether it is energy or broadband, now is the manus: time to do it. manus:adam marshall, acting director general of the commerce. things are being with us. we have special coverage throughout this weekend, right here on bloomberg tv and radio. saturday we update throughout the day starting at 9 a.m. and alive special show at 5 p.m.. anna: on radio we bring you a special surveillance program from noon to 3 p.m. and on sunday we have a full day of coverage across tv and radio, starting at 5 a.m. u.k. time.
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we had some comments, as you said, starting to get comments from businesses in europe. already quite telling. certainly one business that was warning about what this would mean for future investment. what was interesting when you talk about european business and, in the broader sense and continental business, the big ones, speaking to the men's about what it would mean. and they conceded it was not really about the very near term, pulling out of the u.k. it would be about those incremental decisions, the investment that came in the future. they just have to reevaluate those are very different terms. manus: we're trying to assess this for markets. guy has been going through this. stocks in terms of reaction, we have guy in a second, down by 11%, money going into gold. the pound moving to 85-90, 1 of the ironic moments, during the euro, parody on the way?
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1-1 against the euro, it was a vote for brexit, that is according to the asset allocator, 85-90 where you could go to in terms of the position. bund falls back to negative territory. anna: let us give you the latest results, sing the victory for the leaf campaign in this eu referendum. 382 counting areas return results, this is the verdict. it is being called for the lee 51.76 and 48.24 four remain. a bit of counseling still going on. all over but the shouting. anna: all over but the shouting. you have air france coming across the bloomberg terminal, chairmannaming a new and ceo. this is air france klm naming a new ceo.
1:33 am london.32 in let us get the guy johnson with the latest market reaction. guy: you give us some details. but we will see some stability may be creeping into the markets, gusy. the bid offer is still absolutely massive, but the british pound settling around 134. deutsche always bearish, for quite some time with what is happening with cable, 115 handle on cable in 2016. i think the originally had it further out, so that kind of gives you an idea of bearish, but at the moment, it looks like we are settling out. you can see this very clearly on your gmm, settling out around the 134 level at the moment. as i have been indicating throughout the morning, a big party saying to everybody that will listen, do not trade with us. we are not taking losses, not
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doing anything. if you can avoid trading, do. the front end of the u.s. curve, unsurprisingly seeking safety, maybe indicating the given the geopolitical story that now surrounds the markets,that it makes the fed's job even harder. we are seeing gold unsurprisingly. let us take you through what is happening with cable. so this is where we stand of the moment. you can to see the settling out that i am just pointing to here, this is where we are getting a little bit of maybe a bid coming in, maybe a sign of stabilization in the british pound. lettuces take you to where the equity markets are going to be opening, around an hour and a 8%, time, we have ftse down 8.2%. how easy will it be for market makers to open? we will wait and see. it could take a while to get open. in around 20 minutes time we are also getting european futures as well, how do they react to the story i think it would be fascinating, as well?
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this is another chart i want to kick out. this is gold in pounds, really just shows you that the scale of the move, as the market is runs home and seeks a bit of safety. you can really see the scale of the move. looking for safety, gold, fund markets, looking to see how gilts open. back to you. anna: a little bit of news this morning on the credit rating. manus: this is, and i am citing, the u.k. likely to lose the aaa credit anna: rating. a number of agencies. manus: the greater debate is volatility in sterling, as a reserve currency, and what happens next on the ship? we are leaving the port of your. anna: mike is the chairman, joining us now first on countdown this morning. great to see you. u.s. spent the last month campaigning to remain for the u.k. to remain.
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you saw overwhelming benefits to business. how do you read this result? mike: quite clearly be a population at large does not trust the establishment, whether it is business, so the arguments we put forward that are critical to the european union, the benefits we get from it, the critical nature of our involvement in a global innovative world, the british public or you know a significant number of them have rejected average and we have to do with the reality, and the volatility we will see. manus: mike, you are a leader of businesses, what does he need to do when he steps out in dowling street today? mike: i think we need to do everything to create stability, to look for the crisis we have, the markets as you just said, we are going to have a significant short-term volatility, significant uncertainty. and i think the political establishment has to come together to great a degree of stability, and start engaging quickly on what is our plan now, that we are leaving.
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manus: let me bring you this statistic, top of live go, our editor matthew campbell, another takeaway, the rest of the u.k., 75% -- a very wealthy suburb, home of new labor, 75% down. in the north of england, a very hearty industrial part of the world, 69% for leave. that says it all. mike: we must remove that only about 35% of the electorate leave.ositively to we need to remember that. that is why it is such a problem, we need to understand what this is about. understand a lot of people clearly feel left behind by where the economy is, and even if they see the benefits of being in the european union as a country, not sure if they see it individually. and we have to do is try to address that. that is a long-term issue. short-term is dealing with volatility, trying to engage with the trade treaties. what business hates is
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uncertainty. we have seen the slowdown investment, the stock market falling, so we will see a. period of of time about concern where we are going. we do need to really, politicians need to settle down. anna: the focus is for businesses trying to restore, not restorative renegotiate trade relationships with other parties, not just in europe but outside, anywhere where trade relationships are covered by european sort of law. how much of global trade is really on the ticket here? it is not just in the u.k. are we are seeing this challenge to be a step in taking place. u.s. somebody web watch this unfold over many years, mike, how do you think the global business community comes out of this? mike: i think of into the day it is very clear that the establishment per se is not trusted by the people, be in the political stuff and or the community, we have to do of that are job of communicating
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with people and ensuring that people think we care about individuals, that we care about the committees, that we care about the environment, that we care about those things are important to our employees. and of course we do, but we have to be seen to do that. and to come together now, that is really the issue. anna: what are the short-term problems or business? if we sort of helicopter in very a for rims around the country, emergency meetings taking place, what is happening to emerging markets this morning? what are the really important things? mike: at a very practical level, where our interest rates going to go? if falls that will increase rates, and we need to reduce confidence -- manus: are we taking the position that the last time we had sterling at this level was 1990, back in the 1980's, then they raise interest rates to defend the pound, 0%, do you think a rate might help?
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do you think it takes a more substantial response? mike: we are in unknown territory. either we cut the negative interest rates, or we are faced with either a short -- if the gilts fall short,, we reduce the credit rating and that would have an impact, too. i would hope that some of the volatility will stabilize, and we will see some return to stability in the marketplace. avoidlly, we will more uncertainty. let us not forget their other aspects, benefit to the short-term, but there are costs in terms of cost inflation coming in because a large amount of imports we have coming in, because of the trade deficit we have the rest of the world. all of these things are -- anna: focusing on the funding cost, and the interest rate, also focusing operational he i guess on the supply chain, whether they will see disruption in the short-term. and also staffing, leaving to
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take control. immigration very much a part of the message. i,know you talked about the cb how immigration was necessary to build parts of infrastructure.mike: we have record low levels of unemployment. all of the immigrants migrants that are necessary in the national health service, tourism, finance right across the country businesses telling us we need access in the workforce because of our demographics, and the skill shortage lack of availability of labor. again this issue will have to be gripped. rightly,ve concerns, about the housing failure, medical support that was necessary for an exciting growth in population. verys we look at it today, difficult to manage our economy without the immigrants, the migrants that we have. manus: what, the majority of the people in the united kingdom, they have decided to leave europe, we have to agree to renegotiate terms with europe. what are businesses -- you would have been invited to discussions
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over the years, what are businessmen and leaders of ministry asking david cameron if he is the interim prime minister here, what are they going to ask him to come back with? what is he going to expect delivered or promised? mike: we have laid out very clearly our concerns about the complicity, the time it could take, the impact to investment and jobs, short to medium term. what would like to see if politicians getting together, realizing this country does face real uncertainty right now, to really get clarity about what is the basis for our negotiation, our relationship with the rest of the world. and it is not at all clear what that should be. are we going to go to a norway tight situation with the european union? do we think we can do a difference in special deals? what exactly is it that we now want to achieve? now i can tell you what the business community would like to see, is effectively of course the status quo. we like to see the single market continue. we like to see free movement of
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labor continue, because we feel it is economically beneficial to us. whether that will politically happen is entirely another question. anna: we're going to need a lot of trade negotiators. mike: we hardly negotiated a treaty in four years. in fact if you look at the history of our mentorship, nothing but positive to the u.k. economy. notinuing to grow, listen, as a we cannot recover from this. at the end of the day, i think we can do it but it will take some years to do that. in the meantime, we have to create some confidence, as much as we can, so we do maintain investment, and one of levels, while we renegotiate our position in the world. anna: mike, thank you for joining us. mike rake joining us here on bloomberg this morning. manus: let us see what is going on with a chart of the hour, one lady in the house deciding what to give you, nejra. nejra: well of course sterling
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front and center today, we see the wild moves, lowest since 1985, dropping the most on record. i wanted to see how investors have perhaps priced in the move, looking further ahead, i decided to look at sterling risk reversal, option volatility, this is thinking an interesting picture. because if you look at the pink and blue lines, this is the shorter-term one week and one it is you see that yes, still bearish. still in minus territory. but actually the premium on options to sell sterling versus the dollar has been coming back a bit. whereas if you look at the one year, three months little bit further out, that premium has actually been increasing. so what does this say? that sterling is kind of approaching a thaw, as guy has been talking about? or that we actually do have some certainty now in the very short term, but of course now as you
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just talked about with all of the renegotiations of the u.k. is going to have to make and so much uncertainty the next three months, in the next year, the premium, if you want, the bearish bet on sterling seems to be increasing further out than they are in the near term. has the pound actually seen the worst in what we saw overnight is the other question to ask? anna: thank you very much. another breaking line, politicians talking about how they want to go next. the right wing of european politics, italy's northern wing saying it is our turn after the u.k. another country where there might be reconsidering, certain parts of the political scene reconsidering the european future is france. the front national has called for a referendum. harrowing is in paris. caroline: yeah, the national front was very quick to react this morning, the first party in france to react, calling for a referendum in france on leaving
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the european union. and the euro currency. accountonal twitter says that breaks it was a victory of freedom, and that she would be happy to see the referendum happening in france. it was once impossible, yesterday it has become possible today. she says she has been calling for a referendum in france for many years. effect last your i talk to her, she was saying that after brexit, would come frexit. she even asked me to call her madam frexit. she is been campaigning the last two months, not exactly in the u.k., because she was a very welcome in london, with brexit supporters, but he has been campaigning in the press and also in vienna, austria. where remember, the far right wing party did this unbelievable call the last president election, nearly 50%, of course
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that is marine le pen dreaming of 2017 in france. show shelatest polls would get 27% in the first round next year. and that hollande would be eliminated in the first round. manus: caroline, we are already hearing some comments talking about french presence, saying that the ad market will surely suffer, a little bit surprising given the last trend, in terms of the position here in the u.k. that is out of the question. what is the economic impact for paris? i trading relationship between this country and your own. britain iseah, actually the seventh biggest trading partner of france. according torisk, a survey, could be a loss of
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revenues of exports between 2.4 billion euros and 3.2 billion euros, depending on whether the u.k. actually signed some kind of trade agreement with the european union. and on top of that of course, you at the loss of investment in the u.k. and vice versa, that amounts to more than 5 billion euros in the worst-case scenario. without a trade agreement. this same study is actually saying the impact of french gdp would be between 2.2 points and 0.4 points on the french gdp. and every single french business leader i have been talking to in the past two months was in favor of course of the u.k. remaining in the eu. caroline, think you very much. we will have special coverage on bloomberg radio and tv. saturday we have updates throughout the day starting at 9 a.m. and live special coverage at 5 p.m. in the afternoon.
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on radio we bring you a special surveillance program from noon until 3 p.m.. and on sunday we have a full day of coverage across tv and radio, starting at 5 a.m. u.k. time. another central-bank talking about this this morning, the central bank of india, that the global central banks were discussing this situation. india was preparing for any eventuality. manus: this is what we're going to get more of, the key central bank we are waiting for is the bank of england, waiting for swap lines, swinging into action to the need to. sources are ready telling us that they have intervened. the ecb said to wait for now, before convening the governing council. the comment that you just made there, we are also seeing the market side, saying that portfolios are not affected by short-term volatility. they do not see negative brexit impact on our investments.
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i think that might be difficult in terms of the morning that i am looking at. the british pound, it has to be said, a very interesting statement with a pound is over 10% of value, when u.k. equities are down by 7%, when gold is ratcheting higher. the immediate consequences of brexit, he is on the tv at the moment, we will get more on this. talking about the consequence is for brexit. guy has the latest. put this in context. volatility does impact. guy: one thing from we're seeing at the moment is the trade of the day, the trader the week and month, taken away all to the future volatility, the interesting story and trade. we are seeing, and highlighting here, stabilization. i will walk you across this morning. the british pound now down less than 10%. 136 handle, definitely stabilizing. fx continues to be deeply, deeply in the red.
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but some signs of stabilization begin to creep in. u.s. 10 year, look at the scale. this is a deviation move year. you just do not see this. moves.0, massive the market is seeking safety and they are running treasuries and two gold. let us show you what we expect in terms of the open here, ftse down by a percent. we will get the rest of europe. s&p 500 down 5%. a kind of stick their, and we will see what happens with the cash market opening, because frankly that is now in stasis because it cannot move any further downside. there are some signs of stabilization beginning to creep into the market for now. ftse is when to be one of the big, big stories of the day. many companies within the ftse 100 have global footprints. and as result of this movement found a could benefit the basis. let a show you the stabilization, this is dollar-yen, what we're seeing at
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the moment, yes, a huge move relative to the scale of the drop we are seeing. but you are seeing signs we are backing off the 100 level, people in the markets may be trying to stabilize this story right now. remember as i said, the big counterparty said do not get involved. we are not going to take business today. so remember, a very thin market out there right now. similar story happening in ys, still down by 9%. handle,ave a 135-134 looking to make a floor at this point in time. our is would be absolute a fascinating as european equity start to get a little bit of a guide to where we are going to go, in around eight minutes time we will get that and work our way towards the european open of the banking sector. absolute the front and center for many people today. how does italian banks and deutsche do today? back to you. anna: let us get up-to-date with
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the latest results on the eu referendum. 6:52 in london. state of play as it is right now, all of the major media organizations in this country calling it for leave side. that has been the announcement, that has been the assumption here as well as bloomberg. reported, 51.8% 48.18% remain. we have had calls from nigel farage for david cameron to resign. we will keep monitoring the political situation. safe to say we wake up this morning with a great deal of evidence in this country. manus: let's bring in our next guest. kenny jacobs, great to have you with us. we know that you and your boss have been real voices for the remaining campaign. anna challenge me the other day, not a bit of a shock, this is a shock.
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kenny: a shock and it is 100 life goes on, everyone is excited. everyone will continue to travel to europe, and europeans will come to britain. the biggest now, can the u.k. find a way to stay in the single market? if they stay in the single market, it is pretty much business as usual. if they are leaving, then that is a big significant change. anna: what does that mean for ryanair? kenny: we will have a period of great uncertainty. everyone assuming the next two years there is a great degree of uncertainty as we try to figure out how we dismantle the last years. if you are leaving, them further investment will be looked at differently. and that maybe means our business will not grow here, but we will add extra capacity in other markets, continuing to grow in other markets. so we hope it is possible to find a way regardless of what the u.k. has voted, loud and clear with a set of the past 24 hours, that if the u.k. can find a way to stay in a single
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market, that is still better. anna: what is it about the single market, if we stop getting into the granularity, not having tarriffs? kenny: about having deregulated skies in europe, keeping the agreement that we have, and the u.k. continuing to be the leader when it comes to air travel. the u.k. was the pioneer who made a possible for ryanair to set up 31 years ago. and low-cost airlines have the biggest market share in the u.k. we want the rest of europe and th to be like the u.k. if we leave the single market, further investment in the u.k. becomes more difficult. number ofny, a ramifications for your business specifically, specifically for your business, brexit? the reality of that in terms of competition, and in terms of the u.k. position in europe and the glow, how do you think this can
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impact? kenny: it could be bad for consumers. 65% of all of lights in and out of the u.k. are on a low-cost airline. today we just launched another 199. one million seats for that may be our last mega sale. it is a brexit sale. but it may be the last opportunity. we will expect airfares to go up, because you may have less competition. you certainly will not have the fantastic low-cost competition, which is really benefiting the u.k. consumer. and we want more consumers to be like the u.k. and never guarded. and means everyone in the u.k. will spend more on european holiday because the pound has just gotten weaker. but we are taking a medium-term view, if they leave the single market, air travel become more expensive. and that is that anna: for the u.k. consumer. more expensive traveling on ryanair? when you be putting up currency impound? kenny: we do not know yet. just a few by what we know this
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morning, we lost one million seats for $199. and we will have a cheapest fares, no matter what happens. we will be the biggest airline regardless. people always travel. that is the fundamental thing about our business. we hope this does not make traveling more expensive and more difficult, because that is not good for consumers. manus: you have to review the business now, for this period of time with regulation and legislation in the eu, and the rest of the team, from an irish -- brexite, and this is pretty good news for dublin, for the financial market point of view, and for corporations such as yourself. will bring more business back to the republic of ireland? kenny: certainly argument that yes, some national businesses will look at dublin rather than u.k. locations. i think people flying from north america to europe will fly into dublin rather than heathrow. so there is a short-term benefit. that is balanced by an
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incredible publication of a with northern ireland. incredible publications with what will happen with scotland, now want to trigger -- is this what you trigger a collapse of the union? scotland will no doubt said we want another referendum. a is an unprecedented day, huge amount of uncertainty. i don't think anybody can call what will happen, but incredible amounts of work that have to be happening in the next two year, while the last 40 years are dismantled. anna: it could accommodate your business north of the border i guess, in northern ireland, how do you view the situation? i talked earlier this week, she with the northern ireland secretary, that will not be any tarriff across the border. how do you want to see status quo preserved, in terms of free movement of things across the border? kenny: that is what we like. but comes back to the u.k. staying or leaving in the single market. anybody who does travel across the water regulate with say that
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-- manus: i have lived through border control and checkpoints, three currencies. to stay in the single market, because that is the rub, single market, single market, single market. tell me this, the germans have to onside with us. anna: they do. we will come back to you. this bringing our viewers latest news. bank of england says it will take all necessary steps to ensure stability. it will take all necessary steps, undertaking contingency planning with other central banks. we knew there was contingency planning. george osborne tsonga's recently than they have made no plans for a brexit in terms of the government level, but they have made plans and the financial market in terms of stability. manus: i should just say there is a war chest in the u.k. we are ready heard the indian prime minister, and we have the g7, they certainly are discussing what is happening next.
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but there is a warchest in the u.k. they have built up fx reserves of golden cash, $140 billion. what i am trying to say is the bank of england has swap lines, a whole arsenal in terms of what they would do. anna: but gold, in 1990. i think somebody sold a little bit of gold, but i will not go back to that particular point. anna: let's go back to kenny. we were talking about the relationship between the eu and the u.k. and what it has to look like. line of the leave campaign was we will be out. if that is the conversation that is happening very soon, your message would be, this is the most important thing right now for business, to stay in the single market. the leave campaign said a lot of things that has not been thought out. i think the germans have had a
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very pragmatic view of this. i think they will want to find a way for the u.k. to stay in the single market because germany wanted britain to stay. they wanted britain to take an active leadership role. thank you so much for joining us. very early reaction from writer to this -- from ryanair to this news. stock futures are just a bit off. just keep an eye on sterling. it is live tv. we are live and we are doing markets. we have seen.op a precipitous drop. we are clawing back. more london coming back in. we will keep an eye on that. saying they are not
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materially impacted by volatility. anna: we will have coverage this week and on bloomberg tv and radio. updates route the day and a live special show at 5:00 p.m. manus: we will bring you a special surveillance program. on sunday, full coverage across tv and radio. that starts at 5:00 a.m. u.k. time. anna: here are our headlines. it is a brexit. the u.k. will leave the european union. the pound is in a tailspin, falling to a 1985 low. at theoxx 50 is fall 11% open. financials bear the brunt. hsbc, prudential, and standard chartered crumble in asian trading. manus: welcome to "countdown." good morning. anna: it has just gone 7:00 here
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in london. what a very different morning we wake up to the t --o. we have been on the air for a few hours and we have been broadcasting around the night. we are breaking down the markets with the bloomberg terminal. guy johnson is live. and in brussels with ryan chilcote. plenty of angles covered here on "countdown." manus: let's get to the latest in terms of the podium results. it is officially called. leavembers remain 48%, 52%. the united kingdom has voted to exit the eu. or brexit, as it has been colloquially known. let's get to jog -- guy johnson. volatility. huge the bank of england has already spoken. and click this futures box what you get is the fair value
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calculation. cost to carry, all of the other things you need to throw in to the equation. it is telling you that we are .oing to get a bigger reaction at the moment, it looks like the ftse 100 is going down by 8%. dax is down over 10%. mark that that 10,000 we retook only a couple of days back. financials are going to be absolutely front and center. the italian banks, look at the italian banks very carefully. the ecb certainly will be checking in to see how they are doing. bank.n eye on deutsche watch credit suisse, how they work their way through this morning as well. a big exposure into their story. i think it will be some of the
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peripheral banks. it looks like we will see a sharp down leg. it looks like the london market might be a little bit protected by the drop that manus was telling you about and that is what is happening with sterling. the bulk of the ftse 100 is ex-u.k. in terms of its attorneys stream. what we are seeing is it being protected a little bit more. the 250 is not going to fare as well. that is the sense at the moment. youick look at this to show what is happening. the british pound trading at 1.36. we were down over 10% a little bit earlier. the offer remains absolutely massive. accurate to get an gauge of to where the price is at the moment. we are seeing big drops in the asian equity sessions. the market is definitely running , looking for safety. we are now able to populate you with sovereign bonds around
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europe. switzerland five-year, massive move. how will they react to this? they cannot do qe, but intervention we may see out of berlin a little bit later. germany, france, belgium, the two-year move absolutely colossal. remember, this is a standard deviation move. this is a standard deviation move we're seeing here. these are things you will never really ever see in the normal trading session. we are seeing huge moves in terms of the european bond markets already. we will get gilts a little bit later on. the bank of england says they are monitoring the situation very carefully. the market is seeking safety at the moment and you are seeing that very clearly in gold. this is dollar-yen right now. one of the key indicators for risk on an risk off.
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signs of stabilization. we are bouncing off it. that is something to pay attention to as well. this is cable as well. very difficult to get a full price on the big liquidity providers. 1.36 is where we are trading and that seems to be where we are stabilizing at the moment. anna: guy johnson with the latest market reaction. focus.t, that will be in let's get more reaction from the city. matt miller is on the capital trading floor. some of the words we use, shock was one of them. what have you been tricked -- hearing this morning? matt: manus asked me earlier if there had been any margin calls. i was talking with the head of trading and they said they had been closing people out all night long. the difference between tonight and a typical close-out, because a lot of investors use margin
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calls as there stops, is that they would typically jump back in. tonight, they have not been. stopped out and done. we have been trading everything here. even markets that are closed. dax futures are making a market down big. u.s. futures can only go down 5%. you will not see a loss bigger than that. .hat is where they will open up the pound, i am seeing it at 1.3604 behind me. coming back a little bit. some of the traders here are , will you back up the truck? they are saying to wait as it might go down to 1.20. you can hear the bells clicking and the sirens going off. the action is nonstop. there are about 150 papa john's pizzas over here that are untouched because the traders cannot get away from their desks.
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it is truly unbelievable. a lot of guys are scratching their heads and wondering what happens next. advice. have a word of stay away from the pizza. anna: even in moments like this. i wonder if that is also dinner. manus: it could well be. matt, you will be there for a long time. latest market reaction. let's get to the heart of the action. francine lacqua is at the bank of england. the bank of england will take all necessary steps to ensure stability. on eyes are laser focused what the action response will be. francine: good morning to you. mark carney is at the front line of the first line of defense for britain in the case of the financial crisis. we know they are monitoring the situation. mark carney has been working on this scenario for 12 months.
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now it is just depending on how the textbooks play out. first of all, how quickly mark carney response depends on market action. i guess we will have to wait for a couple of hours. we had a statement five minutes ago from the bank of england saying it is monitoring and ready. what can they do now? as well as intense supervision to ensure there is liquidity and the banks have enough cash, they can always put additional funding operations and activate swap lines to help access overseas currencies. this, we understand, is the state of play thus far. there is some kind of bigger coordinated action. it depends on the currency moves and whether there is a severe lack of liquidity. for the moment, it has been volatile. a couple of guests have been shocked, but no central bank has intervened. which wouldenario seem very intuitive.
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we heard governor kuroda saying they are doing their utmost to find liquidity. it seems the central bank of said, wet an hour ago, are here and we stand ready. interesting to see what kind of calming words we hear from various local and central banks this morning. and a key question, whether these tanks work together. they have been calling for action because of their concerns about the currency. if they were worried before, they have got to be more worried now. francine: they certainly do. if you look at the havens, if you are this with national bank, because of this money coming into havens, you would be feeling pretty worried. i guess it central banks were to act and act decisively, remember late last night, the feeling was
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that they would remain, which is why we see this huge swing this morning. manus: thank you very much. let's get reaction from the heart of europe. disbelief is one of the words that could be used. ryan chilcote is in brussels. the belgian pm saying it is difficult for the eu project and calls for a conclave. this is quite a significant verbal reaction at the moment, isn't it? ryan: it is. i think that perhaps germany's up, chancellor summed it the european establishment view of the brexit when he said, "a bad day for europe." relationshipt the with the european union. the concern is the integrity of the european union itself. we have heard from a number of countries already suggesting that they would like to see
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referendums, mostly from the right. first out of the gate was the leader of the freedom party in the netherlands. british "hooray for the , now we want our own referendum." similar comments from france and italy. this is the biggest concern right now and brussels. how do we keep union together. we heard more schultz this morning. he said he would be talking to angela merkel later this morning and he wants to, "discuss how we avoid a chain reaction of disintegration. to that point, picking up on the belgian comments, talking about how eu leaders must reaffirm commitment to the eu. thinking about what happens next from a european level, maybe that is the next step. ryan: yes. i think we will get a show of unity. i think a lot of people in
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brussels think that the sooner we get that much the better. about 10:00 this morning, we will have a meeting of the head of the european commission and the president of the european union. they will be meeting together with the prime minister of the netherlands. they are in charge of pushing forward eu legislation. after that meeting, we expect them to talk about european unity and how the union is still strong. do not forget, there is an election in spain on sunday. they want to make at least some comment. we are also going to hear from individual european capitals, the french president next, at 9:00 in paris. anna: -- with thean chilcote latest. another newsline coming up. says there is no immediate change to its operations as a result of the brexit. of course it is too early to
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have these institutions and corporate say what they are going to do next. ryanair was with us two minutes ago. it comes down to does the u.k. stay part of the single markets? here tor next guest is talk about the implications of this shock result let's get to him now. he joins a in -- joins us in the studio. good morning to you, simon. cio saying they believe the market disruptions are short-term. i mean, the scale of these market interruptions -- put it in context for us. simon: it has been a record fall in sterling. if you look at any of the major moves over the course of the last 40 years, this is probably the greatest. market the of the last five or 10 years.
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lyrical betting over the course of the last 48 hours. a lot of people out there right now that i would suggest shorter-term plays that are desperately trying to think of where they can get out. is about is short-lived. the interesting bit is not where sterling ends up for the bank of japan. i think it is about longer-term consequences. it is about longer-term consequences. the concerns about whether we have referenda and what that means for the euro going full. manus: i am looking at euro as the dollar and that is down over 3%. over 4% at one juncture. is this a worry in terms of how we look at currencies? the usage of the euro has been dissipating slowly as a reserve currency. the fact -- the pound is fair
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and square. is that a big consideration? simon: it is a huge consideration. that has been a issue. the dollar from 2011-2012. the euro became a big issue. people looked for alternatives. here we are with more and more of these currencies. if you are in china and you see that there are $3.3 trillion worth of reserves, what do you do with your money? what you need to do is just liberalized as fast as you can. you do not need to buy any more reserves. manus: what does that mean? >> it means you get rid of capital controls. manus: a lower yuan? >> yes. for the moment, i think they will go the opposite direction. they hate creating instability. in the long run, it is increasing pressure on them to liberalize. anna: is it too soon for this
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kind of question? are you rethinking your prices for how those things go -- low things go? decision thatthe the smartest thing to do was doubt the forecast. it was so event-driven. how did you look beyond today? it was ridiculous. we know that, over the course of the last 40 years, cable has rarely traded below 1.30. we know the long run outreach is in the 1.65's. manus: this is about getting ready for the unexpected. mohamed el-erian's tweet this morning. i am going to fill in the blanks here. trump and the american election. simon: i think you are precisely right. you think about all these events
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, whether we are talking about what happened here and what happens in the u.s., it is about the rise of populist politics. much of that has been driven by central bank policies. rise -- en the that the other argument is central banks have had to step in when politicians would not act. simon: politicians are forced to act. the rich get richer. i am not. that is why we have had a rise in populist. that is the real reason behind today's vote. that is why you cannot discount the idea of a trump victory. anna: we have heard populist parties around europe jumping on this tomorrow. manus: we are squeezed on time. policy response from the bank of england. what is your call?
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qeon: i think they will do if this continues. anna: you hear helicopters? simon: somewhere. maybe not here. anna: thank you for joining us. we will have special coverage on bloomberg tv and radio. we have updates throughout the day starting at 9:00 a.m. manus: on radio, we will bring you a special surveillance. sunday, we have a full day of coverage across tv and radio. 5:00s at five of a.m. -- a.m., u.k. time. getting comments from wolfgang schauble. he said that europe will stand together and make the best of it. business forer of maybe for the rest of the eu project, would be to
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commit once again to the european project. manus: the european union president will meet with european parliament schultz. more are we going to see a federal hunkering down? will we see the franco-german-italian alliance coagulate as a stronger body or is this the beginning of a bigger dimension? anna: we should tell you the latest results in the referendum that took place yesterday. it is now in the u.k. it is a leave victory. we have now had all of the areas reporting. so 382 counting areas that reported their results. leave on 52% and remain on 48%. it has just gone 7:21 in london. it is 8:21 around many other european capitals. we are waking up to a on the
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reality. it is brexit. guy johnson has the latest market reaction. guy: difficult to get a handle on what is happening with these markets at the moment. a lot of business being done on the phones and a lot of his not being done. the bid-offer spread on many assets you could drive a truck through. the pound is continuing to stabilize. did coming seeing a through into the british pound. we are seeing in the reaction. deviations.andard chief accounting officer in manchester waiting to give us the full results. we know the results. let's see if she is going to deliver those for us. you can see them on the screen. at the moment -- let's listen. >> the council officers and election staff, the regional accounting officers, the chief election officers in northern ireland, the gibraltar
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parliament, the election officers, the royal mail and city council. i would like to thank all of the electoral commission staff, past and present, and the deputy chief accounting officer. thank you very much. [applause] >> politics 25 years ago and the first election i contested. be in 164 votes, so i did not come last. it is a victory for ordinary people, decent people. it is a victory against the big merchant banks and the big businesses, and against big politics. i am proud of everybody that had the courage in the face of all the threats. they had the guts to stand up and do the right thing. waswon, -- the
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election was won, in my view, i do not think it was the old labor vote that can to us. we campaigned as hard as we could in those areas. there is still a massive disconnect between westminster conveniences. the one image i will remember throughout the rest of my life was a woman grabbing my hands with tears in her eyes saying, why doesn't the government come and see what they have done to my community, what they have done to the prospects for my kids. people here do not understand. they are too wealthy. what masst get immigration as a result of eu membership has done to the availability of getting gp appointments for kids in their local schools. i am thrilled that we have done this. effectve the other big
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is not what happens in britain, but the rest of europe. the rest of the eu, eurosceptic parties never talk about leaving the eu and here they are. the opinion: in the netherlands say that the majority wants to leave. we may well be close perhaps to an exit. in denmark, a majority there are in favor of leaving. we could be close to the exit. i am told the same may apply to sweden and perhaps austria and perhaps even italy. the eu is failing. the eu is dying. i hope we have the first brick out of the wall. i hope this is the first step towards the europe of sovereign nationstates trading together, nations together, friends together, but without flags, anthems, or useless unelected president. what happens next? 17 million people have said we will leave the european union. we now need a brexit government.
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a government that gets on with the job. a government that begins the renegotiation of our trade relationship. a government that will be mindful that already, many of the german car manufacturing unions have said let's get on and do a deal. let's go on buying and selling motorcars and wine and cheese with each other. but a government that uses the .pportunity of brexit the opportunity is we are now free to start making our own trade deals and associations with the rest of the world. we have left behind with this result a failing political union. we have given ourselves a chance to rejoin the world in the 21st century global economy. so we need a brexit government. we need negotiations to start as soon as humanly possible. we need to start thinking globally about our future. the other thing that needs to happen is that june 23 needs to
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become a national bank holiday and we will call it independence day. [applause] join theu going to brexit government? >> go on. at --ou are looking pictures of 10 downing street. what will david cameron do today is one of the big open questions? a number of mps fought to leave the eu, suggesting that maybe they want him to stay on at least as an interim prime minister. we will continue to monitor events out of 10 downing street. we will continue to monitor the markets for you. welcome to "on the move."
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we are now counting you down to the european equity market open. it has been a wild ride. i am guy johnson. i alongside caroline hyde. here is what we're watching. goodbye, europe. the united kingdom wants to leave the european union. will this be remembered as the day that broke the eu? markets mayhem. the pound hits a 1985 low in its biggest move in history. the yen has broken through 100. gold has been soaring. banks have been absolutely battered. can the central banks stabilized sentiment? and june the 24th, the world wakes up. written has spoken to leave the eu. one big question we are asking, how did the smart money get it wrong?
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let's talk about those markets and what exactly we are seeing this morning. we are expecting to see some fairly big moves. these are the stories that we are seeing coming from around the world. towards ae pointing very negative open this morning. at the moment, we are looking at maybe the s&p opening more than 5% lower. xx the moment, the euro sto down by around 12%. these are the fair value calculations. the dax down 10%. the ftse 100 is only down by 8%. remember, you have a translation effect on what is happening with sterling this morning, which caroline, is being hit hard. .aroline: monumental move this is an historic day for sterling. we have seen the biggest move in history since 1985 on the british pound. we have been monitoring. look at that, down eight percentage points. flight to safety, money moving into the yen hard.
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august 2014. i won't put the biggest most since 19 73. what does this mean for the eurozone? germany and french equities hit. is slumping three percentage points for the this is the biggest risk now, the domino effect of the eurozone. right-wing parties in french and spain both want referendums. of course, and the debt market as well. guy: let's talk about what is happening this morning for the no surprise to the markets really seeking some safety. you are seeing it across the picture this morning. the storyere we think looks for the these major assets absolutely massive that this morning. germany moving into negative territory. peripheral


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