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tv   Countdown  Bloomberg  June 30, 2016 1:00am-2:31am EDT

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anna: preparing to launch their bids to become the next u.k. prime minister. the financial community will be addressed today. getting the green light, dozens of u.s. banks past the federal reserve stress test. others fall short. not seeing a rate hike in 2016.
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a warm welcome to the program, live from london on anna edwards. let's look at where the markets are trading. i have a chart that shows the post or exit vote bounce we are .eeing in the global market the relief rally following the brexit vote is entering its third day. we have the pound versus the dollar also bouncing a little bit and the red line marks the point where we started getting those results coming in that suggested we're heading towards brexit. let's work out where we are in .erms of the overnight trading we've got the msci asia-pacific of by 1%. more than 1% as result. the broader conversation is very
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interesting at the moment. odd measureike an of gold. i will just tell you it's $1513 per troy ounce. 24% increase in the gold price year to date. the pound also down by a round .25%. little changed against the euro if you looking for any expression of the result of the brussels meetings. it seems that brussels is still taking a fairly firm line. the yen has had a very good belt more from market supporters in just a moment. >> federal reserve officials have cleared dozens of banks to
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boost payouts after conducting stress tests. which must stanley shore up its system before the fed issues a final verdict got additional permission to boost by 30%. the u.k. home secretary and former mayor london will today make their pitches to succeed david cameron as conservative party leader. 55% versusjohnson by according to a poll for the times newspaper. the bank of england governor mark carney stepping up to face the brexit crisis. he will be to members of the media and finance industry later in a message of reassurance. united overseas bank, southeast asia's third-largest bank by assets says it will temporarily halt in london due to the uncertainty caused by the brexit
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vote. they will assess regularly to determine when it will reinstate its london property loan offerings. u.k. consumer confidence dropped this week after the country voted to leave the european union. daily sentiment has dropped to the lowest in more than two years. meanwhile a separate report shows that households face -- were shaky even before the referendum. a bigger decline in japan than expected and a new sign that the world's third-largest economy is far from recovery. combined with an export drop in flat retail numbers, there are concerns that stimulus is not working. the biggest diamond founded more than 100 years has failed to sell at an auction in london. of 61 when we
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dollars did not meet the company's minimum selling price. diamond might have sold for about $86 million. that would have made it the most expensive rough jim on record. andal news 24 hours a day more than 120 countries. on can find more stories the market get action, juliet is standing by. asian equities continuing the rally. >> it's the last trending day of the first half of the year and it's looking very good across asia. shock waves ofhe the panic selling following the outcome of the british referendum appears to have subsided and were seeing some solid buying coming through across the region. the hong kong market up for a
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session -- second session by 1.5%. a lot of the stocks that were heavily sold off earlier in the week starting to come back. down by .2% int shanghai. today, little changed the nikkei rising .6% and a solid game coming through in australia. it's the last day of the financial year in australia as well. the asx 200 of 2% and good gains coming through new zealand. were seeing some solid moves coming through, the currency market is also where were seeing a little bit more risk on sentiment coming through particularly in those emerging-market currencies. the end is up 7% over the past, now on track for its best month again since 1998, even though today were seeing the yen little
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change. the korean won is the best performing out of those currencies today, up by .8%. a good gain of cross asian markets today as well. anna: eu leaders have called for an orderly british withdrawal from the block. they spoke in brussels after taking the historic step of meeting without the u.k. for the first time. >> before we receive official announcement of the u.k. wishing to leave, no negotiations whatsoever can take lace. >> the access to the single market requires acceptance of all four freedoms, including the freedom of movement. aere will be no single market carte >> the market should
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get ready to face -- to make some transactions that will no longer be held in the united kingdom. >> good morning. what do the eu leaders agree on the next steps forward? u.k.,ant to hear from the but they are busy making their on plans. >> what they are trying to do is have an orderly exit process. one of the main goals is to calm ,he markets as this process this unprecedented process starts to unfold here. they seem to have been somewhat successful in that. at the same time, they want to make sure they are firm with the u.k. in saying that if you want to have a new relationship, another relationship with a eu but you are being outside of the eu, you still have to follow the single market rules. you still have to abide by the four freedoms, and that includes
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the rules on immigration. that has been one of the big sticking points in this whole thing. anna: that has been one of the big sticking points. of headshis budding over access to the single market on the one side and then freedom of movement on the other. he says colin should be a cassette out it's position on eu membership. >> nicola sturgeon was here yesterday to talk to some of the eu leaders about scotland and the eu, but it's a difficult position because from the eu side, they say they should only be talking with the u.k.. going forward, perhaps that is going to change. we did have a referendum in scotland couple of years ago and was very, very close. it's possible they could have another one, especially now that britain's place in the eu has changed.
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so we will have to see, but for yesterday, it was very clear that while the eu is willing to talk to scotland about the negotiations at this point, the have to take place just with the u.k.. for the future, we will have to see how things might change over there. what kind of relations do you expect between the u.k. and the eu? rightre still a member now but after the empty chairs on the second day of those talks, the future seems clear. was quite unprecedented yesterday to have a meeting without the u.k. here. it's kind ofward, open what the relationship is going to be. all the forces are pushing. it seems like the u.k. would like to have a relationship that's very similar to what they have now, but the eu is very adamant that there has to be a cost of leaving the eu. they want to send a message to other populist and nationalist
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forces that are gaining strength in the rest of the eu that there is a cost to this. it's not going to be a smooth road here. the leaders have called for another meeting in september. this will just be the 27, the u.k. won't be there, and hopefully at that point they will have more clarity on the leadership situation in the u.k. and then will be able to move forward with what and how the process is going to unfold. thank you very much for joining us there from brussels. the co-chief executive officer of the carlyle group says he doubts that brexit will actually happen, as the consequences are so dire. >> it's unlikely that britain will actually exit. when it becomes clear that the terms are so expensive, because the consequences of leaving are so significant that i think the next prime minister england will probably not invoke article 50. anna: it's one view, we've heard
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many. our next guest is chris darwish. great to have you on the program. that was one view expressed their that we won't invoke article 50 and we won't actually will we see the terms that will be demanded. one of our analyst wrote a great piece talking about how denial is the first stage of grief. is that what we are caught in? this matters because were trying to work out my markets generally have bounced over the last couple of days. are we all in denial about something here? i think market see an outcome that is probably best for all sides. largest export market and trading partner. everybody wants to come back to an arrangement here from an economic point of view. it would've been interesting to be a fly on the wall because i
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would've thought the meeting would have been, had we deal with immigration? that clearly was the message that david cameron sent. they still don't move, so why do you remain optimistic that they will find common ground? are we just in the polarizing start of the operation and people will find a meeting of the minds? >> it tells the eu that you have a problem with immigration. neutralize and diffuse it around europe. to me that is quite comforting. i think there is an in game which is a good one. i think at the moment we are in a bit of a holding pattern until september 2 but i do think there are some good outcomes here. one of the outcomes, does
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it extend to the breakup of the united kingdom? >> if you gone into the referendum and vote to leave, and by the way, you lose scotland, i think the outcome would have been very different. so we have these kind of broken promises. it's resulting in different outcomes that people went into the voting process expecting. it's an exercise in direct democracy that failed to produce what everybody expected. anna: why do you say that? what is think it failed to deliver or failed to deliver what the market expected? it delivers what people voted for. think 48-52 is a success. that is a divided country. that's why we don't do direct democracy very often. .t's very difficult to handle
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probably what has to happen is a general election could supersede the results of the referendum and gives everybody a chance to renegotiate and reposition. then you can deal with the scotland problem. anna: you are in the camp that article 50 won't be triggered. >> i think it is unlikely. think they would rather go to a general election than trigger it. anna: so how do you invest around that? what you're saying suggest that the selloff was a bit overdone and they will find some way of staying in and some sort of messy maintaining of relations between the eu and the u.k.. portfolios that had a significant amount of foreign currency exposure, that probably offset the reduction in equities.
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that was the saving grace going into the referendum. now the problem is, does sterling bounce? in which case you begin to lose some of the gains you made on foreign currencies. possibly you could give some of this back. anna: the risk in the town is that every time we hear this tough line being taken by brussels, this argument that article 50 doesn't get triggered and we somehow stay in gets harder to believe in. investors is how does sterling move relative to the markets? market's down, very correlated. now markets are bouncing and sterling is not quite as much. anna: thank you very much, chris. we will talk about some of the
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broader implications in a moment. here are some highlights for the day ahead. we will get german unemployment, and a half hour later the final reading of u.k. first quarter gdp. 30 minutes after that, eurozone inflation. then a televised address about brexit. half an hour after that, yahoo! annual shareholder meeting takes off in california. , we skip us, coming up over to paris. up next, black rock on brexit. our interview with the ceo of the world's biggest asset manager, next. ♪
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anna: the hang seng up by 1.5%. it's generally a fairly risk on session. >> federal reserve officials have cleared dozens of u.s. banks after conducting annual stress tests. mustmorgan stanley which shore up before the fed issues the final birdie got permission to boost its dividend 33%. the sec has opened an investigation into allegations against the outgoing president according to people familiar with the matter. the u.s. regulators looking into whether there was a conflict of interest as well as disclosures to investors. a committee of independent directors cleared him of wrongdoing a day before his resignation.
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at least three prominent hedge funds -- sought ways to predict the brexit outcome. that's according to a person with knowledge of the firm. discovery capital management developed a model using our rhythms and surveyed voters. it helped generate profits or minimize losses for the firm. that's your bloomberg business flash. said the blackrock ceo britain's decision to leave the european union has caused uncertainty and will lead to cash hoarding. he also said the u.s. federal reserve is unlikely to lift interest rates this year. >> i actually believe the brexit will lead to more uncertainty.
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it will lead to modestly slower growth. i'm under the opinion that it's highly probable they are not going to do anymore tightening this year. darby sure is still here in the studio. let's talk about the broader implications. we talked about the expectations around a rate hike. ofe going out to september 2017. by that time there is an butctation of a rate hike that is a long way out into the future. there are people talking about cuts as well. things are shifting very quickly. what do you see in the tea leaves around the fed? chris: we want to understand how predisposed the fed is an other central banks to allow inflation to get a bit of momentum going. the fed has never been shy about
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finding excuses not to raise rates. and here you have a very good one. the second factor is the feedback effect from markets. if ironically markets are very bad, the fed is going to be unlikely to raise rates. anna: a lot will depend on the dollar perhaps as well. been as muchhasn't dollar strengthening as many people would have thought. around the world emerging-market accountant been relatively well behaved over the past week. anna: we have a chart that shows the pace at which these decisions get made on a european level, the lisbon treaty and that sort of thing. terms of your time horizon,
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when you're looking at investment strategy, what kind ?f time horizon is realistic chris: i think the next steps for the eu are to discuss immigration. that clearly is the problem more than any other that will direct the future of the eu and the eurozone at the moment. i think it's a discussion that needs to be had and i am looking for evidence that it is being had. i'm surprised you have a sharp long -- a chart long enough to show the dax we are really day today. it is not our normal way of doing things. i think because of the binary nature of brexit, both going in and now coming out, we are really working day today and making more changes than we would normally make. anna: are you more concerned about u.k. or eurozone assets?
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from angela merkel and others that freedom of movement is one of the pillars of the eu and it remains in place. chris: there really is no alternative to that. what happens is if the eu changes the rules, the rules --e been changed in a way anna: that can turn into an existential crisis for the eurozone. >> people in the eurozone outfield power to vote nonmainstream and go with the -- we didn't see that on sunday and spain. that was a really significant data point coming a couple of days after the election. in spain the vote swung right back to the mainstream. anna: thank you very much, chris.
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program, on the failing the fed test. some subsidiaries don't get it passing grade in the annual banking assessment. more on that up next. ♪
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anna: welcome back to countdown. here is rosalind chin. officials reserve have conducted annual stress tests that proved to rigorous for subsidiaries of deutsche bank. got morgan stanley conditional permission to boost its dividend 33%. u.k. home secretary and former mayor of london will today make their pitches to succeed david cameron is conservative party
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leader. the bank of england governor mark carney is setting up to face the brexit crisis. he will speak to the media in a message of reassurance that cap stays up market turmoil and political carnage. six -- overseas bank says it will temporarily halt property purchases in london due to the uncertainty caused by the brexit vote. he said that monitoring the .nvironment closely global news 24 hours a day powered by more than 2600 journalists in more than 140 countries. find more stories on bloomberg. the international
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technology conference takes place in paris where were asking business leaders what impact brexit will have on europe's take industry. our guest has a lot to say on the subject. >> this is the first edition of the technology conference in paris. the likes of google, face of, uber will be speaking on stage and happy to be joined by the founder of this event, good morning. this is the first edition of this event. what are you trying to achieve here and what will be the highlights? >> what i'm trying to achieve is to make friends the place where people can see that we are entrepreneurs, it's a natural place for investing in france
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and also to make sure that we can bring together large companies with sponsors in order to work together. expecting 5000re startups. a micro there will be a lot of innovations including the self for thecar from google first time ever and also a lot of conferences, more than 300 conferences with great speakers coming from all over the world. chinese, israeli, americans, from europe, obviously and from all the places. >> it comes at a very uncertain the mood do you think of the tech industry is impacted by brexit?
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have you talked to some of the people that are coming, and what are their concerns? >> everyone is worried about what will happen with the brexit . the people who promoted brexit had no idea of what they would be doing if this was going to happen. we see the disarray in which they are altogether. but you know in the world of startups, in the world of business, people are looking for optimistic signs for the future, and what they are seeing is that we are taking some action that would be benefiting the industry. we had a few contacts already with the startups. this is something that will give them an opportunity to show what they are doing, to meet with the venture capitalists and investors and also with large companies in order to build agreements, strategic alliances,
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etc. >> you are personally affected by >> it. he said the advertising market might become a roller coaster for the next two or three years. impactnow quantify the now it's gone past the emotional? quick summary really sad about the decision which has been made . i believe it is a deconstruction of europe and it's too bad to leaving europe. when it comes to the advertising market, we had a very strong gdp.lation with this is limited to the u.k.. i don't believe this will have an impact on the rest of the world. the u.k. will be a roller coaster.
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>> what about the impact on the growth of the advertising market in the u.k.? >> no one today can tell you what will be the impact of the brexit. lastu have seen since friday, they don't know. they don't know what will be the decision they have to make. they have not decided who will be the prime minister. they have not decided how they will leave europe. i think what is important is to see that, when you look at what is happening here, it was six months ago that we made the decision, and six months we have been able to convince thousands of startups and a lot of corporations, hundreds of innovators to come, because
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there's a great appetite for innovation, for action, for growth, and for entrepreneurship. that thehing today is youngsters, instead of wanting , they want to be an entrepreneur. and that is great. optimism andng the the appetite for growth. i like that. >> it's estimated the impact of brexit will be about one billion pounds in lost advertising revenue by 2030. being, we have made this calculation based on clients andfrom our also the media.
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it's a survey that we did, it's a prediction. if in 13 years we lose one it represents roughly $600 billion, it's not a big deal. would be maybe 70, 80 million a year. it's not a big deal, it's not something that will have a huge impact in our industry. the key issue is not so much what will be the impact on our industry, it's how the u.k. will manage its own existence and how the u.k. will grow in the future. the first thing they will
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have to decide is how they're starting the negotiation with europe, and they can expect to see europe, all the people who -- they willeurope keep what they have and at the people havell these been proven to be wrong. europe is not going to be a soft and if we have to fight strongly against the european union, they will feel they have been betrayed. >> this is the first edition of the event technology conference in paris. back to you in london. europe will be a tough negotiator. financial markets have continued to recover from the panic selling triggered by last week's u.k. vote to leave the european union.
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now an update on those markets. >> looking at the global equity picture, the two-day gain since august, we see this continued in asia today with asian stocks rising for thursday this week. global equities over the last two days have recouped more than half of the almost $4 trillion of market value that was wiped out friday and monday. so we are seeing risk appetite continue to gain ground at least in equity markets. if you look at what is happening , two of themarket best-performing currencies are the south korean won and the malaysian ringgit. there are individual reasons for various gains or losses but this is the trend generally. index,g markets currency it has really recouped those losses, almost all of those
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losses at the moment now. aboutrse we cannot talk emerging market effects without talking about the dollar. i just wanted to show you the first half, it's pretty much unchanged today but it's extending its loss for the first half of this year. its pulled back a bit when comes to the dollar as the expectations for a fed rate rise , a cut more than a hike. i just want to show you u.k. assets. we seem to be seeing this recovery globally. it's a feeling that central bankers and governments will sort of contained the effect globally from brexit. we are seeing sterling retreat, the ftse 100 erased its losses from its post brexit site yesterday but a lot of companies that get their money outside the u.k., the ftse 200 has not recovered yet. anna: dozens of banks have been
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clear to boost annual payouts based on the stress tests. european more from our finance managing editor. great to have you on the program. what were the takeaways from the u.s. stress tests? >> eight years after the financial crisis, u.s. banks are slowly but surely pulling away on the fear. they grappled with internal controls and what they are doing now, they're able to boost returns for shareholders in the way of dividends. even morgan stanley which still leads the final signoff from the fed has been a to boost its dividend. what has allowed them to do on a global scale is be very opportunistic about business opportunities. they've been gaining market
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share in many areas at the expense of the european banks on their very own soil. anna: what about the european angle to this? how does it compare with what we're seeing in europe? >> you saw in this instance deutsche bank still coming through with issues they need to grapple with. they need to keep improving their systems and control the governance. what you're seeing in europe is that many of those larger global firms are still grappling with low capital basis and deutsche bank and others, they are in the midst of deep restructuring. the u.s. examiners were fairly scathing, talking about broad and substantial weaknesses. looking at the sector, how
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significantly is brexit effecting the outlook? now were seeing the brexit story being tied in with what the italians are or are not allowed to do. how much of an issue is brexit right now for them? >> we understand the banks have -- theagement plans markets seem to be steady. periodu have is a long of economic uncertainty. it may be more difficulty in boosting of capital basis. you fat italy flirting with the idea of giving its own banks state aid which is something we tried to pull away from after the financial crisis, having taxpayers on the hook.
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clearly what we are seeing overall, many of the european banks are not sufficiently , and it's going to become a bit more of a problem. stay with bloomberg, we will be sticking with the banking scene and we will be joined by the chairman of rbs just after 10:00 u.k. time on bloomberg surveillance. later we will hear from the barclays ceo, he will join us on programming here on bloomberg television. up next we will discuss what small business owners are looking for from the government following the brexit vote. ♪
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anna: welcome back. if you're in new york, it looks like we could be causing the global a -- global economic rally. we've seen a three-day rally in global equity markets since the post brexit boat ball out. we will see how it goes in europe before we get to new york . here is rosalind chin. rosalyn: the sec has opened an investigation into allegations according to people familiar with the matter. the u.s. regulator is looking into whether a roar a has conflict of interest as well as company disclosures to investors. ofommittee cleared aurora wrongdoing the day before his resignation. after the biggest overhaul its too big ge is no longer to sell. it's removed this designation as a systematically important corporation.
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ge welcome the decision which came after it agreed to sell almost $200 billion of lending assets. least three prominent hedge funds sought to predict the brexit outcome. pre-boat poll,a according to a person with knowledge of the firm. discovery capital management developed a model using algorithms to track voting districts and surveyed voters. it helped generate profits and mental i -- minimalize losses for the firm. that is your bloomberg business flash. very much, you rosalind chin there. here to discuss how brexit will affect the 5.5 million small theanies in the u.k. is national chair at the federation of small businesses. a very warm welcome to countdown. nice to see you in the studio.
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much light do you have on the direction this brexit convocation takes? is that we need economic stability quicker rather than the uncertainty were getting at the moment. service have been showing a downward trend in confidence, so we need that uncertainty ending as quickly as possible. we need to be certain about access to the single market. that is critical to small businesses. we need to be able to continue to attract a skilled workers that small businesses need. what are also saying is that some of the funding coming eu structural funds. we need clarity about what that means, either in the ongoing negotiations or once all of this is settled. questions. of big
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you were at the business summit recently, a number of business leaders being called together with the business secretary to talk about what business wants to see from this negotiation. what was the mood like? how is business dealing with this? >> business needs to have some certainty and stability in the markets. interesting to see the markets bouncing back at the present time. the pound is just above its lowest level that we saw our earlier in the week after the vote was announced last friday. the one thing we want is government to be strong, to actually get on to some of the big infrastructure projects that need to happen. i have a feeling at the moment it's been put back, which is not helpful at all. one of the things we have been asked repeatedly is for the broadband access to be made available quicker rather than
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sooner. that is critical to help small business, particularly in our rural areas. and on the regulation front, where does this leave that? has been calling for u.k. tax to be included in their remit, and we do need some currency around that as well. so lots of questions needing lots of answers, i'm afraid, to restore confidence in the small business market. anna: you want to see is remaining in the single market. how realistic a position does that sound to you, given the push back we've seen from brussels? the price of that has to be freedom of movement and politically that sounds like it's going to be difficult. >> clearly that is for the politicians to sort out. making sure the government tyranny understands what it is
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small businesses in particular need, when we say access to the single market, that is critical. about a quarter of our members export. for those businesses that are importing, cost in the short term have increased because of the drop in the value of the pound. equally does present a real opportunity for small businesses, micro-businesses to look again at export markets and get help if they needed, and really look to try to grow their businesses that way. investment decisions are being put on hold as well at the moment. you talk about things that need to be invested in such as broadband. is that a key concern in investment and in the small businesses themselves? >> to restore stability and confidence quicker rather than sooner, putting these big investment decisions on hold is
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not helpful. mentioned some of the businesses that might be looking to the opportunities here. are you having conversations with some companies saying they can ride the bubble and this is political chaos, and turn it into something positive? maybe going out to try to sell to china or other places they feel might be less effected by what is going on. >> clearly a does provide some real opportunities to those businesses that might have thought, i will have a look at this. to actually have a look at that, it's a fantastic opportunity if you have the right goods and services. british brands are well respected in overseas markets. it comes back to access to that single market. i said that a quarterback
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members actually export. export to theity european union, but that's closely followed by north america and other emerging markets. anna: many of the businesses you deal with are talking about the need for access to workers, that is going to be a key concern as well. >> it is. if we look at the hospitality sectors, a lot of those sectors already employee eu and non-eu migrants. they are needed and very welcome. business want some clarity over what that will mean as negotiations progress. i don't think we've ever seen such political uncertainty when we have a new prime minister to be chosen. we do not have a strong opposition party and therefore stability and confidence needs restoring.
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mike, thank you very much for joining us. why the ceo of the carlyle group says he doesn't think a brexit will actually happen. ♪
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?c+sv anna: the bank of england
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governor mark carney will attempt to rei reassure the natn after days of post brexit turmoil. getting the green light, dozens of u.s. banks pass the federal reserve's stress tests. and the blackrock boss says he does not see a rate hike in 2016.
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welcome to "countdown." i'm anna edwards. let's have a look at the retail sales numbers from germany. , onestimate was 0.6% retail sales. 2.6% was the actual number, against the estimate of 2.5%. this is data for the month of may. there we are, the jigerman consumer is resilient, compared to what economists expected. looks like we will draw a line in the sand post the asian sector and into the european session still one hour to go into we get there, of course. the asian equities bouncing by .8%. it looks like a line in the
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sand is being drawn here. many conversations are taking place around his desk, as to what is driving that. too much optimism about whether article 50 is never filed and whether or not the u.k. leaves the eu. more on that ina moment. let's bring up the risk rate, up by .8%. the gold price, a little money coming out of gold this morning, down by .2%. the pound has bounced a little bit since the worst we saw at the beginning of this week, but not by much. here are the global bond yields. we are at 1.5% for the u.s. 10 year. at -0.11 one are the german 10 year yields. let's get to the bloomberg first
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world ms.. -- the bloomberg first world news. reporter: dozens of banks passed annual stress tests. got morgan stanley conditional permission to boost its dividend 33%. boristary endboardand johnson will speak with david cameron. the bank of england governor, mark carney, is stepping up to face the brexit crisis. later, a message of reassurance after days of chaos.
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southeast asia's third-largest bank says it will temporarily halt loans for property purchases in london because of the uncertainty caused by the brexit vote. regularly toess determine when it will reinstate the london property loan offerings. consumer confidence dropped this week after the country voted to leave the european union. sentimenttracker of has dropped to the lowest in over two yeras. meanwhile, a separate report shows that households and economic outlook were shaky, even before the referendum. and it is the biggest diamond found in more than 100 years. it has failed to sell at an auction in london. might00 caret diamond million, for about $86
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making it the most expensive rough gem on record. global news 24 hours a day, powered by 2600 journalists in more than 120 news bureaus around the world. you can find more stories on the bloomberg at top . anna? anna: a very shiny post brexit vote casualty, perhaps. let's get over to the asian market session. the asian markets are looking firm once again today? reporter: yes, they certainly are. it looks like asian investors have taken the post-brexit panic feeling in stride. we are seeing a solid session for the last trading day of the first half of the year. it is the last day of the financial year in australia. of window dressing, up by 1.7% on the close. japan has closed fairly flat, after the yen
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strengthened, up by .2%. a good day in korea. of course, that fiscal stimulus is still giving a boost to investor sentiment there. and a turnaround in hong kong, which is the market that was hardest hit since the vote. a little bit of a switch out, but pretty flat. overall, a very good day for the region. you can see every sector on the index is higher. oil and gas are up by 1.5%. the regional index is back to where it was last thursday, before asia reacted to the brexit vote. in terms of your money, it almost as if that did not happen. want to show you one stock. softbank did plunge significantly today. that is as we heard reports that the u.s. securities and exchange commission is launching an inquiry into softbank and the former president. no confirmation, though, i must stress.
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than just quickly checking on the japanese yen. as i said, it is strengthening in the latter part of the day, up by .2%. the japanese yen, holding. a pretty good day for asian stocks. anna? anna: thank you very much, juliette. group saysof carlyle he doubts the brexit will actually happen, the consequences are so dire. >> it is unlikely that britain will exit because one of becomes clear that the terms of the exit are so expensive, not only because the eu is to manning expensive terms, but because the consequences are so significant, but i think the next prime minister will not invoke article 50. anna: u.k. companies are stepping up, lobbying to maintain access to the single market. david cameron has called an emergency meeting today of his business advisory group, which includes the ceo's of companies like easyjet.
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let's get more with stephanie baker. joined by anot her guest. what are the messages then, that cameron is likely to give? is this about him giving messages, him telling the business what is going to happen? or is he doing the listening? >> most of the people on that group supported "remain," but not everybody. anna: whitbread, though? >> whitbread did support "remain." i think what they are going to do is to try to figure out a way for business to work with government over the next few months, so they make sure they get a good deal, their voices ar e heard, and so they will restore confidence. they will discuss whether or not corporation hacks will
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follow next april, what likely steps can they take to reassure given the political uncertainty in the fact that both political parties in are ia state of crisis. anna: when we watch what is happening now in markets, rubenstein does not believe that article 50 will be filed. he does not believe that a brexit, in the true sense, did will nevrer really happen. although it is said that denial is one of the first stages of of grief. what is our best case, then? >> we started with a market that was pricing the brexit with 100% probability, of what we are working on is a decision tree, whereby you look at all the different scenarios. one thing that is clear is that
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the u.k. must maintain access to the single market, which is 500 million people strong. but the eu obviously does not want to see that access come for free and will have the condition on the free movement of labor. anna: is that what businesses are the most concerned about? the access to the single market? does that remain their primary concern. i spoke with mike cherry from the federation of small businesses and he said that was key. >> he, together with other trade and business associations, met on tuesday with the business secretary to talk about that very issue. how can the government maintain the best possible access to the single market? they are also very concerned about their ability to hire eu workers. they want the government to come out and reassure eu nationals working in the u.k. that they are safe, that they will have the right to remain, regardless of the outcome. anna: that is one point the
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financial services industry wants to hear about, what is the status of people from other eu countries? david cameron has said many times that they will be no immediate changes in circumstances. are businesses then, accepting that they might have to give ground on something here? because brussels and london are butting heads, so far. if you want that, you have to give freedom of movement. >> people are realizing that they will have to make the best of the situation, unfortunately. they will try their hardest to maintain the best possible access, but the reality is slowly thinkinsinking in. anna: stephanie, thank you very much. kokou, let's pick up the conversation from a market risk perspective. now, we are not quite. does that mean the rea
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the recentw in days is over? >> the brexit might not happen as a complete breakup between the relationship between the u.k. and th e eu. we could think of the agreement sort of like nafta, what you could have access to the single market, but with some cost attached to it. one of the things that is interesting is how the leadership of the conservatives and even the labor is a big question mark today. we are unlikely to see any key decision before early september, which also means the article 50 invokement and the negotiation process could take quite a while. and markets do like visibility. what is happening here is we have a status quo for the next few months. anna: then, is that comforting
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to the markets? we will get anything concrete for a while. >> that will calm peoples' nerves. volatilityorward to peak up quite significantly. we have the election in the u.s., we have the election in france next year, and one in germany around october. there will be a lot for investors to grapple with. anna: what is your base case assumption? -- doink we will maintain you think we will maintain a relationship, but with some kind of prize? -- but with some kind of price? case -- ourhe best
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economists have assumed a scenario where the u.k. still has access to the single market. otherwise, it will be detrimental for the u.k. economy. to some extent, it was an emotional process with a lot of inter-generation divide. we assume that those doing the negotiation will have a more rational approach to things. otherwise, we might be heading towards a dystopia, which would be bad and worse for everyone. kokou, you have 20 engineers working for you. mustituation we are in generate a lot of opportunity then? >> absolutely. we call this serendipitous uncertainty. interesting enough, this sort of dislocation created trading opportunities, one of which has post theng gold
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brexit situation. we expect more uncertainty going from sterling into the euro-dollar. down,o have hedges going which worked up really late for us through this -- worked out really well for us this period of uncertainty. is has been one of the most talked about events of the year. most investors managed to survive through something that way.ned in a pretty brutal anna: it was not the "baclack swan," best people have called it. up next, copper comes back. the base metal raises all of its post-brexit losses. we have the chart of the hour, next. ♪
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anna: welcome back. this is "countdown." a bit of a gloomy start here in london. the pound is down 0.25% against the dollar. let's get to the bloomberg business flash. >> federal reserve officials have cleared dozens of u.s. banks to boost shareholder payouts after conducting annual stress tests that proved too rigorous again for deutsche bank. gotn morgan stanley conditional permission to boost its dividend by 33%. the fac is opening investigation into allegations against outgoing softbank president arora. that is according to people familiar with the matter. the u.s. regulator is looking
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into whether arora had comple nflicts of interest. he was cleared of wrongdoing one day before his resignation. at least three prominent hedge predictught ways to the brexit outcome. artificial intelligence was used, as well as a pre-vote p oll. there was a model developed to use algorithms to track voting districts. technologies and pulling help to generate profits or minimize losses for the firm. that is your bloomberg business flash. anna: now, let's pick up with our chart of the hour. copper has managed to erase all of its post-brexit losses. good to see you again. take us through the details.
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>> good morning. central-bank reassurances, driving a lot of the rally we have seen so far in the commodities complex. but pu tt oil and gold aside. copper has been the standout performer here. we put this on a gorgeous chart for you, which you can pull up easily on your bloomberg. on the green line, you can see the 200 day moving average. you can see towards the end, very recently there, breaking through that 200 day moving average. not just on tuesday, but staying there. that again, that is a very important indicator as to how the investors feel regarding the longer-term prospects. the price of copper has faced a glut in the past. now, investors are shaking off those worries. anna: thank you very much. we will continue the conversation in just a moment.
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ceo says the brexit decision will lead to cash hording. >> i actually believe that brexit will lead to more uncertainty. it will lead to modestly slower growth. so, i'm under the open you and that it is highly probable -- under the opinion that it is highly probable they won't do anymore tightening this year. anna: that was larry fink, speaking there. we are getting some comments, from the russian central-bank. instability is growing, they say. they say the brexit was unexpected by markets.
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it depends on your definition of a "black swan," i guess. also saying, we see limited direct impact on russia. we continue to get further commentary from various central bankers about the impact of the brexit. we heard from the south african establishment yesterday, talking about the impact on their establishment. the thoughts around the story are increasingly global. kokou agbo-blous is still with us in the studio. when you think about the global implications -- there are many countries around the world, asking themselves if they are impacted because of their relationships with the u.k. they are also asking whether they are exposed on the global trade front as well. : ultimately, what brexit can lead to is global barriers
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and trade barriers. this is why we expect central banks to be more active than they have been in the past/ our economists have concluded that they will not have a rate hike in the summer this year and have reduced the number of rate hikes next year from three to two. this shows why some of the commodities, like copper, are doing fairly well. the sort of patenting we were expecting in the u.s. is likely to get postponed. also, the bank of japan failed to create more gdp momentum. japan is likely to do more in july. and the bank of england injected much into sterling and into the markets. anna: now, low interest rates might be good for some investors, and less tightening globally by central bankers could be good for some.
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but the banking sector has had a lot of headaches, changes in regulation being one of them. a negative interest rate environment is one of those. is could be an even bigger headwin in the future. >> we are finally reaching the limit of the central bank's ability to dictate the path of asset margins. is what some of the fear in general this year. that is why we saw bank suffering around the brexit in in somedown 20% to 30% of the u.k. banks. we are likely to see a change in how some of the central banks intervene. anna: so, we are done with the negative interest rate experiment? have we reached the lower bound
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then? ofou: there was a lot research that says there is a tipping point, where the collateral damage of negative rates are bigger than the benefits. i think you are definitely likely to see different interventions centraby central banks. anna: over 30 years, u.s. stocks provided the best concerns. also the ftse 100 in the white. making the broadpoint that what you can see in europe right now, you should have been in the u.s. of u.s.he biggest fail equities are the corporates themselves. easingf it as equity to some i would rather be in markets that have not benefit in that sense. matt
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anna: thank you, kokou agbo-blous. we will be joined by the chairman of rbs, coming up on bloomberg. ceo joinshe barclays the team later today. ♪ get ready for the rio olympic games
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party's on! know what your pets are up to with xfinity home. xfinity. the future of awesome. see the secret life of pets, in theaters july 8th. guy: good morning and welcome to "on the move." counting you down to the equity market open, i'm guy johnson. we are watching the reality on the brexit. investors absorbed the hard line taken by eu leaders in brussels. the next u.k. prime minister, will this commit to triggering article 50. deutsche bank does not measure up in the fed's stress test.


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