This is countdown. Im anna edwards. It is just six of clock in the morning here in london and we have interesting developments overnight in the japanese debt market. Lets get straight to that low Interest Rate environment story we have been tracking. Yields on government 10 year week. Hit new loads this we saw a record low on the 10 , 0. 1 . We have been talking about germany and the u. K. , all hitting near record lows. Bill is talking about how global yields are at their lowest in 500 years, he says. He says this is a supernova that will explode. We will talk about that as we get to the program. I will show you what other assets are on the move because it is a pretty weak session coming through on the asian equities story. Hong kong is back in action, of course. China is still closed. The focus seems to be on the risks that lie ahead. The Eu Referendum is one of those her eine in the u. K. Of course, because of the reevaluation of Interest Rates arehe u. S. , investors choosing some of the higher currencies. Wti on the back foot, up. 8 . That is out of step with the weekly pattern. U. S. Stockpiles decreasing, outages in canada and nigeria of course, part of this story. If you thought that was all a little bit too much on a friday morning, lets focus on the football for a moment. We have the euro 2016 tournament kicking off today in paris. This is a good time to talk about the economic challenges that face france as they take on big football championship. Reporter barack obama has formally endorsed Hillary Clinton to succeed him as the next president. This comes after obama met with Bernie Sanders at the white house. President obama i want those of you who have been with me at the beginning of this incredible journey to know that i am with her. I am fired up and i cannot wait to get out there and campaign for hillary. Reporter speaking of bloomberg politics, clinton says the endorsement was a treat. Clinton it just means much to have a strong substantive endorsement from the president. Obviously, i value his opinion a great deal, personally. And as i have said repeatedly on the campaign trail, i think he has been a very successful president , who has made our country stronger and fairer and it is just such a treat because over the years of knowing each other, we have gone from fear competitors to true friends. Reporter the israeli prime hasster Benjamin Netanyahu pledged to defeat Palestinian Militants after a shooting in tel aviv that left four dead. He called on palestinian leaders to condemn the attacks. To put mores going troops on the border, as well as in tel aviv. The leader of the Brexit Campaign has been accused of putting his own future ahead of that of british workers. Fourth Johnson Boris johnson was debating the referendum. His opponents say he is using the issue to enhance his political credentials. He is seen as the favorite to become the Prime Minister if David Cameron loses the vote. They seem to want to take a huge risk. Boris, you dont think to care about the millions of jobs that will be at risk if we leave the eu. I think you only care about one job and that is your own. Reporter meanwhile, citigroup says u. S. Treasury yields my faulty record lows if britain votes to leave the eu. The brexit good weaken the u. K. s trade links, curb Economic Growth, and a spark massive demand for treasuries as a haven. That providealists early financing to google, amazon, and other Tech Companies had died. Opening with an additional 8 million, the firm invested in tech over the next leading to the Silicon Valley boom. Global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. You can find more stories on the bloomberg at top. Thank you very much, yvonne. Lets find out how the asian markets session has been doing. David inglis is standing by with an update. It is a pretty weak session, david. David absolutely. We are down 1. 1 on the benchmark. We are not looking at the full squad today. China is still on holiday, but you are looking at the weakest day for equities in asia in about a month. You can see bright spots, though, in new zealand and vietnam. E big market story in asia, forget equities. It is about what is happening in the bond markets. This is your japanese 10 year bond yields over the last year. It has gone nowhere but down. This is one of the boj that the policy to the negative Interest Rate policy and we are here at the moment,. 14. That is a record low. That is the 10 year. Have a look at how that plays out when it comes to these spreads here. I have put the u. K. s and germanys here, just to give you a sense of where the field lie relative where these yields lie relative to each other. You have doubt that the boj can meet the inflation target. And you have what is happening to borrowing costs with the german and u. K. 10 years at record lows. Everything from the three months to the 15 year is now below zero in japan. Anna thank you, david. The latest on the markets there and we will pick up on one of those things he has mentioning. As we have heard, japans 10 year bond yields have been driven by rallies in the u. S. To a record low. Meanwhile, the bank of japan and other Central Banks are under fire over negative rates. Writing on twitter the money manager says the global yields are at the lowest the may have been. This is a supernova that will explode one day. Gross has argued for some time that the economy is at the end of a decades long cycle that has dominated in negative Interest Rates, a situation he says is unsustainable. Lets discuss where rates go next. We have the managing director and chief economist joining us here on set. Great to see you this friday morning. So, the bond markets as a who le, under fire from bill gross. He says this is a supernova, ready to explode. Do you agree with him . If you are a bond manager looking at rising risks and diminishing returns, then yes, you are worried about this. This is the supernova of bond markets. The latest move has been accompanied by the higher equity markets with some dollar supported recovery in yield. All of that has been very much linked to the view that the fed will delay tightening even further. An environment where the market risk premium is being driven further. Anna looking at this chart, the things that occurs to me, and this track is back to 2000, it does raise questions about how much of this is a cyclical story and how much is structural, back to the conversation about how just high rates will end up getting this time around. Of course there is a strong fundamental backbone behind this story. It makes sense that high policy officials will be reluctant about rushing ahead with a rate hike. The markets are now pricing one 25 basis points hike. We had one last december and we might get one this december. The worry here is that the destruction of yields, which is given by the feds sort of very reluctant hiking strategy, that the markets are losing confidence in the fed. That is a negative thing, if a flat field curve is already putting the risk of a recession on the markets radar. Anna Goldman Sachs yesterday was talking about the yellen call, and declaring that july is still live. You dont think the fed well they are not done with tightening, but you dont think they are on pause for all that long either, do you . I think the fed is in a data dependent delay strategy right now. But i dont think they are calling the end of this hiking cycle. The worry here is that the markets will lose confidence in the feds ability to the fill expectations and also, to give a clear guidance, which is the financial dna behind everything. To asian highyield equities. It is important that the fed has a credible strategy and i think that means a risk hedging strategy, rather than this knee jerk reaction when you have had 20 great months of employment gains. Anna we were just shown at the 18 chance of a fed rate hike in july. We had this on bloomberg under the work function. Tell us about the feds choices, then. We keep hearing they are data dependent. But in your view, do they have some kind of agenda where they do see the dangers posed by a low Interest Rate environment, and they just want to get things moving . Well, i think the last payroll report has reduced treasure on the fed has reduced pressure on the fed to do something now. But they have a choice of raising rates over the summer to a level that is still highly cyclical in real rate terms. Anna and that would be shortterm pain, you think . Yes, because it is a controlled one. The fed can easily communicate and implement without causing any shock to the real economy. Or having uncontrolled pain in the future whereby a lot of the control over the financial kin , and with respect to the unemployment rate, or their create in rate, would the worstcase scenario, dependency on a high debt growth environment, where even the smallest rate rise can cause distress. Arguably, we are already there. Anna so, we could get some better jobs data in a month or so, and then see a hike . And that could be a good thing. Anna thank you very much. Here are some highlights of your day ahead. To get awe are due Rate Decision from russia after the european markets closed. The his evening at 8 00, euro 2016 football tournament kicks off in paris, with france versus romania. We wonder how many people will be paying attention to those rating updates. Why the former london mayor came under fire in a televised Eu Referendum, up next. Anna welcome back. You are watching countdown. This is hong kong, 1 17 in the afternoon. The hong kong, down today. It is a weak session in asia. Lets get to the Bloomberg Business flash. Reporter it was a blower is helping the u. S. Securities regulator and its investigation of Deutsche Banks post crisis trading business. That is according to people with knowledge of the situation. They say the sec received insider information, alleging to which it alleging Deutsche Bank had mass losses around 2013. The bank has declined two, the, but referred to a Statement Given to bloomberg last month. Disney hopes to sprinkle some movie magic in Mainland China when the new themepark opens next week. Bob iger revealed preparations to make a disneybranded film in china with at least one production by the end of the y ear. We are very far along on the process, including ideas and concepts four films and identifying talent already to make those films. Reporter can you give us more clarity on the timeline . Iger um, shortly. [laughter] reporter within the year . Iger we wont have a movie released within a year but we will have a movie in production. Forrter uber has called customers be allowed to book rides 30 days in advance. It is being introduced in seattle at first, but will expand to other cities. Lyft tested a similar feature several months ago, which has been a key selling point. Back in september, ubers ceo dismissed the idea of booking a car in advance. Chinese companies have strengthened their grip on Virgin Australia as a second conglomerate purchased a stake in the carrier. Hna group,after another chinese firm, said it plans to purchase 13 of Virgin Australia. That is your Bloomberg Business flash. Anna thanks very much. The leader of the socalled Brexit Campaign has been accused of putting his own future ahead of the of british workers. Of that of british workers. Boris johnson was debating on the Eu Referendum. His competitors that he was using the campaign to enhance his president ial. He is favored to become the Prime Minister if David Cameron loses the vote and is forced to step down. They want to seem to take a huge risk with the implement prospects of millions of people up and down this country. Boris, you dont think to care about the millions of jobs at risk. I think you only care about one job and that is your own. Toi think i am inclined trust our premise to, David Cameron, who only a few months ago before the whole logic of project fear kicked in, was very clear that britain could roster and floors outside of the eu. We could do trade deals and we could have a great future. Anna meanwhile, citigroup says u. S. Treasury yields could fall to record those if britain both to leave the eu. A brexit could weaken the trade links and spark massive demand for treasuries as a haven. With us now, the managing director and chief economist. I am drawn to a fascinating story on the bloomberg this morning, which talks about the extensive downturn we might see in the u. K. If we were to see a vote for a brexit. It compares various forecasts. It says it is worth delving into the details because the majority of economists say a vote to leave will spark a slowdown, by predicting an outright recession. How weak do you think the economy would get with a brexit . Is very much depends on what tori leadership does the day after the referendum if britain votes to leave the eu. Anna and what the bank of england might do. Exactly. They have to respond to the risks as they arise. Their only job right now is to make sure everybody is prepared to deal with these risks in a highly shop prone interdependent shock prone interdependent european market. What is very clear on this chart, the fact that u. K. Stocks are 50 higher in formalized terms. The world of depressed volatility, the world where Central Banks have basically destroyed volatility. This has been the weakest performing currency against both the u. S. Dollar and the euro. That has not benefited the u. K. Exports to the rest of the world, not just to the eu. All that shows us that the markets are preparing for the brexit. Economists are unusually, for once, in agreement. They think this could some be a positive thing for the economy. We dont know the degree to which this will be a negative one. That degree is very dependent on the political clout that the t ori leadership that are campaigning for the brexit will have with the populace. Clout theyow much will have with the rest of the u. K. Parliament as well. Precisely. It is quite clear that a brexit vote in the first instance will mean a huge political uproar in the u. K. , which will throw ou figures for debt management. There are so many questions. Anna you mentioned weakness in the pound, down 1. 57 against the u. S. Dollar. We have seen a lot of volatility in the pound. I have a chart here, pound the volatility spiking to the highest since 2009. Thats seems to continue, even suggestng odds seem to the brexit is less volatility. The market is looking for any clues, really, as to where this will go. We have about a 26 chance of a brexit and the has come down from about a 32 to 33 chance earlier on this week. But the has not made it through to the market as reduced volatility. Perhaps everybody is just too nervous. Just took it is close. The worry here is the dead heat that is emerging. There is a negative message on eu immigration that seems to be pushed by the leave Campaign Good risk creating no clear winne. R in other words, we could have far too tight a result. If there is one thing that markets, like business leaders, are agreeing on is that economic o uncertainty is a very negative thing where liquidity is already supported by fermentation across markets. The last thing we need is more political fragmentation. Especially with what is going on in the middle east and the uncertainty surrounding the u. S. Election. This is not an environment to take economic risks. A year ago, after the general election that allowed for this referendum, somebody had turned around the markets and said, the u. K. Is going to walk away from its biggest client for its services and it is a with thebased economy, payment of the economy and it is going to walk away from the political influence with respect to its biggest trade partner, nobody would believe that. And yet, that is what we are looking at now. Sayinghe other camp of course, there would still be some trade. Next, we look at the latest on the u. S. President ial race. . C sv anna welcome back. 7 29, 7 30 in the morning if you are watching in paris. Day one of the euro 2016 football championships which kick off today with france versus romania. It is 6 30 in london, one goalie 1 30 in the afternoon in hong kong. Lets go there now. bill gross issued a warning about negative Interest Rates. Quote, global yields lowest in years. This is a supernova that will explode one day. Gross has argued for some time that the economy is at the end of a decadelong cycle of extending credit. The situation, he says, is unsustainable. Israeli Prime Minister benjamin called on palestinian. Eaders to condemn the attack netanyahu said he was reinforcing troops on the border with west bank as well as tel aviv. Citigroup says u. S. Treasury yields may fall toward record lows if britain votes to leave the eu. The bank says a brexit may crimp Economic Growth and spark massive demand for treasuries as a haven. Whoventure capitalist provided her the financing to google and other tech firms has died. Thomas perkins was 84. He left a job at hewlettpackard to establish Kleiner Perkins in 1972. The firm invested in tech over the next two decades, leading to the Silicon Valley boom that ushered in the internet age. Global news 24 hours a day powered by 2400 journalists in 150 news bureaus around the world. Thank you. Yvonne man joining us there. Japanese 10year bond yields have fallen to a record low amid concerns about the outlook for the global economy. Nejra cehic joins us with these details and others from the asian trading session. Nejra the risk sentiment we were seeing seems to have