Dubai. Breaking news. Anna from the clothing retail sector, lets get straight to those numbers. Better than estimates the best way to summarize in terms of q1, 705 million euros, better than the estimate of net profit, firstquarter sales just a touch ahead of the estimate for the first quarter. They are saying that sales in 1 to juneose 15 may 13. And looking at the number, that is coming above estimate as well. Many, thene of the Global Presence is perhaps insulating the company from tougher sales backdrops that they might been seeing in various individual countries. But i would not stop some negative fx implication, we performance of weak performance that they cannot but better numbers, than estimated. Let us turn to the brexit question, manus. The Eu Referendum on the 23rd is just eight days away, marking them off as my calendar goes. We have a series of charts illustrate how the market is looking at the story right now. Manus we have. Look, no doubt about it. Let us talk about a pound, the only currency in 2016 that is actually declined. If you want to understand the risk reward, and the size of the betting against the pound, take a look at this. What you have is the premium sales sterling at an alltime high. That is what the top right of the chart is telling you. The premium to sell over the premium to buy, standing at 9 . Now that trumps anything we have seen, Scottish Referendum, back with margaret by recession. 25 billion pounds, the jordanian economy, and i have not gone into the middle east, i can give you an example in europe. That is half the size of luxembourg economy. 11 billion pounds betting against the pound in march, and if you cannot afford the volatility of the pound, do not worry. You can always short the euro. Repe seeing a mini prieve, would last as we get on to first word . Minirepreive seems to be the best thing we are seeing. Were showing to the asian market and the currency market, cause for breath, whether we go back to the concern of brexit we will see. I have a chart also talking about volatility. This is the index here in white bettingthe odds checker odds for brexit or you will talk about this many times, manus, the volatility of brexit going up according to the odds in the betting market. And is being reflected in what they are seeing at higher volatility, this is the chicago bond option matter of volatility. Let us get the bloomberg first word news. The u. K. Anna, chancellor will warn in a speech today that leaving the eu could spark a fiscal crisis. George osborne says reduced trade and investment believe a 30 billion pound black hole that would have to be fixed by increased taxes and spending cuts. Boris johnson has again argued that the u. K. Should quit the eu because of the slower eurozone growth and excessive bureaucracy. His comments came in a telegraph Huffington Post debate with the prime minister. If you look at the eu as a whole, and has the most growth anywhere in the world. They have catastrophic growth in many parts of the mediterranean countries, running 51 in greece. The whole eu progress is a machine to generate excessive bureaucracy and red tape. Haslinda meanwhile, double line ceo says that if britain votes to stay in the eu, despite leading in several polls. This game after multiple surveys this week show believe campaign ahead of the remain side, sending global stocks and the pound down. Onected give the benchmark lending rates on hold today, but statements from janet yellen at press briefing will be scrutinized for clues of the likely timing of the next increase. Futures indicate the odds of a move by july have come below 60 , down at the start of the month. Expectations have been hampered by turbulence and global credit markets. Has opened aon doubledigit lead over her rival donald trump in a new poll by bloomberg politics. The survey has clinton leading among 750to 37 , likely voters in novembers election. More than half of those polled said they can never vote for donald trump. But trump outpolled clinton when it came to combating terror, both in the u. S. And abroad. Bloombergon has told that the work and structure of the Clinton Foundation would change if Hillary Clinton wins the election. The former president was talking to David Western at the Clinton Global Initiative event. Mr. Clinton if you think very clearly about it, we will do the right thing. And we will try to explain it to the american people, but i will have to wait first i do not believe in counting chickens before they have hatched. So, let us see how this election unfolds. There will clearly be some changes and what the Clinton Foundation does and how we do it, and what is it across the bridge we get there. Haslinda global news 24 hours a day powered by 2400 journalists in more than 150 euros around the world. You can find those stories on the bloomberg top. Linda, thank you very much. Let us get into the markets, and many reprieve for the pound. Juliette sally is standing around. Will it last . Usiette i guess if any of have an answer, manus we would be sitting on a beach somewhere. Certainly we have been a little bit off coming through an asian equities today, and fact nothing that the fourday decline, the biggest we have seen it since february this year, all focused away from the brexit it seems at the moment and back onto the fmoc as we await that decision. Want to check this really big jump weve seen on the shanghai asian market, up by 1. 5 . Shanghai has been down by much as 1. 1 . There is a lot of speculation now that there might have been some statebased buying,s of National Intervention coming through. The market now on the lunch break, but it had a big jump just before that. We had the chief executive officer on, saying the Chinese Government never want to see the market following too much. There could be some Government Intervention coming through there. Here in hong kong the market also trading around one third of 1 on the lunch break. And we have seen a little bit of weakening coming through in the yen, the nikkei 225 up by 2 . The fxkets weighing on 200, you see markets across Southeast Asia and mainly pretty flat. But surly on the regional index we have seen things turn around from early in the session, we were trading at around these lows that we had seen for quite some time, in fact the gate had been down by 4. 4 over the last four days. That is the biggest drop as i mentioned it since february. When you put it in Market Capital it was about 2 trillion off the value of asian equities. Good to see a little bit of buying coming back through ahead of the decision coming through from the fed tomorrow morning, our time in asia. I still want to show you the currency, we did actually see sentiment really new, and the yuan fell to a fiveyear low, the weakest level since january 2011, holding there at the moment. Thank you. Tte, joining us from hong kong. The yuan has extended losses from a fiveyear low, dragged down by the decision to lead the domestic indexes for the third time. Chinese stocks fell at the open, but has since been reversing early declines that there could be intervention. Joins us from hong kong. Great to have you. We caught up with yesterday. What reason, why werent they included in the index rebound . Is the basic sense of it that it comes down to control and access, four for foreign moy managers, in the sense that they need to know that some of the rules in china around stock holds and repatriation of funds, theyre not comfortable enough yet that for Pension Funds and mutual funds that he did of the intake money in and out, and the amounts they want when they want. Look, they have been rebuffed on a number of occasions. What is the likelihood they actually get what do they need to do . Do they need to show less than the relation, Less Government control . What needs to happen . Sam that is a very good question. And it is one that everyone is looking at right now. It certainly is that they left open and anytime in the coming months that they could change their minds or makeup a decision, the expectation is that we will all be here in 12 months time. But some of the big issues are big issues, and they could be intractable issues. China has done a lot in the last 12 months to change the markets, rules, make it more acceptable, for want of better word, for msci. Whether they can do more and change of the outlook in the next year remains to be seen. Anna sam, thank you very much. Bloombergs team leader for asian markets, joining us there in hong kong. Let us talk about china, bring in our guest host, Neil Williams from hermes. Great to see you. Msci deciding not to include china. China is incomplete. You can see why they say that, the Global Equity markets and the second largest economy in the world, msci had the reasons. Neil they did. And we thought most of the conditions have been for phil third time unlikely for china, but maybe relief for emerging markets may have been nudged out of the way in the index, had a china been included just yet. My concern now running up the macro is in there may now be some added retaliation from china, at the time of the fed is in tightening mode. Maybe not today but later. And of course we had last autumn this policy faceoff, where the fed was talking the dollar, and of course china retaliating by then pushing down the reae currency in august. If youre going to hike, we are going to give you a deflationary blowback that is greater than you first thought. I hope the decision overnight in asia will not add to the time when they are already looking at the fed. Manus you sort of almost played into my hands. Good morning, manus in dubai. I have the 15 and five year low yaun, breakingo through and going beyond the five year low. Does this add to capital flight . Does it add to the whole momentum in terms of the currency . Would rejection at the msci level really invoke that level of direct currency war . Is that what you are talking about . Niel it would not be the only reason. But it could be used as an excuse and added reason to get the currency down in china. Let us face it. It is not the only dashboard to press, they have many in the more than we do in europe. Certainly a weaker currency, done gradually, is an important part of their way of stability the economy. And taking back some of that slowdown. The problem really in china in terms of doing that really fast, the fact that the Interest Rates can be reduced far more aggressively. But at a time when the property sector is really very hot still, if you look at property transactions, they are running it twice the speed of building. At a time when Interest Rates, if you take into account Interest Rates paid by enterprises, whose own devices 8 , what they as could do on the other side, the fiscal side is simply spend. We have seen some signs of that by state owned enterprises being forced to increase cap fx. Which is in the shortterm allowing china to reach the growth numbers. So the currency as part of that. The concern i have now that as the fed starts to tweak in the next few months Interest Rates further, that china may couple that with the currency move. And we can return to we had last autumn. Anna some people suggesting that china should not be welcomed any further into the Global International market fold, saying there is too much intervention beard what they have done a markets has been intervention. Can you look at Global Quantitative easing and all of the unusual measures we have seen in Central Banks in action, that is intervention in some markets. If you look at japan, for example. Neil no surprise that japan is a very good test case for china in this case. But china is too big to ignore. So why should may be included ultimately in the index . And 11 trillion economy slows down, which accounts for half of the demand, we tend to notice. It seems to me that some of the indices and Credit Rating may be behind the curve. Anna neil stays with us here on countdown. Up next, will be hawks fly the coop . Tune into our special coverage that kicks off at 6 p. M. U. K. Time. We will talk fed, next. Anna welcome back. 1 19 in hong kong. Of aang seng up by 2 10 percent. Doing well despite that missing out on the msci inclusion there in the industry. Lets get a Bloomberg Business flash. Haslinda anna, chinas Asset Managers are preparing for regulatory shutdown as part of a move to shut down shadow banking. The use of mutual funds will adjust to equities, fixed income, and nonstandardized products. It is estimated that once they come into effect, they wanted to hold about 300 million in net capital for every 1 billion under management. The final round of bidding for at t, ands verizon, quicken loans founders, joined by private equities, each of the suitors once the core internet business, as well as some of the intellectual property and real estate assets. Most of them value yahoo between 4 billion and 6 million, but verizons bid is lower because it is not include property. Navigate the way out of the emissions scandal, that is according to people familiar with the matter, saying that the company is planning to combine components to cut costs and boost efficiency. Vw faces billions in fines and repairs, having a minute to rigging emissions test for millions of cars. A full platform review that may ng ofto the selli ducati motorcycles as early as tomorrow. That is your Bloomberg Business flash. Manus thank you very much. A pretty big day ahead. We will give you the headlines. Highlights, even. 9 15 u. K. Time, billionaire philip green will be questioned by two house of commons committees about the collapse of bhs. Selling for one pound last year. At 6 45 p. M. Ter, u. K. , justice secretary michael gove faces audience questions in the Bbc Television special. At 7 00 p. M. It is the big one, the Rate Decision followed by Janet Yellens news conference. That is a half hour later. Make sure you follow all of these events on top live go. Realtime coverage for you. You will want to tune in. We have a fed decision special a kicks off at 6 p. M. Let us bring in Neil Williams back to the conversation. I want to go straight to the heart of the matter. Can the fed keep two rate hikes alive. Is that missioncritical . Neil i think it is. Let us face it, having hiked all of once, the fed is the only test case we have to see whether central bank can ever normalize again. One,nterest rates, i for expect them to try. Two more hikes this season, i have long been going for september and december to try to andd the winds of brexit what is going on right now. Outside of the u. S. , i guess from the decision today, a move on rates would be a surprise. So i suppose the focus then is on the famous dots. Anna the focus will be on the dots and inflation i suppose, whether we can find much evidence of it. You say two hikes. Im looking at the work function on the bloomberg, suggesting the rest of the market or at least what is back into the markets is less than that. The market less convinced. What do you see that made you think there will be two . I have a chart that shows inflation not so great, expectation is the title, reversing a june survey of only 2. 3 . Does that feel like time to be hiking rates to you . Neil to me, no urgency to hiked today. They have a convenient domestic reason not to do that, which of course is one month payroll numbers. I would look, as well as janet look beyond the onemonth. Anything the fed still looks at the rolling three month average, the underlying payroll figures that have slowed from about 200,000 two more recently posted to 100,000. They have a handy domestic excuse to hold off in june, maybe july. But it seems to me, the question is why hike now and maybe risk return to Financial Market problems of last autumn . When there is a rather large potential disturbance happening in europe, so i think it is best to see through that. And move in september. On the reason for hiking at all, the fed has a mandate looking at two things. The labor market is strong, 4. 7 , below what the fed believes is a level under which we can take off 5. 5 . And inflation is pushing up. The number we should get on thursday will have headline inflation about 1 . The core number of the fed 2 . Et now is if a martian landed and look at the inflation and labor market data, read the fed mandate, he would say there would be a hike. Inflation in advanced economy is 0. 3 . I want to get your terminal rate, if the fed does keep two rate hikes alive by the end of the year, just want to get an estimate from you on where you think trajectory is for the terminal rate . Going back to the inflation discussion, the chart and what you just said, inflation in a vast economy is plus 3 , the least since 2009. Go with me on this journey here. How close are we to helicopter money . Neil well, helicopter money has been tried twice in the states givingt decade while rebates to consumers. It worked. I dont know if any to be repeated in the states now, or they could work in the eurozone for example when there is still no single fiscal agency, which makes it far more difficult to do. But turning back to those dots, manny, i am sort of the other way around on the money markets, where the fed currently is, i see the moving pretty much in line with those dots. But then stopping. My terminal rate is actually as low as 1 , at the end of this year or maybe the start of next year. And the reason for that is firstly because i expect those rate hikes to have an impact, for what it is worth, my estimates suggest that three rate hikes together if you include december left taken over half a percentage point of u. S. Growth at the end of 2017. Anna we will see if that margin lending will come with a helicopter or spaceship, perhaps the money we will call it. Thank you very much. Neil williams, chief economist stays with us here on the program. When we come back, we will talk about what is going on in the u. K. A