Volkswagen hopes to clear the air, since the cheating scandal emerged in september. A very warm welcome to the program. This is countdown. Live from london, i am anna edwards. Manus and i am manus cranny live in dubai. You have a chart. Anna when we need the keep an eye on of course. This is the implied probability of the betting market of brexit. , 25. 68 . Down at 26 last week we went as high as over 40 on this particular measure of whether it was likely or not we would see a brexit. Of course last night, manus was dominated, the heated exchanges at wembley arena, maurice a holding pop concerts, but that was the faceoff between the remain and leave campaigners. It seems that we have some big moves on monday, slightly smaller than yesterday. Now just pausing for thoughts, manus seems to be the way we describe this morning. Manus we are, indeed. The riska look at radar. I think it is fascinating. We have done a little bit of that isour pound index, what you want to look at. What you have here, 146. 84, the bloomberg pound index is up 2. 3 . The biggest search since 2009 with a five month high. But of course, more than just cable, if you look at the pound index, 35 is against the dollar. 8. 5 against the yen. And it is really all about moving that in terms of the probability odds. Oil above 50. The ability to grow 50 msci, global perspective, or the msci asiapacific index. Asian equities outside of japan reaching gains for the fourth day. As a bit of a reprieve. Not much, but i can muster up a good story. Anna absolutely, the pound index is weighted, a measure of the pound based on trade flows, we will talk about that during the program. This is a bloomberg special. That is to the bloomberg first word news. Uks membership of the eu hangs in the balance as politicians enter the final day of campaigning ahead of the vote. The current mayor of london, sparred in a debate last month over an impact of debate in britain. I think the countries around the world, more than 60 of the worlds companies, sony, aig insurance, bloomberg, have offices here. Broioris i think we had an amag amount of running down. The astonishing thing i think underestimate our ability to do better deals if we are not to do it on our own. Businesses to Small Businesses, Labour Party Mps argued leaving the eu is for the better. The bank of england as said that 10 has a suppression of 2 on wages, but Small Businesses are better off to take back control from leaving. Hong kongs richest man has told bloomberg that corporate taxes should be raised to help tackle wealth inequality. He says that a height of 2 can be used, though he opposes higher taxes on individuals. 13 economists polled by bloomberg to be the next entry in Central Bank Governor, he is typically the finance ministry. Been on the dovish side, holding the current governor, stepping down in september. And the bill and hillary and Chelsea Clinton foundation will by hackers. D those from the Democratic Party and Hillary Clinton campaign compound security concerns about the digital security. That is as the fbi continues to investigate the use of personal email server as he was secretary of state. Global news 24 hours a day, powered by more than 2600 journalists and analysts and more than 130 companies. You can find more on the bloomberg top. Nna roslyn, thank you standing by with us. We have gains coming through in the asian session. That in fact, just wiped out, entirely unfazed by the msci asiapacific. Pausing for breath ahead of the referendum tomorrow in the u. K. . Di anna looks as if we have a bit of a problem with the microphone. Sorry about that, haidi. Asian equity markets pretty much unchanged when you saw the 100pacific just eking out of the percentage point of the game. A bit of a pause as we head towards the brexit, or bremain vote. We have the u. S. Dollar against again at 104. 52 this morning. And we have the pound against the dollar at 146. 82. Lets move on to something Bigger Picture on a macro front. Of course it all comes back to brexit this week. Janet yellen has a cautious and uncertain view of the was economy. In the first of two days of testimony to lawmakers, the fed chair said he sees near and longterm factors clouding the outlook. She also warned of possible fallout if the britains vote to leave the eu. Janet yellen this has no close parallel. It is hard to know what consequences would be. Of course there is always particularly globally. We operate in an uncertain environment. Anna meanwhile, mario draghi said ecb has plans in place in case the outcome sparks market turmoil. Mario we are trying to be ready to cope with all possible contingencies. It would be very, very difficult to be more precise than that. I think we have done all of the preparations necessary now. Our guest in the studio with anna is alan hagan. He is the ceo at coutts. These marketshow have pulled himself back. Let us check in on the bloomberg pound index. Of course, this is about understanding the real risk of brexit. Alan, we had this bounce, checkers set 79 is the risk. Sterling is a fivemonth high. What is the riskreward for sterling if we remain . Alan good morning. Yet, i had a look at your pound index. It does round with your odds checker indexes. You have to go i think with the central scenario, notwithstanding what we had last week, is remain. And the cost of protecting yourself, in terms of options, if you try expenses, for my mind some of that is unwinding. Seeing sterling strength, we have done is celso cell phone or dollar assets. We sold some gold, some u. S. Equities in the low one 40s, and come back into sterling because if you look at the really longterm graph of sterlingdollar, not many pounds below 140. So there is a value in terms of an version here. Anna talk to me about the level of risk, or the perception of risk at the moment in the markets. I know that you like this particular barometer of fear, alan. Barometer,ses fear you can see that low touch there we spiked up once again. What is this telling you, what are you fearing . Alan this is similar to what i was talking about in terms of currency. In general, options against risky events are becoming exclusively expensive. If you want downside protection, if you want to buy an option, is historically very, very expensive. On the bloomberg, if you click the fiveyear chart, you will see it on the top left, im putting you under pressure and na, if we take a longerterm perspective to the bull market, people are willing to pay more and more for downside protection. And of course, as people do that, globally it is the bull market, the wall of fear. And therefore market contingencies arise. Just looking at now, you can see fear is really, really prevalent in the u. S. From our perspective it means go against it, fight the fear, do not fear the reaper. And stay with risk assets. , i will see you and raise you. You have a spike involved. I will give you that. This is running the risk of brexit, and the risk, ok, but i will explode this out to maximum capacity. I see you and raise you and say, posh. There is no real risk. I had a researcher here with me and set it is not a lehmanesqqu, referring to the spikes of 2008. Alan, brave man . Alan i am not telling high enough, but when you get these real big spikes of volatility, that is when you sell. This i think if you look at the fear barometer, it is very specific. It is telling you less about the general level, but how expensive put options are in particular to protect your portfolio, compared to call options. A little bit geeky. But it just tells you about the ongoing pledges of protection. Ifis a relative barometer, you like. But i do not quite agree with you there, manus. For general selling, you want to do that, the ideal time to sell is spiking. I would add that though you do have a nice roll down, getting technical this early in the morning, that would slow the curve. And it is quite a nice trade, even and called environment to be selling long. But your entry point may be better. Manus alan, i want to channel my inner geek. It is never too early for a bloomberg audience to talk about vol trade in what you want to do. Higgins. Lan hagan we will bring you interviews with ryanair Ceo Michael Oleary and conservative mp john redwood. Here is your day ahead. Anna . Anna midday u. K. Time we get mortgage applications. Euro area Consumer Confidence on the eve of the Eu Referendum. The Prime Minister speaks in brussels, and of course 4 30 u. K. Time, we hold that final tv debate before the big day. That will be at 8 00 this evening. Withxt on the program, just one day to go until the Eu Referendum, we get the view from the heart of the eu. We are live in brussels, next. Manus welcome back. You are looking at a very bright and cheery Victoria Harbour in hong kong, hang seng trading, up 3 10 of 1 . Rosalind chin is with us. Good morning. Beautiful day in hong kong. Mitsubishi motors has forecasted a loss of 4. 4 billion. The fuel scandal will cost 2 billion this year, including major clients nissan and major supplier. It will be the major loss in four years, after they admitted to falsifying tests as far back as 1991. Volkswagen will face investors theis first meeting since emissions scandal brokerage and lawsuit filed in germany on the half of a California Pension Fund and other Institutional Investors over losses. The share price is down almost 24 , since cheating on emissions test last september. And instagram has passed half a billion users. With growth outpacing the photo sharing at, 300 million of those people use it everyday. Which is double that of twitter and snapchat. Facebook bought instagram for 750 million in 2012. Growing outside of the u. S. Was interesting about growth right now is that it is happening mostly overseas. Because you are seeing countries like up in the same way that the estate did very early on. You are seeing android take a lot more share as well of instagram. So it is definitely a more global growth. I think what you end up seeing there is a Global Diversity of interest. Chefs in japan. Amazing people doing arts and crafts in france. You see such a Diverse Group of interest. Rosalind that is your Bloomberg Business flash. Anna rosalind, thank you very much. The u. K. Prime David Cameron has made a lastditch attempt to stave off a brexit. An impassioned plea, he urged remain in a referendum, that there were be no going back if the u. K. Voted to leave the eu. Prime minister cameron it is about our economy. It will be stronger if we stay. It will be weaker if we leave. And that is a huge risk to britain, to british families, to british jobs, and it is irreversible. In euRyan Chilcote is heartland of brussels this morning for us. Ryan, but have you on the program. What is the brexit sentiment like the last day of the campaigning here in the u. K. . Or there in brussels . Ryan good morning. I would say they are anxious, but they are not showing it. I think the real move is that they are hoping that a brexit, or the threat of a brexit, will just blow over. The main event here in brussels yesterday was Mario Draghis appearance at hearing before members of parliament. He was asked about brexit, in fact the very first question. He said that the ecb is doing everything it can to prepare for all contingencies. And that is about it. Have a listen. Mario we are trying to be ready to cope with all possibility of contingencies. At this point, it will be very, very difficult to be more precise than that. That we have done all of the preparations that are necessary now. Ryan in the past, mario draghi has said it is the ecbs preference for britain to remain in the European Union. He has said that he brings it will be a downside risk. But yesterday was not going anywhere near that, simply saying that we are preparing for everything. We do not have a plan in place do have we extensive consultation with the imf and other Central Banks. Manus and ryan, what is the plan amongst eu leaders if the brexit actually happens and we wake up, all of a sudden, central bankers are holding from the political elite, what are we expecting . Ryan look, we know the eu leaders, the head of parliament, the eu commission, the president of the eu itself, they will get together and watch the results of the referendum together. I guess the real question manus, that you are asking, what are the constituent countries that the eu relies for leadership . What are they going to do, minus britain . We have a great story on the eu terminal saying not a lot. In fact we learned that Angela Merkel and france while aland have met. And a lot of the analysts we have met said that we have an llandewhere ho would strengthen the euro zone, focus on refugee. Angela merkel like to see more the focus throughout the European Union. So there is a lot of concern amongst people who watch thesels, that, you know, concerted response you need from the politicians is of the you syntel weget, cap have elections in germany and in france and 2017 and beyond. Anna Ryan Chilcote life for us in brussels. Coutts isns from still with us. We heard from janet yellen today. We heard mario draghi, as ryan was pointing out. Mario draghi saying they are ready to respond to brexit turmoil. Janet yellen also warning not to exaggerate the reaction you may see in the market. This ties into what i read on the bloomberg yesterday, princeton professor saying that now the job of the Central Banks now is to calm any fear. How do you view that thought . Alan i agree with that, but that is more likely on friday the calling is going to come in. To exaggerate the Market Impact is right. In fact, our thinking, we have johnson are thinking, should there be an exit and a likely sharp fall on the 100, we are likely to be a buyer. Because life does go on for the u. K. Or protector. Notwithstanding likely a shortterm recession bear. And the market will likely over discount the pain. So you will get markets go against, should there be brexit. And i think similarly on currency , you begin the likes of j. P. Morgan and goldman sachs, anything from 120130 sterling on the dollar. I think you will see buyers. I think you see people going against the market there. Manus you are feeding into the market, do not hold your breath. Which is good, alan. Let us go to bonds. We have touched on this a couple of times. What i have for you is a new chart, which is a 10 year Government Bond yield in the u. K. This is bonds in the u. K. Actually turning up versus italy, the white line is the u. K. At the this, im looking mighty return, alan, in the event that we wake up for a brexit, does the world turn against the longerterm . Alan manus, good question. A tough one. I think the initial reaction will be a flight to safety. You will see rally in treasury, bund. I know mark carney said we depend on the kindness of strangers, foreign capital flows. But the guild yields will be lower. Maybe some risk premium building in. There was gilt yields higher, but a risk premium, i think initial trade is lower. Anna what about the rest of the bond markets . You mentioned the response you aght see to a brexit, potential brexit. But here is the question away from the immediacy of the brexit debate. I have a graphic here that talks about the size of the negative yielding debt market right now. The amount of negative, debt negative yielding debt, now exceeding the entire Corporate Bond market. As somebody who has many years of experience in the Corporate Bond world, alan, you wouldve seen that one coming. This does not change particularly, does it, no matter what happens on friday . Alan no it doesnt. If you come into my shoes or anyone else in the Wealth Management shoes building classically, what we do about bond markets . What is the alternative . What youre seeing in the industry is a big focus on Market Neutral funds. Because you cannot just buy, keep buying equity risk. There are selected Corporate Bonds you can buy to get a positive yield. But again, you are starting to take on equity. And it is very hard now to kind of if you like calm the performing o portfolio down. Coutts is looking hard at quite neutral funds, in old turns, hedge funds. But the usage of daily liquidity in the world. Anna alan, thank you very much. Manus, go ahead. Manus i was just going to say and 20 seconds, when is a first rate hike if we remain . You have 20 seconds to go. Alan 2017, march. That is right. Anna we will keep that one on record. Alan, thank you very much. Manus anna, more referendum countdown, as both sides debate brexit. And make the final picture, and we speak to the leading voice on the leave side of the campaign. Okay, ready . Whoa [ explosion ] nothing should get in the way of the things you love. Get americas fastest internet. Only from xfinity. By switching to xfinity x1. Rio Olympic Games show me gymnastics. X1 lets you search by sport, watch nbcs highlights and catch every live event on your tv with nbc sports live extra. Im getting ready. Are you . X1 will change the way you experience nbcuniversals coverage of the rio Olympic Games. Call or go online today to switch to x1. Anna welcome back. 6 30 in london. 9 30 in dubai. As in the first word news. Here is Rosalind Chin. Rosalind volkswagen will face investors in its first meeting since the emissions scandal though. A lawsuit filed in germany this week on the half of a California Pension Fund and other investor losses. Share prices down almost 24 since admitting to cheating on emissions test last september. Hong kongs richest man has told bloomberg that corporate taxes should be raised to help tackle wealth inequality. He says a height of 2 can be use