Be on the program explaining why we are entering a new era of capitalism. Rosenbergck box jeff will be here through up the 9 00 hour. Another jampacked show. Jonathon a strong show ahead. Let us check in with our Bloomberg Team for indepth coverage. Eric is in washington. In hong kong on concern the chinese currency could repeat the january route. Well have more on jamie dimons comments as he weighs in on the brexit debate. First up, the may jobs report coming out in less than 90 minutes. Let us head to washington. X need the jobs number verizon. Will get to verizon in a moment but it is hard to see this jobs report eating the one that forces the feds hand on june 15. Why do i say that . They indicate a 22 chance of a weeksike in less than two from now. We would have to see a monster printed on payrolls for those expectations to change meaningfully. The median estimates of economists we surveyed showed an expectation of 160,000 jobs created in may, the same that we saw in april. The expectation would be that the Unemployment Rate would take down to 4. 9 percent. We would see year over year wage growth of two point 9 . And monthly wage growth of 0. 2 . It is get to the verizon point. 35,000 landline verizon workers were on strike in may. The rise and did a hire people temporarily to fill some of dide crucial verizon hire people to fill some of those crucial positions. Economists had a difficult time figuring out what we might see in these this jobs report. Some think as you as 120000 and others are more bullish. As of now, we are expecting to see 160,000. Jonathon the most important jobs report since the last one until the next one. We are a we always see th that. How does this all factor into the feds thinking . To worke fed has a lot with. There is strong consumer spending. A backdrop suggests the fed should have to move at some point soon. Fed isellen said the inclined to move in coming months. The nearterm future you have the brexit and also the data in laborige book showing Market Conditions are tight and there is high demand for jobs in areas like tech but not a lot of price pressure. Youhad this push me, pull economy which is driving the fed back on some fronts and pushing it on other fronts. It makes a difficult calculation for policymakers. Probability ticking down in recent days. A few days ago, it was 30 and now we are at 22 . Jonathon great to have you with us. David now, to china. The yuan is heading to its fifth concernsop fueling about a repeat of a january route. Joining us now is an economist coming live to us from hong kong. It seems like we have seen this movie before. Good morning. Tople are looking forward the sequel or some people expect a sequel like what we saw in january and august last year. China had a good run over the last few months. They managed to step lise currency and flows. Thatnalysts are worried that timeframe has come to an end and the trigger could be the Federal Reserve if there is a fed hike. Would put downward pressure on the yuan forcing the central bank to intervene and spend some reserves to put a bed of support under the yuan will let the same it is a potential battle that china has on its hands. Next week, we will get reserves data. We know the capital flow, while it has fallen, it is still trickling out of the country. We have gone through a timeframe of calm for the yuan, at the lingering threat in the background may come to the foreground in the near term. David let us talk about the underlying economy. Pmie is more emi data data out of china. We had a soft reading in the index. We know the Manufacturing Sector in china, while not getting worse, is not taking off either. Not showing much momentum. We are heading into a big week of data for china. Inflation data, trade data. By the end of next week, we will have a better update on where chinas economy is heading to at the end of the year. Megan less than three weeks away from the crucial brexit vote and some big names are speaking out about it. Let us go live to london. We have jamie dimon and the Prime Minister weighing in. What is the outlook this morning . U. K. Aftermon in the being in new york yesterday flew in to talk to his employees with the chancellor of the treasury. He has not been shy in the past about what he thinks about inxit but today, he said it front of the jp morgan employees who he says their jobs may be at risk. And will not tell the british people how they should vote on this but i do want to give you some of my opinions. It is a orton that people make decisions with their eyes open. It is my opinion that this is a terrible deal for the british economy and jobs. Dimonre you have jamie speaking to his employees. He says they may have to cut thousands of jobs in the u. K. If brexit happens and move those to the continent both for business reasons and if other countries require it. Megan why are the polls tightening so much . We thought the remain camp had this done. Now, we have seen this tighten so much. Leave is even pulling ahead. What is driving that shift . It seems like there is not a over whatimistic talk happens if the u. K. Stays. It has been more of the fear of leaving and perhaps that has driven some. What you are still seeing some of the betting markets think that remain is the more likely option. The government is stepping up efforts to push that remain vote. Megan thanks so much. Michael moore from london. Lettuce head over to jonathan for a check of the markets. Jonathon payrolls friday. Looking for 160,000 as the headline number, in line with april. This is how we trade ahead of that number. In europe, much firmer with the ftse up by. 25 percent. The debate in the fx market. Stronger dollar, and the fed moving in june or july, what does that mean for the chinese current . The Goldman Sachs moved out right negative. The yuan weaker much of today down by a couple of tenths of 1 . The concern is that you get the dollar strength, the chinese currency week this and capital flight reignites. Those things feed on themselves. That will be a conversation for later today will we get the payrolls report. Wti and brent, a little bit softer. 49. 09 holding on strongly to the 50 handle. Let us go over to abigail for a few stocks to keep an eye on. The top stock we are watching is valeant. They have received another notice of default for filing finance show late this year. Year,the turmoil this including the change in ceo. The companyn call in default if they do file financials late. We do have that happening and the shares are down modestly in the premarket. In europe, the shares of bp are trading higher on news that the company has agreed to pay 175 million to settle claims file i investors regarding the company lying about the degree of the global mexican spill. That is a fraction of what was initially saw to i investors but it does remove the last major overhang over that disaster. Those are some of the stocks we are watching in the premarket. Jonathon counting you down to payrolls. The fed inches potentially closer to a rate hike this summer. What that could mean and whether it could prevent janet yellen from making him move. We are joint by adam parker and find out why he is among the bears. Do not go anywhere. More go is next. Jonathon loses bloomberg go. The jobs report out in a little over an hour from now. One of the big factors is whether the fed will raise Interest Rates later this summer. About his rate outlook for the year. Charles my outlook is coming around nicely. I expect it will be an appropriate it will be appropriate to raise funds twice this year. Jonathon will one of those two calm during will when of those two calm in june . Does it matter in june or july . It does because you have the brexit vote on the 23rd. Let us suppose something goes wrong there and we have this surprise event. Then, the fed will not go in july. Charles evans was the second membervish number and and he thinks it is appropriate to raise rates twice this year. If you raise june and september or june and december. But, if you do not go in june, you probably will not go in july. Jonathon is charles evan no longer dovish . The fed has moved with its socalled sep projections. Feeling ve some across the entire committee pretty much, that they need to start moving. I think people thinking about the jobs number in the wrong way. They think the jobs number needs to push the fed to go. I think it needs to stop the fed from going. And the futures market has it wrong. Megan you mentioned brexit, at the outset. Is it appropriate for the fed to be taking this into account so much . It is a factor. But is it something they should put such emphasis on . Shock to the a Financial Markets, nothing changes for two years. The trade arrangements with the eu remain unchanged for two years. Megan David Cameron was warning last night that it would take a decade to renegotiate these deals. There certainly would be unease. Beenthink that there has when the fed in december of last year, or actually earlier, they raised rates in december. In september, they talked about Financial Markets. They got themselves into a catch22 situation. The u. S. Fundamentals, near full employment, underlying inflation ticking up and with oil at 50 a barrel, everything says the fed should be raising rates. I think the fed has come back to look at the domestic economy. I dont think they will take brexit into account. Janet yellen could change the entire Market Perception and she gives her speech on monday at 12 30 p. M. Cumulative improvement. Hanging on the latest observation of a number that has been that will be revised twice in the next few months. David what should they be focused on . What is the most important thing when you are in evaluating the strength of the u. S. Economy today . To ask yourself what is the appropriate level of Interest Rates overtime. And ask this expansion started in 2000 nine. We are now in 2016. A7year economic expansion. Sevenyear economic expansion. It is not about tightening. They want to go cautiously and gradually and not moving risks that. Not moving or falling behind risks the fed having to move more rapidly and not gradually. I think the market is reading this wrong. Unless you get a really weak number today. Jonathon the main event. Break inayrolls number a little more than an hour from now. Is the market ready for a hike in june . Adam parkereys joins us next to answer that question and he talks about the risks to stocks right now. More bloomberg go is coming. David this is bloomberg go. The s p 500 closed at a sevenmonth high yesterday but Morgan Stanleys chief equity strategist adam parker does not think this market optimism will last. He has one of the more harris calls bearish calls on the street. Why are you on the bearish side of the projections for the s p 500 . Bullish calla very years. S p 500 for many we decided to move more balanced. Our outlook is that earnings will grow 4 per year this year and next year which is above consensus view. If a year from now, you pay 16 times the earnings two years from now, that gets you 2050 on the s p. Wen we got around 2050, thought that was a reasonable set of assumptions. We probably should get more cautious. We are not telling people it is an imminent collapse. But the market has had a big move and much more than the earnings trajectory has moved. David when you look at how for your call, is it more the earnings . The issue is on the multiples. Expand because the alternatives out there do not look that great. You always think a basket of high quality equities look better then a french upon to. A french bond. That relativeto assessment. If the multiple continues to expand it will be because investors are not fully invested and they want to chase a rally. Jonathon some of the sentiment and positioning. The Short Interest popping eightmonth high. My question is that that against industrials against momentum is that a view on the u. S. Or the rest of the world . Adam the biggest risks to earnings are the chinese economy slowing down in the second half of the year. That has fueled some of the industrials lower quality rally and the dollar gets back on a big strengthening path. If those happen, my estimates of 4 growth proved to be too optimistic and earnings become lower. Then it is easier to see how the multiple will expand. Earning expectations are coming up a little bit for the first time in a year and a half. Yearoveryear, you do not have as big a head when as the dollar euro. I find myself above consensus on the earnings outlook. It is hard to know what the right multiple is that the market should trade at. Risks that are out there and given how far we have moved since february 11. The earnings underneath have not moved as much. Megan we spend a lot of time about risks to the downside whether it is china or brexit. What you see as possible risks to the upside including a possible productivity jump, a surge in the labor market, a weaker dollar . Itthe chinese economy 5 6 and that would be the biggest contributor to Global Economic growth. Europes economy has been growing ok over the last couple of quarters. Japan could have some economic improvement. Emerging markets do a bit better. That would be the bull case and you could drive earnings expectations. What matters more than the base case is the base case has not moved much. The probability of the bear case. Probable ore seems 30 40 . We are saying now that the bear outlook has changed, not so much the base case. David the strengthening trend of the dollar. How much headroom does the fed have to raise without driving that track up on the dollar . Adam one thing i think is funny is if they race rates once this rates oncethey raise this year they are dovish and if they do twice, they are hawkish. I dont think 50 or 75 basis points matter for Economic Growth. It is not as easy as supply and demand. On u. S. Created 4 trillion the computer. At the end of the five year time frame, our 10 year yield is still higher than every other any other country. Way that it would destroy an Economic Outlook. David adam parker is staying with us. Megan could chinas weakening Economic Outlook and floundering currency lead to less risktaking in the u. S. We discussed the Global Economy and the impact. More bloomberg go is next. Jonathon this is bloomberg. Happy payrolls friday. This is how we trade. Europe, we are firm. Ftse is up. Bound fxt a range market. Look at the g 10 space. Bloomberg dollar index going nowhere. Flat on the session. You see it reflected in cable as well with the pound weaker marginally. That is how we are set up in the fx market ahead of the labor Market Report. In the commodity market, it was not about opec but about data and supplies and how crude got a little higher in yesterdays session. We come back a little bit softer. Group with a 50 handle through much of this morning. Also unchanged. A range bound market. David we are all waiting for it. We are less than two hours from the opening bell. The countdown to payrolls. Consensus among economists calls for an increase in may of nonfamily nonfarm payrolls. Theyll yet has received a notice of default from the trustee for two of its senior indentures. Because of the delay in recording its financial results. Jamie dimon warned that he may have to cut jobs in the u. K. If the country decides to exit the eu in the referendum later this month. For news beyond the business world, we turn to business world. Donald trump and Hillary Clinton taking off their gloves in the race for the white house. Yesterday, donald trump said the likely democratic nominee should of ant to jail for her use private email server as secretary of state. Earlier, Hillary Clinton delivered a blistering commentary on donald trump and his foreign policy. The Human Rights Group says the eus deal with turkey to curb in regular migration is illegal and reckless. There are 3 million turkish refugees who ares your he and people are without power in paris. Vre museum is closing its doors due to high water. More downpours are forecast threat the weekend. Global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. You can find more stories on the bloomberg at top. Jonathon tom keene joins us. We are going to be talking about the Federal Reserve bank of england bread. It used to be tight and now it is wide. 16 year wide. U. K. Guild yield trading way below u. S. Twoyear notes. Let us to let us start when it was tight. It never happened. Out toread has blown some extent, 50 basis points wider. Because of the referendum. I would also suggest it shows the internationalization of june 15. Anna edwards spoke with Charles Evans earlier this morning. No one is talking about international up but for brexit. Did you notice german yield this morning grinding down . Jonathon and twoyear yields on gilts have also been grinding down. Side, say, on the other 2year note yields have been increasing in the us because of the expectation of the feds move. At this point, if the Federal Reserve more comfortable with the politics in the u. S. Then the bank of england is looking uncomfortable with politics in the u. K. . Would suggest the dimonosborne meeting was studying. Stunning. At was i cannot fathom that meeting. A bankn i could imagine chief standing up and telling his employees what he thought about the world and the risks. I get that. But to stand next to the chancellor makes quite a bold statement indeed. You can see he is very clearly concerned about what may or may not happen. Realize theot polarity of the United Kingdom over brexit. Elitesear from our fancy talking. But the polarity that we have in our bloomberg reporting this week was incredible. Jonathon the cross party hilarity. You have the Labor Party Led by Jeremy Corbyn who is also campaigning to remain within the eu on a different platform. Within the labour party, that do not like the way that greece was treated and they would also want out. The left and the right have an interest in the outcome of this very the lines have become blurred but they are nuanced. Two year to year yield spread, it shows the dynamics of the global b