Will yellen hide behind the brexit . Is july still a like still a likelihood . U. K. Time. At less than half our way. A couple of things happening. We are going to see a bounce in europe in european equities. The u. S. Markets are called into negative territory. We will see if that changes a little bit later on. At the moment, it doesnt seem we are going to see a higher open in europe and a lower open in the united states. Matt. Matt take a look at what is going on in china, i look at the nikkei. It rallied up from losses overnight. The shanghai composite really turning around. Big down index because of the msci, and yet it comes back at the end of the session. Heres the 10 year bond looking fairly positive. It had been negative five 1000th of the percent. It looks like we are back to a positive yield. I wonder how long that will last. I guess it depends on the brexit polling numbers that come out. You see the pound, a little bit of a gain. Being led around by the nose by polls. To the pound that one for the 1. 71. 141. 71. S brent crude. Oil on a big losing streak. Four down days in a row after we got more rigs, more supply in the u. S. 49. 12 for brent. Lets get to the bloomberg first word news with haslinda amin. Mscinda chinas benchmark indexes for the third time. 1. 5 trillion in assets says the countrys policy makers need to make more improvements. The decision [indiscernible] to raise the profile of the markets and make the yuan into an international currency. The fed is expected to keep the landmark bench the benchmark rate on hold today. Scrutinized will be on close for the likely timing of the next increase. Features indicate a move have belowoad have tumbled 50 . Below 15 . Hillary clinton has opened a doubledigit lead over her rival, donald trump. A new poll finds clinton leading 49 to 27 . More than half of those polled say they could never vote for trump. Chop outpolled clinton when it came to combating terror, both in the u. S. And abroad. Global news, 24 hours a day, powered by 2400 journalists and over 150 news bureaus around the world. You can find more stories on the bloomberg at top. Guy thank you very much. George osborne will warn of a brexit text told saying induced just sing reduced investment from the you would leave a black hole in the british economy. His speech will come after five polls in 24 hours showing the leave vote leading. Having they momentum. Lets talk to our guest, david stubbs. Good morning. Matt winkler has written a nice view piece for bloomberg in which he looks at the polling and he looks at the market. He is saying will the u. K. Vote against europe . Markets vote no. Should we believe the markets . David certainly best case remains. Thinking 65 to 45 . Landslide. S a in a referendum, that is a landslide. Medical it will be interesting to see what will be the indication of the remain campaign and what is close enough for him to still be questioned over this issue. For there to be massive risks in the conservative party. I dont know the exact number. I know when they started out they were hoping to get 60 and then it would be victory in terms of referendum, especially in this country. We have had some of the undecideds move toward brexit. That is what some of the polls have shown. There is a check of people that have not made up their mind there is a chunk of people that have not made up their mind. Vote undecideds will remain in the last moment. Matt i have a chart of it here and we have 35 billion that the 35nd will drop to one dollar 1. 35 or less. Falling to a low that we have not seen since the 80s, how far do you think we are going to get in the pound before the referendum vote . What do you think this amount of bets on such a low level means . David obviously there are people out there playing the embedded leverage to hedge the risk over brexit and make a good return if it turns out. I would not be surprised if the pound trades under 1. 40 as we get right up to the vote itself. We have seen a lot of that weakness being priced in. What has been interesting as the polls have switched and we get very close to the referendum, is degree to which this is that policymakers are focused on us. Even if it is not as major an issue as say a u. S. Recession or chinese hard landing. The things we were worried about a few months ago. Meantime, itor the is putting policymakers on hold it weve seen the effect and a modest slide to safety and Government Bond yields globally. Guy a previous guest described it as a layman like a moment. Is it . David it is a swiss franc moment. Janeway 15th last year was a huge moment in global fx. Move, it is scale possible. What would that do to the economy, saying mr. Jordan. Has been dealing with this for quite a while. Still, is the british economy going to be up to deal with like that . Guy in some ways it is easier because it is going the other direction. Currency. A weaker david it will be a weaker currency. This will be destabilizing for a range of people. I dont think it is a big enough event to cause a major systemic issue. The bank of england is aware and well hear about the places we will hear about the precautions they are put into place. This is going to be a major move if and a currency, if we do vote to leave. Leave a there is a vote, dont you think that will be massive with rippling effects . Look at, we have already got the yen at 106 four dollar. If there is a leave vote, dont you think that would pile in down under 100 right away . David i dont know if the yen would go below 100. You will see some pretty heavy turmoil on Global Markets on the day and the days after the brexit event. Look, isnt this really systemic . It is politically in a mediumterm for europe and the institutional and framework that we have been operating for decades. It is not the same as someone leaving the eurozone because it is not read the nominating assets. Really relevant in the region of asia . I am not sure if it is irrelevant on the degree. It would be a big shock in this world where growth has been tepid. Where there is no shortage of things to worry about. It would be a shock to a fragile system. It would come to keep the Monetary Policy of other countries in the shortterm. Is enough to keep the fed away from doing something further in july. Guy david, stay with us. Entry. , denied china fails to get into the club after the msci says it markets needs to be more hospitable. We are going to get the reaction from hong kong next. Guy matt here is a live shot of the Brandenburg Gate in berlin. Im matt miller. We saw japanese markets and asian equity markets turned around overnight and arise. European futures rising as well. Here are your dax futures up 1 . Lets get to the merck business flash with husband i mean. Will sellvolkswagen assets as it tries to navigate its way out of the emissions scandal. According to people familiar with the matter. The company is planning to combine to cut costs and boost efficiency good vw faces billions of dollars in fines. Efficiency vw faces billions of dollars in fines. Vw may make an announcement as early as tomorrow. The largest clothing retailer has reported firstquarter profits that beat estimates. It increased to 705 Million Euros in april. Fromted revenue came the zara store. Chinas Asset Management are preparing for a crackdown as a part of a move to target shadow banking. Mutual funds will need to adjust leverage ratios for investing inequities, fixed income and nonstandardized products. Units of Public Mutual funds will need to hold 300 million in net capital for every 1 billion under management the final round of bidding for yahoo is said to have seen horizon verizon, at t joined by three private equity groups. Somethe six suitors of its intellectual property and assets poverty in assets. Property in assets. That is your Bloomberg Business flash. Matt. Matt haslinda, thank you very much. Chinas stocks have been denied entry into the msci world index for a third time. Surprising analysts at Goldman Sachs and hsbc. The one weakens beyond a fiveyear low the yuan weakens beyond a fiveyear low. Sam, this is a blow to chinas ambitions. What has been the reaction . Sam hi matt. The Chinese Government says they agree with the decision. You can take that as you will. There has been there were some people who thought they would get included this year. We have been hearing the sentiment of people saying that they did not think it was going to happen. Matt so what are we seeing in markets . Is this a Short Covering . Sam there has been talk that the government is buying up to make sure the market rises today. Theres nothing official. Willan make of it what you. The fact is also that the market had been falling for a few days before today, so some of it could be people flying up again. Matt sam, we will leave it there. Thank you for joining us. David stubbs, it will market ,trategist at just david stubbs david at the moment, yes. It is going to be a big deal when they fully include it. The market is bigger than south korea, taiwan, india and south africa combined. It is a very large market. It surprised if you people. There are major issues. ,ook at the volatility, data suspended from trading in a frequency and duration does not present in other markets. It doesnt matter whether they get included now or a year from now, probably not. In inclusion is going to be phased in. It is not like there whenever full way in from day one. If you look at the chinese shares which are in the msci, they have a little bit over 20 already. About getting the onshore stuff together. China is moving that way. We have seen some of the tensions and what is fascinating about china is their longterm goals we have seen a combination of for reform but also stimulating the same will parts of the economy as last time. For the moment, it is not the end of the world but the chinese are going to have to wait. Now . What would you do expected to come in at any point , do you start loading up on the stocks that you think are going to go in . Do you wait . Do you average in . How do you invest . David when i look in market, a look at a market that worries me. The way it trades. The valuation of the smaller cap onshore is fairly elevated to me. I am happy to get my exposure to chinese equities through a broader msci emergingmarket. I am happy for my fund manager to own some namesake in the asian market that they think are very compelling that they trust the numbers on in the books, that they think are leverage to the longterm growth and consumption of volatility that we are going to see from this economy which is going to be a story for the next couple of decades. I am not falling over myself to gain exposure to the domestic market. With potentially compelling opportunities opening up in similar parts of the emerging markets, i think it is a risky to target one country or another in emerging markets. There are a plethora of options out there. Guy how do you judge risk in china . We see what is happening with equities. We went through a weird phase where commodities were all over the place. The currency with the dollar doing what it is doing, beginning to creep up at fairly elevated levels. Isnt that if youre looking for an idea of what is going on, is that the best place to look . David the market has become more comfortable with chinese policy. Weve got the message that they are managing into a basket. The dollar is not the beall and endall of the world. You look at the data of claims for chinese institutions abroad, it is clear that a huge amount of foreign currency Debt Repayment when on. That was a big part of the currency outflows. Lot. Has slowed down a you look at the current account surplus is very large. They can have an outflow and it is balanced by the money coming in on the current account. Some of the reasons we dont think the china sick currency the chinese currency is going to be under a lot of pressure, obviously it is the slowdown in manufacturing side. It is going to be hard for them to maintain that topline growth. We think the period of maximum stress for the current time is behind us. Matt it is not that much of a feature right now. David stubbs is going to stay with us. Up next, we are going to look at some of the corporate movers in todays trading. Guy it is 7 54 in london. We are minutes away from the start of european trading. Lets look at the stocks we need to be focusing on. Caroline and deals that seemed to be dead before the begun. Aviva, 8 on the open. His is the u. K. Software maker Schneider Electric analyzing the company thing they want to do a reverse takeover. They have two days of talks. This is why we saw a spike in stocks. We could see a slump. Agomber, it was six months that the initial first time they tried to do this deal fell away. With the stock price reaction then. Desk will be at a see a slump at will we see a slump at aveva . This is about the brexit which we have been talking about all day. Barclays has a significant warner warning to 20 slump in reservations this year. Reservations down 20 because of the eu referendum. Good thereis growing is a real dumping this year because of the brexit affect. , it an eye on this stock could rise as numbers beat the First Quarter. Back to you, guy. Guy thank you very much indeed very Caroline Hyde on the stocks to watch. Up next, we have the market opened. European equities on this sunny day in london. It is going to be sunny today. London market up by. 5 . Guy good morning and welcome. You are watching on the move. I am alongside matt miller, in berlin. He has your morning brief. Matt rattled by the polls. Chancellor George Osborne today will want the brexit will mean higher taxes and Less Government spending. We speak to the leave campaigns john redwood. Chinas domestic shares are denied access to the msci benchmark again. Plus, will yellen hide behind the brexit . And is july at least, still a live fed meeting. Guy matt, lets talk about where we think be the european markets are going to go. We think we will see a positive open, this is what the futures are showing us. Lets look at the ftse 100, which is just opening up right now. It looks like we are probably going to see a slight bounce at the open. Here we go. Remember, we had the 6000 level yesterday. We will see how the day progresses, but maybe we will start to retest that level. Nevertheless u. K. Assets have been all over the place. It is interesting that the ftse 100 has been below the 6000 level. We are up 40 points of the moment, trading at 5960. Let me bring up the rest of the european markets. We will have to wait for the dax to open. Full 1 . Ac is up a as expected, the euro stocks are trading up around 1 as well. Those are the stock market moves. Lets see what stocks are moving the market. Caroline a sea of green, everything will Industry Group is on the rise this morning on the stoxx 600. Dig into the biggest movers today. 3 4 of als are also up 1 . Every single Industry Group is trading higher after five days of losses on the stoxx 600. 2 trillion worth has been wiped out from the entire global stock market valuation over the past week, but today, a sign of relief heading into the fed meeting. 77 of people think the fed will hold fire, but what will janet yellen discuss in terms of the overall picture of the economy, both internally and externally . Lets look at how yields are moving. They are coming off of those record lows. Lessrisk evident today and risk aversion. The 10 year yields are just a little bit higher at the moment. But interestingly, there was not that sort of flight away from safety in japan. With all yields come down in japan. In fact, every single benchmark in japan is trading a record low yields we are talking about your five year, 10 year, 30 year. They are all in negative yield that the moment. Lets have a look at the stock markets for you. I want to look the individual stocks. Profit is rising higher than expected, up 6 . Sales rise 17 . I think i am blaming matt miller here. The 60 jackets were flying off the shelves, and im sure he helped. Berkeley group is up. 3 . They say uncertainty is hitting current transaction levels because of the eu referendum. Group, unchanged, but this is likely to fall on the open after Schneider Electrics talks fall on the open after just two days. Matt . Matt obviously, i am more likely to purchase a ducati than a pink jacket at zara. But ive be able to buy the entire brand soon. Full flag and will hold 2025wagen will hold its investment meeting. They will tell investors exactly what they are going to do to cut costs. What we know from people familiar so far is that the new ceo is planning to possibly combine all of the component makers from his 12 different brands into one company to cut costs. This is something, guy, we have seen General Motors do. Ford did it, but maybe more importantly, at least to me, the new ceo could tell us about the brands he could sell. Ducati is one of those. Or you could see a spin off of a luxury brand, like audi or porsche. I did not realize until recently that volkswagen owns a 10 stake in bayer munich. Guy presumably, matt, the bikes make more sense. Less synergy that you could derive as a result of bringing together the subcomponent layer. My question is, who would buy it . Matt well i mean, it has been on by private equity in the past. Investment industrial owened it. And it is not a lot of money. Volkswagen payed 820 Million Euros for it. But youre right. The synergy does not seem to be there. The ceo has said will liken and ducati the ceo has said and ducatilavolkswagen do work together. I will ask him who he is talking to about a purchase. Guy which ducati bike, i am just curious . There could be a very different experience. Matt it will be a multistrada. Im actually going to drive to london on friday. I am going to join you for a week and then i will drive down to bologna from london. Guy a european road trip, it sounds nice. Lets bring david stubbs into the conversation. We will talk to him about bikes, but we will talk to him about what is happening with the european car space. It has gone quiet on the investment front. Story over for you, when you talk to investors . Are we over it yet . David we are potentially over it with this one Company Getting a full idea of a scale, but you still have investors 30 worried about, what happens if there is a drop in the car industry . We have seen other people have to fess up. This is the danger of running a concentrated portfolio. You have the individual stock risk. This is a highly competiti