It seems like brexit is underpinning every investor fear and driving markets lower. It seems the Brexit Campaign is gaining serious momentum. Tom i guess i look at it like the fed meeting tomorrow. The Brexit Debate is data dependent. When i am fascinated by, i know we will touch upon it through bremainance, how do the people respond to what you see . Francine i do not think it is data dependent. I think there is emotion and it is a very Clear Campaign from the brexit people saying if you are historically one that takes the u. K. Can win this then you should vote for brexit. This is a very interesting nuanced game plan. Lets get straight to the bloomberg first word news with nejra cehic. Four new polls indicate the u. K. Is on a path to leave the european union. Has the leave faction ahead by as much as seven points. Britains biggest selling newspaper came out in favor of a brexit, saying if britain stays in the eu britain will be engulfed in a few years by this german dominated federal state. France is bracing for a wave of demonstrations against new labor reforms. The Union Promises to rally more protesters. The union is the most vocal opponent of the president s plan to make the labor market more flexible. In northern france, a News Agency Says a police man and his partner were killed i a gunman who claimed allegiance to Islamic State. He reportedly was convicted of taking part in a terror cell. Authorities are investigating. Orlandoter in the massacre was not on a nofly list even though he has been investigated twice by the fbi for links to terrorism. Fbi director said omar mateen was taken off the watchlist because authorities had no evidence he was a danger. He called authorities and swore allegiance to Islamic State. Paul ryan will unveil a republican plan to roll back government regulations. He wants to expand Energy Production on federal land and limit lawsuits against businesses, as part of his agenda he is released to unify republicans before the election. Global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. Cehic. Jra tom within all the news flow, markets are on the move. Currencies,ns, commodities, and the first and second derivatives are interesting. Futures further give way. The 10 year yield is 162 2157 in, from 24 hours. Oil nevertheless hold some resilience at the 48, 49 level. The vix gets my attention, a balloon from 16 to 22. The vix trades now before the u. S. Market opening. The 10 year again to compare and year,st with a german 10 which has moved mightily in the last 60 minutes. Negative 0. 02. It is not the twoyear german, it is the 10 year. Hugeine this is psychological impact. The first time the german tenure is negative. It is a 10 year. It is not supposed to go in negative territory. If you look at yields, the 30 gilt yield fell as well. Sliding stocks and you can see yen, one of 5. 75 and the pound 1. 4143. Tom it also mentioned mexico in a 19 print. Today. Mexico weaker maybe it is brexit that maybe it is not. Lets look at a snapshot of Small Business in america and i wonder if it is much different in the u. K. Back 15 to 20 years. Down we go in the crisis. We come back and get just through 100, and here is the recent rollover in overall Small Business mood in america. I would suggest maybe it has a u. K. Tinge. Francine i like that chart. I want more plain vanilla to show that yields are falling across the board so i chose the 10 year yield. Tenure, ine german year, and in. K. 10 white, the japanese 10 year. Global outlook seems to be fueling demand for perceived havens. Ofriel stein is the director Management Services at oxford. Thank you for joining us on a day the negative 10 year yield the 10 year yield in germany went negative. The move was quite quick but this was in none of the textbooks. Gabriel go back a few years and negative Interest Rates were not in the textbooks. It is fascinating to see how our world and the understanding of economics is changing quite rapidly. I think there are two things to look at. Tom was mentioning a Crucial Point that yes, it could be brexit related or specific issues but maybe it is something more longterm. Looking at your chart which goes back to 2000, what we can see is a very long downward trend in bond yields. Yes, you cane, always find a daily issue. Down. L, trends clearly we are in the low inflation world. Will be blissfully happy if they get inflation back up to 2 . We are in a low inflation world. Lower ands will be that will therefore not be unusual for them to slip from time to time below zero. This, andbut look at i know that longer trend they are falling but given in february german yields were still at 0. 5 . This is quite a sharp move. What im trying to figure out, is this a small move that will stay and it will go back up or is this the new normal . What does that mean for Central Banks . Againl i think we may , there has been a clear shift probably months, brought on by realization that u. S. Growth was slightly weaker than expected. Some concerns misplaced about the eurozone and in particular more concerns about brexit. That yes, the new normal is yieldly a u. K. Bond between one and two. They signify slower activity and lower inflation. That does affect centralbank policy. Tom you have a swedish extraction. The idea of being from stockholm means that you know the courage of the sweetest centralbank in times of other Swedish Central Bank in times of other crisis. Are the Central Banks to timid given what we have seen . Gabriel it depends what Central Banks should do. If you are saying Central Banks should go all out for creating whatever, then i would say the fed is doing reasonably all right, perhaps a little bit to timid. The fed and markets in the u. S. , it is very unhealthy or the markets are centralbank dependent and the Central Banks are market dependent and it should not be, but broadly speaking it is headed in the right direction. I think the japanese are far too timid and they should switch to what is loosely termed helicopter money. Deutsche bank had challenging days yesterday. What will be the ramifications of this new regime of lower Interest Rates, greater negative rates on the banks . How will it transmit to the european Banking System . Gabriel depends very much on what happens, on how banks treat. So far, banks have been very unwilling to pass on negative depositors,es to particularly small retail depositors, particularly households. That is because banks realize that real tale funding is quite useful retail funding is quite useful, but that erodes their Profit Margins so you are looking at a time when banks alienate retail depositors or take a hit on their probability profitability. Ultimately i have a feeling that ranks are going, if negative long,st rates remain banks will pass them to retailers. They will simply have to do it, and we will see what that aims to depositors switch out of cash and into deposit. Francine thank you so much for that. David westin today will sit down with president bill clinton at the Clinton Foundations cgi meeting for an exclusive interview at 11 00 in new york. Tom good morning, everyone. Lets talk foreignexchange report. Thank you, interactive brokers. We are going to do it right now in the 5 00 hour. Yen blows through 106, renewed yen strength. Sterling. This is not cable under the water of the atlantic ocean, this is eurosterling and a. 79 that has not moved all that much given the sun report. I do want to point out selected emerging markets in 11 nations very weak. Dollar mexico at a 19 print. Says thenew forecast Global Oil Market will be almost balanced next year. Demand will continue to rise faster than production and the oil surplus in the first half of this year is about 40 smaller than estimated. Dannon sayst maker profits will rise this year. They are hoping to make up for difficult target. They say its our parading margin should widen to 6 6 10 of a percent. Detwiler has agreed to buy the new british the british million,or 871 representing a premium detwiler has been looking for acquisitions to expand its business. That is the Bloomberg Business flash. Francine nejra cehic with your update on the top stories you need to find out about. We are just nine days away from the u. K. Referendum, for polls showing the leave poll remain. Sunbritish newspaper the has backed the brexit. Gabriel stein is still with us. Why is a Brexit Campaign getting so much momentum . They have chosen one focus which is immigration and it has something that has worked well with the electorate. We have had the remain campaign for weeks making the case for economic risk, for project fear. I think rather than try and meet them pace to pace on the it is appealing fundamentally to something the voters feel they are not being listened on. An interviewhad with justin king on what it takes to be patriotic. Difficult to quite say that the only you have to vote leave. I think you can vote stay and be all of those things and more besides. Francine what he goes back to is what you are explaining, that it is between the emotional and people will have to decide whether their heart is with leave or not. Does the sun have the power to sway voters . Svenja it is the most read newspaper in britain and it does not come to a surprise come as a surprise. You have a lot of voters who are still on the fence and i think what the brexit camp has done is they have gone for the emotional argument and so far this is working. A note of caution, or member we were this time last year. The polls were showing that the conservatives would win the election so we have to remember there is a margin of error, a tendency for voters to stay with the status quo. Buts not a done deal yet certainly today it is a bad day for the remain camp. Tom lets bring up eurosterling. Maybe it is a litmus paper for. Our world sterling weakness against the euro and the euro challenged as well. What will you watch for today from Prime Minister cameron, from the chancellor, and from the other elites preaching stay within the eu . Planmust change their game. What are they going to change to . Svenja cameron has noticed that this Economic Campaign is working and is trying to get. Abour to help out we saw Gordon Brown Gallup to the rescue yesterday just what happened in the scottish referendum. He gives very impassioned speeches and many think that swayed the campaign. Our vote is very important and there is a feeling they have not engaged. Francine do you believe the polls . The polls rather than the bookers . Gabriel i think britain is going to vote to leave, yes. And partly because of something saying, this is for most voters and emotional issue. I think most economists, even my colleagues who support brexit will agree there is an Economic Cost to leaving but the attitude is it is worth it. Is thestion is, how big Economic Cost and how much is it worth it . The remain side, you have had this project fear. It seems to me that the exit side uses what i call project intimidation. Anything that says anything negative about the eu, that person is not allowed to speak. The remain side has not been able to make cogent arguments for staying. Francine it is about campaigning. A stark warning from Gabriel Stein. Tom keene will be joining may next week to bring coverage of this momentous day, momentous week, and momentous time. Latest insights and perspectives from Global Leaders and thinkers as we bring you the referendum decision june 23. Francine i am francine the clot in london, tom keene in new york Francine Lacqua in london, tom keene in new york. Gabriel stein is still with us. When you look at centralbank action, we were promised the virgins and emergence is not coming. The boj probably has promised divergence and divergence is not coming. They should push money not into the Banking System which is what they have been doing for the past three years. They should push cash or Bank Deposits rather, to households and Nonfinancial Companies until they have as much cash as they want to hold in the form of cash and they should keep giving them more as that is the only way to get activity going, and activity is the only way we can get inflation going. Is the boj going to do this . Not this week. They make up their bonds purchases from 80 to 100 trillion but it will not have the required effect. They need to do Something Else and hopefully they will. As thethin currency solution of last resort, where will the dollar b in a year from now . Gabriel the problem with currency as if everyone is trying to use it as the weapon of last resort, it does not work. The fed does not seem to worry about that and that says the dollar a year from now will be slightly stronger, perhaps not terribly much. Weaker. A bit , as much asweaker the bank of japan will be able to arrange. Tom Gabriel Stein with oxford economics. We go to london next week and before that, a fed meeting. Michael and myself with special coverage tomorrow afternoon. Get ready for the rio Olympic Games by switching to xfinity x1. 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. Tom good morning cute bloomberg surveillance. On microsoft linked in we are thrilled to bring Eugene Munster who will join us later today. Just nine days before the u. K. Votes on whether andeave the european union, for new polls show the leave campaign is running ahead. The surveys have the leave leading anywhere from one to seven points. Another blow, the biggest selling newspaper in the u. K. Is backing a brexit. U. K. Has won a fight over welfare issues. It wants to restrict access to for Migrant Workers and the eu court of justice agrees, andthat the u. K. French government spokesman said the killing of a police man and his partner was an act of terrorism. They were killed in northern france. , whoe killed the attacker had claimed allegiance to Islamic State and had been convicted of taking part in a terror cell. Some advisors are urging Benjamin Netanyahu to cut a new deal on military aid with president obama. There are tensions between the two leaders but some israeli officials are concerned donald trump is unpredictable and Hillary Clinton is unreliable. Gets 3 billion a year from the u. S. And now wants as much as 5 billion. Donald trump has barred the Washington Post candidates credentials, saying they have no integrity and writes falsely about it. Owned by amazon founder jeff bezos. The newspaper rejects his accusations. Global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. I am nejra cehic. Francine thank you so much. We are joined by douglas norton. Straight to with the imf told me a little bit earlier on. They are looking at the chinese economy and the deputy managing director stan lifton was talking about chinas nearterm economic outlook. He is concerned about the mediumterm. We are concerned with the present rapidly rising credit in the economy that too much may go to companies that really not have the basis for repayment, and the debt problem that presently we think is manageable could become unmanageable. Are managing it but how likely is it that they will get it right . We need to see progress in reining in credit growth and hard and budget assets. Douglas particularly because china has a peaking 8 beginning workforce and the fastest rising age. Tothey have the ability finance the current credit environment . We think they do. The banks have cash balances the size of the entire fed allens sheet. We had fed balance sheet. Huge governmental summit coming in august and it brought forward the next financial conference to this summer. Concerned as everyone else and we think there are indications that moves will be made in a short time. Francine what do fed hikes mean for the chinese economy . I think the issue with the yuan at the moment, a lot of people are putting too much weight in terms of policy. I think it has been driven ever more so by flows and the Chinese Government has the ability to normalize those flows if they want. The interesting different from last year when we saw huge outflows from the government, they have not chosen to sterilize those outflows on this occasion. Tom i am glad you bring that up. Or idea of sterilized unsterilized actions by the oddest of Macro Economic policy. Debate, hereexit is the reality of a longterm strength. Enan be douglas martin, what i would say is i combine this with massive yen strength and currencies like the mexican peso weakening as well. D. C. And unraveling after we have heard the comments from the imf . Douglas absolutely. Particularly when we are looking doj, we have seen a huge yen appreciation over the past three months or so. The interesting thing about the is no one islity position for it because no one is putting any risk on it at the moment. What i think is fascinating is where the rmb