I think the conversation on brexit is continuing to shift but im looking forward to seeing whether janet yellen tackles this issue headon or dances around it. Tom i do not think that is a small idea and i believe she has got to. I would be stunned if she did not directly mention it. Day, Michael Mckee and i will do this at 1 00 p. M. This afternoon. Francine i wonder whether she will focus on domestic risks or international. Lets get the bloomberg first word with nejra cehic. Nejra a new warnings from George Osborne on the risks of leaving the European Union. In a speech he will say that brexit would lead to a 42 billion black hole in the budget that would have to be plugged with higher taxes and cutbacks. The eu is june 23 and recent polls show the leave faction is ahead. Hillary clinton has opened up a doubledigit lead over donald trump in the race for the white house. A new bloomberg poll shows clinton leading trump 49 to 39 among likely voters and 55 said they could never vote for trump. He does have an edge on it comes to fighting terrorism. Voters say he would do a better job. After the polls closed and washington, d. C. For the last primary Hillary Clinton met with rival bernie sanders. They released statements about the dangerous threat trump poses to the nation. The orlando massacre has some Senate Republicans pushing to expand the fbis surveillance power. They have a longstanding request to expand the scope of it can electronic records. Legislation could come to the senate floor this week. Global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. I am nejra cehic. Tom thank you so much. Being at the bloomberg terminal, equities, bonds, currencies, and commodities, there is a little bit of fed day stability but still interesting. Futures after a number of difficult days up six. Brian belski to join us and im looking forward to talking to him about what i should do with my 201 k. Oil continues a dampening, a lot of that yesterday afternoon. I thought oil was soggy to say the least. The vix is 22. Even with yields taking a relief, we have curve flattening. In dollar renminbi it was a 6. 0 with a manage beijing weakening rim nimby overnight. Francine european stocks rallied attach. The british pound rebounding ahead of the fiscal policy review and i also want to show because it is nearing a 5 a fiveyear low. A lot of focus on the u. K. Unemployment rate. Eight days to the brexit referendum. Tom our coverage beginning at 1 00 p. M. New york time this afternoon. Heres the fed funds rate prevolcker. What we forget here, i could show this chart literally every day. We do it like once a quarter or whatever. Here is 1994 with a length of policy stability, accommodation and this timeline here puts in scale the massive zero bound combination in this modern crisis. Francine i got a lollipop chart made. Shows the amount wagered on the pound falling to the 1980s levels has more than doubled in the last three months. This is my first circle and this is when the u. K. Was taken by a recession. The second one you can see volatility and how many bet showed the pound would fall was the scottish referendum. Guess what this is . The referendum coming up next thursday, june 23 and which you will be in london to cover. The fed ties back to the referendum, divergence, what yields are doing, and it sets Monetary Policy along with the bank of japan, bank of england, and swiss bank. Simon derrick joins us for the next hour. I do not know who has the toughest job, the fed or when you look at these odds and the risk of a brexit, whether it is the Swiss National bank. Simon i think you are absolutely right to focus in on an open economy is incredibly susceptible to inflows and outflows at any given time, and it goes back to the start of 2015 when we started to talk about qe in the ecb. That was one of the big factors that led switzerland to remove the bank. Look how extreme the have gone on Monetary Policy so the next question is whether there will be fresh inflows enter switzerland, can they really go even more negative than this . This is like japan. Havens in this risk environment do not really have any power to do anything, or do they . Simon i think japan has got more space to do stuff. I think that actually, we have been talking about volatility in sterling. Places weone of the have not focused enough is potential volatility in some of those haven currencies over the next couple of weeks. We know the story in japan, we know the political pressure to not intervene, not to enter more Monetary Policy. We also know that a surge in the yen would have a huge negative impact on local markets and asset prices. Japan, do the bank of you worry about the g20 or local markets . Tom lets go into the bloomberg and look at the bet within the market. Bet in three dimensions on sterling. This is sterlingdollar, not eurosterling. I have never seen this chart, that is how odd brexit is. In the very short term getting up to june 23 there is a bet for a weaker sterling. That is the headline and you can see on this line. There is a bet and then there is stability out critically. If we get a brexit vote and we get sterling weaker out six months, out two years, out five years, do you expect sterling to crawl back to some level or does it stay week . Simon i think you are getting to a really key argument which is exactly where is sterling in the global skiing . Against the dollar in the global scheme . Against the dollar it is fascinating. Fast it has how fallen on a oneday move, the largest individual move in one day. We also know what they sterling crises have looked like in time past. We know about the 1980s, 1992, 2008. Each one of those prices came from a point when sterling was significantly overvalued against the dollar arguably. A 1. 35d be trading at post1985, and that is the key difference. There is another factor that is important. Over the course of the last two years, the yield have moved massively over sterling. I do not know that the market is that long on sterling anyway. Tom it reminds me of Olivier Blanchard appearing with us where he basically said, when everybody calm down, the ramifications are not going to be that great. Witness chancellor osbournes comments yesterday on taxes and i wonder where sterling is one year or two years from now wherever the vote may be. Francine that is something that bloomberg has written a lot of copy on that we may see a downside. If you look at the economic indicator, overall it is not looking that rosie so you could actually argue that it could go either way. Tom it is going to be most interesting. Really looking forward to being with you next week with Michael Mckee. Michael mckee and i this afternoon have a task at hand with scarlet fu. She will lead our fed coverage beginning at 1 00 p. M. Vicerd clarida and the chairman alan blinder, good morning. Francine welcome back. This is bloomberg surveillance. I am Francine Lacqua in london, tom keene in new york. He will be joining me with Michael Mckee to talk about the brexit. Here is nara chi etch. Nejra cehic. Rate the british jobless fell to 5 in the three months that ended in april and wages grew faster than expected. The spanish bizarre clothing 6 . N revenue rose retail rival h m reported sales that just estimates. Stocks are nowc a threetime loser. Has denied time msci access into the benchmark saying that chinese policymakers need to make more improvements to the accessibility of the market. To them to raise the mainland stock. Francine lets bring in enda curran. He joins us from hong kong. Snub is this for the president . How badly is he going to take this for the third time . Enda i think it is pretty clear rejection and it goes to show you how far china has to go before it fully integrates the its economy with the world system. Plansalked about sweeping for opening up to the world but the progress has beens white quite slow. Some say it is a credibility issue for china because ever since they intervened last year and the way they responded on yuan, that dense their credibility a bit and the msci says you must try a bit harder before you join our club. Francine when are they going to review this . Some say it is understandable giving the transparency issues but the msci said they will delay. One year down the line, three years, is it possible to say . Enda the next review is next year but a decision could come sooner than that. He stepped back and look at the optics around chinas market, notwithstanding that some china theyogress is being made are still intervening and the stock market and are a key supporter. The company i mentioned earlier has not returned to chinas market and it is quite fragile. Look at the currency. There is still a lack of certainty where they are going with the exchange rate. Tom you mentioned there intervening into the equity markets and the currency markets we had fireworks lacks tonight last night with a significantly weaker yuan. We are buttressing up against these two standard deviations of the volatility trend. We leg up last night and come in as a stronger renminbi over the next few hours. How managed is managed . Are they literally running their currency and the stock market tick by tic off a desk in beijing . Enda the state still very much has a firm grip on thing that we should remember that the Yuan Movement in somewhat reflects the dollar gained. That is why the fed will be so important today. Signaling from us yellen that they plan to tighten in the next few months would be prodollar. The best gauge for the yuan in the near term will be tonights fed meeting and we will see what miss yellen has to say. Tom enda curran from china this morning. Simon derrick, there is all of these dynamics. What is your call on rim nimby . . Run nimby that the pressures on have been about the market costs relative markets relative position. Significantlyes since yellen pulled back. The question is what happens september in july, in than the Downside Pressure on the rim nimby will significantly decrease. Francine it is about the fed, right . It is all to do with the dollar rally . We are not really going to see a dollar rally, are we . Simon no. Frankly the u. S. Authorities would probably prefer to see a weaker dollar. I think that would work internationally and will help take the pressure off oil that equally going into what looks like a highly volatile second half of the year, it makes things a lot easier for the fed. Tom we showed sterling earlier in brexit. This is a whole different view of that currency map. It looks radically different than brexit. This is the massive bet on weaker yuan out a good five or six years, remarkably different chart than what we saw with rex it. There is a 3 with grexit. Brexit. We will speakadio with Abby Joseph Cohen when Abby Joseph Cohen when about janet yellen, washington economics, and maybe the washington capitals. Tom good morning, everyone. A fed meeting this afternoon. The capital are not focused on janet yellen but we will be at 1 00 p. M. Scarlet fu, Michael Mckee and myself to give you insight on this important meeting. They are distracted by politics and part of the distraction has been at the Washington Post has lost its crest press credentials from the trump campaign. This has caused a modest upward celebration by some Trump Supporters but most people just upset. Alexander petri at the Washington Post takes a more approach. Donald trump is never wrong, that is a good idea. Facts are often biased against donald trump and should be used sparingly and reporting if at all. Think of them as a garnish. Word suffices. Fact checking is that west is worstt gauche and at treasonous. What is fact . Donald trump speaks truth which is bigger than fact. Francine i love that morning mustread and it goes back to how you model the trump presidency, how you model a clinton presidency. Simon derrick, you are reminding me what dollaryen did under bill clinton. Simon the great thing discussed in the currency market is the second half of this year and the fact that this could well be the most politicized president ial race in a long time as far as currencies. To talk about Hillary Clinton or bill clinton, i would point out the 1992 campaign, immediately after that he started on a fairly successful campaign. That combined with easy Monetary Policy. He was all about japan manipulates currency. , onlys race coming up talking about trying to win over those disenfranchised bluecollar workers . Japan, i think actually we could see a lot more of this stuff come back out between now and november. Tom megan murphy will join us later as we talk about Bloomberg Politics. This afternoon at 5 00 p. M. , with all due respect, Mark Halperin and John Heilemann will continue the derby forward. 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, everyone. Francine lacqua in london, i am tom keene in new york. The german 10 yield is positive after a history making yesterday of a negative yield. And theresident obama Republican House leader paul ryan find themselves on the same side of an issue. In the wake of the orlando shooting both are reject the Donald Trumps called to temporarily banned muslims from the u. S. Ryan says he is still backing the republican nominee. Police say a twoyearold boy was attacked and dragged underwater by an alligator at a Disney Resort while he was partially in the water at an artificial lake. 50sear. Nato is increasing the number of troops in eastern europe. 4000 troops would be deployed in poland and the baltic nations that order russia. Officials in indonesia do not expect a repeat of the forest zeres that led to thick ha last year but that could be forecast by better weather. Global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. I am narrow change. Cehic. Nara jh nejra francine George Osborne says he will have to do an emergency 30 to cover a 30 pound Million Pound black hole is the u. K. Leaves the eu. We are joined by the labour partys largest donor, john mills and with us still is john simon derrick. John, you are probrexit. Explain to our International Viewers why brexit is gaining momentum. Factors, then issues surrounding immigration are becoming more salient. It is becoming more obvious the remain side does not have any answer to the number of people coming to live in this country larger and larger and putting more strain on us. That is part of the explanation and the other is that there was a big drive by the remain side to a front everybody with dire economic consequences, and the remain case has been substantially demolished. Francine the remain camp would of course refute that but do you think there is safety in numbers . The more polls that show brexit is likely to win, the more people who come out and say i . As a closet brexitier john there is a momentous effect undoubtedly in play that acceptable tore be in favor brexit. People are now getting very precipitous about this. Tom john mills, what do you want fm your labour party . I will be visiting next week into london to join in the hoopla, but what do you want from your labour party . What is their best practice over the next week . John over the next week i am not quite sure what they can do. In the longer term i think the Labour Party Needs to have a stronger but critical approach to the eu. I think the mistake is that the Labour Party Leaders and Parliamentary Party and the party as a whole have been so enthusiastic about the european with they have lost touch larger numbers of labor leaning voters who have a different perception. Tom do you risk losing scotland . John i think it is very unlikely that the result of a brexit would be scotland feeling off. There is not going to be a referendum and Less Parliament agrees to it that deans anything, and i think it is likely that parliament would sanction another referendum. If they did, with the smp really welcome this . Bear in mind the budgets they did for scotland becoming independent had oil at 130 a barrel and now it is 40 or 50 a barrel. Simon this looks as though it is going to be a really tight though. Expect there to be serious political turmoil on both sides of the vote in the aftermath . John i think this will be a shakeup for everybody. There is an awkward position in the conservative party and labour party are campaigning for an objective which is not shared in the conservative party, many of their rank and in the labour party, very few. Francine you refute some of the figures the treasury came up with. Do you accept in the next six months of a brexit vote, the political system and investment be a little bit of a mess because we do not know what kind of politician will negotiate and who will ago she ate . If the pound goes down a bit that will make a bouncing in the economy. I think a lot of the projections are very gloomy because if you aed gloomy projections into model, you get a gloomy outlook. This is a siren call of france. Lets drag this these out for john mills. This is the animal spirit of the United Kingdom and france. I have taken nominal gdp and them at thegged financial crisis when they both peaked, nominal gdp in white, france in blue. France has way under performed. If that is the proxy for europe what is the part of the economy that your