♪ >> welcome to on the move. it: 30 and berlin. we're kevin you down to the european open. i am guy johnson. here is what we are both watching the brexit battle. french economy issues the toughest warning yet for the risk of a brexit. -- what is he going to say for himself. asian stocks extend the rally, after better-than-expected u.s. data.

the european markets in 30 minutes time. front, the german company sees growth when consumers spend more. what is the global retail environment like? we are going to speak to the outgoing ceo this afternoon. adidas has never quite short on that one. the french are making their point very clear. matter whichn't because he wears, he is making it clear he is going to have consequent is for britain if they leave the eu. it is a remarkable comment. it shows you how fluid this entire conversation is going to be. we are in for an exciting three months. guy: i think he is pushing the right buttons. the contest in the u.k. has gone very negative. he is taking that little further but he is pushing the negative campaign buttons. look the consequences and the disaster that will become the u.k. if it decides to leave the

eu. he is pushing the migration button pretty hard here it he is pushing the financial conservative button pretty hard. he knows what he is doing. hans: i will think david cameron would necessarily would've done it any differently and is the negative side. this is the other side of the sphere component. guy: i think the brits all listen to the french. it is funny how that relationship works. the rally is still on in asia. we are seeing that quite strongly here it you're going to strengthen boards -- you are going to share the boards in just a moment. let me take you to the bloomberg fair value. london recording lower at the moment. berlin and paris -- a little bit higher. the aggregate, .1 higher. these risk on sentiments that we see dominate the story have maybe come to a hold here in europe.

hans: there is discount argument that the rally sort of petered out at the end of the month. that is not happening in shanghai. we had the shanghai up doing pretty well. we got dollar yen, all the way to 114 did the weakest in the yen. breaking through 140. the brent is down a little bit but still above 36. when we look at that brent story, there is a question of whether or not there's going to be any -- maybe bring some of that down for us is caroline hyde with bloomberg first word news. caroline, what do you have for us? caroline: there is more evidence of a china slowdown. the output index which covers manufacturing sectors fell into construction last month. down from 50.1 in january. meanwhile, moody's has cut its credit rating outlook on china's largest phone company and

biggest bank. that is after doing the same with the company's government. -- with the country's government. sale pioneer aubrey mcclendon has died in a car crash in oklahoma city. it comes a day after he was charged in rigging bids for oil and gas. mcclendon faced accusations that he conspired to keep the price of leasing drilling rights artificially low. he slammed into a bridge embankment. global news, 24 hours a day, powered by 24 howard -- 2400 journalists. its: france would relocate camp from -- to britain and welcome bankers fling ludden -- fleeing london if the u.k. were to leave the eu. like thoseo reason

who rollup of carpets, i would say we might have some repatriation from the city of london. of books --ahead wolfgang schaeuble. guy: george osborne -- hans: george osborne -- carry on. guy: he is your finance minister. i will talk about him here he is set to hit back at his pro ,rexit colleagues later today according to his prepared remarks. he will tell the british chamber of commerce conference that "those who want britain to have to leave have not been able to leave -- benefits answer the most basic questions of how to retain those single markets and all of the benefits it brings. ryan chilcote is at the conference for us. we have two americans talking about a british subject. tell us where does the business community stand?

your at the same time, conversation demonstrates the difficulties of people having rational conversations upfront. it is never easy. let's see if the german financial minister is aggressive and emotive and risque as the french economy minister is when he is in the room. i doubt he will be, pointing out the benefits for germany of brexit. he is here to stand beside george osborne and point out quite the u.k. should remain in the european union while pointing out the benefits of that, as opposed to what would be bad about it for british this is. going back -- british business. is for remaining in the european union. andeconomist did a survey it shows that 50% of the people withinrve a want to stay

the european union. 30% want to exit. 10% want no. that is pretty consistent. here's what you have to keep in mind. he was saying, look, generally speaking, business in this country is not very well represented by the business groups. 80% are not represented by any of the business groups. a lot of those small businesses are for brexit. they don't see the value in being in the european union. thinks, thishe bcc might be a much closer fight that perhaps people think within the business space. that's important. why? look the number. the poll yesterday, 41% of the british pub survey yesterday think that britain should stay within the european union for the 1% think against.

-- european union. 41% think against. therne needs to lead british public into remaining in the european union. he doesn't have that unanimity just yet from the group of people. stuff.an, great thank you very much. let's welcome our guest, head of global equities, matthew beesley. good morning. the campaign is getting negative incredibly quickly on the brexit story. does that make it harder for the financial markets to look at this objectively in trying president? -- try and price it in? what are the stocks you expect it to the badly hit? they have not been hit on brexit fears yet. you think of the media companies. they are on board. guy: things have been heart --

hit hard already. matthew: the banks that are .oing be hardest hit, rbs the event hit with dividend related weaknesses. it is not going to send them out of the economy. it's more back and loaded. the market so far has left brexit as a thing to worry about down the line. ryan: -- guy: the foreign-exchange markets have taken a different view. we have seen a revision of that -- gets because people affected by it. there are other asset classes. there is a witness beginning to creep in -- there is weakness beginning to creep in. that is right. there is a logic there. what you're going to have over the next three or four months is a hiatus of investments.

we need investment in the u.k. from overseas. that investment is going to be on hold pending the outcome at the end of june. it is logical that both are willing to buy sterling, to buy british pounds to invest in the economy are going to wait for the next three or four months. that it hasogical sent the pound lower. guy: in the initial part of the campaign, you listen to what macro had to say. there is a lot of noise upfront and then we start -- the story settles down. what actually documents are good that is what most people are missing. matthew: that is what happened with scotland as well with the referendum. it was very pressing for financial markets. markets -- betting scotland leading the u.k.

they were consistently in the 70% stake and the 30 leave. -- 17 stay and 30 leave. that is enough to keep financial markets from panicking. guy: we start to see the volatility we saw in sterling, when does that happen? will you be short into that? matthew: as the undecided narrows, we start to include this day and leave numbers. asis so large in the polls, an investor, to position your portfolio, it is so difficult, your paid to hedge a wage. hans: matthew beesley, i will have some questions for you later, whether or not i should be buying adidas or nike. up next, we'll have the fed page book.

what is the central banks next move? we will discuss that next. ♪

guy: welcome back to -- hans go welcome back to on the move. let's get to bloomberg this is flash. here's caroline hyde. caroline: hans, thank you you'd shale cofounder aubrey mcclendon died in a car crash in oakland city. he comes a day after he was charged with making bids for oil and gas prices. he conspired to keep the prices artificially low. he drove his car at a high rate of speed and slammed into a bridge embankment. u.s. products, deb jones has left the jet maker. -- left of the drugmaker. this sunday night, valeant has itsed its -- has delayed

fourth-quarter results. the stock is down 16% this week. miramax, the film company betting -- that owns oscar-winning movies like pulp -- aon -- a deal will be spinoff of al jazeera media network. [indiscernible] that is your bloomberg business flash. got? feds beige book painting a picture of the u.s. economy that is expanding at a moderate pace. number intelligence analysis said the fed sentiment of economic conditions should reduce the likelihood of an extensive rate hike campaign. investors only see a 10% chance the fed will raise rates. a probability that we will see a did this year is at 66%

test 66%. we have come a really long way. let's bring back in head of global equities, matthew beesley. the market has swung too far hit with price some of it out again. where are we now in terms of where the pendulum is? volatility -- there is a huge a rain of outcomes. it is harder because we have had his move where it is declining. that is really unusual. obviously going into an election year as you well. -- election year as well. there are so many moving variables, that swing suggests investors don't have a clue. they really do not know. the ability for that outcome to be swayed, depending on what happens in the u.s., it is going

to be a very volatile time to be investing. guy: let's talk about what is happening elsewhere we have ecb coming up. whatve seen the impact of the japanese have done to the yield curve over in japan. 3-d charts here. you can see the sharp rolloff on the bloomberg as rates go negative in japan. they follow off a cliff here as we go into negative territory for the japanese curve. we still do not understand the impact of what this is doing to the global economy yet, do we? matthew: this is why bankshares have been successful this year did -- this year. very challenging. the margins are under immense amount of pressure. japan is no different. it is not a lack of supply. it is not that banks are not trying to land. they are over lending.

areaid negative rates causing banks to overextend credit. it is happening in asia and australia. they are forced to compete for market share because the japanese bank in australia has very low margins. the global economic picture you'd it is more creating -- is creating more uncertainty. question, the idea that markets are basically not getting clear signals or investors are begging for signals and then reading too much into one thing. does this notion of payroll being this big signifier, is that diminishing overtime? should guy and i stay late to see what the number is for

payrolls? matthew: i have been skeptical about that number. statistically, it is the most revised series of data that comes out of the u.s. it is a calendar event on the first friday of every month. i think we as investors pay much attention to it. it is policymakers we should be listening to. what is it -- what is interesting is policymakers are starting to signal that rates in the u.s. are probably less likely to go up because of hawkish members of the feds have been talking about a slower prospects of growth in the u.s. economy. that rhetoric is much more important than payroll data. that i am going to take that everyone in london when that numbers -- when those numbers come out, they will be at the pub. you will stay with us for the rest of the hour. we are good to head out.

we will look next at corporate movers, including the dutch king after its earnings beat estimates. ♪

guy: six minutes to the european open. a lovely day in london. this is what we're looking at the futures. thanes a little bit softer that. nevertheless, let's get to caroline hyde it let's talk stocks we need to be watching it caroline: as we are heading toward the eurozone we tell numbers coming out later. adidas, pre-want preannounced the numbers that it has come out with it the confirmation -- come out with. final annual results. we are going to see double-digit growth going to 2016, 10% to 12% is where we are likely to see the profit going. this is why you see over the

course of five years adidas surge to record highs. it continues to rise higher when it comes to adidas us share prices. go evenlly, it could further higher. -- ashad zone the rains he hands over the reins. soccer going to be driving the next few months. let's have a look at our holders, another retailer, big in the netherlands and united states. you know the brand, stop & shop. hold, improving because of cost reductions. seeing sales on the upside that managing seeing margin improvement for 2016. the reduced rice is they've got to keep on driving forward here it hans, back to you.

next, it is the market open. futures pointing up. the open is next. caroline, we are going to get back to whether your running in adidas or nike. ♪

guy: welcome to "on the move." i'm guy johnson. here is your morning brief. the brexit battle bills. we of the toughest morning yet regarding the rest of a brexit. the german finance minister will speak on the topic in london today. what will he have to say on the matter? asian stocks extend the risk rally. appetite continues to build. if the rally going to lose steam here once the european open gets underway in a couple minutes time?

the german sportswear company has seen 10% growth. what does the global retail environment really look like? we are going to speak to the company's outgoing ceo this afternoon. hans: guy, when we take a look at the future, it is basically flat. let's head out to caroline hyde at the touchscreen. caroline: thank you very much, indeed. could we make it a seventh day of gains on the european stoxx 600? we have had our longest winning streak since october in europe. we have added 1/3 of one trillion-year-old. asia is up for three straight worth.dding $1 trillion france is opening up 1/10 of 1%. energy stocks are on the rise.

once again, it seems to be the miners who are in vogue across the board. we are likely to see retail sales come out of europe later. we also have a lot of services data. the chinese services data is ts.ing below forecasted we are expecting the retail that a to show a little bit of slowing in europe. down,e got oil coming though. even though stocks are rallying in asia, that correlation with oil prices is breaking down once again pulled. -- once again. we did see oil at $36 yesterday. why? see a hurting t starting to lowering of production.

shell providers are winning back in terms of production. we have a little bit of risk aversion creeping into the gold market. overall, the debt's markets money is going out of the u.s. into greece this morning. ahead of the retail lumber in europe, the big retail in netherland and in the nasa states is showing better than expected -- and in the united states is showing better than expected probability. they are at record highs in terms of their share price. numbers showing the expected double-digit growth in profit for the next year. and porsche, keep an eye on this. once again, it is opening flat. the legal battle could be rearing its ugly head. the judge could be bringing back

two witnesses. porches now 6/10 of 1% lower. guy: european stocks are flat and slightly negative. that is depending on the market. let me show you where we see money flowing this morning. we can see discretionary's are off. financials are a little bit later this morning as well. japanese financials have been interesting to watch. industrials are trading a little bit higher this morning. let's bring in matthew beesley. rally inatched quite a equities. here?we chase it from >> i think it is hard to. the rally did not happen when expected. it finally has happened. we traced back most of the loss we suffered back in the early weeks of the year. centralare waiting for

bank's observations. we are now looking and watching data ahead of further corporate news. the chances we know end up in a bit of a flat or sideways market with investors not yet knowing which way they want to jump. i would argue that we look at the list of positive and negatives. the negative list is the still longer. i think it is very hard to be a buyer of some of these stocks that have been recovering in a this rally, given where fundamentals are. we are looking energy. prices are rallying. copper prices have turned from very low levels. if the evidence yet that we are seeing sustainable supply and demand normalization? as a long-term investor, you want to be confident that the lows are behind you and the

outlook from here is not as bad as it was. i would argue that the jury is very much out on that last point. hans: matthew, if i could follow on that. does that mean you are not buying into this traditional spring rally where mayday will be a beacon equities? inmayday will see a peak equities? off somes have sold much harder and faster than anyone expected. a negative feedback loop potentially, given some of the tensions we can see in equities and credit markets. a lot of those issues are now well understood. therefore, from here we are looking for further news, we are looking for confirmation that

the markets were oversold of the growth outlook is ok, or be are looking for confirmation that the outlook has been materially impacted. totainly everyone we speak -- and i am a bottom-up stock investor. there is definitely a tone of caution. companies are holding back on investment and looking to see how this year pans out. this becomes a self-fulfilling prophecy that markets end up suffering and profits end up slowing, simply through fears of corporate leaders. guy: let's get a team to bring that board back up again to show us your picks, geographically. which region do view prefer out of those three? and b, which stocks do you prefer out of those groups and why? >> in the global equity funds we manage, we are very lowly exposed towards asia and japan.

we have the majority of our assets in europe. stocks, at that list of from s&p, coca-cola, and more. it is a very collective list. have thisall characteristic -- this is ap or lee eclectic -- this is a purely eclectic list >> we really are struggling at the moment to find the company in japan where we don't think the changing macroeconomic backdrop will be prohibitive to growth. we are trying to find interesting investment ideas in emerging markets and asia. we have been struggling to find fundamental reasons to be buyers of material and mining stocks at this juncture. shows how badly these stocks have done.

but still, the outlook is so uncertain. they are not yet levels where you can close your eyes and buy. it is much easier to focus on companies where there is that idiosyncratic company specific to latch onto, rather than those top-down macro themes where uncertainty reigns. guy: one of the ways to do this is to go by volatility. in aarket has all repriced lot of volatility. we still don't have it for november and the u.s. election. we have a series of events that provide quite a lot of volatility, a lot the reasons for the market to become more dispersed. expl is not so i can oit. there is an advantage by being a longer-term investor. there is a contested advantage. if you have the ability with the type of funds you are investing to invest on a multiyear view

and ignore the short-term -- we are trying to screen out the short-term noise. we find these opportunities, we try to take advantage. thanks for joining us , matthew beesley. i heard someone has to take a company specific approach to everything. adidas has seen their earnings growth as consumers spend more. we will look in more detail at the challenges that lie ahead for the new ceo. that is up next. ♪

guy: the risk rally is running out of game in europe. let me show you what the european equity markets look like. the dax is a little bit higher, but the stoxx 600 is not moving very much. rally over the last few days, it is unsurprising that we start to see investors housin pausing for thought. let's get to bloomberg first world news. nejra: there is more evidence of a china slow down this morning. the output index covers the services and the manufacturing sectors. down from 60oints

points in january. meanwhile, moody's has cut its credit rating after doing the same to the country's government. this is a day after cutting 25 noninsurance outlooks from negative to stable. aubrey mcclendon has died in a car crash in oklahoma city. this comes one day after he was charged with rigging bids for gas and oil releases. car at ay he drove his high speed and slammed into a bridge embankment. global news, 24 hours a day, howard b powered by 2400 journalists in 150 news bureaus around the world. consumers have

been spending more on higher-priced goods. this comes as herbert hainer gets ready to hand over the reigns to kasper rorsted. i am not going to ask you if you runner, but i amt it a going to show you this board. here, you can see a adidas is up with the best-performing stocks. does adidas finally have a strategy to move in the right direction? >> it does look like it is improving. it has been re-argued that it strategy should be becoming more like a fashion retailer. what it should do is be more fast fashion, getting the best sellers out more quickly. that is the strategy it needs. guy: if you were running a company that sells detergent, i would you bring those skills to bear? >> i would be in a different

market. they did mention that costs in asia were rising because of the strengthening dollar. that is something they are going to have to tackle and he is in a good place to do that. guy: how much volatility will we see? they are selling a lot of stuff in the football market right now. we have championships coming up in france this year. how much volatility will be see around that and what happens afterwards? >> they should not be putting all of their resources into that. sports have come back into fashion. ony should be focusing what people wear inside of the ym and outside of the gym, as well as footwear.

reebok is the big one. do they keep it, or do they get rid of it? guy: what would you do? >> i would try to build on it and it might help them in the states as well. if you sell it to someone else, there is a risk that you will have another competitor. guy: do they need to become a technology company? france fashion these days is driven -- these guys are not retailers or fashion guys. they are technology. they have and algorithm. should i think of it as a tech company? >> i think it needs to be more of a fashion company. fashion and tech are blurring. you have instagram and snapchat; they are all focusing on that.

it is going to play out very well on social media. it is very high-profile. that is probably helping the brand, whether you love him or hate him. he is a big celebrity. you can play down that sort of halo affect around the brand. guy: andrea, thank you very much. data out as well? coming inpmi data is a little bit lower at 54.5. this is that the outlier. they have been well north of 51 or 52. 54.5 is slightly negative. guy, i'm glad you did not take the opportunity to ask me my shoe of choice. i appreciate it. i will be kind to you later in the show. let's stay with the earnings. audi is due to report its earnings at 9:00 a.m. u.k. time.

that is after the volkswagen results have been suspended. we don't know when then those will come down. audi contributes to about 20% of volkswagen's revenues. joining me now is naomi. i know you don't drive an audi. we won't get too personal. what are the audi results going to tell us about the strength of full slid volkswagen? >> audi is not only the largest sales contributor. they are the largest earnings contributor to volkswagen. we will see whether audi has rising intact. we will see whether there was an effect from the volume in the u.s. hans: we could see a little bit of fx benefits for them, especially with sales in the states. maybe not china as much.

when we take a broader look at volkswagen and we see that martin winterkorn potentially new that they had installed these defective devices. where does this story go from now? does this complicate volkswagen's ability to clean it up with regulators? >> we will see. we know for sure that winter rn was told september 4. there is a possibility he may have known in 2004. it is hard to predict how regulators will react. hans: the question was really, did he read the memo? his inbox is pretty full. did he read his email? guy: i have a couple questions. emissionsk to the

scandal, again, how does this read back into them as well? do they get an extra kilometer every time we have a problem? how exactly does this work? across, is of read think what investors will be looking for is margins. we already have the mercedes results and they reported a healthy 9.8% return on sales. bmw is coming up later in march. we will see whether audi can come close to matching the results that mercedes gave us. we'll see. hans: naomi, thank you very much. we have seen mercedes be a bit of an outlier, especially in china. we will break down those numbers for you. henext, we will discuss what has to say ahead of the brexit

today and his trip to the city of london. ♪ guy: welcome back.

you are watching "on the move." stocks are absolutely falt. -- flat. the french economy minister says france would welcome those fleeing london. this is if the u.k. decides to leave the eu.

to reason like those at red carpets, i would say we might have some repatriations from the city of london. he is obviously echoing these comments made a few years back. for more, let's bring in alan crawford. he is normally in berlin, but today, he is here i. these seem to kill two birds w ith one stone. they filit in with the negative campaigning surrounding the brexit. >> we have seen a different emphasis from different government across europe. for example, the german government has been very encouraging and wanting britain to stay. some of the baltic states were extremely positive. the french have a different tone.

yes, they want britain tuesday but they are playing hardball. there is a lot at stake for them. hans: alan, i am in your home city. you will have wolfgang schaeuble there in a few minutes. schaeuble is a pretty crafty counterpunch or. what are you expecting schaeuble to say? are you expecting a direct response? any directnot expect response. you have the diplomatic schaeuble anti-undiplomatic schaeuble. -- and the undiplomatic schaeuble. i think we will see the diplomatic schaeuble today. has picked up awards for his engagement and europe across the continent. he i think, will be stressing of europeve benefits staying together in terms of a globalized world.

i doubt he will be ramming home the risks to the u.k. although, a couple of those might slip out. hans: there was distance between wolfgang schaeuble and his chancellor. is there any distance between them on brexit? moment therethe has been some emphasis. schaeuble sometimes hints he might do things differently, but he stands behind merkel, which makes it more likely that merkel will get through this crisis. guy: on the break the question quickly. what you think will end up working here? positive or negative campaigning? in scotland that negative campaigning works. it is hard to see beyond that anymore. guy: alan crawford, thank you.

changing the financial landscape in germany. that story is up next on "on the move." ♪

guy: we are 30 minutes into the

trading session. let's take a look at the markets. this is the picture. it is negative now. we have turned a little bit more red over the last 10 minutes. he markets are starting to sell a rally. let's go to caroline hyde. inoline: up to five days gains. jc is on a down day, but jcdecaux is up 6%. revenues are up 14%.

you can also see adjusted organic revenues up 4.2%. that guidance is very strong. on the downside, dragging the stoxx it's hundred lower the oxx 600 lower, the numbers are not looking pretty. the adjusted earnings are missing forecasts overall. are somethere commercial markets remaining subdued. investors are selling this particular stock. they are also selling ebonics industries. this is the worst performer today, off by 11%. this is the worst thing ever for this company. the earnings target seems to be underwhelming the market. they said we will pull in 2

billion-year-ol in adjusted euros in adjusted earnings. on. the pressure is acquisition or start returning it to investors. they seem to be voting with their feet. back to you. hans: let's talk fintech now. after many's financial industry -- germany's financial industry is posing to surge. spoke exclusively earlier this week and we asked him if the banking industry should be worried about fintech? >> of course it is a threat if they do better than us. they are definitely fancier, but we have to go digital anyway.

a fintech in our own bank. we don't need to be scared of digital channels because if we don't manage to go digital, we are gone anyway. we have to prove three things. is tinted compared to what that will bring to us. hans: joining us now is fintech founder, thomas. thank you for joining us. walk me through on what you are trying to do, what the architecture of your technology is. >> yes, of course. typical compared to other fintechs. we are on the same side of the table with existing banks. we have invented a new process, a way consumers can actually get

the checks that are required for account openings and credit card applications done completely by our innovative video technology. consumers can now be completely identified. we are helping banks digitalized e their application skills. hans: so in this battle between the banks and financial companies, you are actually on the side of the bank s. >> we are assisting them in digital isaac. -assisting them in digitalized thing. -- digitalizing. this is quite a trend. london.is guy in how big a threat of the banks

facing here? the boss said this is a much bigger threat than regulation. mark carney has been talking about this. give me your idea about how much damage this is going to end up doing to the financial sector. how much distraction will we see? >> we are going to see a lot of disruption. that will actually fuel the activities that are happening at existing banks and banking institutions. i will play a catch-up game here. the disruption will certainly be tangible. it is not too late in the game. banks are trying to improve their own processes. we are seeing some very positive trends here. guy: in other industries, we have seen the incumbent operators ceased to exist.

is that what we will see in the financial sector? >> we don't think so. we think banks retained one vital element and that is the trust to the consumer. that is something that fintech still have to build. for the next four years, we will see banks develop strategies that will capitalize on that trust. hans: where are we on fiber security? there is a much concerned that banks are not protected. what is the next evolution in this conversation? >> we are seeing a lot of spending going into that area that we work with. we are also very much developing and continuing to optimize our own processes. fraudulent customers, fraudulent identities, and fraudulent accounts won't even be opened.

we are trying to get one of this components solved before the customer even hits the banking side, before the account is even opened. guy: the problem with the incumbent operators is they have legacy technology. if you are starting from scratch he would not build technology to look like it does now. you would build it in a completely different way. that is what i come back to this question. how challenged wilbanks be? --challenged will banks be? homage money needs to be spent to bring them up to speed? >> it is very much in line what we are observing. the banks we work with are wrestling with the exact problem you are describing. we help them fit into a modular approach. we do not need to change legacy technology. we leave the banks to themselves

to improve that part of their technology. there are huge timelines going along with that. digitizing the banks are undergoing right now is the process. hans: thank you for joining us. guy, we had breaking news. we have gdp down 14.4% for the fourth quarter. informatione got that gambling that it was not that bad for the month of february. but if you want an indicator regarding how much corruption is taking place, you will be hard-pressed to find a better reading. read a reada across?

with a also be counting back? that will be an interesting one to watch out for. hans: maybe not, right. maybe the house lost. maybe these guys went back to china. go both ways. neither you nor i have never gambled -- and certainly have never been to las vegas -- we are not qualified to talk about it. we will discuss the potential impact of brexit on the u.k. property market with robert gardner, nationwide building security's chief economist. ♪

guy: will come back. you are watching "on the move." let's get you caught up. here is your bloomberg business flash. nejra: shale pioneer and chesapeake energy cofounder aubrey mcclendon has died in a car crash in oklahoma city. this comes one day after he was charged for rigging bids. he faced accusations that he conspired to keep the price of leasing drilling rights low. police say he drove his car at a high speed and slammed into a bridge embankment. the move comes after three

tumultuous days at the company , following the return of michael pearson. by the secoenaed last year. the stock is down 16% this week. bought by media group. help al jazeera obama's plans to favors a five. the sale ends months of and certai uncertainty. remaink. house prices steady in february with a rise of 0.3%. that is unchanged from january's reading. we're still seeing growth. now is robert gardner. e ismuch of the ris w

being distorted, do you think? >> we have been seeing a gradual pickup in the levels of approvals in previous months. i think the jump we saw in january up to 75,000 approvals -- i think a lot of that is related to people bringing forward purchases for investment purposes. i do think that is a big bit of the increase. that we are looking at is labor markets continuing to stress. hopefully, that will provide ongoing support for more approvals of a look through the rest of 2016 and beyond. guy: how much volatility will we see around the referendum? >> i think there is going to be quite a bit of volatility. i think we will see another pickup in approvals in february.

in the months ahead, we will see them fall back quite a bit. as we move toward the referendum, i think there will be a dampening influence. it is hard to say how much. i think it will definitely have a dampening effect. hopefully, the underlying improvement in the labor market continues and helps to limit the extent to which it pushes down activity. guy: we are starting to see softness in central london. will that start to spread? what normally starts in central london works its way out to the rest of the country. >> london really has been performing in a very different way from the rest of the country. for example, in london prices are 50% above the precrisis peaks, where's the rest of the country is only 7%. 4, london we look at q

has prices rising at a double-digit rate. the rest of the u.k. is still rising at about 4%. when you look at that, you can see how much london is outperforming. it is inevitable, that london will flow. the rest of the country will pick up and narrow the differential. it is almost inevitable that london will slow relative to the rest of the country in the quarters ahead. guy: how does that actually work? which places would you highlight that are likely to benefit from that? the affordability question has been delayed by many people. they have not come to an answer. now they are coming to the realization that they need to answer the question. are they going to move out of london? where they going to move to, if so? >> what we have seen if you look at the races across the u.k. is

a very clear decline in the price growths as you move from the south to the north away from london. we can see problem areas in the southeast and southwest. they are recording much faster price growth then london or whales. scotland is continuing to see prices decline over the last couple quarters. the conditions strengthen in the u.k. overall, but we expect house price growth to pick up in the rest of the u.k.. that is not going to be true to the same extent in london because affordability is so much more constrained. even the labor market conditions will continue to improve, you can't get enough people that are able to buy into the market to get the rate of house price growth be maintained. i think we would expect to see house price growth outside of london southeast staying where it is, or picking up in london.

guy: can i ask you about the bank of england and mark carney? he says the property market place is one of the biggest threats to the economy. he says it has the potential -- if everyone decides to go for the exit at the same time, there are significant risks there. would you echo some of those risks? has been very clear that it does not see a problem at this point, but it is considering what tools it might need should the needs arise. i think that is the correct approach to take. you look at the market overall, household balance sheets in the u.k. are in a much editor shape that they were precrisis. -- in a much better shape than they were precrisis. underpinning.

we should be less concerned on that front. if you look at mortgage lending, there has been a real strengthening of the lending criteria. affordability criteria apply to it. more people are overstretching themselves, leaving vulnerability down the tracks. we are in a much better position. lect,it comes to buy se the bank of england is being vigilant. very mucht, thank you indeed. now, let's break down some of the data we are getting through. we have pmi data. services are rising to 3.8%. we were expecting a 52.8 number. we are starting to see better numbers coming out from the

italian economy. you are sayineeing an outperformance o. italy is outperforming spain. that is the political risk story. not much reaction into the euro-dollar, which is absolutely flat at the moment. let's break down the french data for you, which is coming out as well. let me bring that up for you. we will flash it on the screen. that number is a little bit more negative. let me find france. 49.2, a negative number four friends. y emmanuel isat you manua i so concerned. ♪

guy: welcome back. you are watching "on the move." a slew of european services and data is out this morning. then, we get a snapshot of the british services industry. that is softening a day ahead of the payrolls numbers. less claims at

1:30 p.m. i want to take you through some of the data that is coming. attention to what is happening with germany. let's get a take with richard jones right now. the last one before ours has focused on the sterling story. -- the last 24 hours has focused on the sterling story. the brexit story can affect the eurozone as well. >> the initial knee-jerk was to sell the pound and buy sterling. that made sense. this book will be closer than everyone imagined it would be. it made sense to sell the pou nd. i still think, irrespective of how british voters and up deciding, there is some downside with sterling. if britain decides to stay, all of that negative premium will unwind. even if brexit does happen, it would be bad for europe as well. that is what we have seen over the last 24-48 hours, the

selling of the euro versus the pound. they won't be happy with the fact that the eurozone is trading down. that is not beneficial for europe. those are two important metrics for the ecb. guy: if you look at the work function on bloomberg, the german data looks a little bit better on the services. stronger ase is well with 54. 54 is not bad for germany. i want to take you back to the work function. what the market has price in has been great hikes from the fed. rom the hikes for fred. we have praised that back in. we have a 6% chance

and that is still not nailed on. the fed is probably comfortable with that. that means we have nothing for the next eight or nine months. that is consistent with what we have seen since december. we have two priced in at that stage and now we have maybe one. it is still consistent with the fact that the fed will not be as aggressive as they were thought to be. guy: the curve was flattened like a pancake. it continues to do so. what are traders saying about that in relation to the yen? >> the anticipation is that the boj will cut rates again. the consensus is they will continue to do it to drive inflation higher. the way the yen has reacted still perplexes everybody.

guy: that is it for "on the move ." "the pulse" is next. the london market is down by 4/10 of 1%. ♪

guy: europe's five-day winning streak falters following a rally driven by better than expected data. ministereconomy issues the toughest warning yet on brexit. and driving vw. audi reports that volkswagen towns the cost of the image scandal to break those numbers next. welcome to "the pulse stephani :