manus: will come to "on the move." we are counting you down to the european open on this monday morning. i'm guy johnson, alongside caroline hyde in berlin putting peace at risk. said to have is escalated his campaign, by warning the isolationism will be to conflict. we have his speech live in 30 minutes. has greece done enough? finance ministers will hold an

emergency meeting today in brussels. minister,s new oil pumps al-falih, keeps the under pressure. it looks like we will be a positive performance with equities on the front foot. let me take you to the bloomberg to show you what is going on. their value is pointing to a dax that will open up. the cac is up, half of 1%. the ftse 100 is up .6%. overall, it will open up .8%. a different story in asia, wasn't it, caroline? caroline: the shanghai composite went down 2.3%. we are on our worst two day streak since february. of course, much talk over the

weekend that we are still on track for two rate hikes tihs year. bill gross has said, look, believe the fed. the pound is flat ahead of cameron's speech. oil is at $45.93. we are focusing in on what is happening with the oil prices, but we have to factor in that news out of saudi arabia. should we see more voicing that we should not the production cuts? guy: we will find out. caroline: let's get out to david inglis, live for bloomberg first world news. david: thanks. i will talk about crude prices. after wildfires in canada,

production has gone down to one million barrels a day. protecting companies from liability for contracts that will go unfulfilled for reasons beyond their control. owners pick up in march. this was adjusted for seasonal swings in inflation. compares with a median estimate for an increase of .6%. reported a modest stabilization and exports, as well as the first back-to-back gain in foreign reserves int wo n two years. the data suggests that the economy is slowly showing growth.

china leading party mouthpiece has a full-page where an unnamed theoritative person says nation needed to face up to its nonperforming losses. and three of the world's most influential bond investors are signaling that the u.s. central bank is on course to rase interest rates. all think there could be a move in june, despite the u.s. only adding 160,000 jobs last month, which is sort of the 250,000. global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world.

you can find more stories on the bloomberg at top . guy? arabia asaudi appointed a new oil minister. khaled al-falih is a close ally of the deputy crown prince. joining us live is tracy alloway. tracy, any reaction in the local markets to this? well, we have quite an interesting reaction in saudi arabia and stocks. they closed up .2%, but that was after initially rising 1.2% on the back of a slew of degrees from the saudi arabia and king. he declared the replacement for the oil minister, ali al-naimi. a lot of investors say this

means the kingdom is serious about reducing its reliance on oil, hence the initial enthusiasm in saudi arabia and stocks. however, it is still the vocal to disaggregate saudi arabia from the rebound in oil prices. oil has been up, thanks to the canadian wildfires. the new oil minister also says he intends to maintain the existing oil probabl policy, basically protecting market shares. it will be interesting to see if those comments offset the defacto production cuts in canada. caroline: tracy,, let's dig in to the higher oil prices. some are starting to take advantage of the rebound. tracy: that is exactly right. we know that abu dhabi issued a

bond last euro month, taking advantage to get external funding. since then, the qatari out,nment has also sounded looking to take advantage of the rebound to help plug some of their budget holes. this is becoming increasingly important for the gulf region because of those generally lower oil prices. it is also becoming more important because bank liquidity in the region has been drying up. that forces companies, and sovereigns, to look elsewhere for external funding. we will have to see how that develops. so far, the demand for this debt issuance remains pretty bou yant. guy: tracy, thanks indeed. let's carry on the conversation here in london.

we have an analyst from energy aspects. what do we know about the new minister? he is not just an oil minister. >> he is another industry veteran, another professionally educated expert in oil markets. we are not expecting a lot of change in policy here. i think there will be a lot of in the broad policy. the new minister is happy to leave it to the market, rather than to try to get opec allied, on board, and deal with the diplomacy there. guy: he is also in charge of the electricity ministry and that is significant. because you go to saudi in the summer and it is pretty hot. they crank up the ac, and that consumes a huge amount of energy. you think he will look at things to decrease that dependence? >> i think he is.

that is something to look at. this will give him far more control regarding what goes on. we have already seen subsidy reform to increase electricity prices. we have seen new gas production come online. if we see a huge focus on reducing that summer peak of demand, that might mean that saudi crude production does not need to move up as high in the summer -- if they can manage some of that summer peak demand. give us arichard, sense of oil prices going forward. you were talking about the continuity within saudi oil policy. you also said, expect oil price volatility. what is behind the volatility going forward? richard: a really good question. over the next couple months, we will be looking at a market where the supply and demand balance is improving. we have a lot of short-lived, and sometimes longer lived, disruptions.

is goes from the canadian wildfires to political dissolution. market tries to look through that, i think we see a lot of volatility, but the secular trend is that as we get into the second half of the year, as the balance going forward looks tighter and tighter, we can see sustained prices. just don't expect a smooth pathway forwards. caroline: and can we expect more vocal is him as well as expectity -- wilcan we more vocalism, as well as volatility? richard: already, we have seen khaled al-falih take quite a vocal position, speaking in the wake of subsidy reform. he has been the voice even before getting the job.

i think he will continue to talk to the market, but don't expect any dramatic changes in what he is saying. it is up to the market to rebalance the high cost production. spare the saudi's have production costs. therefore, they will stick to their guns when it comes to the long-term market focus. guy: what is happening right now, in terms of how long of output will be out for? richard: over the weekend, the fires got quite worth. we started to get reports of damaged oil camps. we should not see a lot of permanent or lasting damage the way they are designed. that we have seen a lot of evacuations. probably about 1.5 million barrels a day have been disrupted. it will be probably two or three weeks before we can get a recovery.

the process of testing and production will be immediately restarted. guy: richard, thank you very much indeed. ok up next, greece is back in the spotlight. we are live in athens with the latest, next. ♪

caroline: welcome back to "on

the move." futures are pointing to a green day, but the imf is assessing whether or not greece has done enough. it could increase fears of the grexit. we are now joined from athens. we are back here again. explained the significant, the nitty gritty, of today's meeting. >> fit is significant because he will have an idea of what is the development of the issues that are currently under negotiation. the first is the issue of greek debt relief. issue, and i think this is more significant, is whether the greek government will have to legislate not only the first set of 5.4 billion to received in order national aid, but also if the

greek creditors will ask the greek government to legislate another set of contingent measures of around 3.5 million euros. the greek government has said it is not willing to pass it through legislation. a good have another safety pillow that will enforce, whether the first set fails to deliver. the government has already crossed red lights through court legislation. -- through current legislation. they will not pass through the second set of contingency measures through the greek parliament. guy: it is guy. if this is a problem and this kind of next step does not get agreed-upon, what is the possibility that greece won't get its money what is the possibility that we missed some payments coming up? this is how it all started last

i don't think we will find to some agreement today. we're looking at a meeting on may 24 to see if then the greek government can agree with its creditors. now, if the creditors really demand for those contingency measures to be passed through legislation, and given that we on june brexit vote 23. if we don't get an agreement on may 24, i think mabye we will summer ineat of last the greek saga. july then, will be a very hard month. guy: great. my suntan needs a little bit of a push. thank you very much indeed. we have got some breaking news on the oil sector. bought a battery company

and we will come back to that story a little bit later. do you worry about greece? >> probably not. we have been here before and we tend to get a deal at the end. guy: could we get some volatility before that, though? >> i think we could and the point that would make here are first, the euro does not really trade on a grexit risk. secondly, the euro is now used as a funding currency. but we learned last summer is when you get some bad news in the market, the euro tends to go up. that is because its risk off to the euro tends to rise. ironically, if there is stress in greece, is probably supportive of the currency. caroline: it is interesting that

we have seen germany really, fearsomely wanting no waiveringz in terms of how much debt relief gets. there is still that tension between germany and the ecb. where do you see the euro going, given what is happening in the european central bank at the moment? it seems to be germany's own account surplus that seems to be the real headache for draghi. >> i think this battle between the germans and draghi is key. to answer your first question, where is the euro going? we think it is going higher. our targer in bnp paribas is 1.16. thehi has signaled to market he does not really want to cut rates further. he is relying upon quantitative easing of the asset purchases. in that environment, if he is

not going to cut rates, he will have to rely on inflation expectations rising to get the euro lower. we don't think that will happen. so, the key point is, we are very confident in our 1.16 target. caroline: what about the flip side? what about the dollar aspect to all of this? you are not buying that the new york fed president has said that two hikes are going to happen this year? >> we are definitely not expecting two rate hikes this year. our view is zero. the point we would make is the fed wants to hike. the question is, whether it has the opportunity, or the market conditions, to be able to deliver that hike. in our view, they won't get that. as far as the dollar is concerned, a key point is, what is priced in.

if you look at two-year yields, we started the year at 110 baiss points. that has gone down to between 70 and 75 basis points. a loss of the adjustment has already been made. we think the current equilibrium of where the market is as far as u.s. rates are concerned is probably on the rise. the reason we did not get a big last friday is because the market has already taken back a lot of fed rate hike expectations and is pretty close to equilibrium. let's call it a neutral outlook as far as the dollar is concerned, particularly against currencies like the euro. guy: look at what the fed has been saying. look at what draghi is doing, i will do whatever it takes. the market is pretty unconvinced

regarding the ability of the japanese to do what it takes. do we have a crisis building? >> look at each central-bank differently. let's focus on the fed. as we saw with dudley's comments on friday, the fed wants to hike. thin nose unemployment is low and earnings are picking up. unemployment is low and earnings are picking up. the key factor is how the data continues to come out. we are not confident at bnp paribas that we are going to get strong data from the u.s. in the second half of the year. despite that rhetoric, we don't think we will see a rate hike this year. guy: it has got to get the market into a place that the market believes there is at least some risk it is going to hike. they have to get therir ducks in line. if they turn around and say, "we

are going to raise rates now" and the market is not ready for it, we know how that ends. the fed have got to convince the market at some point that actually, there is a serious risk that this is going to happen. i am wondering how the communication strategy works in your mind around that positioning. >> i think the bottom line is, the fed will look at what is priced in, as far as markets are concerned. we saw this last year when the fed was talking relatively hawkish late in june in september. they weren't signaling a rate hike. when we got to december, it was very clear the market was fully expecting a rate hike and the fed delivered. we would argue we are in the same situation this year. the fed is not going to surprise the market. they are too nervous. the point we would say is, if we are close to getting a fed rate hike, they are going to prepare

the market and ensure it will be fully priced in. to convince the market -- i am listening to the language and i have not heard from the hawks for quite some time, but i am starting to hear even the dvoeoves say, we can do this. >> i think that is right. hasmber, what the fed really prepared us for -- and janet yellen did this herself and her most recent speeches -- it is a global phenomenon. rather than the state of the u.s. economy, particularly the domestic economy. that is what they are really looking at at the moment. from that perspective, they still see risk. we don't know what is going on in china. and remember, the dollar had

been very strong up until the beginning of the year. these are the factors the fed is focusing on, more than domestic economy. fromine: steven saywell bnp paribas, staying with us. total is getting into the world of electricity storage and battery storage. they are going to be spending 950 million euros in equity valuations for a french battery company, saft. totalief executive of says this will spearhead its focus on electricity storage. that is all about, lamenting the renewable focus as well. heels. on elon musk's the market will be looking at total . we headch more as

to the open. futures are pointing higher. screen.reen across the the open is up next. ♪

guy: good morning. you are watching "on the move." i'm guy johnson and we are moments away from the start of european trading. caroline hyde has your morning brief. caroline: putting peace at risk. david cameron is set to escalate his campaign to the britain in the eu that warning isolationism could lead to convicts. is he going too far? has greece done enough? the finance ministers will hold an emergency meeting in brussels to decide if they can release more aid. and saudi's new oil minister. will khaled al-falih keep the pumps running at full speed to

keep up the pressure on u.s. shale? as we head into the open, futures have been pointing higher across the board. germany is putting toward a higher start as well. keepe is some mma news to up on. we thought a bit of a mixed plate in asia. the shanghai composite fell, disappointing trade data from china. so, if we look at how europe is opening, we are seeing futures pointing higher. the majority is green on the industry groups on the stoxx 600. telecom stocks are actually leading the gains, up .3%. i will tell you more on that in just a second. we are of course, also watching oil, with wti holding above $45 a barrel.

those are being driven by the wildfires in canada knocking about one billion barrels a day in output. let's move on to see how the market is opening across europe. if we can get the board of the stocks and a look at the stoxx 600 versus of course, the different countries. the stoxx 600 is up .5%. the ftse 100 is up .4%. 40 dax is up .2% and the cac is up .5%. now moving on to individual stocks. there was some quite strong calls on this. it is unchanged at the moment, but basically it is the world's biggest distributor of chemicals. fourth-quarter profits missed analyst's estimates because of the slump in oil production, hurting demand. back to you.

guy: he is about to introduce the british prime minister, david cameron. we are expecting this speech to be full of fire and brimstone. david cameron is morning about peace and security and the implications about what a brexit would mean. clearly, there is a strong message being delivered here. we will get the opposite side of this message a little bit later on. but the expectation is that david cameron will really set o ut the implications if britain decides to leave the eu. others will argue that ultimately, our eu membership is not related to our security. i expect, over the next 24 hours you will see an awful a lot of bickering.

fronty, security is and center. the eu was created to make sure we do not see a repeat of the complex in the past. we will see a very churchhil l-ian tone in the speech today. we may be talking about waterloo as well today. so, look forward to that. let's get a quick comment from steven saywell. the pound, how much attention will fx traders be paying to what david cameron is saying? steven: quite a lot. we know what he is going to say. this is what sterling has been responded to very closely. again, the last time i was on the show we made two points. the market is very short with

the pound. and secondly, the pound is very weak. it has deviated substantially from our models. for example, euro sterling, someday nine and almost 80 toda y. 80 today.almost the market is pricing in quite a lot of news today. from our perspective, the biggest risk is a rebound from sterling. -- ofne: give us a sense course, you are seeing a rebound. how much should we be paying attention to the bank of england? how much do you expect mark carney to weigh in? he is between a rock and a hard place. it seems as though economically speaking, all of the big swingers are coming out this week saying, from an economy point of view, we have got to bid "remain."

view we are is the seeing from the bank of england. thereal impact ion market is, how much of an impact do these speeches have on the polls. clearly, boris johnson is taking the other side of the argument here. as far as the bank of england is concerned, i think they are playing a more minor role. if you look at the economy, we would argue the pound is not really responding to economic data currently. it is much more about the political risk here. we do have the inflation report coming out. itour view, this time round, is going to be much less important for the markets, and sterling in particular. the market is much more focused on is political risk -- on this political risk and particularly how the polls move. the remain camp is ahead and has

been for some time. the question is, can that expand further? i think that is where the market will take its lead, rather than data. guy: so, this is the three months skew. when we first got into the story surrounding brexit, we did see it affect the skew. whether you look at this move, we have seen a bounce off it. what will it take for this to start to change? you have talked about the fact -- where you see the price going. the market is not there yet. volatility is really interesting in relation to sterling. it's fight dramatically -- it spiked dramatically earlier. again, it is down to what is being priced in and what the market thinks. the point we would say here is, if you start to see a clear

expectation of a result before that referendum takes place, that is one volatility will come back down again. if however, it comes neck and neck and there is no real decisive potential outcome, i think volatility remains elevated. again, it is the same old adage. the market likes certainty. steven, how certain or uncertain are you regarding a rate cut going forward? could the weak data from last week, with that start to see some of the more dovish nature come back again? steven: i think we are a long way from that. remember, we just five minutes ago we were talking about the fed wanting to hike twice. the basic fundamental analysis here is the u.s. has

unemployment falling quite sharply. and wage growth is starting to pick up. the u.k. is very similar to that. below.yment is and wage growth is picking up. this is not an environment where a central bank would be traditionally cutting rates. the only scenario where you would see a rate cut is with an escalation of political risk, rather than a deterioration within the economy itself. guy: steven, thanks for joining us from bnp paribas. we now have david cameron, the british prime minister, on his feet. let's listen to what he has to say. cameron: i too look

coverd to the private eye with trepidation. thank you, richard for hosting us here at the british museum. in 45 days time, the british people will go to polling stations across our islands and cast our ballots in the way we have done for generations. they will, as usual, weigh up the arguments, reflect on them quietly, discuss them with friends and family and then calmly and without fuss make their decision. but this time, their decision will not be for a parliament, or even two. they will decide the destiny of our country, not for five years or for 10, but in all probability, for decades, or perhaps a lifeline. this decision is bigger than any politician or government. it will have real, permanent, and direct consequences for this

country and every person living in it. should we continue to forge our future as a proud, independent nation, while remaining a member of the european union, as we have been for the last 43 years? or should we abandon it? let me say at the outset that i understand why many people are wrestling with this decision and why some people's heads and hearts are torn. but i understand and respect the views of those who think we should leave, even if i believe they are wrong and that leaving would inflict real damage on our country,'s economy, and its power in the world. i believe that despite its frustrations, the united kingdom is stronger, safer, and better remaining a member of the u.k. we are part of a single market with 500 million people, which britain helped to create.

our goods and services, which account for 80% of our economy, we can trade freely by right. we help decide the rules. the advantages of this far outweigh any disadvantages. our membership in the single market is one of the reasons why our economy is doing so well, why we had created 2.4 million jobs over the last six years, and why so many companies from overseas, from china, india, the states, andd other countries invest so much here in the u.k. climate of enterprise makes britain such an excellent place to do business. all of this is alongside our attractive regulatory environment. according to the oecb, it is second only to the netherlands,

who is alsoa an eu member. if we leave, the only certainty we will have is uncertainty. the treasury has calculated that the cost to every household in britain would be as high as or pounds if we leave by 20 30. from the international monetary the fiscale oecb, to studies institute, supports the fact that britain will suffer an immediate economic shock and be poorfer for the long-term. the evidence is clear. we will be better off in and poorer if we leave. has said, in my experience, there are calculated risks, there are clever risks,

are unnecessary and dangerous risks. from what i can tell, the brexit is the last. those advocating brexit, some of them have spent many years preparing for this moment. and yet, they seem unable to set out a clear and comprehensive plan for our future outside the eu. some admit they would be a severe economic shock, but i sure ultimately it will be a price worth paying. others are in denial that there will be a shock at all. and they can't agree what their plan for post-brexit britain. will look like. one minute we are urged to follow norway, up next, canada and then, switzerland. until it becomes clear that their rage and does not find much access for services to the -- that their arrangement does

not have much access to the services of the eu. leverscently, the have noticed that many countries have negotiated separate trade agreements with the eu. they called these countries the european free trade zone. but in fact, this does not exist. to suggestone on that britain might join this nonexistent zone, just like albania. seriously? even the albanian prime minister thought the idea was a joke. the lead campaigner asking us to with thejor risk future of our economy and country. yet they cannot even answer the most basic questions. what would britain's relationship be with the eu where we to leave? when we have a free-trade agreement? the man who headed the world

trade organization for eight years think this would be, "a terrible replacement for access to the eu's single market." some of them say we would keep full access. if so, we would have to accept freedom of movement, a contribution to the eu budget, and except all eu rules, while surrendering any say over them. in which case, we would have given up sovereignty. others say we would definitely leave the single market. despite the critical importance to the single market, to jobs, and investment in our country. i can only describe this as a reckless and irresponsible cause. these are people's jobs and livelihoods that are being toyed with. and the leave campaign have no answers to the most basic questions.

what access will be trying to secure back into the single market from the outside? how long will it take to negotiate a new relationship with the eu? what would happen to the 53 trade deals that we have with other markets around the world through the eu? e campaign can't answer them because they don't know the answers. they have no plan. and yet, skeptical voters who politely ask the questions are denounced for their lack of faith in britain or met with sweeping assurances that the world will simply jump to our tune. if you are purchasing a house or a car, you would not do it seeing insistin o what was being offered. so, why would you do so when the future of your entire country is at stake? the british people will keep asking these questions every day, between now and june 23

and demanding some answers. because nothing is more important than the strength of our economy. upon it depends the jobs and livelihoods of our people. and also the strength and security of our nation. if we stay, we know what we get. continued access to a growing single market, including an energy, services, and digital. together with the benefit of the huge trade deals between the eu and the united states, and other large markets. genuinely a it is leap in the dark. but my main focus today will not be on the economic reasons to importantth e eu, though they are, i want to concentrate instead on what our membership means for our strength and security in the world and the safety of our people and to explain white again, i believe the advantage comes down to staying,

rather than leaving. this is a decision also about our place in the world. about how we keep our country safe. how britain can get things done in europe and across the world, and not just except a world dictated by others. today and want to set up the big, bold patriotic case for europe to remain a member of the european union. if you want to keep this country strong in the world and keep our people safe, our membership of the eu is one of the tools, one of the tools, that helps us to do these things. in othermembership international bodies like nato. let us accept that for all of our differences, one thing unites both sides in this referendum campaign. we love this country and we want the best future for it. ours is a great country. not just a great country in the history books, although it

shortly is that, but a great country right now. with the promise of becoming even greater tomorrow. with the largest economy in the world, europe's foremost military power. our capital city is a global icon. our national language' is the world's language. our national flag is borworn on tshirts all over the world. people from all corners of the earth watch our films, dance to our music, flock to our galleries and theaters, cheer on our football teams and cherish our institutions. these days, even our food is admired. our national broadcast is one of the most recognized brands on h isplanet and our monarc one of the most respected people in the world. britain today is a proud,

successful, thriving nation, a nation the world admires and looks up to, and whose best days lie ahead of it. we are a product of our long history, of the decision of our forebears, of the heroism of our parents and grandparents. and yet we are a country that has our eyes fixed on the future. from the birth of the internet to the decoding of the genome. if there is one constant in the ebb and flow, it is the character of the british people. our geography has shaped us and shapes us today. we are special, different, unique. we have the character of an island nation, which has not been invaded for almost 1000 years. and which has built institutions which have endured for centuries. as a people, we are ambitious, resilient, independent-minded and they might add, tolerant, generous, and inventive.

but above all, we are practical, rigorously down-to-earth, natural debunkers. we approach issues with a calm mind rooted in common sense. we are rightly suspicious of ideology and skeptical of grand schemes and grandiose promises. we see the european union as a means to an end, a way to help anchor peace and stability across the european continent. of we don't see it as an end in itself. we continue to ask, why? how? and as we weight out the competing arguments in his campaign, we must apply that capital rigor, which is the hallmark of being british. would going it alone make britain more powerful in the world? would we be better able to get our way or less able? would it be better to remain and cooperate closely with our neighbors? would going it alone really give

us more control over our affairs? or will we soon find that actually, we have less and that we have given up a secure future by years of beset trouble. open uping it alone new opportunities, or would a close them down? that is the approach i take when judging whether britain is stronger and safer inside the european union, or leaving it. i have just one yardstick. how do we best advance our national interests? keeping our people safe at home and abroad and molding the world in the way we want -- more peaceful, more stable, more free, with commerce and trade flowing freely. that is our national interest in a nutshell and it is the question that has confronted every british prime minister since the office was created. had we best advance britain's

interest in the circumstances of the day? express of prime minister taught us that the membership was holding us back, i would not hesitate to recommend that we should leave. but my experience is the opposite, the reason i want to britain to stay in a reformed european union is in part because of my experience over the last is yesix years. day does help make our country better off, safer, and stronger. there are four reasons. what happens in europe affects us, whether we like it or not. so, we must be strong in europe if we want to be strong at home and in the world. second, the dangerous international situation facing us today means corporation with our neighbors is not an optional extra. -- it issential.

essential. third, keeping our people safe from modern terrorist networks and from serious crime the increasingly crosses borders means that we simply have to develop much closer means of security cooperation. to be fullys engaged. far from britain's influence in by ourld being hurt membership, it amplifies it. it helps us achieve the things you want, whether it is fighting ebola or climate change. that is the view of our friends and allies too. on the go through these in turn. first, europe is our immediate neighborhood and what happens on the continent affects is profoundly, whether we like it or not.

our history teaches us the stronger we are in our neighborhood, the stronger we are in the world. years, our affairs have been intertwined with the affairs of europe. for good or ill, we have written europe's history, just ha as europe has helped to write ours. proud as we are of our global reach and our global contribution, britain has always been a european power and we always will be. we know them to be a global power and a european power. the moment in which we are rightly most proud in our national -- guy: david cameron, making the case for remaining in the eu. andays the european power global power are not necessarily different things, trying to maybe put nato and the eu

together in the same country. that get back to steven saywell and get some commentary from the speech. he is the global head of fx strategy at bnp paribas. steven saywell, not david cameron. the market is not moving a great deal. the pound is selling off a little bit during that, but nevertheless, we knew roughly what he was going to say. why would this change things? what do we need to get things to move here? steven: i would agree, they were nose of prizes from the speech whatsoever. i would not really look at the short-term move in sterling on the back of this. we are not really going to see a result in sterling until i think, we get to see polls coming out. and this is quite interesting. if we look at a chart of euro-sterling, you can see the

move from november. g, november 17, it moved aggressively from there until april. the euro depreciating dramatically against the pound. that sterling weakness is uncertainty. we have seen sterling trough and then come back a bit, but the jr ury is still out. the relay impact from this beach will be how he impacts the polls , and therefore, uncertainty in the weeks ahead if it leads to less. think itty, than i will start to rebound. caroline: you are even seeing potentially a little bit of recapitalization and the british pound. talk to us about the other currencies we should be spoken on. what about japan?

what about their policy right now? are we expecting a weaker yen to come? steven: we are, yes. thehe dollar has weakened, currencies that have shot of the most in response have been the euro and the yen. these are the risk off currencies. when we have stressed in markets, they appreciate. that is a real problem. is thew at bnp paribas bank of japan will not sit still. and will probably go more negative on the deposit rate. the key message here is, more eaising from the boj to prevent the yen from depreciating. the problems they face is, it really depends on the dollar. is, it is hard for

the japanese alone to influence the level of the yen if they don't get the markets pricing in policy divergence. caroline: steven, we have heard you talking grexit. oil play you seeing into the fx market? also, are we going to start to see the saudi's come off of that dollar peg? steven: i think you have left the best topic until last. the point we would make is that oil and commodities have rebounded. we don't see that as being sustainable. point, we would say that monetary currencies, like the canadian dollar and the aussi dollar, have benefited from that, but they are looking really vulnerable. as the artie seen this

australian -- we have already seen this as the australian bank has cut rates. the implication for the foreign exchange market, these currencies are set to fall further. in the case of the australian dollar, we favor a weakening, not just against the u.s. dollar, but also against the euro in the coming weeks. so: thank you for sharing much of your valuable time with us. .teven saywell from bnp paribas i want to check in on the equity markets. the early pop has faded a little bit. we are down .4%, but are still up. we opened up much more strongly than where we are now. the stoxx 600 is up .2% with of the ftse 100 similar. the cac is absolutely flat at the moment.

i want to draw your attention to the events that occurred overnight and talking little bit about the shanghai selloff. the good trade data was a little bit a part of this. the chinese authorities are indicating that this debt story is a bigger worry. as a result of which, you have seen this big two day selloff. what is interesting is, it did not read often too much of europe. whaat stock story should we be focusing on? nejra: talking about security firm up almost 4%. revenue rises almost 4.5%. the company put out a statement saying the first quarter was up 6.5%, excluding restructuring charges of one million pounds.

that is one of the biggest gainers. tullow oil is falling closer behind. in general, oil and gas companies are not the best performers on the stoxx 600 today. so, why is tullow rising? they said they are turning a corner. tullow has proved able to adapt to the lower oil price and therefore, has a better understanding of operating conditions in africa. perhaps we can see those gains on the back of that note. brenntag is the worst performer today. hurtlump in oil production demand. sales for short of expectations, but the company did confirm its 2016 goal for growth in and

earnings. guy: david cameron continues to speak at the british me sa just museum. fromis just down the road here. it is going to be a big week, lot of heavyweight speeaches. later on today, we are going to hear from the other side of the fence. we will hear from boris johnson. david cameron obviously, in the remain camp. we look forward to hearing what boris johnson has to say. later we get george osborne, also in the remain camp. and then, we have the bank of england. already, mark carney has been shouted down. let's talk more about the ramifications of this brexit debate.

joining us now is the strategist from citigroup. michael, talk to us about where you see guilts going. down a little bit. where do we see this in the longer term? michael: first of all, talking we have ait, i think 30% to 40% probability of the brexit happening. that is quite a close call. guilts, wef think the front end of the curve showed it replicate -- and of the curve should replicate. we don't have any supply coming

into the market until july. therefore, this point of the curve looks quite attractive. euro bondut the scenario isbrexi slowing down economic growth. there we have seen some sort of relative weakness for the irish government bond market, but also for the spanish government bond market. as i said, brexit is not the only case. guy: guy, in london. caroline: guy, please. guy: the market has performed reasonably well. how would you expect guilds to trade post brexit?

with this outperformance actually carry on? puzzling.t is quite if there was a brexit, we would see some effect. on the one hand, we would have inflation popping up. this is centrally, could lead to the bank of england to hike rates. that could essentially lead to higher yields. that would be the effect. weakestw, let's say the point on the curve should be at -- 30 year of the curve though there are usually buys on supporting.t are guy: the market is clearly not ready for any kind of a hike, including from the fed. and that is pretty clear,

judging from the pricing. yet, we continue to hear from fed officials telling us, june is a live meeting. what is it going to take to get the market ready? >> first of all, we have to pin down the numbers correctly. 160,000 of jobs additions, that is ok. it is below estimations, but it is not bad. haveink as long as we numbers above 10k, it is still in line with the definition of the fed. therefore, we think the june and july meetings will be live. however, in june we have the referendum on the brexit. to us, it is much more likely

that we will see one rate hike in september. later on, you will probably have more noise from the political side in the u.s. early on, we have the u.k. referendum. we think september is something which is most probable to us. caroline: michael, do you expect two hikes? although, it sounds like you are expecting just the one. do you think the federal reserve is going to price whermatch where the market is. michael: i totally agree. we expect just one rate hike. we also think that the market's pricing is around 180 in the 10 year yields. until the end of q3, we only see the yields rise to 1.95%.

which is definitely below some estimates. that we also have to take into account global yields. we also have to take into account global investment lows. therefore, we will not entirely rule out the drop of the u.s. 10 year treasury yields to about 1.5%, which we thought in may of 2000. that is because we had very low elds in asia and in the euro area. caroline: michael, great to get your views about the brexit and ongoing u.s. policy. up next, we are live at the citiweek forum. speaking to the executives in london. guy: coming up, we will take a look at what is happening today. david cameron is talking about security.

this is what is happening in mowcowscow. they are celebrating their victory over the nazis. it makes a point really, that security does remain something an issue around europe. russia is making very clear that it is still a military force. ♪

guy: 42 minutes. into the equity market session. this is the picture at the moment. remember, this follows a significant selloff in asia. the ftse 100 is up 5.2%. the cac 40 is up by .2%. here is david inglis. david: let's get started with takta. the airbag recall has increased. the u.s. regulators ordered this last week, grading the biggest safety crisis in the history of the auto industry. in $6.2nsion result billion in additional costs. think of australia governor will not have long to settle in.

jpmorgan says he may have to incorporate 1%. is said toer the rba face risk of rate cuts to 1%. the monetary policy eans consolidation will be much slower. this follows negative interest rates, which could be slowing growth. proving popular, even before it is opening. the company has a trial opening and pulled in tens of thousands. disney's five point billion islar -- $5 billion resort

expected to be a success. guy: let's talk about what has been happening in london this morning. david cameron has been down the road at the british me sam, talking about white he thinks -- down the road at the british museum, talking about why he thinks th britain needs to reman in the eu. we get to hear from the bank of england. that will be an interesting one for mark carney to have to deal with. how is this being viewed over in berlin, caroline? as we watch the debates developed, what are the germans making of this? caroline: it is quite notable that the finance ministry went against was being out -- and was speaking out against the u.k. leaveing the eu.

world leaders want to see the u.k. remain part of the you are european union. because what does that mean for the eurozone? how ieasy is up for people to negotiate their way out? of course, we know the european union is at the heart of what david cameron was calling, hopes about security and safety. guy: there is a fascinating poll out for bloomberg talking about the fact that half of europeans believe a vote by britain to leave the european union would spark a domino affect the other countries having referendums as well. lieveof responders belive their own countries should hold a referendum.

this has become part of the political landscape. what a ripple effect this could be. that is probably generating quite a bit of interest when it comes to what is happening in berlin. let's check in on the ound. this is the euro sterling rate. steven saywell was with us earlier, believing that if the u.k. were to remain, we would say this move back towards 70. as i said, it is trading just shy of 80 right now. up next, we will get another voice into this debate. we are live where representatives are gathering. we will be speaking to the london lloy'ds ceo. ♪

guy: welcome back. you are watching "bloomberg markets: middle east. -- you are watching "on the move. it is city week in london. francine: the first panel is 20 minutes away. we have the first interview of the day. thanks you for coming on. how do you calculate risk? >> you are looking at insurance. everywhere we look, there is

more and more risk in the world. it is interesting because some of the work we have been doing is showing that a lot of the risk businesses are facing today are man made. a lot of those were actually based around some natural catastrophes, or something physical happening in the world. these days though, man-made risks are much more prevalent and we have done a lot of research into this. we looked into things like oil and s dipping, terrorism, auto crashes. these affect the risks more so than earthquakes. can then ensure.

>> we don't just provide insurance. what comes with a that is actually crisis manufacturing services. a lot of what we do helps businesses. them construct their systems and build security. then, we provide them with crisis manufacturing, should something go wrong. recuperation.e -- cing francine: can i insure myself regarding the brexit? >> that is the big question. 15% of the revenue in the lloyd 's market comes from the rest of the eu countries.

we rely on that a lot. as a whole, the eu insurance market is the largest in the world. we benefit greatly from being a part of the eu. we also benefit from the trade agreements the eu has built around the world because lloyds is a very global business. helps uspart of the eu keep the business. it also helps us access parts of the world. it is very important to us. francine: as a company, can i insure myself against the brexit? you can probably hear the master of ceremonies trying to call us in. have you deal with low interest rates? >> in two ways.

they can hurt the deals within our own portfolios. we have a lot of new capital coming in, and investing in insurance. we have a lot of competition. gs from thetwo thin low interest rate environment. underwriting though, that is key to what we do. we have to major that we get the pricing right. for is our biggest focus within the lloyd's market. >> i will hand it back to you. they are all waiting for her. we have to let her go. guy: the master of ceremonies, you can't ignore him. it is city week. richard jones is with us now.

china is interesting. the fed stuff is interesting as well, also the pound stuff, fascinating to watch. a quick word on china. today.ot hammered >> that is one of the things that could become very interesting, if this is the beginning of another sustainable setback in chinese equities. we, what has happened in the past. it does have a ripple effect outside of the domestic markets. that could be interesting going forward, if it is not a one-off selloff. caroline: if only we had gotten 3% lower on the miners. where are you sitting on the brexit discussion, richard? are we expecting continued pound weakness all the way up until june 23? or are you focusing on the 20% undecided? >> i don't think the uncertainty

will go away. we will have to live with that for the next six to seven weeks. i think the point that was made earlier with steven saywell, if we do get a remain vote, and the pound it does strength in considerably against the eruo, that could provide a significant headwind. we already know the downside risks. remain does not make that situation any less complicated for the bank of england. guy: it will be interesting to everybody's position is. "the upulse" is up next. jon ferro and i will be on the radio, talking about all of these issues. all of that is coming up on the radio as well. as i said, "the pulse" is

next. weekine is down at city and she will be covering that, giving you some great interviews throughout the day. ♪

saudi appoint a new oil chief. will they reach a new record for output? brexit baffled. david cameron says leaving the eu puts fundamental national interest at risk. we will hear from boris johnson later this morning. and thousands protest in athens after the national creditors meeting in brussels. in greece braces for another summer of discontent.