guy: welcome to "on the move." 7:30 in london. we are counting you down to the european open; i'm guy johnson alongside caroline hyde in germany. this is what we are watching. as thelears her desk impeachment debate drags on in it now looksd clear that it will be her last day as president. what next for brazil? nissan and mitsubishi enter talks amid a fuel economy scandal, but will it really be in the driving seat? and the ble and brexit.

the central-bank prepares for its last super thursday ahead of the referendum. we will bring you full coverage, live on bloomberg. so we are 28 minutes away from the start of the european trading. it looks likely will see a mildly negative start to the day. let me show you what's happening. this is the picture at the moment; you need to focus on his missed price column. london looks like it will be down around 3/10 of 1%. continental markets looking firmer. i would say probably that points to a flat story at the get-go. caroline: yeah. let's have a look at the asset checks we have on. i want to draw into what has been happening on the oil side, and what has been happening largely on the japanese trading front. keep an eye on oil. there was a surprise reduction in inventories in the united states; we saw it down to its lowest in september, 2014.

clearly a bounce in oil has been driving it, some japanese bonds to keep a close eye on. i'm interested by the fact that 30 year japanese debt sales went on today, another record low yield. investors are desperate to get their hands on any piece of paper that has a positive yield in japan. so keep an eye on how the japanese debt is trading. and of course the brazilian rial. it seams with the time being, rousseff will have to pack her desk, but will she go through the senate, and willoughby longer-term? keep a close eye on that, which is trading higher. let's get onall, to the bloomberg first word news with shery ahn. shery: thanks, caroline. chairs and mitsubishi motors have jumped by more than 16%; that's after a confirmation in talks with nissan, including a

possible capital tie up and that if you will economy scandal that has battered one of japan's smallest automakers. people familiar with the matter say nissan is taking a 33% stake in mitsubishi motors. the bank of england holds its last so-called super thursday before the eu referendum today while all economists in a bloomberg survey predicted no change to the interest rate. that bank of america merrill lynch says one or two of the nine-member panel may vote for a rate cut. reportrterly inflation with governor mark carney will be scoured tonight by both sides of the brexit debate amid concerns with recent services and production data. japanese investors appetites for 30 year bonds has made them, in the words of one manager, the most expensive on earth. locals say they want more, not maturing in 15 years or more, with the only ones in positive

yields. japan has sold almost ¥800 billion of 30 year securities today and a record low auction yield of 0.319%. he supports- says donald trump for president, and has backed his call for a temporary immigration ban on muslims. speaking at a conference in las vegas, he said this -- shery: globa global news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. you can find more stories on the bloomberg at top . guy: thank you very much. let's move back to that top story. president dilma rousseff may be entering her final hours in office. brazil senate is gearing up for

a vote on her impeachment; the pre-vote debate is ongoing. it's already clocked at 18 hours of speeches, and it now looks as if the majority will back a removal. our emerging-market managing editor has been watching the story. justin, give us a timeline -- when will it come to a head? >> well, in a sense, it already has, because now we have the majority of the senators at least declaring their voting intentions. we have a fairly good idea which way the vote will go. that will happen in about an hour and a half. gets about 2:30 now; we have been going on for, i think, something like 18, 19 hours of debate. each senator so far has had about 15 minutes of speech. we're really in the endgame now. i suspect when we get this vote, dilma rousseff will be out of

the presidential palace. she will have to step down for 180 days. her vice president will step into her shoes and run the show, during which we will have an impeachment trial against dilma and a vote at the end at some stage. she'll be completely and officially removed from office. anna: 180 days is a long time, and we have seen a rally in the run-up to this vote. do we see the rally sustain? it's interesting. we have reached this point at which, i think, the majority of the investment community expected we would get to. we've see the markets rallying on optimism, if you like, that she will be removed from office. investor stock markets up almost 40% this year in dollar terms, the second-best emerging-market

stock market this year. at the top rial up of the stacks, the best anywhere in the world. yesterday we saw the rial moving north, 1/2 of 1%. the stock market fell, that we are now seeing the exchange traded funds outside of brazil starting to play some of that optimism, and we are seeing gains on the trade in japan, for example, and london will open in the next few hours. we will keep a close watch on that. i suspect we will season gain. the real work starts now for brazil. this is not a case of us being out of the woods, but really entering the woods, and we have some very serious economic problems to overcome. the budget deficit, fiscal reform. notwould be president is exactly mr. popular, himself. he will have some work to do in the months ahead, too. guy: thank you very much indeed. we will continue to monitor the story. justin kerrigan joining us from

brazil. let's welcome tim grokford. i'm not going to ask you directly about the brazilian stocks, but as the european equities guy, and as there are a whole bunch of european equity fund have exposure there, would you be getting long or short? i think most european stocks that have any significant exposure to brazil now are not discounting much in the way of things improving. we have been very mindful, i think -- we were getting bad in brazil for a long time. this is one of the worst recessions we have had in decades. last year was down 4%. this is not new. a lot of the bad news has been priced into shares. what we are looking for now is equities that have a good, fundamental story rooted in europe, driving their earnings

forward. but that have some sort of option alley on improvement, not just in brazil. stock,s a swiss listed now the largest duty-free operator in the world, having acquired the second and third largest players. we don't own it because of brazil, but if you look at what is expected to going forward, very little is priced into the share. actually, that could prove to be quite a nice, positive option now to the earnings going forward if brazil does start to recover. however that is a big if. things are still tricky over there. guy: but you would rather play these stocks -- i'm curious. you are playing a european recovery story? for global recovery story?

which one is it? europe is much unloved at the moment by global investors, therefore are you valuing europe, or saying we need to look more globally and take a look at the international stories? >> i think what we are saying is -- we aren't playing either global recovery or european recovery. what we are looking for is structural long-term themes, that are going to grow regardless of the macro. if global growth declines, they will be hit, by to a lesser extent than pure cyclical stocks. will we are looking for are the mid-cap growth stories, where you have the stakes -- it's the that's -- theets, growth and travel from emerging markets. that is the case with many of the stocks we own. we are topping of these positions that are exposed, a

little bit of option a la the if they do improve, given that emerging markets have been in a downswing for quite a lot of time. guy: we will come back to you shortly. tim crawford will stay with us. up next, a big move for mitsubishi. shares surge on news that they are in talks with nissan. we are live in tokyo with the details, next. ♪

anna: welcome back to a very blue and sunny berlin. we will be taking you across to japan for breaking news, where mitsubishi motors is surging because nissan is considering to purchase a 34% stake in the company. headlines across the bloomberg terminal -- that's a bc -- a scandal, up 60%, the best we have seen for the stock. let's go to david mccombs. nissan, seeing that mitsubishi is attractive right now -- what is it seeing? why does it want to buy this? >> they had a profitable relationship in that niche, mitsubishi supplying minicars just after announcing the scandal. that is a big problem for nissan. they salted some way by buying a

big stake in the company and rescuing them. mitsubishi also have some very solid electric car technology. nissan is thought to be a leader in that sector, so they pick up that. mitsubishi motors is also quite strong in indonesia and thailand. the brand is very well respected, very popular. that could be a big plus. view,or the cash point of this isn't a big deal. my question is how much control can he actually get. he was very successful when he went into nissan, wrestin controlg from the embedded interest. can he do the same thing at mitsubishi? >> i think you put your finger on just the bat investors are making. they are saying he has done this before. he went into nissan when he was in deep trouble, and he managed

even as a foreigner to mediate that. mitsubishi motors, a traditionally japanese part of the group, a very strong alliance, of what had people scratching their heads is the fact that the mitsubishi group companies are not in a strong position. they have been hit hard by declines in commodities prices. they aren't doing as well as they were. the last time they deal doubt there carmaker, they have come in and said -- it is interesting to see the early reports have 33%, 34% is the level you need to exert control. they are aiming for 34%. they are willing to hand it over. guy: it will be interesting to see if he can repeat his success. dave, thank you very much. dave mccombs joining us out of tokyo. tim crawford, hermes investment

management, joins us now. you don't like the oen's. what you like are the subcomponents. >> that's true generally. reno is our favorite oem. that is why we do it. i think generally speaking, we are seeing that these manufacturers -- that is pressure to meet commission standards. the balance of power, typically rested completely in oem, is slowly shifting to the parts makers, who are becoming increasingly more valuable. guy: we are getting more details. caroline: yeah. we are seeing more breaking news -- mitsubishi and nissan to sign an agreement by may 25. within the end of the month, we are likely to see the stake taken on by nissan, then see shares sale, to be completed around october.

it can name four directors to the board. they can also be named on the mmc chairman. clearly already outlining how this company will be merging. tim, i want to get your view on m&a. you are seeing this trickle of deals, it seems to be ad hoc. we've heard some of the synergies coming out of tokyo just now. give us a sense of whether m&a is on the right track. we have seen a lot of deals actually being unwound. yesterday we saw the two deals unravel with a hong kong company. ever going to see more fall over? >> i'm not so sure about that. the telecoms in particular, there is a very strong regulatory regime over there. with regard to looking at what's happening in japan, it's no surprise -- in a low interest

rate environment, you have a company which has, i think, about $13 billion worth of cash from the balance sheets, and i think any company right now who has a lot of cash on the balance sheet in a low interest rate environment is potentially looking around, sitting around names it could require. guy: can i take you back -- we were just talking about the car sector. you mentioned that you own read down. that's your favorite. why? what are we looking at that you like in this space? is it because of the emissions story, because there is upside out of france to do more? walk me through the reason. >> it's very much about the cost story. this is a company which has been behind the curve in terms of -- you had vw, which for a long time did very well with a multibrand approach, and by

sticking all those brands on a common platform. renno is starting to do that now. i think it is interesting that if they gain control of mitsubishi they could do that with another manufacturer as well. as we just heard, there is some synergy in small cars, with mitsubishi manufactures. french are forcing through legislation at the moment which will change labor laws. does that help? presumably it must do. >> any improvement in terms of the neighbor environment in france is only going to be positive. guy: nice to see youguy:. you will stay with us. let's find out what exactly is happening out in asia with the market update with shery ahn. a raftedy, disappointing earnings out of japan and the u.s. down sentiment across asia, but the nikkei did manage to finish in positive territory, gaining

4/10 of 1%, rising. the asx 200 is a different story; it reversed five days of gains, falling 2/10 of 1%. we are seeing iron ore volatility reaching this year's high and affecting miners. bok are down ahead of the policy decision tomorrow where they are expected to keep rates unchanged. strengthening, affecting exporters. the shanghai composite down 2/10 of 1%, the hang seng down 6/10 of 1%, investors being a bit cautious about the chinese economy. that thereis morning are still downward pressures on the chinese economy. yen,a look at the japanese which is reversing course after strengthening a tencent 1% yesterday. it is now weakening half a percent, which has helped exporters in japan and helped

the stock market turned positive in the last hour of trading. caroline: thank you very much. let's have a quick look at what stocks are going to be watching ahead of the open here in europe. we looking at some french stocks across the board. keep an eye on this particular bank; we are seeing it come out with numbers where profitability slumped some 70%, and it is all about the restructuring story. is chief executive there saying that march and april -- first-quarter profit did slump. we saw a retail decline because of net interest margins on the downside, but this company is starting to see a turnaround in improvements in march and april. keep an eye on wholesale -- lafarge is coming on board, the biggest cement maker. and looked relatively painful.

first quarter sales up 0.1%. it was a mess. seasonality is what it blames; pricing is what a blames as well.the chief executive says , i understand this is where we need to be, but for full-year they seem to be on target. then we have to dig into renoo. keep an eye on the carmakers; that deal with nissan can be buying a mitsubishi motors in japan, a 34% stake. that deal could be agreed by may 25, and we could have a deal done by october. guy: looks like it is all moving in that space. tim crawford still with us. are you a bit worried about renno? are you worried about -- they have a lot of cash, but is this the right way to spend it? on the other hand they are taking up a lot of yield. >> exactly. we're long-term holders, and if i were trading in a stock, i

wouldn't expect it to react well today. just thinking about the story here, my first reaction was -- what are they doing? my second reaction, especially with the fact that they are gaining control, going back to the story i just talked to through, if you can synergize their manufacturing capabilities and the story starts to look interesting. mitsubishi has quite a decent franchise in southeast asia. we need to do some work on it, but i think it looks quite interesting. guy: with a be doing this if they didn't have this huge cash pile? case of central-bank action having an impact on corporate policy? >> absolutely. i think there are a number of things at play here. i think it's nissan today, and opportunistic. they announced they were embroiled in the emissions scandal, but i think definitely there is a theme of m&a being driven more and more by this money printing we are seeing worldwide.

initially, would still be the stocks that can grow, that have the structural themes that are driving underlying earnings over a long period of time. --you are a company that can that has a huge cash pile and can put it to better use by buying something which will increase future earnings, and it is a potentially -- guy: it comes back to the fact that, do you want companies to invest in products productively, but on the other hand, the big theme in equities is dividends. two competing forces at play. >> it all depends on the returns they can get. with the cost of capital push down, it can -- as a management board, the cost of capital is low, so we don't need that big a return to justify it to shareholders, but at some stage

that is going to change. what we want to see is that a return to the future. guy: the market open is coming up next. ♪

guy: good morning, you're watching "on the move." in berlin.de is we are moments away from the start of european trading. desk, as clears her the impeachment debate drags on, looks like it is the president's last day as president of brazil. so what next for brazil? nissan in the driver see, it will take a 34% stake in mitsubishi motors. the central bank prepares for the last super thursday ahead of the referendum to bring you folk of her. on bloomberg television.

let's take into this futures markets. the edge closer to the markets, looks like it will be a down day. but for tenths of a percent. it was a little bit of pain, the beside downward take yesterday, taking of the markets by surprise. we continue to trade above $46. into mitsubishi motors. asian stocks fall for the first time in three days. looking at the european market, the ftse 100 up by .7%. that is off that almost .5%. toll waiting for the dax

move any stoxx 600. let's take a look at some of the earnings, it was a disappointing earnings that drove the losses in the u.s. overnight spilling over into asia. first, down at the moment. quarterly profits falling. decline inby a consumer lending margins and trading revenue. insurance, itich posted a first-quarter profit that beat expectations. we're still waiting for that to move at the open. in the meantime, i move on to aegon, he is a profits they first-quarter falling 50%. this is the alternative asset and hedges. they backfired on market volatility. let's take a look at the next three stocks, first quarter earnings missed estimates.

a slowdown in brazil, and russia that is opening lower. first-quarterrwe, profits with little change. it was a beart on gians. talktalk, this was the much in line -- the numbers here. we saw the full-year adjusted. back to you. guy: a couple of things happening over the last couple of minutes. downtock, this is dropping 1.1% this morning on the back of the news that we heard out of japan. posteder thing is, they their numbers, they were delayed because of what was happening surrounding the acquisition of the 34%. the operating profit coming

through at ¥59 billion. the operating loss out of europe , interestingly enough, this comes back to the conversation we were happening -- having with tim a moment ago. they are going to be raising the yen and by 14.3% to 44 share. the man who engineered this acquisition is currently speaking in the wake of the details be delivered as he continues to make that commentary. who could probably have a quick lesson. let's take a moment to listen to what he is saying. this will be a dynamic cooperation between two major japanese car manufacturers. enabling us to harness their respective capabilities of our companies. are determined to

preserve and nurture the mitsubishi motos brs brand. we will have this company address the challenges it faces, particularly in restoring consumer trust in its fuel economy performance. is central to everything we do. but today is also about future growth for mitsubishi motors. as part of our large family. that family has been around the center pillar of our 17 year partnership. together, we have created one of the largest, most of global and diverse automotive groups in the world. led the way into a new emerging market.

we have taken pioneering steps and electric, most notably with the zero emission nissan leaf. increasingly, in autonomous driving systems, and connectivity. we have delivered more than 4 billion euro from our normal relationship. we are also building engines, sharing architecture with our daimler.at the we have a strong presence in the russian markets, which is well placed to benefit from a rebound when that market recovers. what we share, and the potential for many of the synergies in areas i already mentioned. nissan also would contribute the management expertise, and corporate governance experience necessary to deliver sustainable

and profitable growth. we're at the beginning of a new journey. i am confident that mitsubishi, with our report, will be able to and take newrust business opportunities. for nissan, this alliance will extend our scale. we will deliver reporting, direct synergies. as i said at the outset, it is a potential win-win transaction. we have the track record to make it work, and to deliver the expected results. i will now invite comments about this a deal, then we would be both happy to take questions. >> ladies and gentlemen, thank you very much to be with us on this occasion. guy: he was talking with the

acquisition he announced this morning, a 34% stake taken in mitsubishi motors. scenario.t a win-win dustin crawford, manager and holder of -- agree with that? to the i haven't gone numbers it, it is hard to say. i do think, as i said earlier, it is about scaling up. they can do that, and took them a long time with the nissan but they finally started to do that. if they can do that again with mitsubishi, i think it could indeed -- guy: they're already working quite closely with them. exactly, they already know them for a well. there in the same geographical regions. don't forget, given how far it has fallen, the timing looks quite opportunistic. we will see. dark i could

opportunistic timing also because a lot of cash on the books. talk to me about the implications, the banking sector for example. that is one of the worst performers today. it's numbers really being hit by debt trading, also but the retail banking being hit and not bringing as much. are you worried at the moment? tim: with the banking sector, we have been on there for a long time. we will continue to be so. what you have over here, the banks are being squeezed on the interest margins by the ecb and by negative rates. you are essentially now having an ecb which is competing to lend to businesses. it is just getting harder for them. about the banks in more detail, but let's take

you back to what is happening right now. how much of this is a bet, how much do you like? we talk about arithmetic leaders, he is definitely one of them. he has been transformational that is driven so much that what has happened within the group. how important is he your investment thesis? tim: the cynical investor would say it took a long time to get them talking. actually,g ideas, but one of his skills is as a diplomat. he is very good at negotiating the sort of political environment that comes with not just the firm, but take away the japanese companies. i think he has been very good at doing that. he probably cannot replicate what is done with nissan with mitsubishi. i think he is probably the right man for the job. guy: staying with us come up next week talk banks. quarterly profit falls.

we talk about what the starting season has delivered. ♪

guy: welcome back, with 12 minutes into the equity market session. look around europe, you will some fairly significant losses. reasons for that dropped that we are seeing is because of financials are being knocked, and knocked hard. the swiss market is taking it on

the chin. we have ubs down 6%, there is credit suisse down 3%. two of the biggest name certainly suffering this morning. insuranceide, zurich is trading up custom nevertheless, the banking sector is front and center today. some fairly significant losses being generated. 4.22, but ubsdown is down this morning. let's find out what is going on around the world. here's the first word news. shery: nissan has confirmed it will purchase a 30 force -- 34% stake in mitsubishi murders. -- motors. be shee comes as mid to motors has been rocked by a fuel economy testing scandal.

earlier shares jump by 15%. the bank of england hold it penultimate meeting before the eu referendum today while all economist at a bloomberg survey predicted no change to the interest rates, merrill lynch of thene or two nine-member panel may vote for a rate cut. where mark carney will be scrutinized by both sides of the brexit debate. that is the concern the outcome taking a toll on recent services. investor looking for 30 year bonds has made them, they were to one manager, the most expensive on earth. local said they want more. it is maturing and 15 years or more comedy on the one in the nation with positive yield. leaving investors little choice but to buy. will selling securities at

a low today. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. you can find the stories at bloomberg top . that right to see now is going to positive territory. it is been talking about in brazil, and looks like -- what am i talking about, he could become a getting in the brazilian. but the stock is beginning to jump a little bit now. there will be talking to a little bit later on this t has popped renaul back. that is one of the positive stories coming out of the french economy this morning. caroline: fascinating come opportunistic, we've been speaking about much of that whenever guests.

howere talking before about the banks are suffering today. a notable one among them, quarterly profit declined in trading. we saw net income dropped to 227 million euros. it fell 70% year on year. she is currently trading -- shares currently trading lower. it started by asking about the italian story. his country's bank rescue fund. >> let's consider where we would be without a plan. number one, it would be not so nice situation for the number two, let's also remember that a plant is a private sector. they might decide to speed it up. point, the arc of its mission is to deal with this will take time. caroline: there has been a lot

of investors thinking that this big news affect has done. would you just tell them to give you more time? were you disappointed by that? >> there is no new information with respect to what was available today for us. e markets disappointed today rather than a week ago? having said that, let's imagine a world without it, we would the in a worse situation. more banks are about to tap for funds. will atlante be sufficient? >> i think it will be needed much less in the case of the chains. i do not see many of the critical situation to the banking landscape today. caroline: where do you see these trends in six months? >> it has the potential to build up a strong business model.

also what the economy needs. caroline: is it looking into running? >> it is privately run, and privately owned, and is developing longer-term strategies. to long-termmedium instrument which needs a medium to long-term strategy which they are developing now. let's dig into the banking story of little bit more, and london it is tim crockford still with us. whites a sense, if a 36% out of the value of the stoxx 600 deking index in the last 12 months. is there further to go? -- weaching a bottom reaching a bottom? is a bit cheap, it has come down quite far. but there is little to get me

excited. until you have some sort of a catalyst that can generate some earnings growth, i would still be largely avoiding the sector. i think there are some interesting things potentially, but i wouldn't be playing them to the banks directly. downthe reason why ubs and is that they have got asked dividend. i apologize for mixing -- missing that. i guess it is a duration thing. at some point, these banks are going to come back, or are they? if you look of the technology changes, are witnessing a painful moment for the industry. irmally you'd be around 1, could stick this in my back pocket and i would make a decent return. on the other hand, you could say actually it will shake the

industry up to the point to which some of these businesses will be unrecognizable going forward. am: it potentially will be story for the future. right now, it is more simple. they need a steeper yield to make money. maybe six months ago you might have hung on to the fact that the ecb was going to stimulate volumes. we have seen it pick up a known volumes as europe has slowly improved. but actually, now you're the central bank which is competing with these banks to lend. in the bond market, it is going through the roof right now. and a shot up in the eurozone, and that isn't going to help the banks. guy: when you talk to guys like banks, down at the swiss these are sergio's words, they talk about currents being

paralyzed. it is paralyzing volatility. the yield curve needs to come back for their businesses, but nevertheless client activity is on the floor. it would he wants to do anything. you need to have some of that come backs of these guys can attempt. life,enerally, it makes particularly because of the central banks, it is made life so much harder. what do you do now? normally, you would rely on the fundamentals. now you have to consider what they would do in reaction to changing fundamentals. i can understand why they would say that. guy: it is great to see this morning. manager, just to confirm, the reason why we are seeing some of these big losses is the ubs and credit suisse going ex-dividend. is how brexit risk affecting. that is next. ♪

berlin, less funny the trading on the dax this morning. we are seeing just four stocks higher trading on the dax. stocks,eye on german let's talk a little bit about the politics of europe. talking unity in europe, germany's interior minister

tells us in a bloomberg exclusive that the agreement may be at risk. functioning means no border control within the state. this assumes efficient protection of the outer borders, we want to determine who is coming into europe and who is not. it has to happen at the external borders. for this, we set an array of different measures. to expand the eu agency to a proper coast carding agency. infar, this has only existed certain extent. we want to create an entry and exit system for heightened securities or it can be clear who is coming into europe, registered, and who is exiting again. we want to connect the different data sets that we might have so we don't encourage any security risks. all of this must happen to be can keep the internal borders without controls. if all this fails, then yes,

schengen on the long-term is in danger. that would be bad, not only for freedom of movement, but for the economy of europe. guy: the german interior minister talking about schengen. nejra: we're not six weeks away u.k. will stay in the eu. this shows the evaluation gap widening between ftse 100, which has the biggest companies in the u.k., and he 5250 of mid-caps and he 50 small-cap index. this is in the event of a brexit there being an adverse effect on the economy. smaller companies, which get most of the revenue in the u.k. will be more adversely affected theboarding and might actually benefit from a weaker pound. a great chart ahead of

the brexit. up next, i will be departing. i'm leaving you for the next half an hour because i am off to frankfurt. deutsche, we talk much more about brexit debate. ♪

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simply by using your voice. the billboard music awards, live sunday may 22nd, 8/5 pacific, only on abc. guy: welcome back, you're watching "on the move." let's talk about how the markets are shaping up. i forgot it is thursday. wise thursday important? whole bunch of stocks go exdiv idend. exdividend going today. theou are looking at numbers this morning, that could account for some of the reasons why these stocks are trading down. nejra has some stocks we should be watching. at some of looking the biggest movers on the stoxx 600 this morning.

it is been a challenging time for rwe in the past few months. last year was the biggest decline in the dax index. it had to suspend its dividend to common shareholders for the first time in 50 years after losing more than half of its market value for stub some good news today has pushed it higher. first quarter profit, the little changed, was actually a beat. unusually high earnings from trading countered slumping power prices. of the biggest to gain her. the biggest loser the stoxx 600 is the aegon. drop inted a 50% first-quarter profit and alternative assets and hedges. asally, this is slumping well. it reported a 71% drop in first-quarter profit. it was hurt by a decline in consumer lending margins and trading revenue. thebank's beginning

organization to try to streamline its capital structure. guy: thank you very much, the u.k. chancellor want to consent out his case for remaining within the european union. >> the claims of the impact of the economy have been supported by the bank of england, the and everyf the imf, major credible institution in the world. everyone at our allies in the world has support of the argument be made about our securities. osborne yesterday, the brexit debate looks like it will be bit the bank of england's so-called super thursday. remember, the bank is expected to give it update on the june 23 vote of eu membership is affecting the expected -- infecting even the economy. external number of the

bank of england, the emerging policy committee joins us now. good morning. >> good morning. guy: steady as she goes? that has to be the message from -- ey give any >> yes. even i, who believe that we should -- guy: for quite some time. >> believed that we should be raising interest rates think that the right strategy for the bank of england for this month and the next month would be to keep things on a level playing field and keep a steady hold on the tiller. guy: after that? >> it depends for a much on the referendum. if we remain in the eu, which is my expectation, the right thing for the u.k. than the bank should be getting back to thinking about raising interest rates in the second half of this year. guy: let's deal with that. why should that be the case? i will throw some exhibits at

you to show may be u.k. economy is losing momentum. all are the pmi's, they been coming down. got manufacturing a negative territory. there are moving in a negative direction. theou take a look at surprise index in terms of the data, the surprises have been falling as well. we're not below zero for quite some time. the u.k. economy is losing momentum. a combinationis of things for stub there is element of brexit insecurity. couple of month ago, i would have said that was effecting business decisions. i think it now is. it is also a bit of the global economic slowdown. we just had to very strong growth from our main market out in europe. so, i would be surprised if this is just a little bit of a blip

in terms of growth. we have to put these growth figures in context. 2% growth, which we have had in the recovery so far is really quite a good for the u.k. the new normal world that we have. been a temporary dip, i'm much rate will be sustained to the year. guy: the pound has come down. within the eu,in the expectation amongst the foreign exchange is that we would see fairly rapid appreciation. we would see an effective tightening by the foreign exchange market of the conditions in the u.k.. the bank could say we could say we can that the pound to the hard work. andrew: we have to be careful about interpreting volatility on the pound in terms of loosening monetary policy. yes, it will probably bounce back, but it would bounce back up against the dollar. the power value for the pound against the dollar somewhere so that is not particularly strong against the

ono area we were over 1.50 average. so, some recovery in the pound is probably something that the economy needs. hikes wouldy rate you expect to be delivered? any process of raising interest rate in the u.k., or the u.s., will be quite slow and gradual. hink probably one by the end of this year would be an optimistic assumption. for someone like myself who believes we should be raising interest rate. more importantly, the bank needs to set out a strategy. to make clear that the strategy is, if the economy continues to grow reasonably well, and unemployment continues to fall further or states where it is, the right strategy in the circumstances should be to gradually raise interest rates. it hasn't been that way up until now.

they have been sitting on their hands, saying they're not quite sure. let's talk about phillips for a moment for stub why is it not working? or is it working? you would expect in these kind of levels, you'd expected to be significantly higher. why not? when does it it arrive? andrew: this is not a new issue. we heard before the financial crisis, charlie bean and others give speeches about the phillips curve. that is a lot to do with the influence of the global economy and the fact that our inflation is driven quite heavily by global factors. it has to do with the fact that the labor market itself is more flexible, so we would get to quite a visible lower level of unemployment before we saw wage pressures. the point i would make is that if we wait until all of the signals are flashing red, and i made this point on your show

before, before we start inching up from the very low level. then, i think that is something that will ultimately catch up to the central bankers. guy: janet yellen, was way smarter than me, believes we of the see the whites eyes of inflation. you wait for those rate signals to be flashing before we deal with it. andrew the there are textbooks tell us how to deal with inflation. nevertheless, should we wait for the red lights? andrew: i don't agree. all of the history of good central banking should be trying to anticipate development, and think ahead. thinking ahead means thinking about economic conditions in two or three years time. just responding to a big surge in wage pressure. if we were to at a normal level of interest rates that would be the right argument. but to wait or 5%,

until it is flashing red might be the right signal, but there is a strategic challenge in terms of the u.k. and the u.s. getral bank's that and to away from settings a policy that we put in place quite rightly during the financial crisis. it is taken us quite a long time to get away from them. guy: thank you very much. joining us in a few minutes, the finance minister of chile. speaking to us exclusively the sun what is happening in south america today. we will talk about what is happening in brazil. ♪

guy: let me show you with the european market and doing from an equity point of view. we are in negative territory. it full bunch of stocks are end, mainly out of london. on the downside. you also have the swiss market being effective. nd this gone exdivide morning. it is the last day, or yesterday was the last day. renault, itday on is trading absolutely flat. they havee news that decided to acquire mitsubishi

motors, a 34% stake in that business giving them control of that acquisition. it will be interesting to see, ultimately, what he does with that. let's get more details. lefarge reported first-quarter earnings and missed estimates hurt by lower prices in india in the slowdown in brazil. adjusted operating earnings before interest and taxes and a -- fell 22% in the first few months of the year. the company's shares are down today, and around 40% since last july's merger. there the world's largest cement company. it will get a pay off of at least 50 million euros from chelsea who and that a sponsorship deal of six years early. that means the german company

could boost its profits forecast. adidias says it will illustrate strategy of partnering with your sports teams. 227 millionfell to euro in line with a average estimate. trading revenue fell, and the bank began a real commiseration to streamline its capital structure. shares have fallen this morning. willn has confirmed it purchase a 34% stake in mitsubishi motors. under the deal, nissan will by $2.2 billion in share to one of japan's smallest carmakers those of this comes as mitsubishi motors has been rocked by a fuel economy testing scandal. speak later on this morning. that is your bloomberg business

flash. looking forward to the conversation a little bit later on, a bold move by nissan. anbrazil counts down to impeachment vote that has applications not only for its economic future but also that of the whole region, the south american continent, we're joined now by the chilean finance minister for the thank you very much indeed for coming to see us. huge things happening in brazil right now. thedominant economy on continent. does it have a ripple effect? what happens their terms of what you do with. rodrigo: it matters a lot for the region. chilean's invest in brazil, and vice versa. this was brought up because of the distrust. the movement and the economic side is locked and you have these political problems.

that is very unfortunate, what happened. i would have to say that these institutions are working. that is our biggest change from the last decade. guy: certainly. you're feeling quite positive about this? from an economic point of you, you're feeling quite positive. o: not even that, i cannot give an official perspective. i have to be very careful for what i say. but i would like to say that at least negotiation to working in the region. second is that this problem of political recs -- politics dominating you don't have the space, the energy, the time to devote to economics. point, it is good that this is result of overall, it is very complicated for is cause fore this

the best in this country. it is very important for the region. guy: you are quite optimistic about will happen with the chilean economy. it hasn't delivered quite yet. we're looking for a catalyst, will be get that? rodrigo: it is a slow process. chile got used to a decade a very high prices. at the beginning, everybody thought this is short, lasted. but it lasted so long, that wasstment in mining, there migration within the country. the fiscal account got used to the high prices. this is over. if to undo these. guy: i much are you can. go: one thing that is important is the move. if you could do this without the movement, that is really tough.

at least, the price signal is non-mfor investment in ining trading sectors. guy: when you think about the prime driver for your economy, you talk about what happened with copper, which is come down pretty sharply. what is next? what takes over, what provides the momentum in your economy? rodrigo: chile was very successful for the commodity boom that started in 2003. with able to export many things. i hope to go back to that. we are very open economy, for a competitive. the private sector will find the exact services to export. services to me a very important. it is some only goods, it is also services. i mentioned services to begin with. i think i'm very positive at the

end of the day that chile will be there. we grew substantially without copper. we know how to do it, i hope. let me give you one number, today in chile we export to a three times of copper from agro business. in new zealand, the agro business is per capita three times our copper. newthe space for finding business is huge. the private sector, that is the one the needs to find the opportunities. the state has to help them with financing. that needs tot happen. there are new industries appearing. super popular in china, and when exporting a lot. bring upglad you china, copper, a lot of was

going there. you bring up australia, a similar story. do you still see them being the main opportunity for you? or d.c. at coming back to the region? are you still china focused? we're very diversified, the u.s. is very important to us. so, whatever it is growing more, we will be there. we will be competing with others in that market. of itsly, china, because size and because it continues to grow and its transition from infrastructure to consumption -- guy: what you're talking about is a reflection of what is happening. rodrigo: an opportunity, i think they have a huge opportunity. guy: what kind of growth rate will we see there? than the past in china. it will be difficult to have

size that we saw in the last 10 years. le in particular grew much more before the boom. thatyou think we can get to that kind of growth? is possible. we delay the groundwork for investors to choose what to do. this affects the region. this is a game changer from what we had in the past. in the past, these type of shocks would produce crisis. around, you have a softening of growth but it is picking up very gradually. we need to accelerate to that. it is investment into the private sector. guy: it is the great to see you this morning. minister,n finance right come up next it is bank of england super thursday. we look ahead to what governor carney will say about the brexit. that story, next. ♪

guy: 54 minutes past the hour, welcome back to "on the move." it is decision time for the new region central bank. we have an interview with its governor, let's get those words around later on. at midday, we get a policy decision from the bank of after thatlf an hour governor mark carney holds his news conference.

his comments will be scrutinized by both side of the brexit debate. bloomberg customers, you can watch it on live go and go to , that would give you what is happening there. an hour later, your official jobless claims are out. it is thursday. we are joined now by richard jones. i think he won't want to. i suspected that what the bank says today would be with a view to keep things in a as possible. having said that, there is some anticipation. but all think it is the base call for a lot of people in the market. there is some anticipation of might get a dovish dissent today. if that were to happen, market will move. i don't think that is the base case call for most market participants. guy: how does he tease out what is happening with the economy and the brexit story? kenny separate the two?

too soonit is probably to tell it the slowdown we have seen in the data -- jonathan: the pmi has softened quite a lot of to richard: you can't not talk about it. how does that play out after we get the vote the next month? guy: how does it relate to the rate path? things itne of the will do, they have to put out the short-term concerned with a long-term concerns. that is some may be needed to all the time anyway. -- thursdayuesday the debt with that. bob is the, brexit makes it more complicated. it is not quite as straightforward as they would like. guy: richard, thank you very much joining us from bloomberg first word. he will be back on the radio very shortly. we will kick around some of these issues are little bit more. also coming up, 9:30 u.k. time the pulse.

friends in looking forward to that conversation. we're talking a little bit later hishe ceo, coming up on announcement is taking a 34% stake in mitsubishi motors. ♪

demise.: dilma's a majority of results senate says they will vote to him teach rousseff. the japanese automaker will by 30% of mitsubishi. a shadow on thread needle street. the brexit looms large. full coverage of the last super thursday before the referendum. we speak exclusively to the ceo of intesa sanpaolo. what more can be done to shore