>> welcome to on the move. it is 7:30 in london. we are catching you down to the european open. i am caroline hyde with matt miller in germany. u.s., thestay in the estimate is 150,000. -- 160,000. federal uncertainty. brexit a big concern for several officials at the fed. could the referendum matter more than payroll to a june hike? long live opec.

oil is unfazed at the vienna meeting. opec try to find its footing in crude. -- tried to find its footing in crude. let's check in on how the futures is settling. and little bit of cautious risk appetite in asia. we see the same when you look at the ftse 100 up .4%. overall benchmark signaling we could rise .3%. the dax up. some relief there but perhaps these hairline strikes have not indeed taken off. more risk appetite good matt, what have you got? matt: take a look at what we see in asia. , really littlee movement across equities. we now see a pickup at the end of the session here. the nikkei up .5%.

the hang seng in hong kong gaining as well p over in china, a gaining -- as well. over in china, there gaining as well. the yen gaining strength. not a heck of a lot of movement in currency. you can see that as the pound is almost completely unchanged. the yen at one away .74. 108.74.en at merkel -- angela merkel throwing support behind david cameron and the remain camp. that doesn't seem to have swayed the currency much. let's get the bloomberg first word news with eve on an. -- with yvonne man. shareholders -- these securities are poised for the

biggest one-day gain since 2009. 13%, thest as much as lowest since 2003, following the announcement. the singapore company which lost its ceo says chairman and .ounder intends to go donald trump says hillary clinton should be sent to jail for her use of a private e-mail server while secretary of state. at a rally in hand -- in san that she was guilty as held. --says desk within says he clinton says he is unfit to be president. weekends.n it could spill over into global selloff. declineis poised for a -- the yuan is poised for a decline. paris on the second-highest alert level.

the louvre, the museum of historic artworks will shut its doors today. the flooding is disrupting travel on motorways and some train lines. forecast.ours are global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. you can find more on the top stories -- more other top stories on bloomberg top . matt: 160,000 is the magic number for this friday. according to economists surveyed by bloomberg, that is the number of jobs expected to be added -- expect to have been added to the u.s. in the month of may. hike -- robert kaplan says it is time for action. >> i think we are getting to the

point where it will make sense to remove some level of accommodation in the near future. what does that mean? july.sn't mean june or i am getting to the point where i am advocating we take an additional step. caroline: let's dig deeper let's welcome our guest. june, july, clearly. >> i think it looks like july. let's face it, the fed has done a remarkable job at what they have done is reprice expectation . like july let's look at today's number, but the other imponderable is the brexit . there is no difference between june and july the market is about 65% priced for july.

caroline: thinking that janet yellen will probably look at the brexit concerns. it is interesting to have a market dislocation. the rally at the end of last week, are we saving ourselves for more? nicholas: think of the first quarter in the u.s., gdp growth was 0.8%. you got the economy growing maybe at 2.5% now. the other benefit with july is it gives a little more time to see a few more of the data releases. matt: does it matter whether or not the fed raises rates in conjunction with brexit somehow? is there any relation between the two, other than a short-term moving currencies? niculescu--necklace: isn't -- s: the consensus is it

would lead to volatility. you get volatility and financial markets. -- in financial markets. that is the angle with which you potentially -- with which it potentially impacts the u.s. economy. matt: the federal reserve, they have two mandates. watching u.s. unemployment which is looking like it is going to be 4.9%, really incredibly low by any measure. watching inflation. they are getting ever closer to the 2% target. .e're looking at the 1.6%, 1.7% if you strip out the moves in oil and gas. it -- by those two measures, should the fed be considering raising rates soon? nicholas: it goes back to that good job they have done. they brought forward the first rate hike expectation i will

over a year. they have done it -- expectation by well over a year. they have done it. the other factor is the joy is still out on you look at the performance of the u.s. economy. go back to that first quarter, you've got very gastrin levels of growth. why not wait for a few more data prints? today's number is very critical. when we look at the forecast of 160,000. a lot is depending on that number it if that number today is in the number, who knows? maybe that puts june in play. caroline: ecb was yesterday. when you look at the market reaction. where are you standing in terms of credit when it comes to the ecb? -- somet the certainty

of the bond yields are going to push higher? are we going to see a selloff in the french debt? necklace: what you look at what -- nicholas: when you look at what the ecb is doing, it is superpowerful. it will probably inch lower and lower as that percentage of negative yielding and government bonds increases. the real power will be on the corporate side. let's see when the ecb gets going. we think between 4 billion and 10 billion a month. that is powerful. the beneficiary will be eurozone corporate bonds. caroline: thank you very much. we will be sticking with nicholas gartside. .taying with us throughout the chicago federal reserve resident, charles evan -- charles evans. crucial ahead of those nonfarm

payrolls. long-lived opec. the vienna meeting. oil prices for the unfazed. opec says it is not dead as it tries to find footing. ♪

matt: welcome back to "on the move." i am matt miller. we're looking at shots of new york city.

a.m. now, 1:40 to -- 2:42 in the capital of the world. let's get to bloomberg business flash. here's yvonne man. .vonne: thanks matt they has secured $63 billion in its pursuit of monsanto. they say bear -- bayer has goldman sachs, hsbc and j.p. morgan chase to provide talk on 5 million -- to provide $12.5 billion. more private equity firms are interested in troubled airbag maker, takata. they are evaluating bids although discussions are at a early-stage. retail costs for its lethal product.

twitter reportedly met with yahoos management several weeks ago to discuss a possible merger. that is according to the new york post. paper says they spent several hours in discussion, but twitter bowed out soon after. the two companies refused to comment. -- angela merkel next week. senior management from china's flagship airline has told the deal isat complex. that is your bloomberg is as flash. caroline. -- bloomberg business flash. caroline. caroline: let's talk oil. some big moves in crude.

the cartel stuck to its policy of unrestrained output. >> i am confident that the future is bright. this organization will not only survive, but will adapt. >> opec will stay engaged to the market. [indiscernible] will continue to pay through -- play through. responsible to the market and to the needs. i want to say that we are very resilient. >> don't take that notion [indiscernible] important signal of the economy. .aroline: apparently not dead

let's bring in our guest, nicholas gartside. will you look at this from your asset class perspective? how much are you dictating the buying or selling? nicholas: if you think of things like high-yield in the u.s., oil has been a massive driver of that, in terms of some of the investment. there been downgrades from some of the big components, really because of what has happened to oil prices. yesterday's results were great. that is what the market needs, stability when you look at oil prices and other commodity prices. oil, there are two big shocks. the first shot was a huge amount of supply. then there was a demand shock. that lack of demand. there is an equilibrium. oil around $50, that is good

news. that is good news for credit markets. matt: necklace, what does opec do aside from -- nicholas, what does opec do aside from supporting the vietnamese hotel industry? even if they agreed to put surprise guest to suppress production limit, no one would've stuck to them. what is the point? truthas: there is some when you look at that. the key is to look at the broader equilibrium enough. the broader surprised relative to demand -- broader supply relative to demand. global gdp growth. we look at that, it is woven. gdp growth will be in and around 3%. at that level, that keeps oil at about the 50 level. matt: exactly. , forget abouttegy

opec, saudi arabia alone has driven down production in the u.s. shale field. that has reduced supply. it is not about growth in demand that is holding oil at $50. it is about reduction in supply. nicholas: that initially that lack of supply. not looking back, when you look who is, the key will be that marginal buyer going forward? that marginal buyer is largely absent. caroline: what about the price in terms of $60, $70? will that be enough to bring the glut back? shield doesn't take that much to get going again. nicholas: -- shale doesn't take that much to get going. certainly a lot of those high-yield bonds that

would've been expected to default, it takes a lot out of that. that has had a genetic impact in terms of supply -- a dramatic impact in terms of market. from the broader perspective, -- on all ofome these nondiscretionary goods? caroline: some ups, some down. -- some downs. nicholas, thank you very much indeed. -- searching for a u.s. payrolls report. the reasons why in a rather gray london. ♪

matt: good morning this is "on the move." that is the quad tree got, the famous statue of the winged victory driving for horses. let's get a check on european futures right now. off, theok, first broader stock 50 gaining about .33%. at frank for it, where looking at -- at frankfurt, we are looking at stronger gains. the ftse up about .4%. take a look at what we are seeing happening in a bond -- in bonds. caroline, under you want to focus in on treasuries. echo at the moment, pretty much

flat. we got two-year u.k. bond -- caroline: at the moment, p much flat. he got two-year u.k. bond. paying the two-year most since 16 years. surging as britain prepares to vote on whether to leave the european union as investors stateside get ready for the fed to raise rates. we are focusing on this chart. -- we areields currently more than 50 basis points and separation. clearly there has been a move out of u.s. come into u.k.. let's they can to this with our guest, nicholas gartside. this with ournto guest, nicholas gartside. best case in reo, if we see a brexit. -- best case scenario, if we see a brexit. nicholas: central-bank will cut

rates on that. the other reason that this spread is at its widest level, really relates to the fundamentals. brexit aside, the message from the u.k. economic data is the economy is slowing. the economy in the u.k. has been slowing for 18 months. caroline: really? nicholas: absolutely you look at retail sales and what you see -- absolutely. you look at retail sales and what you see is slowing. the risk is the bank cut rate. part of that is u.k. is very linked into europe. caroline: that is counter to part of use -- counter to popular views. nicholas: it started slowing 18 months ago, way before exit concerns were discussed by markets desk before brexit concerns were discussed by

markets. -- before brexit concerns were discussed by markets. the u.k. is an open economy. it is like a barometer when you think of a leading indicator for all global growth or slow down. it is bringing it to europe. look at what the ecb is doing. you got a huge amount of easing and more to come. you take -- matt: do you buy the idea that the brexit is slowing the economy that much at all? nicholas: it has some impact, but the bigger factors are the structural inflation -- growth and inflation factors. brexit as uncertainty but the reality is the economy was slowing way before brexit was an issue. caroline: matt, i will take it. nicholas gartside is staying with us.

brexit debate could much more after the break. five minutes time here to the overlook of the market, but you futures up .3%. ♪

caroline: good morning, and welcome to "on the move." we are moments away from the start of european trading. matt miller has our morning brief in berlin. is jobsod morning, it day in the usa. the estimate is now for 160,000 new positions in the world's largest economy. how will the data drive rate expectations? and, federal uncertainty, brexit a big concern for several officials at the fed, but the referenda matter more than payroll to a june hike? opec, oil is unfazed

at the vienna meeting ends with a whimper. opec try to find its footing newude's -- in crude's world. caroline: it looks like it will be a green day, with a some risk when it came to asian trading s&p 500 closed at a seven month high. a great function if you want to see what is moving across asset classes. i dry your attention to the far right, never linens -- netherlands opening up higher. sweden, belgian, visit a completely flat. let's wait as the dax gets a move on. jra: it looks like we have green across the board. as you say, after u.s. stocks in a high, the s&p 500 above 2100.

in europe, it is pretty positive. energy stocks leading the gains. we are seeing crude rally today. brent back up over $50 a barrel. let's take a look at how the u.k. 10 year yield is doing. looks like we are at 134 on two yield, just moving up basis points is what it looks like at the moment. let's see how stocks are opening. i'm looking at bb fp first. it's managers are clamped the light about the size of the 2012 gulf of mexico spill. this removes the company's last major overhang from the disaster. we are expecting bp to move a little higher on that for some

's hotelaccor, china group. according to reports, it wants we aret its stake to 29% seeing accor move higher on that. this is prettyr, much unchanged. but people say it has secured about $63 billion in financing from five banks for its proposed takeover of monsanto. rejected its bid, the question now is it going to come back with another, most likely yes? but what could that be? open. flat at the matt: expect interest rates to remain low, that is the message from ecb's mario draghi.

that could continuing to march of next year, leon. >> based on regular economics, we decided to keep the key ecb interest rates unchanged. we continue to expect them to remain, at present, or lower levels for an extended period of the horizonll past of our net asset purchases. garoline: now, let's dif bit more.cb a little we surprised by the lack of inflation adjustments? many felt it would be pushed out for the longest time. look at inflation, let's face it, it is dead. there is an absence of inflation. what we heard it was forward to guidance. they will keep doing qe, and rates would remain low beyond that timeframe. as you look at it, the ecb has one lens, that is inflation.

they want inflation just beneath 2%. at the moment, it is nowhere near that. on the forecast, it is nowhere near. matt: were you surprised at that? in 2018 was the previous forecast, that remained unchanged even now we have seen some of the numbers in the core, germany specifically, rise. other member said if up the measures that they have the work already would increase inflation. nicholas: does this tug-of-war with inflation, isn't there? the reality is the increase in commodity prices will push up headline inflation, on the other side, what you have is core inflation going down across the euro zone. the net effect of that is probably to keep inflation unchanged on their projections for the other impact is lack of

wage inflation in the eurozone with levels of unemployment being so high. matt: is that going to come back? what brings that back? these are vital aspect of an economy. thatlas: the only thing does that is economic growth. that is the issue still when you look at the ecb. zone economy, that in terms of form projections of growth, simply aren't strong enough. the message is that the ecb will be accommodative, probably for much longer than most people think. caroline: let's play assets then, where should replace our money? live talk about the corporate sector doing particularly well with bond buying. will people be searching out the riskier assets because guilty yield will remain in negative territory? nicholas:they --

european high-yield looks like a steel. -- steal. is?line: it pretty much, as a market is pretty diversified. bhs?ine: the u.k. just went under, are you worried about defaults? nicholas: they didn't have high-yield bonds, but across the euro zone there was more company upgrade relative to company downgrade. you have pretty good indicators of corporate health. you have an attractive yield, your of credit quality that is generally improving, they look attractive. caroline: indeed, the process is working. is the ecb action to getting cash into the hands of the corporate -- forget about the fx rates for now -- that is starting to pay off?

these companies have access to capital when needed? but it is slow. it is going up, it's going up from a low base in the pace of increase is still sluggish. that takes time to heal. this is a long process. dominated of a cycle by debt, ethics and long time to get out of that. caroline: now is the time to perhaps it raise your risk appetite and get into high-yield. always great to have you on the show. still staying with us, but up next goldman sachs says capital outflows from china could lead to a corp. -- global selloff. ♪

caroline: welcome back to "on the move," a gray day in the city of london. let's check in with the rest of the markets. the stoxx 600 up this morning, a little bit of conscious ahead of the oil not -- u.s. non-payroll industry basis. most of the industry groups in the green come oil and gas up by more than a percentage point. let's dig into the individual movers. beinge upside, rwe upgraded by merrill lynch and

this is the first tablets and earnings per share in four years for this utility. the hotel company in france up on the back of the news that chinese companies could be boosting its holdings. a u.k. retailer mnf being downgraded today. but now let's go for the bloomberg first word. bonds surged as shareholders replenish its capital. the securities are going to the biggest one-day gain since they were sold in 2009. 2003 followinge the announcement. the singapore listed company was which lost its ceo said the chairman and the founder intended to go with it -- within a year. crucial jobs numbers out of the

u.s. earlier. nonfarm payrolls could rise by 150,000 in may, at is a marked slowdown from last year's average monthly growth of around 230,000. the data is released at 1:30 p.m. u.k. time in bloomberg customers can follow that on top post-up, chum says hillary clinton should be sent to jail for her use of a private e-mail server while secretary of state. she said she was guilty -- he said she was guilty. hillary clinton get a blistering critique of trump on foreign policy saying he was unfit to be president. is on the second-highest alert level is the biggest floods more than 30 years that the french capital. the louve busy him will shut its doors today, the flooding is disrupting travel on motorways and some train lines.

downpours are forecast to drop the weekend across a band of central europe from france to the ukraine. global news 24 hours a day powered by our 2400 journalists in more than 150 news peers around the world -- news bureaus are on the world. get now to the chart of the hour. is focusing onrt china, showing what is happening with the shanghai composite index because chinese stocks headed for their first weekly gain in almost two months. those of the bars if we can bring that up, if you look at the line coming were seeing the yuan against the dollar. the yuan has been falling against the dollar, and is poised for a fifth the weekly decline that was the longest streak since december. a five year low against the dollar for celeste week, goldman sachs said that the end of a temporary sweet spot for china enjoyed with its

exchange rate meaning strength versus the dollar, weakness against trading partners, the spurf that was going to capital outflows. we shift to a negative view of the yuan, you can see on the chart there. what goldman sachs is saying is after the pboc guides the yuan lower, the risk is that this reignites capital flight in the same manner that it did in august, and around the turn of the year. fascinating trends, we have seen a lot of money pushing into the hong kong areas instead tried to get out of mainland china, worried about this flight of capital. much of a destabilizing effect will china continue to have? is volatility in the rearview mirror? nicholas: i think the key phrase was "guided lower." they are likely to be guided,

and managed, but the key is when chinese currency enters the imf's, the reserve currency at the end of september. so, there will be brought stability as we approach in that. : i wanted to just bring in a pretty cool functionally bloomberg that i used to track etf flows. shows you etf flows in and out of different regions. over the last three months, united states is at the strongest inflows for etf's, china among the biggest losers for outflows. the eurozone and japan and germany really beat it. function,nteresting you can adjust the time, and the way the flows are ordered. it shows you the people are running for cover, doesn't it? people are looking for the safety of a less volatile area.

nicholas: it does very much. there are two reasons for that post of the first is, the dollar is that safe haven and probably always will be for the foreseeable future. the second is that the dollar-based assets are very attractively yielded. in the government bond world, take every government bond in the world and rank them from high-yield to low yield, 85% yield less than a 10 year u.s. treasury. u.s. treasury and the world we live in is a high-yield in assets. caroline: what about the world of the emerging markets? puts china to one side, it's a time to be bracing yourself for these other emerging market credit plays? or, if it's still too soon with so much fx volatility? the dollar denominated bonds have lots to do. to millie attractively valued corporates and country. caroline: can you name some? nicholas: look at mexico, for

instance in terms of dollar denominated debt, some of the asian countries, they look really attractive in terms of the extra yield you get relative to u.s. treasury. when you look on the local side, it is an fx story. the risk there's of the dollar is a little stronger. is toughollar strong in them if they owe money u.s. dollars. there are guys here paying mortgages in the u.s. and every time the euro sinks it is like a dagger to their heart. we want to see if we going to mortgage bond securities at another occasion post-up give us a sense of where -- is it all about u.s. corporate debt as well? if you are thinking in the pickup in u.s. assets? is the sovereign area the safest

for what the yield is? nicholas: it depends on your starting point as an investor. if you want to have safe assets, u.s. treasuries are a real standout when you look globally in terms of the yield they offer and liquidity the offer. those are inclined to take some more risk against the corporate market. when you look at that market spreads a significantly higher than the euro zone, yields a significantly higher than the euro zone, the market is a fair bit of issuance. you have a liquid market of their. a lot of flow will probably continue to go into those dollar-based assets. demande: perhaps dollar will drive up demand and keep on hedging this. thank you very much indeed. to spot thatchart emerging market debate. -- couldsouth africa it be cuts to junk today?

ahead of the decision we speak to the finance minister. ♪

matt: let's get a look at how markets are trading him in europe. we have gains across the board with the broader stoxx 600 up about one point.

42, the dax and the cac not gaining quite as much. caroline? focus in on that story in south africa, facing the prospect of being cut to junk today. a downgrade would place its credit worthiness below investment grade for the first time in 16 years. he want to get a check in -- credit man.ith a i was speaking earlier to robin gordon, the finance minister thinks this in june heard all is over and he managed to keep moody's at bay. he things s&p will be ok. are you interested in south africa? do you think this is a longer-term worry? at south when we look

africa, a downgrade would not surprise the markets. when you look of the economic fundamentals, south africa has a twin deficit. it is a current account deficit, and the budget deficit, and .rowth is pretty sluggish a downgrade is at some point probably factored into the market and wouldn't alarm market. we member also, all of these things are relative. when you look at all the emerging markets, they all suffer from similar issues at the moment which can be encapsulated in low growth. that is the challenge they all have. south africa is no different. matt: look at the south african see a bigthe rand, i climb over the last 52 weeks, about 25%. is that a problem for their exporters? you can check out ectr, which is a great way to visualize trade. at the south africa in the drop-down box, their biggest trading partner here is china,

$32 billion of global trade. is the currency here a problem for them? level, iton one should help in terms of exports, the real challenge with that is the weakness in the currency has sucked inflation in. when you look at south africa, it is lowish growth and quite high inflation. of course, that if it persists, can become a very tricky cocktail. matt: what happens to this economy? frankly, it is not very big and seems to be collapsing. what happens when south africa's financial hub has its economy totally fall apart? nicholas: it is the similar challenge with these emerging markets, it comes down to the need to reform. when you look at virtually every emerging market globally, that is what they all have to do. they have to do some hard

reforms in terms of labor markets, and terms of liberalizing economies. thingsely, those are the that drive longer-term growth. but there the hardest things to do not just for emerging markets but in dna economy. -- in fact any economy. caroline: how do you factor that in? going from the dollar denominated debt, where do you advise your clients. political risk and it's that factor. the political risk comes in and isthrough that lens, reflected in a wider credit spread. typically, these days it is the currencies that take a lot of the strain. that is one of the big shifts in emerging markets from the late 90's. they now have floating exchange rates, they have undeveloped local bond markets.

the currency,ough but political risk is everywhere. the show is but dominated by brexit. or by spanish elections, then dominated by u.s. elections, political risk is pervasive everywhere, not just emerging markets. caroline: thank you very much, it is the wonderful having you with us on the show throughout. still miss important conversation to the federal reserve president charles evans speaking a political risk. his life here in london at around 10: 10:00 a.m. u.k. time. up next, digging into that key political risk for the agenda in june. we will talk all the politics of the markets, the polls that you need to know. that is coming up next. the ftse 100 currently trading up, we have an oil and gas rally.

it is your outperform or for the day. keep a close eye on that and the pound. the worst-performing major currency this week. ♪

theline: welcome to bloomberg brexit debate. for the next 30 minutes we will be covering the latest news market action and politics around prettied up coming year a friend and, let's get out to nejra with the big brexit storage ribbon watching. denieddavid cameron has he is scaremongering the dangers of a brexit during a question and answer session the prime minister warned the u.k. would face a decade of uncertainty having to negotiate exit and trade agreement if it left the eu. a a referendum

whether or not we should stay in this organization which is good for the economy and strengthens britain's role in the world for stop i'm not sitting if one minute saying this organization is perfect. i wouldn't ofhat, been a renegotiation which got us out of that and set targets for burden reduction and safeguarded a parent to loop never have to bear the euro zone countries. eu campaigner says he is bullish for british business in the event of a brexit. he spoke to bloomberg tv. 5.2 billion businesses, and hardly of them trade with the eu. but they're bound up with the regulation of what comes and is called the single market, but it is a protectionist customs union. as for as international trade is concerned, we will be free to strike our own deals with the rest of the world. there will be more free trade and that is within it, i am bullish for british business. angelagerman chancellor

merkel has made her strongest intervention yet the brexit debate. she warned the u.k. would be isolated and lose influence if it folks to feed the european union. don't get me wrong, this is for the people of great britain to decide. we can only say we believe that this is something that would serve british interests in particular much better. nejra: that is the brexit news for this week. caroline: thank you very much. than talk markets -- less three weeks before britain vote on its membership. the equity investors aren't much worried about the outcome than their trading partners. and ader joins us now, global strategist always great to have you on. let's dig in, first of all to a great story got on bloomberg today, it is a chart showing how volatility is being shown through fx through the town.

>> what we see in the chart is volatilities. this shows the volatility in the ftse 100 index is actually at the lowest point ever relative to volatility in the pound according to data going back to 2008. that it's interesting, we see that as we hit three weeks before the referendum equities are calm relative to the pound. it is interesting, and someone would expect there to be some kind of volatility, and there is, but when you compare it to the pound it is really kind of flat. caroline: do you agree? matt: that is what they wanted to ask how much of it is a currency story? how does it compare to your world, the fx world? >> sterling's were a volatile, once you get that to you look at going back they have

spiked up to levels that are historically incredibly high. there is an enormous demand of uncertainty as businesses want to hedge outcomes. people are paying more for sterling dollar, the downside protection against the fallen sterling they are for the upside. this is definitely a volatility and uncertainty story more than anything to do with the eventual outcome. by contrast, the equity story tell you more than anything else the british companies in the ftse 100 are all big international and multinational they have more to do with the rest of the world and they do the u.k. economy at this stage. caroline: rather unfair to use the ftse 100. at the 5250,e look that is not been as volatile. 250, and it is not been

as volatile. the ftse 100 is not the entire story. other trendsn affecting equities. there is the rising commodity prices which have given miners a boost. the fact that a week sterling is good for these u.k. exporters, than the fact that investors are convinced that brexit is not going to happen. people come in the market is a brexitpricing in right now. it is in a wait and see mode. it will perhaps we may like this until we get the vote. caroline: the ftse 100 is a part of it, but not the whole story because we have other index is also being not as volatile. fx market is the pricing in a brexit right now? traders have to be responsible and hedge a certain amount of risk, but are they chauffeuring

the dead even -- showing the dead even tie we are seeing? monitor policy between the u.s. and the united states is threatening to diverge again, i don't think we'll get a rate hike in this economic cycle in the u.k., in the eu or out of the eu, that is a contrast with the fed. certainly, sterling is the weakest major g10 currency this year. fallen on the back of a weak economy, and weak economic policy. yes, uncertainty is bad. i would also add, there's a nice correlation between fx volatility in the pound. high vol is bad for the sterling. once i see the chart, it will not make me happy about the pound. matt: thanks for a much.

-- very much. meanwhile, it is jobs they today in the usa, with the mandated terms of employment and prices is in the one thing to central bank is thinking about? daniel says the brexit vote is also a big factor. brexit, there is a lot of uncertainty. there is uncertainty about the results, obviously, but there is uncertainty even as to what of a happen in the case remain vote in markets. under those circumstances it is a factor i would consider. kit, wht's get back to at do you think about the fed worrying about the brexit? they take so much flak forwarding about the chinese currency?

can they brought not their mandate so far beyond unemployment and inflation? fed watches markets more closely than any other fed i can remember. markets watch the fed, and the fed watches the markets. we had a meeting in july just after the eu vote, and markets have chosen to price a better and 50% chance of a move by july. a less than 50% chance in june. i guess we said if they announce at the june meeting they will have a press conference after the july meeting, who will just say that decided to wait one month to see how this vote to goes. anything else that might happen in the world. we are now used to the fed watching markets. caroline: it is interesting to throw europe into this, the center of europe which is berlin at the moment because the euro

thing really affected by the volatility we've seen with the brexit debate. how much a expecting volatility to calm? it seemed to be an initial knee-jerk reaction. policing sentiment change for the euro? kit: yeah, i think there is no doubt that if someone wants to argue if you listen to mr. cameron and say leaving the eu would be better for the u.k. economy, the u.k. leaving the eu would be bad for the european economy. is whyural conclusion europeans feel the need to be involved in the debate of a point. debate is the uncertainty in the economy is slowing. that is done now i don't agree get that back. caroline: do you agree with our that hasguest saying been slowing for 18 months? kit: peak growth is sometime

behind us. you can see that feeding through in terms of the currency. that is important. in that sense, that vote isn't important. when i wake up in three weeks time and find a what the result was, the economy is still slowing. it is not slow, but i think that is a difference to europe, which for want of a better description is trundling along. caroline: kit is staying with us, up next the former vice president of the european inmission on europe's future the event of a brexit. you will join us live. will be speaking to in the next couple of hours. charles evans taking the stage in london to weigh-in on the u.s. data on brexit. ♪

."tt: this is "on the move will listening to fed president charles evans speaking right now in london. he is talking about divergence, talking about monetary policy. if you want to check it out on the terminally can go to live ,go. and get more from charles evans.

final three weeks of campaigning have shown opinion vells for support of the lea campaign catching up to those of the remain campaign. right now, we speak with our guest here in berlin ahead of the brexit vote. formerlye weeks out, on the european commission for the expansion of the euro area, thank you so much for joining us. we will do this in english. let me ask, first of all, from a german for spec if, from the perspective of this country because angela merkel care last night for the first time in strong support of the remain camp, what would a brexit actually mean? >> germany would be a victim of the brexit politically and economically. politically, germany would be isolated in the remaining eu if,

would survive the brexit which in my view is not 100% clear. you don't think the european union would stay intact britain voted to leave? guenther: it is not clear. everybody is now aware that the so-called brexit could trigger a whole chain of similar things in other countries. i could name some countries where there are movements bubbling up. matt: please do. guenther: the netherlands, poland, the czech republic, i'm talking about austria, i can make the list longer, but this is a risk enough. what would be the followed for germany? political isolation, it would be the only remaining big country

in the european union that stands for a market taste economic policy -- market-based economic policy. the only country that stands for efficient spending, for instance. and germany would be forced to e.cept a visible leading hol everyone says germany must take the lead, but the reality nobody would like to see germany be in the lead. matt: clearly, the most part of a europe. why hasn't angela merkel, previously more vocally in favor? she supports the remain camp but hasn't really been campaigning for it? have criticized her already. the whole problem was terribly underestimated in berlin. when it started, i remember a

reaction from a leading member of this government -- the governing party -- a saying if they want to let them go, let them. they are a nuisance anyway, and if we get rid of them we have free ride to organize. that nobodyhere is wants a federal europe. right, we have party spring up all over the place that are anti-european union even here in germany. : exactly, so that was underestimated. plan,what is merkel's then? clearly, she want burton to remain in the european union. a you think she has contingency plan a case of an exit? no, she does not have, the european council does not have, everybody is now theing at the date of

referendum. hopebody is hoping past that we might, at the end of the day, it might not happen. and you and i both know that, and everybody watching knows it, it is not unlikely that it can happen. it is not unlikely. the direction cannot be continuing the business like usual. nothing will be the same. even if britain doesn't want to remain -- does vote to remain, can we continue to hope for strengthen the european union? cab thi -- can this experiment in peace continue to remain strong? that,er: my view is regardless of whether we have a

majority, things must change after the date. like this.ontinue we cannot continue business like usual. it is a big mistake of the european leaders that it is totally disconnected the long that mr. cameron gave it his speech. some extremely important part and correct part in it seeing what we need to change in the european union, flexibility, subsidy, transparency. many things that can be done without changing the treaty. it did not happen. i am really afraid that the big promises mr. cameron got from his peers, these will not be sufficient to convince skeptical british voters. -- there youven't

have it from the former vice president responsible for the european enlargement. clearly this is a vital and important debate. caroline: great interview, up next, the u.k. prime minister denies scaremongering over brexit and answers questions over the verdict of his argument. ♪

>> i am delighted we are this referendum, i will carry out the will of the british people. my job as the prime minister is to warn about the potential dangers. caroline: u.k. prime minister david cameron talking on brexit last night. i'm not so sure if it is really what he wished, it's getting close to the brink. what are they focused on in this debate? was jobs,'s message jobs, jobs, jobs, jobs, with a side order of everything if we leave. immigration, about from the audience about immigration, there was a lot of accusations of scaremongering at him.

his relentless return was to jobs. at risk if we leave the european union. it was summed up in his closing were march which was tomorrow morning, look at children in the eye and think the you want to roll the dice on their future? that is the prime minister's message. caroline: you have rather helplessly rolling of such, give us a sense in the polls. have they changed at all? a a lot of things had in the pound earlier this week on we had two polls that showed leave ahead. at this is really hard to poll on. last year we had a polling disaster. much of the problems haven't been fixed. talking to people inside the remained camped, there is a degree of anxiety that we just don't know. we don't know whether it is tight, or wide.

they are worried that their economic messages not cutting through in the way that they had hoped it would. caroline: polls, how much does the fx market look at this? polls, so chart the yes, we do this. the challenge has been that in a have movedolls around in a position where most of the time remain has been ahead by not very much. we understand the uncertainty around the polls. havethe bondmakers continued to suggest they think it is a pretty clear outcome with the remain more likely if you want to go that with that. be trying to work out whether that is giving me the right idea, or not. in have seen a pick up

nervousness. that is reflected in another spike in volatility in the fx market. onoline: thank you for being from bloomberg news, matt, some breaking data? in germany coming up 55.2, growth of their. indeed, decent growth in the services pmi, we already had the earlieruring pmi out this week. but in lime with a survey will looking for 55.2 and we got it. later this morning, don't miss the conversation with chicago federal reserve president charles evans live in london at 10:00 a.m. u.k. time. we saw him speak just moments ago about monetary policy and divergence of took forget, at 1:30, that the u.s. jobs number. ♪

mark: it is job stay in the united states. fed officials talked up a midyear hike. will today's numbers keep them on course? the vienna meeting ends with a whimper. opec tries to find its footing in crude's new world. a leave vote could be the deciding factor in a june hike. chancellor osborne will warn that it threatens 400,000 jobs. welcome to "the pulse