get america's fastest internet. only from xfinity. guy: welcome to "on the move." we are counting you down to the european open. i'm guy johnson alongside matt miller. sterling stumbles. a survey suggests the brexit camp "leave" accrues several points. a jarring jobs report. the weakest payrolls number in almost six years leaves fed rate expectations and the dollar on the floor. can yellen rebuild credibility for a summer hike?

and jack lew says china needs better monetary policy. is washington the best place to teach communications 101? we will hear exclusively from the u.s. treasurey secretary. matt, we are less than half an hour away from the equity market open. let's take a look at where we think the european space will open up this morning. the ftse 100 is up by .4%. euro stocks a little lower this morning. is going to be interesting to see what the miners do on the back of what is happening with the dollar. the miners are up in australia and could be up in london as well. matt: we thought a lot more weakness earlier in the trade. the nikkei right now is down by .3%. the yen had gained a ton of

strength, as did the euro and a most any currency against the dollar on friday. 106.96, a pretty shocking number two c therefore the yen. the pound though, losing ground. those brexit polls showing they "leave" camp a stronger than the "remain" camp. rent is not a little bit below $50, but hovering around $49.99 a barrel. now let's get to the bloomberg first world news. david: thanks, matt. china must improve monetary policy communication as it takes increasinglyan large role in t economy. so says jack lew. >> i think when you talk to the economic policy makers, there is no question that they understand

what they need to do in terms of having market forces become much more determinative of resource allocation, in terms of opening areas of competition internationally, as well as domestically, in terms of excess capacity. i think the question and the reason the jury is out,'s divisions are not always made by economic policy advisers. wond: hillary clinton has puerto rico's democratic party. that leaves her a few delegates short of clinching the nomination, which she could achieve by tomorrow when voters go to polls in california, new jersey, montana, north dakota, south dakota, and new mexico. five star movement is ahead in the push to become rome's female mayor. she is leaving her closest rival. do 19. will fight on a victory would have the euro

skeptics the biggest win to date. 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? guy: dave, thank you. let's get back to the stories we have been focusing on. the pound has tumbled to a three-week low. this is after polls suggest the brexit camp has several points over the "remain" camp. volatility has continued to spike. to take you to the wcrs function on the bloomberg. these are the major currencies. there is not a major currency that is down against the british pound right now. even whith what is happened with the dollar, the pound is losing out against everything. the major currencies, the u.s. dollar. a fairly dixon move against the euro as well.

the market is nervous. should it be? let's welcome our guest. the market is clearly nervous about the moves over the last few days. the data we have seen from polls, it has not been the greatest. the market is hanging off of every single twist and turn. is this going to get more volatile? >> expect more volatility as we approach june 23. i never pay much attention to polls for obvious reasons. guy: the market is, though. >> i am not sure it is. if you look at the sterling versus the dollar, it is trading at fair value. you have ttp growth that 2.3% the market is telling you the brexit is a firm "in" vote. matt: what do you think would "leave,"f we did get a lea

though? would markets tank? >> i do think that would happen, but let's be clear. we are not expecting a "leave" vote. if it where to happen, you would expect the ftse 100to decline quite significantly. remember, europe is down 3% to 4% year-to-date. you can expect europe to trade down as well. of course, we would expect sterling weakness. 135 would not be realistic, given the circumstances. we do not think this will happen and we don't think the market thanks this will be happening either. guy: this is the one-month risk reversal on sterling. the mark at the moment is pyaing much more for downside protection. oom was here the other

day and says that is logical. the bigger move, as you just laid youout, you are going to gt a much bigger pay on a "leave." what i am hearing from you is you don't think that would happen. should we be taking out that kind of protection? >> we would not be taking up that kind of protection, as we don't think it is relevant. a number of institutions have to, but the reality of the situation is the markets and we are not expecting a brexit. i would like to look at what happens to the u.k. should a "leave" vote become a reality. look at what will happen to the u.k. real estate market. look at the impact that will have on trade and employment with eu members. there is no economic argument supporting leaving. guy: absolutely and you sound

like a guy who works within the financial community. the problem with the argument is the rest of the country is not lessening to the argument. you saw the bee sting david cameron got from the general public. the general public is annoyed, and i am being very lenient in saying that. mabye we in the financial community are missing a trick here. >> i actually think, sense will prevail and everybody will look at what is going on with of the u.k. economy and the shape it is in and the implications of leaving. but i am worried that the whole argument becomes an immigration argument. guy: exactly, and an emotional one at that. >> exactly. maybe it is a bit like owning an apple watch. nobody ever goes out to purchase the first apple watch when it

comes out, but in the second, third, or fourth generation it becomes more obvious. votesthree or forur down the road it could be a more obvious conversation to have. yogi, assuming you are right and we do see a vote to remain. are their investment that aren't obvious that we should be looking at right now that will profit from that? >> i think anything that will benefit from sterling strength will actually be a good place to actually be. i think it is hard to turn around and say generally, specifically there is one sector that will benefit. i think a lot of decisions have been put on hold in the run-up to june 23. i think the real estate market has been put on hold. i actually think everything will be well post june 23. guy: thank you very much. the ceo of hasseum management

will stay with us. up next, the worst u.s. jobs data drops the dollar and fed expectations. janet yellen speaks later today. rebuild confidence when it comes to a summer hike? ♪

guy: welcome. 10:42 in london. let's get you caught up with

what you need to know with the bloomberg business flash. david: nestle is expanding its online offerings in china. he food company have them build 67 products. these sole dealer of bentley is closer to an the initial offering the has been in the works since 2000. the ceo spoke exclusively to bloomberg tv. 9 >> we are close, but we spoke about this a few weeks ago. is updatee need to do all of the information. some of the products that we had are not finished. today, it is finished and ready. that will be a plus for investors, before they were

looking at incomplete and now they are looking at the finished product generating revenue. the singapore listed commodities trader has a suffered its biggest fall in four years. raiseis moving to half $1 billion. powerad of gas and trading is also leaving. the chairman is said to step down in a year. the head of equities at the bank of america died over the weeke nd. the company says the death of the mumbai based managing director is a huge loss to the farmirm, as well as to all of us him.oved businessn a

trip to hong kong. matt: it was the worst jobs are poor and almost achesix years. at 30,000.l came in the number crushed expectations for a summer rate hike forrom the fed as well. we were looking at a more than 50% chance in july, but the has fallen to 27%. umining us is the ceo of hasse asset management. i keep trying to figure out why this happened. even if you take out the number of strikers from verizon, even if you consider a multiplier of two or three times that, it does not add up. on the plus side, the unemployment rate fell to 4.7%.

what do you see from the u.s. jobs picture? >> i don't think it was a massive surprise. the magnitude of the miss was very extreme and quite a surprise. the reality of a situation is we had weak earnings numbers with revenues growth down to present and earnings growth down 7%. it is back to have had an impact on unemployment. the unemployment rate did fall, and that was one of the silver linings from the data. i was surprised, and maybe you did not pay as much attention to this, but by the revisions to the earlier number of those well, going back to not just by going backer, previously as well. i don't think it was a massive surprise. it is now going to fall in line with what we expect with rate hikes, which is none this year. and then you have probability numbers that come out at 59% by the end of the year.

that we think it is incredibly unlikely to the rate hikes in the u.s. if they do take place, they will take place for political reasons in this environment. guy: the central bank's tendency to look through numbers like this. and we has been yellen get slightly more hawkish. a numberu after like that come back and continue a narrative? can you? >> jigger got in completely wrong and she needs to put her hand up and say, we did not see the economic picture deteriorating. synonymous is quite with the picture we predicted. i think many people will be listening her from a market perspective. matt: look, that does nothing 100% fair. she has two mandates, right? she has to look at the jobless rate, which is at 4.7%. a rate a european economy would

salivate over. and she has to look at inflation. they are getting closer to 2%. by now we are looking at a core cpi that the ecb does not even forecast until 2018, 1.6%. and we have wage inflation at 1.2%. the picture is not so dire, sis it? buto, it is not so dire, it is not a reason to raise rates. the reality of the situation is, do you really need to increase rates? there is no inflation concern here. economically it makes no sense and the jobs data does not support it either. guy: we are making a big deal of yellen speaking later today.

is it really important? does the market really care at all what the fed says at this stage? i suppose the chinese are looking at jack lew's comments with a smirk on their face. >> i think the market will be intrigued by what yellen has to say. and you do have to pay attention to what yellen does say and any interest rate about interest-rate policy. but whether it is credible and whether people will make investment decisions based on the, i think that is up for debate. guy: let's talk about what we are going to get later on. we will have full coverage, of course, of janet yellen's comments. 5:30 this evening in philadelphia. if you want to track it on the terminal, you can watch it. we will be live blogging that event.

galsreally good guys and speaking on that top live. up next, we are moments away from the market open. a lovely day in london. we will look at the potential corporate movers, including the miners in london. they are up big in australia, which has sent metals prices sharply higher. we will talk about that story when we come back. ♪

matt: we are looking at a live shot of the brandenburg gate here. 8:52 on theon and continent. let me give you some more disappointing economic numbers to go with your sunday morning. factory numbers came in in germany at a drop of 2% month over month. we were looking at a drop of 0.5%. the revision of the previous number was a big jump from 2.6% in the positive territory. the big question is, why this big drop in factory numbers here in germany, especially after we had such strong numbers on the jobs front? tiem low since the

for unification. then we actually have inflation here in germany. we are no longer looking at deflationary concerns here. guy: i don't know, we will get more details on that data. we are moments away from the market open. let's talk a little bit about how we think that will go. the miners are up a very strongly in australia. not some of the biggest names, but you have most of the resource stocks looking pretty solid. all trading on the upside this morning and some fairly decent rates of return. the dollar is obviously, a big factor in this. it is interesting, the london market at this stage is one of the few in europe that has been called higher. i wonder if that is affected by the mining stocks. you can get the fair value line on the bloomberg. london is called up about .4%.

the cac is down by .3%. the dax look like it will open fairly flat, but london looks like it will open up a little higher. i wonder if there is a commodity affect that will be felt a little later on. , if you believe what you say, you must sleep at the dollar will shrink from here and that will be good for the metals? >> completely. i think it is good for emerging markets and it is good all round. guy: where specifically? >> we have gone very generally, looking at energy related ets. we have looked at mining related ets. i think they are both good spaces. we don't want to state specifics, but it is a very smart strategy to follow. also, we have seen all trading higher as the dollar weakens. guy: thanks, very much indeed.

is going to dewarn stay with us. stay with us for the kickoff in london and in berlin and across the continent. ♪

guy: good morning. you are watching "on the move." i'm guy johnson alongside matt miller. matt has your morning bief. matt: sterling stumbles. a fresh survey suggests the brexit camp leaves by several points. and a jarring jobs report. the weakest payrolls number in almost six years leaves fed great expectations and the dollar rate on the floor. plus, jack lew says china needs better monetary policy signals. we will hear exclusively from

the u.s. treasury secretary. guy? guy: thank you, matt. european markets are pushing a little lower this morning on the equity front. let's see how the miners affect the london trade right now. the ftse future pointing a little bit higher. the dax is fairly flat. the continental markets run from generally flat to slightly negative. we are going into the open. france and the ftse 100 just beginning to open up a little bit. the ftse is up by .2%. cac down by .3%. so, it looks like we are getting a positive move in london. let's talk about the details about what is happening here with caroline hyde. caroline: let's dig into the industry movers. you called it, it is the miners. we saw them move over in asian

trading. we have seen materials lead the charge. this is your imap function. this digs into the industry sectors. energy is looking pretty flat, though we have seen a little pop in the oil prices. financials, just eroding a little bit of value this morning, as is the i.t. sector. overall, we have seen money move into the material this morning. eye on what is happening to u.k. bond yields. remember, this was a sudden fall we saw when we saw u.s. jobs data coming in at a very poor 38,000. there is no sliver lining to these jobs numbers. they are very bad in the united states and this is what drove money into the haven of bonds. they are coming down again today, down by two or three basis points.

let's look at what is happening with global bond yields. this is your function for the bloomberg global developed sovereign bond index. we are currently seeing about 1.62% on your average global bond yield of the moment. you have australia on record lows for their 10 year yield. you have other areas of significant weakness. we have seen japan slide further into negative territory, very close to their record low as well. there is a search for safety as the u.s. jobs data looks bad and the brexit debate seems to be investormany a base. lastly, i have to show you also a little mice area in terms of the pound. -- a little nice area in terms of the pound. lastly keep an eye on easyjet and rio tino. it is up by 4% as miners rally.

guy: thank you, caroline. to you like european stocks? u.s. stocks look very expensive right now, don't they? >> u.s. stocks are very expensive right now. at least in europe, they are significantly lower. we obviously have a week euro. guy: tell me where the earnings growth is coming from, though? >> it's hard to say. i think a lot of the market is trading around the u.s. dollar. eally, it seems to be a market driven by the u.s. dollar. as the u.s. dollar weakened, it will benefit commodities, emerging markets and it could help stimulate growth. the issue of course, is currency wars. everybody wants a weak currency because it helps their economy and help boost earnings. weak dollar doesn't

help any companies here trying to export to the u.s. are trying to get earnings back from dollar markets, does it? >> really, when you look at the euro, we would like to see a weak euro. in the u.k., you would like to see a weaker sterling. if the dollar does weaken, it is not great for the rest of europe. the point i am trying to make here is the global economy and markets, which were essentially flat here to date, were being driven by a u.s. strength or weakening story, which is driven by what is going on within the u.s. domestic economy and when the next rate hike will take place. it is not being driven by oil, by china. his instability u.s. domestic story driving -- it is the u.s. domestic story driving the market right now.

matt: this was supposed to be my chart of the day, but it want to rip up the script now. this is the bloomberg commodities index here in white. what i have highlighted here is that we have now entered a bull market officially. gain froms a 20% below in january. give entered -- we have entered a bull market. any weakness helps to boost commodities. will that continue as a trend going forward? >> yes, i do. remember, we are in the camp that does not expect the u.s. interest rate hike this year. it has been delayed and delayed, would suggests further weakness going forward. remember, the dollar is significantly undervalued. the euro-dollar should be around

1.31, that we are hovering around the 1.13 level. this is what will drive things forward from ours perspective. -- from our perspective. you will also see a whole range of things happening within emerging markets and within commodities. we are of the view that this is good news for global equities per se. what is your portfolio going to look like at the end of the year if the fed raises rates twice? >> we are not massively overexposed to global equities. they will trade higher by the end of the year. but you can adjust portfolios if there is an interest rate hike, heaven forbid. but from our perspective, we would take advantage. guy: i am just wondering, what is your level of convention? of which, can chase

the dollar trade. >> a solid convention trade, without it out. debts5% of sovereign markets are yielding negative rates. the way to look at this is there are not many places you can put your money at the moment to get some sort of return. so, to balance portfolios that were 50-50 equitiesin and bonds we would be up 60%. guy: up next, the u.s. treasury secretary says the pboc is to be clearer about policy. our reporter is with us and is with the u.s. delegates and will join us from the chinese capital, next. ♪

guy: welcome back. you are watching "on the move." we are positive across the board. thecac is unchanged and stoxx 600 is unchanged. the ftse 100 is outperforming. the dollar is up and the miners are up. there is a sterling factor within this as well. the british pound has been battered. but rio is up quite strongly

about 4%. bhp is trading quite strongly as well. anglo american is trading higher. glencore is up 2.5%. the top of the 600 was dominated this morning by metal stocks. this is the mrr function on your bloomberg. the very clearly, a dollar effect coming through australia into the london market. let's get you caught up with the bloomberg first worldd news. david: thanks, guy. the currently has fallen to a thats polls suggest britain favors leaving the european union. a survey found 45% of voters would it choose to leave. 41% say they would vote remain. the "leave" campaign was shown ahead.

and hillary clinton has won puerto rico's democratic primary. that leaves her just a few delegates short of clinching her party's presidential dominate. she could achieve this tomorrow when voters go to polls california, new jersey, montana, north dakota, south dakota, and new mexico. five star movment candidate is ahead in the push to become rome's first female mayor. projections show she is leading her closest rival. the two will likely have a runoff june 19. a victory there would give the biggest part the to date. 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 . matt? matt: thanks, dave.

china must be more adept a policy communication, or at least so says jack lew. he told bloomberg exclusively that there are question marks over the economic handling within the world's's second-largest economy. >> when you talk to the economic policy makers, there is no question they understand what they need to do in terms of having market forces become much more determinative of resource allocation, in terms of opening areas to competition internationally, as well as domestically, in terms of excess capacity. i think the question and the reason the jury is out, these positions are not always made by economic policy advisers. lew and secretary of state john kerry are in beijing today. david, who is traveling with the them, joins us now. david, talk to me about this

meeting. what is the point of these talks? david: this is the 10th year they have done this. they were formalized at the beginning of the obama administration. it is an excuse for these sides to get together and talk essentially, every year. last year it was i washington, d.c.n and this year it is in beijing. it is interesting, just noting how these there are many went this morning -- how the ceremony when this morning. secretary kerry as secretary lew enumerated things they were hoping to work on. the mentioned excess capacity, and the maritime dispute was something john kerr brought up. bringing a lots of things to the table. what do the chinese want out of this? what are they anticipating that they will see success on? had anyeah, so we unadvertised guest.

the president of china came and spoke optimistically about this partnership. he said there could be a win-win policy. john kerry spoke after him and he enumerated on some of the areas that they had disagreements on. but the u.s. will press for china to do more with overcapacity, better communication, the pboc communicating better, and the government generally just communicating better. and the kurds a manner that has been in the news -- and the currency matter that has been in the news since august, that is something jack lew said he will talk to his counterparts about again and again. guy: it is interesting that we see the u.s. talking to the chinese about clearer communication. we have had a chuckle about this this morning. fed, communication policy? really? someone argue that is in tatters

at this stage. yes, there is some cause for concern as to what is happening with the chinese currency. we went through the idea last week that the fed was going to raise rates. havethe payroll data may made that a moot point for the time being. that people still have grave concerns about this. do you? >> i think it is really interesting listening to jack lew. he really should be putting a mirror in front of janet yellen, rather than talking about the chinese economy. currency depreciation has always been on the table and will continue. the domestic picture is slowly and gradually improving in china. we are concerned about excessive manufacturing and the impact it

is having on the commodities market and obviously, the oversupply of commodities throughout the world. that is something we are focused on at the moment. the reality here is china has not fallen off a cliff. domestically, things are looking ok. the currency is now included within the imf market. investment teams can now mainland china from hong kong and vice versa. they are issuing bonds in europe as well. i say this is net positive globally to everybody. guy: we have seen weak german factory numbers. china has probably played a significant part in that. when you look at what is happening in europe, how much you are investing in is china related. chinese factories should be doing reasonably well. they should be ok right now. german factories, by extension, should not be looking too shabby right now either. >> you know, china suffered, but

they are doing ok right now. the u.s. data gives more substance to the german' numbers. both japan and germany -- japan sneezes, and both of those economies get a cold. it is a very significant investment area for us. . we have significant exposure to china. to 17%kets are down 16% year to date. matt: i have to jump in there. you say valuations are reasonable. the shanghai composite is trading at about 59 times earnings right now. the is a lot more than you do see anywhere else in the developed world. their you tihink valuations are reasonable, because to me they would seem to be so expensive? so, we are quite comfortable

with those sources of valuations. it obviously depends on what index you are looking at across the board, doesn't it? as a general rule, i don't think china is in as bad a shape as everybody believes. the issue for us is how you actually get exposure to cihina. because the etfs are overexposed to financial and to commodities as well. it is hard to get broad-based exposure to china. but we are quite comfortable with the valuations across the board for the main index. matt: we are showing the shanghai composite valuations that just tower above g-10 countries. is there a better way to get exposure to the chinese economy than through its equity markets or through etf? because some people will tell us when we have economists on, that

the equity markets don't reflect what is going on within the chinese economy. >> we have are detached on two economies that have a significant exposure in trading relationship with china. that is japan and germany as well, matt. let's say you can get exposure to both of those jurisdictions and you look at exposure to china as a result. also, getting exposure to broad-based commodities gives you exposure to china. you can also purchase within significant etf's the have exposure in china. much indeed.ery we have another conversation with yogesh dewarn coming up. to kick it off, it is the chart of the hour. matt has only blown through one chart of the hour. we have another one point.

we last saw back in the 1970's. that discussion, next. ♪

matt: welcome back to "on the move." i want to issue first off, an "on the move" a correction for yogesh dewarn.

it turns out he was right and i was wrong regarding the shanghai composite index. there is a ratio at 16. at one point, that had come up but not nearly as high as the number i had seen elsewhere in a news story. so, yoge, my apologies. it looks like you were correct and i was wrong. now, let me run a different chart, which is the chart of the day. it is 1552 on the bloomberg terminal. what this is is, the labor force participation rate in the united states. is it down at the lowest point since 1977 because of disgruntled workers who simply can't find jobs, or is it because of demographics? this is a different look than you typically see. this is the unemployed leaving the workforce. as you can see, we have had huge spikes up -- the one that we reported on on friday was the

biggest spike up we have seen in two years. i have shaded the recession areas here in red. the reason that unemployment number has come down so low, 4.7%, is because so many people are leaving the workforce. yoge, do you think that is because simply because of a demographic issue? people are just getting older and retiring? for the because frustrated workers can't find jobs? >> probably a combination of both, but it is an important chart because it highlights the 4.7% is moreto about capacity. that payroll number was really quite bad and you can't really say the unemployment rate went down to 4.7%, we are actually ok. guy: what is it going to take to get productivity up in the united states? >> i think a weaker dollar will

actually help. guy: that is cheating, isn't it? >> yes and no. it does have an impact on imports and exports, and it does have an impact on how the american consumer is feeling as a result. in a way, it is cheating. opposite,o the exact you get a much stronger currency. the japanese are being forced to make the kind of structural changes. that is what you get. >> that is exactly the same in china and europe as well. i think when you look at the u.s., the things that are really driving and how the u.s. consumer feels there is job security. they want to see some minimum gdp growth. the weaker dollar often helps and feeds into both of those numbers. a stable housing market will also help. guy: great to see you this

morning, yogesh dewarn. joining us from hassium managemen. ♪

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guy: welcome back. "ou are watching "on the move. this is what the picture looks like. london is storming ahead. we could payrolls leads to metal prices going up. let us get all of the details on all of this and go to caroline hyde. caroline: the concern that the leave campaign is all tied up .ith the u.k. referendum of the everys sending down single member of the u.k. homebuilders in the bloomberg

index. eye on the house builders. they are really feeling the pain as we see concern that the leave vote could be gaining steam. the miners, what a pop we are seeing on the back of a weakening u.s. dollar. 38,000 jobs from the u.s. data. up goes rio tinto. leading there charge. look out for hp billiton. lastly, industrials. it used to be part of the carmaker. it is one of the leaders of the pack. currently up almost four percentage points. "buy." sachs says pound has tumbled and

volatility has jumped as a poll shows more britons favoring exiting the union. that thetold bloomberg u.k. remaining in the eu is the right decision. jack lew: the upside is very clear. the people of the u.k. have to make that judgment. we will maintain our special relationship with the u.k. no matter which way they go. as an economic matter, it seems pretty straightforward to me. remaining is the economically stronger place for the you a to b. -- for the u.k. to be. matt: we are joined by harvard professor, niall ferguson. thank you for your time. you have written a piece on how you think historians would view this. 300 living historians have signed a letter supporting the remain camp.

the history of europe you say relies on, or at least the trade history of europe relies on the eu staying intact. niall: i was a skeptic about monetary union and i have been skeptical about many aspects of eu membership. britain's membership in the eu is a good idea, not only economically. the overwhelming majority of economists have said it would be an economic disaster to leave. the historians argument goes beyond economics. inc. about europe's history. and how extraordinarily violent and conflict ridden it has been until recent times. one of the reasons europe is in a more stable place now, is european integration. i think that is why i have come down firmly on the side of remain. i think if the eu starts to

unravel and brexit would start that process, the long-term prospects for europe are quite troubling. matt: on the trade side -- this recent wave of populism that we have experienced, this your inane earning for another reagan or thatcher. this yourresting -- earning for another reagan or thatcher. niall: donald trump is no ronald reagan. brexit take a of different view of the matter from margaret that church art when she was prime minister, she pushed for the single european act that was the most important reform of europe in its history because it created a much more integrated market.

previously, the union had been a protectionist club for agricultural economies. that transportation -- that transformation was very -- a very important contribution from britain. and themoved europe direction of free trade. in the direction of economic integration. more recently, britain has won two important arguments. monetary union. we decided to stay out and that was right. the argument of free movement of people. we did not sign up for schengen. we were smart about that. to leave it when you're winning the arguments, seems really strange. at the ways, we are height of our influence in europe. guy: professor ferguson, let us look back to thursday night and the battering the prime minister received in front of an audience.

ont audience was not focused just the economic arguments. they were firmly not focused on the economic arguments, but rather anything else including immigration to what is happening with the and hs. -- and what is happening with the nhs. the british people are interested in the emotion at the moment. how did it get so off course? i don't think we should read too much into one television show. the polls show there is a substantial part of the public that is euro skeptic and a substantial part of the public that is inclined to remain. it is pretty close. that is the first point. the second point, you are right. the argument has shifted away from economics and into a bunch of other areas, not all directly

related to europe. the more the argument is about immigration, the tougher things get for david cameron. this is one issue that really mobilizes people against euro. supporters have a side to their campaign which is focused on immigration. ele immigration story is a dua story. people coming from other parts of the eu including poland. and there is the other story about people coming from the rest of the world to the u.k.. that goes back a much longer way. i think these issues have been confused with one another. part of the problem for the government between now and the vote on june 23 is to get the subject changed back to economics. it is really important to persuade those attracted to brexit that voting to leave the

eu will have direct, negative consequences were them and their families. the polling right now shows they do not believe that and that seems to me to be a big problem. we have been trying for months to persuade people that this would be an economic blunder. guy: the problem with that argument is that it is easy for the leave camp to say this is project fear. you're trying to scare us into remaining. withseems to be resonating a key constituency right now that is worried about immigration and the jobs. by people left behind globalization. how do you make that argument work if, judging by the polling thus far, the blood are more concerned about immigration and the negative association with that than they are the economics? how would you run the campaign? people thats remind britain has performed much better economically since

entering the eu. accounts fore eu half of britain's exports and imports. more importantly, britain is a heavily reliant on attracting foreign capital to the city of london as the economy as a whole. the uk's current account deficit is 7% of gross domestic product. it is a post war record. the one thing that will freak foreign investors out is the thought that britain is about to leave the eu. that is why you're seeing the action in the currency market. sterling is weakening as the polls tighten. there will be a recession if britain votes to leave the eu. there could be a sterling crisis. that means everything that people in britain want the rest of europe will go up in price by 15% which includes your holidays in sunnier countries. we have to get right back to economic breast tax as we did

two years ago when we were debating scottish independence. two years ago, we convinced the wouldsh citizens that it be a huge leap in the dark to vote for independence. to do it again. we have to patiently explain to people that leaving the eu is not an independence basin area. this in fact would be an exposure of britain's dependence on foreign capital. ferguson, your are going to stay with us fortunately. we are going to take a break here. the eu referendum is not the only big political risk this year. there is the u.s. election in november. larry summers thinks markets are not paying enough attention to the possibility of a donald trump win. we will discuss the u.s. next. ♪

matt: larry summers thinks markets should be more concerned about the outcome of the u.s. election this november. he predicts a protracted within 18to begin months if donald trump is elected president. he writes that mr. crumbs economic nationalism is highly dangerous. he would surely set up the worst trade war since the recession. it is not a shocker that someone

who works so closely with the clintons and the obama's would support hillary against donald trump that what you think about the campaign and the possibility of a win here for someone who was previously laughed off as a reality television star and now seems to have such a strong command of a huge part of the population? niall: you don't need to be a raging democrat to agree with larry summers on this. i do. in whate so many risks donald trump has said. matt: he is very anti-trade. in europee people have trouble understanding what is going on. you have to look at what he is saying. it is an anti-globalization message. he says the problems, a rep -- addressing his angry, white males without college degrees, he says your troubles are due to three things.

one, mexico which is code for immigration. two, in the -- china which is code for free trade. plus wall street. i am sympathetic to .3 that i do not buy the idea that america's troubles are mainly due to immigration and free trade. they have actually been great for the u.s. economy. matt: there doesn't appear to be an education level differentiation. without college degrees -- it doesn't seem to matter very much. until you get to a doctorate or phd level when you look at polling. niall: core demographics. begannald trump bandwagon with those without college degrees and the white, non-hispanic vote. one thing that larry is correct about in his piece is that we are still underestimating this. you have to look at the

prediction market. market still thinks that donald trump has a 1-3 chance of being elected. i think it is much higher than that. i think it will be very close. donald trump has a pretty close to 50-50 chance of winning the election especially since hillary clinton is not a strong and attractive candidate. that is the key point. you have to strip away a lot of the media commentary and get down to the basic policy positions that donald trump has taken and that is anti-free trade, anti-free immigration, and a whole number of policy issues. about doing a great deal with vladimir putin, you should feel very uneasy. with vladimir putin, i am by and large against. guy: how worried should europe

be about the prospect? niall: more worried than markets seem to be. we are still somewhat away from november but if you look at what donald trump has said about some of hisues in foreign-policy statements and interviews, it is pretty troubling. at one point he's adjusted that nato was obsolete. at the u.s. commitment therefore to europe's security might be open to question. the thing i really found troubling was the talk in his foreign-policy speech of a great deal with vladimir putin. the idea of donald trump flying to moscow for a bromance with vladimir putin chills the blood. what would that deal be about? presumably it would be about ukraine. maybe we would see more territories handed over. and then there is the middle east. the donald trump says about

middle east is extremely confusing. theays he will destroy islamic state but he will not reveal how. be a bigt appears to part of his campaign strategy. he makes big statements and doesn't share how he will accomplish that. professor ferguson, you are going to stick with us. we have one work block of television with the professor. the negative rate debate. ratesccessful negative have been for denmark. "on the move." ♪

guy: welcome back. you are watching "on the move." denmark has had the negative interest rate since 2012. what has been the outcome of this experiment? let us bring in matt campbell. negative rates are something that many central banks have experienced with. they have gone deeper though than many others. how is it working out? matt: the danes have done this lower and longer than anyone else and that results are not as dramatic as a might hope. the inflation rate is in line with the rest of europe. there has not been the sky turning red and locust devouring crops. a lot of the things that told us would

happen. there is a wicked housing boom which is undoubtedly being fueled by the fact that money is free and in some cases you can get paid on your mortgage. there are people in denmark that have a positive balance on their mortgage balance. the lesson here is that nothing magical happens when you do break this zero bound. guy: is this just a denmark specific issue? it is a small of economy with 5 billion people. what works for denmark may not work for someone else. an important point. what stands out is how tightly thelated particularly housing market is. if you do not live in denmark, you cannot buy property there which in some place like london would be quite remarkable. there are very strict rules on associated with the kind of mortgage you can get.

it is tightly regulated and and efficiently run country. you cannot apply these lessons elsewhere cleanly. guy: matt campbell, thank you very much indeed. bring back ino professor ferguson. he has written the latest henry kissinger biography. talking about a couple of volumes of one of the most controversial figures of the last century. i wonder how he would come down on the brexit debate. i would be interested to hear his thoughts on that. niall: i will not channel henry kissinger. matt: you could channel him, you have read all of the papers. niall: he has just celebrated his 93rd earth day and is still going strong. kissinger would regard britain leaving the european union as a blow to u.s. foreign-policy. the u.s. has consistently

supported britain membership of the eu. when president obama said we would stay in, he is only saying 1956.as been said since it didn't look great for the president of the united states to advise britain on staying. niall: this is not about seceding from an empire. part of a unique thing in the european union. it is relatively loosely structured. the confederation of sovereign states. they have pulled together mainly for economic purposes. from kissinger's point of view -- you could see this back in the 1970's when he declared a year of europe. european association is

something americans have been in favor of. a world wheren most people would probably side .ith kennan it is a difficult question. george kennan's argument about containment was right for its time. it was made at the outset of the cold war when it was clear that stalin had ambitions to expand the soviet power. across western europe and further afield. the policy of containment was a huge success. clear,1970's, it became not least because of the split between china and the soviets, that an alternative option was available. and that was detente which involve improving relations with the soviet union. i think that policy still has a

lot of relatives. the u.s. policy towards china remained similar to what kissinger embarked upon back in 1971. matt: what would he think about donald trump's policy regarding ripping up trade agreements with china and having a beer with vladimir putin? although to be fair, donald trump does not drink. metl: i note that kissinger donald trump but i know he did not endorse him. matt: would you be shocked if he did endorse him? i would be astonished. everything that donald trump says, especially regarding china is at odds with what kissinger's dance work. matt: it has been a professor having professor ferguson here. the most it -- the most recent author of a biography on kissinger. a two-volume book.

i will get volume qqq on my kindle. up next, what do we have on the pulse. guy: i will speak to the former president of nigeria. more details to follow. ♪

jobsine: fridays numbers. the fed chair speaks this afternoon. the pound feels the pain. polls show britain favoring a leave vote. ate brexit with nigel lawson and stephen kinnock. and, we speak to former nigerian president goodluck jonathan. welcome to "the pulse" live from