francine: clinton clinches and ap delegate count has hillary making test of a u.s. major political party. yellen is keeping the fed hike alive after -- her cautious tone pushes expectation. shell cuts deeper. europe's biggest energy come -- company cuts. we speak to the ceo. ♪ francine: welcome to "the pulse." live from bloomberg's european headquarters.

i am francine lacqua. first thing's first. let's check on the markets. we have seen movement after we had data from germany. the european stoxx 600 gaining 1%. miners on the up. i want to say the south korean won. this is after what chair yellen said. jumping the most in six years after chair yellen quelled speculation that u.s. interest rates will be raised in july at 0.7434 after at the rba leaves everything unchanged. let's get to bloomberg first word news with the very latest. >> a car bomb in the center of istanbul has killed 11 people. the city's governor has said many more have been injured in the blast. it appears to be a terrorist attack targeting a police vehicle. -- use referendum.

she speak to a lawyer first. that is the warning from jenny watson, the chief counting wants her -- chief accounting officer. which forbids the publication of any information about people have voted before polling stations close at 10:00 p.m. saudi arabia has approved a economic overall on a post-oil future. a transmission program includes cutting public wages and borrowing billions of dollars to shore up finances. it declined to 30% of gdp by 2020. taking them once oil revenues to more than triple from the current figure, a goat some analysts think is unrealistic. that's a goal some analysts think is unrealistic. -- a goal of some analysts think

is unrealistic. global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. francine: caroline hyde there with the latest. june is out. july might be too soon. september is not a sure bet. that is the message that economist took from fed chair janet yellen. yellen herself chose to accentuate the positive. cooks the -- >> the economy has been affected by a mix of countervailing forces, i see good reasons to expect the positive force is supporting employment growth and higher inflation will continue to outweigh the negative ones. francine: one of the factors is the u.s. presidential race. hillary clinton secured enough delegates. that is according to an ap count. very clear statement, we are repudiating donald trump. we are getting ready for the

fall election. we are going to defeat him if you will vote for me, i will work for you. ourcine: let's introduce guest. he is tim crockford. great to have you on the program . equities, markets in general, all asset classes. are we overplaying it? does it matter if they move in september, november, december? tim: i wonder if we're standing too close to what the fed is saying. all of the rhetoric the comes out of the fed members. for us, the most important thing that they say is they are dependent. look at the data and stand back. that way you can try and get a hold of what they're going to do on the longer-term. and where the cycle is going rather than trying to guess whether the next hike comes in

july? trento i don't know what to do with the u.s. jobs number on friday. i don't know if we are measuring it wrong. tim: probably from the fed's point of view, they will claim -- it is too late to say. if they are claiming we are [indiscernible] there is a good argument for that number to slow down. i think what will be seen is watching where wages go, because if we start to see strength in the labor markets over there picking up, you'll see wages and earnings pick up words. that is what we will be test pick up words. -- pick up words. francine: are you concerned about -- from emerging markets. tim: the fed is one of many

things causing volatility on the markets. francine: that could go wrong. tim: that could go wrong. there is a long list of things over the course of the next few weeks going into the summer which are going to continue to cause of volatility. francine: referendum? china? greece? tim: greece eventually. greece is on life support. within europe right now more of our focus is on literally. -- is on italy. successful than pushing rate hikes through. the mpl problem is there. than enough speed bumps to derail every coverage for now to worry about the markets. if i can be optimistic, what this volatility does is it is a great opportunity for investors that are in it for long-term. runco let me come back to you on those opportunities we have some

breaking news. china foreign exchange reserves before the end of may coming in at $3.1 trillion. we were expecting $3.2 trillion. a quick thing on china. it seems that the pboc and authorities are tied to do everything to keep -- it is a value judgment on whether it will work. you are optimistic that they will handle the situation. tim: there is going to be volatility in the short-term. in long-term, we are optimistic. has beenhe growth focused around the coast and east of china. you have a big chunk of the country which could participate in future growth. i think certainly it is going to be volatile and the short-term. we do expect the reserves to come down. the money flowing out of the country. more valuek to buy up the value chain.

francine: where d.c. value? you are an asset -- where do you see value? you are an asset manager. it can be a very crowded market. tim: i do like gold. i do see value. european equities are not -- they are all equal good within europe, you have a load of great companies. -- they are all equal. within europe, you have a load of great companies. we like companies that are exposed to these longer-term themes, things like renewable energy. things like biologics. this volatility, especially in the summer months, it is going to be great for people like us who are trying to get in there but at lower valuations. francine: tim, thank you so much

for now. he stays with us and we'll talk more about where he thinks value is. commodities bounceback. the blumberg commodities index centers the -- the shell ceo says we may never see $100 oil again. we bring you that interview. sterling spiked as much as 1.5% against the dollar. that figure. man who saidhe italian banks keeping him up at night about what to buy in southern europe. ♪

francine: welcome back. these are main stories. considering producing new smart phone models that will feature bendable screens. that is going to people familiar with the matter. the devices would organic light would could be unveiled as soon as next year. this is likely to give it a head start on the apple iphone's. the latest business flash, i think caroline hyde has more. isoline: general murders ceo bullish on chart -- general motors ceo is less on china. she sees huge potential.

she says exclusively to bloomberg's david west. is morethough china volatile than it has been, we still see tremendous growth three now and 2020. we have over 60 new models coming between now and then. a typical emerging market is going to be a little more volatile could we still see tremendous growth opportunity. caroline: pine river capital management is closing its fixed income hedge fund after one of the comanagers announced he was stepping away. the eight-year-old fund will be liquidated and cash will be returned. francine. francine: caroline hyde to their. this caroline hyde -- caroline hyde there. >> we are balancing the books. if we see oil price levels at a level that we have go further, we will go further. he still have more in our tank

in terms of taking cost out, in terms of investment programs. we can work much harder on operational excellence. i am not so worried that we will not be able to bounce the books. francine: he spoke to ryan chilcote who joins us now. what if the oil price plus back to the low we saw this week. what did he say about that? ryan: we should focus on what he said about capital expenditure. they said that in 2016, they twoct to put $29 billion in capex. a few months ago, they were talking about 33 billion, then it was trending toward 30 billion. they are cutting back. when we heard from been burden uerden.b

at a certain point, it feels like they are in danger of biting the hand that feeds them. >> we need to be at a $25 billion level in order to sustain the company for the longer run it yet to bear in mind, we have to move fast in the -- in order to keep this company strong. yet to have assets that continuously decline and competitors continuously eroded. what he $5 billion a year, we can sustain and grow the company -- $25 billion a year, we can sustain and grow the company. ryan: one thing shows doing is giving a pledge for the next several years. what they are saying is between now and 2020, they are going to between $25apex billion and $30 billion. that tells you a lot how they view the oil market. not so bullish. .rancine: we hear that a lot

oil majors saying that futures and to be extremely difficult. ryan chilcote from shell headquarters in london. crockford.us, tim when you look at oil majors, is there any value to be made by investing in them? i know they have different portfolios. the oil price gets stuck between the $25 and 65 dollars because of show producers. -- shell producers. tim: in the case of shell, a 7.5% dividend yield. of course in lower yield environments are now arguably the dividend as long as they can sustained it becomes more valuable. from our point of view, look at growth and play. there is a question mark about the futures of these companies. how they grow in an oil price

environment. they start to look interesting within the oil space, if we do remain $50 to $60 for the for seeable future. francine: this is my chart of the hour. price.e line is wti oil nine oil rigs returned to operation last week in the u.s. this is the biggest gain since december. us that thesews u.s. rig counts changed the game forever. it will we have to see a lot of commodity producers or small oil -- a small oil producers defaulter? tim: that is the only way you get sustainable high oil prices. the massive decline in terms of discount. in

it has come down a not as big in terms of magnitude. what that tells you is this is an industry which is driven by and -- driven by innovation. this is why these guys are able to pump up more oil with less resources. francine: what does it mean for equities? if you're interested in equities, can you play that through shale producers organizations? tim: it is tricky right now. we're talking about shell and the majors here to these guys have all of the power when it comes to pricing and negotiations. oil pricedhe longer environment, these guys -- we are starting to see pockets of the market in terms of oil services where you're getting some providers who are now operating cash flow. you are seeing more bankruptcies it there. there could be some areas that could do pretty well.

francine: tim crockford, thank you for coming in. he stays with us. too close to call, the latest polls on referendum shows the leave and remain count head-to-head. ♪

francine: the pound it dumped by

1.5% while it is still not clear whether today's spike is due to brexit ditches. the volatility is continue to this is expected to continue. -- is expected to continue. mr. patterson thank you for joining us here on the bloomberg. when you look at the brexit debate, you believe the u.k. would be up to reestablish trade relationships with europe once outside the eu. what is the premise? >> the premise right from the beginning is -- above the nationstate, the supranational body. [indiscernible] of league ofe nations that's the big picture was debating railway crossings when the germans invade -- the germans invaded poland. they came out to set up an

overarching body. they are taking it under the guise -- francine: out to folks on now, the trade. >> we have all of the single market stuff. he was taking part of the center. you have the final -- the euro. when can i join the euro no matter how hard the establishment wants. they've got to form a new country around the euro. ssl and the business reports last year -- they said so in the business reports last year. [indiscernible] francine: originally, this was to keep peace. are you more concerned that would make this in that it would make the u.k. more feeble? -- it would make the u.k. more feeble?

>> the only way they can bring it to a conclusion is to set up the euro -- to sort out the euro. the rate in which they join the euro. that is the way you transfer money from texas to arkansas. it is incredibly dangerous. will be somewhere on the outside, still in the you -- francine: but you are at the table to negotiate. let's talk about trade. >> the key point of that. yes, the drama with greece. david cameron [indiscernible] emphatically. we are not a part of the eurozone come correct? what happens on a thursday afternoon we slid past 150 million, how echo because we have long-term commitments as members of the union. we will be consistently outvoted.

they want to go on and talk rent controls and pricing. -- gral areas of economic francine: i am confident that you can get a better trade deal once exit happens. >> we have a massive deficit. it is 5 million europeans that depend on sales of the u.k.. and the merkel back -- angela merkel that kicked in the teeth. [indiscernible] we going to make 1.7 million cars. where do the spare engines go? that will carry on. social services will do the same thing. we are not as big of a forces them but they need our skills. francine: what people worried about. we have this new report out from the business secretary.

new trade deals across the country would costs -- would cost 50 billion. why take the risk? these ludicrous government reports have been wrong. we have had four budgets in the last year. every forecast has been wrong. investors bloodmoney. the -- investors pull out money. >> nice impartial man there. we have had all of these scares. nissan would pull out. what happened? cars thanking more the entire italian car industry but together. i just on by this. people don't buy products because they -- people by

product because they are the right value. that will carry on. patterson, -- as in, thank you for joining us. we talk about istanbul in turkey. we will bring you that next. ♪ get ready for the rio olympic games

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francine: welcome to the pulse live from bloomberg's european headquarters. i am francine lacqua. bombtanbul, a car targeting a police car and killing 11 people, wounding 36. think it was about half a mile up from the main road you are seeing. createsest bomb blast new security anxieties in a company that country that has been already on edge over militant andrdish

islamic state attacks. seven police officers were among the dead according to the istanbul governor. we also heard from turkish authorities that the turkish prosecutor has just issued a gag order on the istanbul bomb attack. it is unclear at the moment whether this is because they do not know what is going on or they are trying to find the perpetrators, but this news just coming out in the last couple of minutes. the turkish prosecutor issuing a gag order. let's get to the bloomberg first word news. caroline: hillary clinton has reportedly secured enough delegates to scoop the nomination, one day after president obama was said to have spoken to bernie sanders to unify the party. sanders has vowed to stay in the race. is stilllen says she

fairly sure the u.s. economy will improve enough toward increase, that she was silent on when that might come, playing down a june move and raising doubts about july. recently has been affected by a mix of countervailing sources. i see good reasons to expect the positive forces supporting employment growth and higher inflation will continue to outweigh the negative ones. n/a banks or hedge funds thinking of commissioning voting day polls into the referendum should speak to a lawyer first, that is the warning coming from jenny watson. she says financial institutions are hoping to gain and add on the survey risk falling afoul of british electoral law.

global news 24 hours a day powered by 2400 journalists and more than 150 news bureaus around the world. francine: thank you so much, caroline hyde. the market is higher. let's get your asset check. mark: the best-performing groups, oil, gas, and chemicals. is june out of the equation or july out of the equation -- equation when coming to the fed? yellen says she is planning to raise interest rates gradually and did not specify a time. . this is our world interest rate probability function. june is now down to 2%. yesterday it was at 4% before yellen spoke. july is at 21%.

you only get above 50% in december, the probability rising to 61%. goldman sachs said there is a 40% chance the fed will raise rates in july, almost double the expectations on our work function. according to goldman sachs, she presented and up beat view of the economy even after the weaker than forecast jobs figures on friday. goldman sachs still saying there is a greater probability of the than ourg in july world interest rate probability function. sterling.k for just after 5:00 a.m. u.k. time, you saw a 1.5% spike in the pound, causing many to be surprised by the suddenness of spurring talks of

fat fingers, algorithms, and stop losses. stirling is rising almost 1% against the dollar today. it fell in intraday 1.1% yesterday. releasedls were showing the leave camp where ahead. today, thekly central banks, the australian central bank holding rates at a low 1.75%. they failed to provide policy guidance and that is sending the aussie higher against the dollar, trading betting that last month's cuts will be the last. francine: mark barton with your asset check. our next guest is joseph o, managing partner at amber

capital. they have an eight u.s. of $1.5 million with the majority of their exposure to the u.s.. thank you so much for joining us . you have a lot of exposure to southern europe. some of the topics you are looking at, you have the .ellenic exchanges, telefonica overall are we behind on the structural reforms, and are you concerned that we go through the turmoil of summer 2015? joseph: i was listening to the gentleman on brexit that was looking at the volatility on the everyone is talking about political turmoil in southern europe. it feels more like the political of as, populism is more problem in the u.k. and u.s. this year, and that is what is driving this volatility. southern europe companies have gone through a lot of pain. obviously those economies have gone through a double-dip

recession over the last seven years and we are seeing lots of green shoes. we have seen those economies rebounding. francine: a touch. 25% growth? joseph: spain is rebounding quite handsomely. francine: joseph: unemployment -- francine: unemployment is still terrible. joseph: it is still too high that that is where i think the economy -- the opportunity comes in. they are only starting to benefit from lower interest rates now. francine: why are they starting to take advantage of that now? ratese had low interest and qe is in quite a ways. joseph: because of the sovereign crisis, interest rates in southern europe were still much higher until really two or three years ago. the last country that will benefit that has not benefited

is greece, the country we are most bullish on. francine: which is surprising because we speak to the imf on a regular basis, and there is a fear that we go back to the turmoil of last year if there is no debt relief. it is dangling the carrot for the future. joseph: it is interesting, the imf was so bullish on greece in 2010 when they extended all these loans and now they are so bearish. the economy in the meantime has gone down 25%. there is a lot of potential for that economy to rebound. we do not even think that the debt issues are such a big deal because at the end of the day, they are being postponed and they can keep getting kicked down the road by the eu and ecb and creditors. in the meantime, what you have

seen with the greek government as they have done all the asked to,at they were and they are one of the most reformed settlements in europe. very low base,a and i'm not trying to be downbeat on europe. there is concern that southern europe he comes like japan if they are lucky. joseph: japan did not go through a -25% gdp over a very short period. i think the beating has taking place and everyone has turned bearish over the last couple of years. but the macro environment, the external shocks as economists call them, are pretty positive for those economies. you take a country like greece, from a political standpoint if there was a problem with this government, and if this government was to come down the alternative is much better.

how many countries can you say that about? francine: that is a fair point. do you look at some of the banks? joseph: we like the greek banks. they are very cheap. francine: it is about the returns you can get on them. joseph: they have just raised capital in november and december so you know the share count will be ok for the next year or year and a half, which is a big deal and you are dealing with financial institutions in europe. we feel that capital based on stress tests that were really , some had prices with commercial real estate being , so we% or 95% from peak feel that they have raised enough capital, they are adequately provisioned, and they will benefit from lower interest rates from the ecb buying greek bonds when they finally get back the waiver, and mostly from the

gdp rebound we expect. toncine: if brexit were happen, does greece say, i do not want the reforms, we just want to leave the eurozone, or is that too simplistic? joseph: i actually think -- --ous last words, greeks greece is a safe haven in europe. francine: i have never heard that. joseph: i have never bought a greek stock until this year so this is new to me. having said that, i look at greece, a country that is on its knees. the government has done all the reforms that were needed, that they were asked to do. we are just a few days away from finally getting the eu to disburse the funds i should think. conversely, i think britain could be in quite a bit of trouble if there was brexit

because this economy is very reliant on asset prices, real estate prices namely. i would question what would ,appen to that economic model and afterwards we can argue whether that is the right economic model for this country or not. but it has worked quite well over the last 20 years. if we had a problem with interest rates at 0%, i am not sure what economic policy room for maneuver we have in this country. francine: briefly about italy, that had the realization the roma may or may become someone from the five-star movement. this is extreme and is going back to what we are seeing in the u.s. with donald trump. scuff a lot of reforms they have been trying to push through? , it wasthe rome mayor

local elections which we have this weekend, i would not read too much into those because they are obviously very linked to local considerations and local characters which emerge in those elections. i am anxiously waiting for the results of the referendum which would take place in october on the constitutional reforms. that would be a true test for the government and this would be a key vote for italy, whether they will proceed or not with perform -- reforms or will go down the route of populism. francine: joseph oughourlian, thank you so much. saudi approves its plan for a crude rich future. we are live in the middle east. ♪

francine: saudi arabia has approved a plan to cut public sector wages and subsidies by 2020 as a part of its post oil future, to curb debt which the kingdom sees as surging to 30% gdp. program have you on the . i never get to speak with you. what was most significant. >> i think it is the debt portion. it is a grand bargain with the

saudi people, which is taking a nation that was nearly 80% work for the government, increasing the debt load. that will end -- create a hugely liquid market. the other pieces of this jigsaw or the non-oil revenue, trying to break the link to oil. they are talking about the non-oil revenue, talking about it going to 530 billion rio's and bringing in public partner private ships. the nuts and bolts of it come to 45% of theng from nation employed by the , cuttingt to 40% subsidies, and boosting the non-oil revenue, that is the key to this deal. francine: is that achievable? achievable within

the realms of everybody saying to me, this is going to mean they are going to raise it by $200 billion worth of debt. these markets have the ability to raise that debt and it will be by delivery. i caught up with his excellency up the road in abu dhabi. he said it is all about delivery and targets. this is the reason why there's going to be a success, because this is the challenge for saudi arabia. here we are with the fx reserves. the reserves were being wiped out. you have no choice. there is some stabilization. it has to work, that is why this anuty crown prince has ambitious plan and he is literally marching forward on a day-to-day basis. dubai.e: manus cranny in on the brink of making history,

hillary clinton says there is still work to be done. we are live in new york to discuss the democrats' super tuesday. ♪

>> we are balancing the books and if you see all price levels at a level that we have to go further, we will go further. we still have more in our tank in terms of taking costs out,

deferring or canceling investment programs. we can work much higher on operational access, so i am not so worried that we will not be able to balance the books. that was the shell ceo telling bloomberg he intends to balance the company's books at any oil level. caroline: the uk's antitrust regulator may start an in-depth probe into the plan to buy and i cap brokerage unit. competition said the 1.1 billion pound deal would put a realistic profit of substantial lessening of competition for the hybrid broking of oil products. samsung considering introducing two new sam's -- phone models with bendable screams -- screens .

the devices, which would use organic light emitting diodes asld be unveiled as soon next year, and is likely to give a head start on the apple iphone. gm chief executive is bullish on china. she says despite jitters, she sees huge potential. she spoke to david westin. >> even though china is more volatile than it has been, we still see tremendous growth between now and 2020. we have over 60 new models coming between now and then, and we think in a typical emerging-market it is going to be more volatile that we still see tremendous growth opportunity. caroline: that is your business flash. u.s.ine: today is the last super tuesday with primaries and caucuses in six states, including california and new jersey as hillary clinton has already secured enough delegates

to win the nomination. michael mckee joins us from new york. mike also has known hillary clinton or met her around 38 years ago. what does it mean that she has clinched the nomination? michael: the democrats have two categories of delegates, pledged delegates and superdelegates. press, after her victories in the virgin islands and puerto rico added them up and decided she has got enough delegates to win the nomination, even without today's contests. ernie delegates disagrees and says -- bernie sanders disagrees. clinton is expected to win the biggest primaries and increase her delegate call today, so it is basically a done deal. that is relatively historic because it is the first time an

american political party has nominated a woman, although that has been overshadowed by her likely opponent. how important is it that bernie sanders steps down gracefully and tells people to support her? michael: it is going to be important and she is trying right away to unify the party. sanders wants to get through today and see how he does. she is hoping he drops out, and he will, under a lot of pressure to do so that he has brought a lot of young people in the political process that would be helpful to her in the general election campaign. president obama likely to endorse her. then she will pick a vp candidate. europe weoverall, in see hillary clinton as democrat but really a centrist.

donald trump definitely on the right side of the republicans. is there a likelihood that she gets the presidency because she will be able to grab some republican voters? donald trump is not really so much to the right as andover the map, republicans complain he does not embrace a lot of their policies. it depends on what policies she adopts over whether she can win some republicans or independents. bernie sanders wants her to run to the left. he is putting pressure on her and says that is one reason he is staying in the race. francine: thank you so much, michael mckee, u.s. economics editor. " is up next and tom keene will be joining me. banks, talk about the emerging-market currencies on the back of that all-important

fed chair janet yellen speech yesterday. look at that beautiful picture of new york, tom keene in one of those apartments. ♪

it,cine: clinton clinches making history as the first woman to become the nominee of a major u.s. party. yellen has been keeping the 2016 hike alive. europe's biggest energy company trims spending as it boosts production and cash flow. this is bloomberg "surveillance."