terror and in florida. the u.s. mourns the deadliest shooting in u.s. history. risk with 10 days to go. sterling slumps. the 10-year yield hit a record low. the rally asy says not over yet. goldman-s disagrees. ♪ >> welcome to "the pulse," i'm

francine lacqua. check the markets before we get to the top news over the weekend. this is the picture. is how in scrambling would quantify investors seem to be. i want to show you the index 18.16. european stocks under pressure. tenure german bond at a record low. 0.02 on friday. i want to show you the pound as of course we are only 10 days away from the all-important referendum. now let's get to bloomberg first reviews. we start with the sad news in orlando. >> the fbi says the gunman who killed 50 people in a florida nightclub had spoken about the islamic state. he was killed in a shootout with

police. born in afghanistan -- president obama called the atrocity and act of hate that is being investigated as terrorism. deep ways they attacked is more than a nightclub. a place of solidarity, empowerment, where people come together to speak their mind in solidarity and advocate. a sobering reminder that a tax on any american, regardless of race, at the city, -- regardless of race, ethnicity, or sexual orientation is an attack on all of us. >> the shooter had previously been investigated. he was interviewed twice between 2013 and this weekend's attack. he had been employed by a british security firm whose clients are in more than 400 countries and include the u.s. government. candidatesg sought

hillary clinton called for tighter gun control. the killer was armed with an an -- alt rifle as well as an handgun and the democratic candidate said weapons of war have no place on our streets. donald trump claimed he was right. president obama and clinton to resign for refusing to use the word radical islam in their talks after the attack. andred by 2400 journalists news bureaus around the world. find more stories on the .berg at top >> on thursday we hear from the

doj at bank of england. battling a strengthening currency. the yen now but another 0.8% this morning. the u.k. just 10 days away from the european referendum. meanwhile, the most expensive bond market in history is causing disagreement. government debt is an bubble territory. morgan stanley says the 2016 bond rally has further to go. let us bring in our guests. management,stment great to have you on the program. today there is a clear risk. people worry about the fact we are creating possible bubbles in bond markets and worried about the referendum. >> i think it is a combination of things. what i have observed is everybody says the equity markets look stretched. we did not see much coming.

earnings are not that great. growth is ok but not exhilarating. where is the next trade? is the ecb starting to buy or break bonds? francine: which may distort the markets further. make the nextou bit of money? i'm not so sure this is a distinct risk off yet or if it is a move of the fast money to the next opportunity which at the moment is more in the bond theet than the exit -- then equity market. francine: we have all of these foreseeable risks. exitina or local via the concern in geopolitics what is happening in the united states and donald trump. we may see a shock to the system that creates a leg down for all classes. >> confidence levels are not

high. we sought in january. if we get a certain outcome from the eu referendum it could trigger one of those and that is the concern. it could make things worse. >> as chief investment officer how do you position your self? do you need to hedge more than you would otherwise? >> we are treading carefully we are in the camp that we are doing more of what the bookies tell us. the referendum outcome is more likely to be a stay the end a leave. so would not be in our best interest to hedge. we have to take some risk off the table so we are not at the .oment right now francine: i want to ask you why you are not looking at the polls but let us move on to china. are you concerned about this

mainly because of stimulus from the government did unravel? lothar: i am not concerned it unravel. if there is a concern about china it is misplaced. the chinese officials feel they are doing what they should be doing. they have done their job but they are not prepared to do more because they are also aware could create eager credit bubble problems and they really do not need that. francine: if there are no shocks i guess for now until july, does the fed gone july? do they hike rates or did they wait on the end of the year? lothar: i am convinced we will get some language. the interesting thing about wednesday will be language. we will get language. francine: before thursday and friday? it for july? lothar: a yes. if nothing else happens, they will raise rates in july. francine: so i guess you're

expecting new pricing. a hike and the markets are not pricing in an? leather: i think the markets are more than pricing in the july rate hike. i am pretty convinced that is the state of the play at the moment. francine: thank you, ceo and cio lothar. we will be talking a lot more about brexit and japan. bondg up, u.k. government it yields at a record low with 10 days to go until the uk's european referendum. we will talk about brexit. and robert hayward is best known for the 2015 election, calling it correctly. he thinks they will leave the eu. we will ask them why and how political uncertainty is affecting ipos. and we will talk to a leader of a french energy market who thinks now is the right time to get into the market.

♪

♪ >> welcome back. let's get right to the newsflash. shot 50 people dead had been employed by gs. they have employees in more than 50 countries, including the

united states. and a $1 billion unit for the hotel. it would've been the biggest flotation this year but was scrapped after allegations into slush funds a end of bribery is pushed the south korean conglomerate deeper into crisis. is expected to announce the first tally of its corporate bond buying program. around to: 45 p.m. u.k. time. last week, the central bank was said to buy from several banks. preparing to buy the for foururity system point 65 million dollars. a finance deal with cash and 2.5 billion dollars of new debt. it expects savings of 150 million dollars a year. ceo greg clark will take over the combined corporation after the deal is done, probably in the third quarter of this year. and that is the bloomberg flash.

francine: a record low. investors seek safety 10 days referendum. too close to call but prime minister david cameron says he is confident the campaign to keep from britain in the european union is working. let's get into the political risk and brisket risk with the ceo and site -- see i/o. -- cio. for the moment, you are steady as they go because you believe the pollsters. not pollsters, but bookies. in terms of u.k. leaving the eu, it is different when you look at peoples than when you look at what the bookmakers are pricing in or living the odds. why did you use bookies? lothar: and has been our experience with the scottish referendum and the election last year that the bookies, not the bookies themselves, but there is money behind the european union,

-- if there is money behind the opinion, it seems to be more balanced and then the element of initiative from those taking part in the polls and we know at the moment it is for more patriotic, far more emotional, far more passionate to be in the leave camp than the remain camp which is deemed to be more boring and let's age out it. francine: do think people will change their minds? i find it difficult. there was a big move because the markets are realizing that a leave vote to could happen, albeit small. -- lothar: there is about 10% undecided. in thea similar picture run-up to the scottish referendum and at the end of the day when people went to the polls, what went through their

minds is, is this going to cost me money? i think the scottish referendum was far more h roddick and emotional than what we are going through in the u.k. and the referendum. whene end of the day, people have to make a decision between their emotions and their money, it is down to money. say brexitet's happens. what would you do the next day? lothar: if it does happen and you have not priced it in, you are probably too late. moving then is for the very fast money that can then move. when you are managing and amounts of retail money, that is not possible so then you would have to sit out that crashed that is pretty likely to happen because it is not priced in. the currency markets are taking the bed of the view that the risk is increasing but the broader markets of not really priced in a brexit. when i talk to european

colleagues, i was in berlin last are, a big industry, they said, no, it's not going to happen. it is completely nonlogical that the british you have the best deal in the eu would leave. they tell me does is not priced and and therefore we would have to raise ourselves for a rough awakening on that friday. francine: what can central banks due to prepare themselves in the eventuality of some kind of brexit shock. again, the boj being a haven would have the most to lose. lothar: i think the european central banks will be called upon because with the run for the exit, there is bound to be lack of liquidity in the market and i think they have already made the preparation to step in and support the market should that be the case. francine: what happens at the lj this we? did they stay put? lothar: my money is on them

staying put. worried a little bit about what negative interest rates are really doing to the banking system. whether they are counterproductive. i think they want to see more evidence, be a bit more clear about what may happen. what would be interesting would be if we get some action that we have not expected. something new. dramatic wasething mark something like that? lothar: possibly. francine: what are the bounds? will they continue to be more inventive? especially the boj? lothar: the boj possibly. i don't think the ecb has to be. is corporate fine program likely to work. generally, i think they will talk more to politicians and say, look, monetary policy can only take us such far. we need to be more fiscal. they are saying, we can help you monetize.

francine: lothar. we will be talking about yields next. stay with bloomberg for more on the brexit stories with just 10 days to go before the eu referendum. we will bring in the chancellor. that is on bloomberg at midday london time. another problem, never have traders paid so much to own so little. the most explicit explosive bond market in history, has it come unhinged? that is coming up next. ♪

francine: welcome back. it is time for the chart of the hour. 500 years of recorded history. are we on the verge of a bond up bubble? let's bring you the chart of the hour. it basically shows you, the german in blue. this is expectations. you can see the yield going lower. 003.e currently at we touched a record low of 00 two on friday. let's get more information from an investment manager. global benchmark yields. the u.s. is down, japan is down. we had record low yields for all

of them last week. how low can they go? >> they can go negative. anything up to 10 years in germany as negative at the moment. if you are thinking there is always a buyer who will bid you up, you do not worry too much about the yield because you are interested in the yield. lothar: absolutely. andcine: it is a 10-year two negative territory. how crazy is that? crazy. it is quite suggesting the market is not really buying it from the per what shouldou know, be the case. francine: at yes. lothar: we have had lots of turmoil in the market this year but nothing has gone wrong in the economy. the economy is plodding along. the economy is increasing in the u.s. wages ticking higher.

cross gasoline going higher. inflation figures, reason to believe that at the moment as much more a function of the ecb bond buying program than a reflection of the market. francine: lothar, if we had zero percent, now we had 0.3, going into negative territory again, does it have a psychological impact? or do we not care? lothar: i am not convinced that it does anymore. early on in the year, and looked as if the markets thought, all right, this is a repeat of last year. really didbonds blow. you want to get up before that happens. this year is different because the ecb keeps buying. they are buying corporate bonds, but it has got the impact on the yield. the one psychological effect i wish it did have was on the german finance ministry who is now -- they can take out money

for free so why would you not think that money and invested into your infrastructure, education, things the bond markets do recognize as investment into the future and do not mind that much. francine: because they are worried about inflation, wrongly or rightly. think wrongly, particularly if you're are investing rather than doing handouts. at that is what you're doing, that is a very different story for the bond market. francine: are you worried about a bubble? a bubble that could burst at any moment? lothar: i do not necessarily see it as a bubble. i see it as a lack of confidence. that is not just private, that corporate. confidence is missing to put this money into risky investments into that is why you might call a day credit bubble, "ut it is also a "save us

bubble. what worries me as we will not get much of a return for years to, on investments. investments and investors are past andking at the saying, why should i invest in equities. now we have run out of road. a will go negative slightly, the bonding year. that there is a point where people start storing their cash in a bald rather than taking it to the bank. i have so many people sitting in your chairs and, by old. if everybody is buying gold, at willpoint at some point it be a bubble. lothar: gold is the currency of fear. nothing is going on in the economy, it is plodding along. my best bet is still diverse to equity investments. i actually think emerging markets may have quite a bit of potential to come back.

that investors currently need to recognize you need to be in this game a bit longer than that you used to be because it is volatile and that you are a -- not getting that much of a return. that is quite a lot more than the zero to get from bonds in the long return. quickly, a lothar, which emerging markets? essen is janet yellen normalizes, we may see even more. lothar: yes. you do. that is a cleansing affect you have in a capital market environment. in emerging markets are still what they were. a fast growing middle class that is wanting to consume. that is wanting to live a better life. that story is in tech. not all linked to commodities. i would still be careful about commodity-producing countries. francine: thank you, lothar. joining us for the first half hour of the show. up next, unless there is a high

turnout, my next guest says the u.k. will leave the eu. will ask a poll-watch him for his prediction. that is next. later on, we will talk to george osborne. ♪

♪ francine: welcome to "the pulse," live from it european headquarters here in london. now an update on the attack in orlando, florida. gunman who says the killed 50 people in a florida nightclub had spoken about the so-called islamic state in a 9-1-one call before the massive car. the shooter was killed in a shootout with the police. he was a u.s. citizen born in new york to afghan parents. massacre inorst

u.s. history. president obama called it an act of hate and it is being investigated as an active terrorism. pres. obama: the place where there were attacked is more than a nightclub. it is a place where people came together to raise awareness, and to advocate for their civil rights. this is a sobering reminder that attacks on any american, regardless of race, ethnic city, religion, or sexual orientation, is in attack on the all of us. francine: he had previously been a subject of the fbi investigations for connections to terrorism but no links were confirmed. he was interviewed twice between this weekend and will 2013. was an employee of gs who has businesses in more than 100 countries including the united states. they are fully collaborating in the investigation.

at the candidates refocused their campaign messages towards an atrocity motivated by homophobia and an allegiance to islam it terrorism. the killer was armed with an -- alt rifle as well as an handgun. meanwhile, donald trump it proves he was right. andalled on president obama hillary clinton to resign for refusing to use the word "radical islam" in their words after the attack. by 2400 journalists in more than 100 50 news bureaus around the world, you can find more stories on the bloomberg. recent weeks have shown a narrow advantage for the campaign. the probe brexit site, 10 points and front. my next guest successfully called last year's election votes.

politicalou were analyst and house of lords. first of all, a disclaimer, you are actually pro-state. let's make that clear. >> arguing against my own position. francine: you believe there are a lot more people that will vote for brexit been they say or all the polls placing this run. they arek underestimating the propensity of people to vote to leave categories of society. i have taken the polls and said, does this match up with what i and other people see in terms of society. overwhelmingly, where you would expect a democratic -- demographic to be pro-remain, large numbers are actually pro-leave. i am talking about lawyers, bankers, professionals, people who have not received the message.

haveine: will they not changed their base assumption or who they poll? >> the difficulty people's faces this is a one-off. the last time we had a referendum across the whole of the u.k. was 1995 so their base may not be accurate. then to the right groups of people to the right to extend. francine: this is anecdotal evidence, but how much do you think people's good swing on the day? it depends upon voter turnout. >> absolutely. one of the key influences its turnout. a is a view i have had for while. to remain would depend on a higher turnout. to leave will depend on those who are committed more to go vote. i also think there is more to play for. at this stage, the balance better to leave the

en stay. i think a lot of people only started addressing this issue or four weeks ago so the message he is, for the business leaders, it has not yet gone out particularly for example, two women who vote more on pocketbook issues than men who clearly vote or four weeks o so the message on a motion him more. that is sexist, but that shows it. francine: you previously said bankers, to your surprise and my surprise, are actually more prone to vote pro-brexit than we think. this is the same for lawyers. is the rationale sovereignty or is in on an economic basis? >> it has not cut through as much as the gut pro-british anti-immigration instinct for so many people. we as a nation historically have

a distinct view of those across the channel whether they are french, german, italian. and that is the instinct the leaders have played on effectively. francine: 10 days from now, can it change? robert: eight yes. people of not considered it. they only got to it in early to mid-may. so they only have started getting messages. i think one of the groups of people who may have an influence are not politicians but employers. you have the statement being of theiry by bt to all employees. it is probably the wives of the employees who may listen to that more than the men. but i think the balance and probability is more towards it leaving then staying. francine: when you speak to the pro-remain camp they are always negative about the eu. can you change that around with 10 days to go? robert: you have to accept the notion is negative towards the eu.

remainders will take the view like a guy who was threatened with a divorce and say, well, i am going to stay for the marriage because of the kids and that is almost the message. on the other side, the levers are saying, i am going to divorce but i have not spoken to my lawyer yet and that is the message that has not gone through on the other side. could can change but it be for those, not just the undecided but those who think they are going to vote to leave. but with a greater positive and messaging, could change their position. francine: how many do you think will not change their position? the probe brexit spurs until they die. robert: a pretty high proportion of those who want to leave will not move but you do not need that many people to change their minds. are part of that.

how much to talk about it? robert: much like the rest of the population, it has only become serious over the last couple weeks. one of the striking things as i made my comments prior to the weekend and a number of the house of lords of the labour party as well as the tories say they agree with my assessment. they are worried about the people who they thought would remain are leaving. francine: a word of warning, if you're from the remaining camp. robert, a member of the house of lords in the u.k. joining us today with some great anecdotal analysis. some breaking news from japan. japan and has revised the outlook to negative. a reminder that later on this week we have the boj meeting. under pressure on the up side. it seems that colorado and

abenomics have had a rough time into it is difficult to push inflation up in japan. coming up next, european ipos. we will speak to the owner and founder of a french energy company who says now is the right time to get to the market. ♪

♪ the red: the markets in this morning. let's head to the bloomberg.

dropped myle i little mouse. excuse me. every single industry group is trading lower today. the stock is flowing for the fourth consecutive day. concerns, anxieties ahead of next week's referendum. a whole load of federal reserve at meetings. bank of england and boj. for bank meetings taking place this week. on friday we saw the biggest drop since february 11. a decline of 2.4%. second consecutive week of decline. we are down for the second consecutive week also that is what is happening to stocks. every group is trading lower. big survey bloomberg has done today on the currency market, specifically sterling. this is a lovely chart going

back to 1980 which highlights the big points of this survey. most of this survey sees a sterling falling below 135 if brexit occurs. 150 could happen if remain occurs. the survey is for sterling to drop between 130 and 135. the redline is 130. you will see we have not been above 130 since the middle of 1980 five. the feeling is it will stay 140 5-1 50 if we remain in the eu and those are the levels we this saw roughly earlier year. there are more within that survey. 14 out of 32 economists expect 130.ing to fall below five of them seeing below 120 which would still take you back to lowe's we're not seen since 1985. the record low for the pound, 105 in early 1985.

today we are at 141-140 three. we are in for a massive 10 days and the reason we are seeing the yield for once again to another record low it's concerned about the referendum on friday. we had this all but dependent poll showing a lead. the polls over the weekend were not so start. cap atutting the lead had. what is definite, the polls are very close. sending the u.k. to the lowest consecutive low. the german 10-year is up to zero point 23. the record low on friday was .0 09%. will today be the day we see a record low for the german 10-year dropping below zero. very quickly, china. this is in an important index i want to show you which is back

to 2011. it is our monthly tracker for gdp. it is showing a figure of 6.9 percent for may. little changed from april. come to believe within the leadership of china's annual target, it was updated after andhly retail sales investment data. it's one from around 6.3% in the first two months of the year to 7.1% in march. economy isgest the stabilizing. industrial production rose 6% from a year earlier in may. retail sales climbed 10% last month. fixed asset investment increased 6.9% in the first five months of 2016. missing all 38 economist forecast. so it is not just about exit and stocks. and record there is a bit of macro data out of china. francine: we forgot about the

mouse. thank you so much mark barton with your bloomberg terminal. how is political uncertainty affecting it european ip is. my next guest thinks that now is the right time to go to market. welcome. the founder. great to have you on the program. congratulations for that. we are expecting volatility going forward. because of political risk and the referendum. are you confident it was a good call to get the ipo done before more volatility? morning, francine. indeed it is the right time to -- market.march prices are picking up in europe. we think this is the right time. francine: you are not worried? how much expansion or money do you have to play around with thanks to the ipo?

julien: we think we are competitive in any market and berman. so independent of the macro dynamic we would still be in a good place. francine: how difficult is it to be in france at the moment? julien: well, the dynamic is definitely getting better. i think we have seen it in the past few years and we are picking up now. i think there is a dynamic showing that we can develop a very ambitious reject and france and we are living proof we can achieve that. francine: it right. let's leave your company to the side. you find it difficult to employ people? i know a lot of americans have pulled out of france. a lot of american companies have criticized the fact it is

difficult for them to come to france and make business there. would you refute that? julien: it is definitely not the world,en market in the but we have got a lot of the advantages. we have a fantastic infrastructure and education. if you put the right ingredients together you can develop a project. or french or being american being chinese, i think this is a great market. it has been tough the past year but it is recovering and we are showing the way of this recovery. francine: how controversial wasn't for you to open some of the plants? exploration, appraisal, production of grass -- gas in france. a lot of the neighbors were not happy were the plants are. julien: well, the activity is -- extracting the gas that

coal seams.the the coal seams have been explored many times. what we are doing is just replacing this imported: asp by a local gas that to we produce without a injecting anything into the ground. without fracking. without any invasive technology. so i think that is why the local [indiscernible] >> we have a high-quality gas. francine: thank you. coming to us live from paris. of next, exit and the 10-year falls to thete lowest on record. and we will talk about how the eu referendum is moving markets. ♪

♪ francine: welcome back. this is the pulse. in the british security firm g4 as is down this morning that is after the news that a man who shot 50 people dead this weekend had been employed there. thanhad clients at more 100 countries that include governments. cooperating fully with the authorities in their investigations.

china chief has been named as the next ceo of the supermarket chain at the. you will take over from sean clark. sean clark is one of the most experience and executives. he began his career in 2001. and shelving what may have been a 4.5 billion dollar ipo for the hotel unit. it would've been me biggest flotation this year but it was scrapped after widening investigations into allegations of slush funds and bribery push the conglomerate into deep crisis. the ecb is expected to announce the first tally of its corporate on buying program which began last week. it should come around to point -- 2:54 p.m. european time. businessour bloomberg flash. francine? francine: apple's annual developer conference takes place in san francisco today.

bloombergs reporter alex webb looks ahead at what we can expect from the event. apple's worldwide developer conference is where developers gather in san francisco and apple shows some new.. these are not new iphones and new macs. these are stock where development. new operating system for your mac, free up a watch, for your tv. crucially, for your iphone which accounts for more than two thirds of apple's revenue so it is important what they do there. the developers are going to see an update to apple music, which has a tepid reception in the one year it has been a. we wrote about this about a month ago. crucial update to syria. apple will develop a benefit which will allow developers to build surrey into their applications are you as a user could order a pizza or taxi through urban -- through over

asking sorry to do it for you. behind the scenes developments relevant to the developers themselves, apple changing the way in which it shares of revenue. at the moment, apple takes a 30% cut of everything processed through the app store. in the future, if you can convince the customer just described to your app for more than a year, they will cut the percentage they take to 15%. that incident advises people to sell descriptions rather than one-off one-click urges us. that helps apple predict its revenue stream while locking customers into longer-term contracts. rinsing: that was alex webb with more on the apple developer conference. nine: 55 here in london which means it is 10:55 and frank for. a quick look at the markets. we are mostly into things. all, the index

indicates people are nervous about what is going on. they are saying there is nothing to worry but people are starting to price and the possibility of something not going according to plan. i am not saying if it is going to plan good or bad, but you see the volatility index, gaining. it is at 18.18. the backside as there is pressure on european stocks. overall, stocks were down today. the have been growing over prospect of the u.k. exiting the european union. you also see some safe haven demands. also, sovereign debt and gold. overall, 0.02 unchanged. record low. we may see a new record low as it is today or this week. maybe not but we are watching out for it if it goes to zero and then negative territory. 1.41-1.52.

stay with bloomberg. surveillance is up next. we will be talking to stephen king from a just be. a great interview later today with george osborne on brexit. ♪

francine: terror in florida, the u.s. warns -- moran's a shooting. risk.ndum we are 10 days to go, markets are rattled. aerling slumps and they tend -- the 10 year yield hits a low. the 2016 bond rally market is not over yet but good men disagrees. i am francine lacqua in london with tom keene in new york. we