streak. >> japan's finance minister calls for g7 correlated action over the surging yen. jon: a warm welcome to bloomberg ." we begin with breaking news from jim bullard on the regime change . the situation can change and will change in the future, but exactly how is hard to predict. the best thing we can do today is forecast the current regime up dot gost -- bring

on the bloomberg. the reason you do not see a dot beyond on the right-hand side, he is saying that is outside of a poor castable -- four castable -- forecastable period. this is fascinating. when the summary of economic projections came out and we look at that straight up right at the bottom, the answer is there now. jim bullard. david: when you read the statement he's just issued, he's saying a lot of things people the fed is about -- projecting out into the future well beyond what it can no. know.s what it can some people think their models are run. alix: how do you forecast a fed

that is data dependent? after the dots were released, there was chatter in the market with alie evans statement of a shift in how you view the economy and where you actually think rates should be. of the f1 all members see are in agreement about the approach to this question. agreement. in the question is whether other people come to jim bullard's side. david: we will have a bloomberg exclusive with microsoft cofounder bill gates, telling us what he think about microsoft buying linkedin. jon: we will be airing your interview with the ceo of monumental sports and entertainment.

first of all, let's go around the world and check in with our bloomberg team for in-depth coverage of the top story. simon kennedy and lyndon on the brexit campaign -- in london on the brexit campaign on hold for a second day. withchilcote in russia vladimir putin speaking at an economic forum in st. petersburg. simon kennedy joins us from london. great to have you with us. silence on both sides of the campaign. campaigning suspended by both sides for seven days -- for a second day today. very little brexit chatter. otherwise, christine lagarde

making a speech in vienna in which she touched on the issue. that is the only commentary we've seen. tonight, the imf releases a delayed report on the economic outlook on the brexit and a couple of polls that may well be redundant now because they were carried out before yesterday. of pause in the campaign. jon: the questions are being asked about whether this changes the debate fundamentally or whether it drains the drama from both sides as we reflect on the severity of yesterday's incident. the debates have evolved away from here? simon: we will only know in a weeks time how much it will change. we know for sure that the campaign will be very different in the last few days. ,t reached a boiling part turned nasty between both sides. rhetoric.a level of

with little sign that was going to change into the last week. now, you feel there will be a change in tone. both sides will have to be careful in what they talk about. we appreciate your time. japan's finance minister says he is worried about abrupt currency moves d. let's get more from richard jones. the end hitting a two-year high against the dollar this week. it is the latest in a long line of comments. they're obviously worried about the strength of the yen and the impact on the japanese economy. what is interesting about these latest comments, calling for

courtney did intervention is that coordinated intervention is admission that japan acting on cannot do anything about yen strength. they are asking for help with this. the strength we have seen of late goes to show how much anxiety there is among investors, not only with the brexit wrote next week, but also a lot of other economic tailwinds and volatility we have seen. it is actually something that may change the way policymakers actually approach the strength of the end. alix: what happens over the next six days? i look at the way we've seen a lot of intraday for tuition here could -- fluctuation here. between now and the vote, we

don't get any strong moves. i suspect we will see a downside bias and dollar yen and euro swiss. joining usrd jones in london. david: record low yield on sovereign debt around the world. for more, we are joined by susanne walker barton. we had record low yields, but they have bounced back a bit. suzanne: that is because of what we saw in britain with the murder of the lawmaker there. , well, people saying there is a stronger possibility the leave camp may not win. you get some semblance of stability and you see stocks going up around the world. yields and global bonds yields coming off of their lows. david: if that is the reason for

the slight bounce back, what does that tell us about what would happen if leave wins next thursday? there would be a significant reduction in trade s in the u.k. and that would slow economic growth around the rest of the world. if we are not going to see that, there is more optimism and people start saying maybe it will not be that bad after all. david: susanne walker barton in new york. thank you for joining us. nowme putin is begin right at an international economic forum in st. petersburg. ryan chilcote joins us there. what do we expect to hear from mr. putin today? about charmingll investors, trying to get them to put money into russia. that will not be an easy job.

+++ its longest recession in two decades. the sanctions are not helping. he will say russia and the european union should return to business as usual. he is not going to say that russia is ready to yields to western demands on sanctions. vladimir putin can always decide this. how much of the sanctions are hurting investment in russia right now? i think they hurt. no one wants to get on the wrong side of sanctions. we have seen the u.s. punish companies when they have in the past and send in that message, they worried about the uncertainty. it is not just the sanctions, it is the trajectory. the oil price really doesn't help. if the oil price got russia into this recession, it is the sanctions need to get rid of to get out of recession.

--: let's get a rep campaigning suspended for the second straight day in the u.k. after yesterday's tragic events. the campaign was hitting sentiment in many ways. equities drifting higher once again today. up four percentage points. without the campaign drama we've seen over the last couple of weeks, things have stabilized across as a class -- asset classes. commodity currencies are performing well with the ruble higher and canadian dollar stronger as well. two-year yields in japan drifting higher. five-year yields higher as well. the big bond market rally we've seen reaching a bit of exhaustion. -- six-daytreak

losing streak for oil. let's get some headlines outside the business world. president obama is pleading for congress to consider new gun control laws in the wake of the orlando massacre. the president spoke at a makeshift memorial to the victims of the nightclub attack. he wants congress to limit access to military w-style weapons. russian cyber gangs have been linked to bank robberies worth millions. authorities have linked malware used by russian and eastern european gangs to a number of bank heists. one of them, the record-breaking that of $81 million from bangladesh's central bank. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world.

david: one week from today, we will know the results of the brexit boat. if the u.k. decides to leave, u.s.-u.k.it mean for y relations? ♪

david: this is "bloomberg ." tragedy in great britain after a british member of parliament was shot and killed yesterday. both sides of the brexit debate remain suspended. we are joined by peter westmacott. of course, we have to start with this tragedy. it dwarfs all else. tell us about this young woman. tell us about what that means

for the issue of brexit and the campaigning. macott: joewest cox was someone who joined parliament last year. it is clear from the reactions of people from both sides of the political aisle that she made a real impact while she was there. she had worked for the gates foundation. she had paraded the russian berated the-- russian ambassador. it is a sign of the impact she made. she was feisty, courageous. the political atmosphere, the political world in britain is just devastated by this.

she had a great future. she lost her life in what appears to be part of this increasingly unpleasant debate about brexit. it may make for a better, more rational discussion in the last few days of the campaign. you would need to have a law passed by parliament -- that is out of my hands. party -- aacross cross party issue. do you think the campaigning itself was getting too ugly on both sides? ambassador westmacott: it could get ugly, and got personal. part of the strategy was to hold a referendum in order to calm people down.

it was not designed to get us out of the european union. the risk is that people say, now we have a chance to get out. unpleasant.y quite a lot of name-calling, a lot of personal stuff come unpleasant language. accusations the government statistics agency was putting up false forecasts. if there's any good that comes of this, it is conceivable this will calm things down and allow for more rational debate, perhaps. alix: it seems like what we heard is the remain cap was focused on economic figures and leave camp was not addressing those figures and the criticism was the numbers don't make sense. can we take it down to a level where we can have that kind of economic debate from both sides? ambassador westmacott: that would be helpful.

the two biggest issues are immigration and the whole eurozone thing. to some extent with the argument has been a bit bogus. the british economy has been the best performing since the 2008 beltran. this 2008 meltdown. people are saying we cannot control our frontiers if we stay european union. we would have an influx of turks. if turkey meets the criteria, they should be looked at on the merits and we should be welcoming, but that is a long way away. to put aside the rhetoric, the nonsense would be helpful.

you don't need a visa to go to u.k. that is fairly straightforward, but you don't have control -- that is the problem. that is why the remain campaign has been losing the immigration debate. the you see that changing over the next week? ambassador westmacott: the numbers show that immigration from within the eu has been great for the british economy. they have been filling jobs and paying taxes. we've had the lowest unemployment figures in britain since 2005. we are way below half the european average on implement rate paid -- unemployment rate. the rate ofped keep inflation down and the british

services industry up. the debate got bottled up with the fact that there are people coming from outside the european union. we have border controls. immigration from within the eu is something that has been a net beneficiary. state campaigne has been losing that. stay campaign has been losing that . alix: what is the risk of the credibility of those leaders if the brexit camp either wins or we see a high number come next thursday? ambassador westmacott: there is a real risk for the rest of britainnd globally -- won the second world war, we can manage on our own -- we won

because we had hundreds of polish pilots. we won the battle of britain and then we succeeded in innovating because we had 2 million american serviceman. britain is part of an international community, even though we don't always like to remember that. -- if wel be an impact vote, it's someone pulling at a thread of european construction. me if you guys go, we will come under huge pressure because europe at the moment is not popular with all member states and then where are we? the glue would come undone. , it is ae and the u.s. investment issue, there is a great deal at stake and i'm

hoping that will not go the wrong way. ambassador peter westmacott is sticking with us. up next, christine lagarde. ♪

david: this is "bloomberg ." we are back with sir peter westmacott. christine lagarde came out today with a statement saying the imf's view, the risks are to the downside if there were to be an eu. of the u.k. from the i want to go back and talk about the larger issue you raised earlier. the possible effect on global trade and globalization a overall. is this a wedge issue? ambassador westmacott: in the sense of the rest of the global economy? david: other countries are interested in having their own little britain and putting up barriers and discouraging

international trade. ambassador westmacott: there is that risk. i have a huge regard for christine lagarde. there is an important letter in one of the sheets this morning about bill gates come a big investor in the u.s. for whom jo cox used to work. direct foreign investment in the , fit into they wedge is a risk. recent pew research shows in many other countries, europe is not popular. the french are even more anti-european at the moment. risk, if we go down that path, number of others might follow. is parliament able to

follow through if the leave camp wins? ambassador westmacott: one vote, referendum, that's it. arliament would need to enact piece of legislation to give effect to the views of the british people. david: peter westmacott, thank you for being here. banks,ming up, european stocks down. hammered by the feds outlook on brexit concerns. ♪

jon: this is "bloomberg ." equity markets stabilizing, still heading for weaker losses

the fx market, it is risk on a little bit with currency bouncing back. the russian ruble stronger on the session. the canadian dollar stronger on the session as well. up .6%. is the first half of the session yesterday, treasury yields granted -- grinding down. even in japan, the five-year up for basis points. that's four basis points. firmer crude. the bti snapping a six-day losing streak. -- wti snapping a six-day losing streak.

that wraps up the market action. searches have recovered the second of the black boxes from the egyptair plane crashed into the mediterranean. each of to flight data recorder was found with its memory unit one day after the voice recorder was recovered. of u.s. state department officials have criticized the obama administration's policy in syria and have called for military action. an internal document says u.s. policy has been overwhelmed by the civil war in syria. more companies are deciding to sit out the republican convention in cleveland. donald trump's nomination has promised a level of controversy ford, ups,em,

jpmorgan and wells fargo. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. david: monday marked one of the biggest tech deals on record. forosoft buying linkedin $26 billion. eric should -- erik schatzker sat down with bill gates. i think it is a --at transaction not linked great transaction, linkedinh brings a lot. combined with what microsoft and, working with people i productivity, there will be a lot of synergies there. it was very encouraging as that deal came together. glad to see that it really

happened. so far, investors have not been supportive of the transaction. should they be? bill gates: the stock price will jump up and down. i'm no expert on what the stock price should be day today. day.y to the two companies combined are greater than the two by themselves. the market wants us to show that. is an expert in software and managing those audiences and it's great that they now have an opportunity to supply the world and say this feed, this professional feed in linkedin, that's how i want to learn about my career, my company, my industry. if we can make that as valuable as the facebook feed is in the social world, that is huge value creation and that will happen over a number of years. : you were ceo and chairman

ng time.oard a lo execution is always tricky with a deal of this size. what are the keys to not screwing it up? bill gates: you've got great people involved in this thing. does willhat linkedin stay exactly the same. the idea of how you get the contact lists and user profiles from that synergy is pretty easy without changing a lot of the engineering. like -- likest most tech companies, have had deals that of gone better than others. the nature of the synergies look pretty clear. david: that was erik schatzker with microsoft cofounder bill gates. coming up, we will have my ted leonsis.h

european banks nearing their february lows. how much more downside is there? joining us now is barnaby martin . here is my question. european banks suffering day by day. waycredit default swaps below february highs, way below -- how does this make sense? barnaby: you're telling banks get less risky, but that is not a great equity story. one thing we are seeing some of mario draghi's monetary policy is not healthy for the bank equity stocks. those things are difficult in a

world where we have negative interest rates. lessbondholder, you feel risky. --t divergence between swap the equity market is telling you it is a troubling phenomenon. david: is it just that simple? risk for profit -- risk or profit? you can't have both? barnaby: the ecb is trying its best to help the banks recap. we know the peripheral banks if youave a legacy -- are challenging the income story , it will take a while for the banks to grasp this nonperforming loan story in europe. how do you move the bank narrative forward? out.they bailed the banks

7% for italy and spain. npr's are theer governments' problem. barnaby: that is the problem. they.s. got it right when recapped the banks they injected a huge amount of capital into banks and there was no moral problem there. we cannot do the same. we cannot take a lattice of the banks in a blink of an i. -- in the blink of an eye. jon: you have the ecb buying junk corporate bonds. here in the u.s. commission wins for corporate credit just skyrocketed during the fed's

bond buying program. if you're a corporation, you say we will give you free .oney, you will take it it's more intense than what we ever saw through the fed qe era. you never saw a negative yield incorporates. saw negative yielding corporate's. jon: is that because people thought the fed qe was going to work? there's many people who look at the ecb qe and say it is not going to work, i will buy bonds because of that and chased the ecb and go with the momentum anyway. barnaby: we have a bit of a circular problem in europe. the more mario draghi tries with

quantitative easing come it is tougher to generate inflation. the idea of inflation gets entrenched in the consumer's mind. we have raced through sovereign bond buying and corporate bond buying -- david: the more you encourage corporations to borrow, the more they lever up. we worry about how it ends. here we are today with a high yield default rate of between 5% and 6% in the u.s. in an era when the fed is time to raise rates because they are claiming the u.s. economy is strong. you end up with a misallocation of capital and poor lending decisions when you drive down and's debt costs here we are in europe with negative yielding that.

debt.ative yielding we won't know until five weeks we cannot comment on that until we see what they bought. if you have one investment rating, it doesn't matter what the others are. alix: can the ecb get to 5 billion euro a month corporate bond buying or more? if they don't, what does that mean for inflation? on mondayhe number which just represented last wednesday's purchases suggested the ecb would not have a problem getting that 5 billion target. the ecb wanted this program to be self of filling. -- self-fulfilling. alix: such a pleasure to have you. thank you very much.

, european credit strategist. david: is microsoft's purchase of linkedin just the beginning of more consolidation in tech? the chairman of monumental sports entertainment, next. ♪

alix: this is "bloomberg ." coming up in the next hour, we will have a commodities roundtable with barclays head of .nergy research ."n: this is "bloomberg live pictures from the st. petersburg economic forum where

vladimir putin is currently addressing the audience. it series of headlines coming across the bloomberg in the last 10 minutes or so. russia needs to target 4% economic growth rate. the key headline here is that russia needs to cut the nonoil deficit in half. that is the story coming out of russia right now. the oil situation is only one part of the story. the rest of the government and the deficit there is something they need to address. david: they have to balance their books. they have trouble and it is turning into a long-term balance sheet problem. alix: how do we rely on something other than oil over the next few years? jon: that is your update from st. petersburg. let's cross over to julie hyman . back andis bounce

stocks being led by the bank's were some of the worst performers selling throughout the week. -- bnp bnc paraiba revlon buying elizabeth arden for $14 a share. --ut a 50% premium to revlon 's close. arden revlon has risen your today because the best year to date because they were exploring strategic alternatives. both of these companies have been struggling as legacy cosmetics and perfume companies. , that tsonga is

continuing now. sumner redstone trying to remove philip from the viacom board. saga ism, that continuing now. my comment is being upgraded to sector perform from underperform at rbc capital admits this turmoil. -- amidst this turmoil. the stock has not been doing that much throughout this turbulence. david: microsoft's $26 billion acquisition of linkedin raises a question -- which other cash rich tech companies might be looking to buy and whom should they be buying? ted leonsis is the ceo of

monumental sports and entertainment. he owns the washington wizards and the capitals. led at air well -- he --l before -- aol ted: i could see apple buying tesla. that would be a smart move if they want to get into driverless cars. tesla is a software company, a brand. they have innovative next and ration -- next generation leadership and management. company buying a car manufacturer. tesla is really a computer company, just has some wheels on it. you will see those kinds of bi

ds going outside of your swim lane to try to get capability to try to get ip and management. everyone needs to grow into a different business category to continue to get that kind of growth. these companies have such incredible scale -- walmart needs to grow 1% or 2% per year because they are so big. where will that growth come from? 1% or 2% is like rowing their biggest competitor on an annual basis. unless you start to look at different industries, different businesses, it is hard in your own lane to get that can of growth. is now owned by verizon and is said to be a significant bidder for yahoo!

in: i tried to buy yahoo! 1993. we offered $2 million at the time. we watched the company grow. aol inally replicated terms of e-mail and search and content. they built an unbelievable franchise. now, the world has moved away from desktop and desktop search numbers are way, way down and everything is about mobile. verizon acquiring aol was not l's content,o it was about their ad serving technology. all of facebook's growth is coming from mobile advertising. it is what google desires. their one i kill seal is falling behind -- there one i kill you

one achilles he el is falling behind in mobile. needs to be in someone else's hands right now. there is a collective this needs tothat be someone else's platform. it is not a platform itself. tech: a formidable ad presence -- that is not said so much about yahoo! very gifted, talented leader and also understand he was a media business and needed to get more traffic, more customers and .eeded to monetize that traffic he got ahead on mobile.

yahoo! was a platform. it seemed to lack a bit of crispness and whether it was a product company or beget company. for customers, it is users or advertisers. ,avid: that was ted leonsis chairman and ceo of monumental sports and entertainment. tech is going to potentially be the next hot spot of where we will see disseminate -- see this m&a. david: there are companies like apple that have a lot of cash on their balance sheet and they want to grow and apple is having that challenge at the moment it makes sense to acquire. jon: some news coming out of the u.k. david cameron to make a joint statement together with the leader of the opposition party,

mr. jeremy corban on the tragic murder of jo cox. the u.k. conservative party will not contest the election to cox.ce jo minister and the labor leader will be making a joint cox'sent on jo killing. alix: we will wrap up this crazy come unbelievable week. off the charts is next. ♪

alix: this is "bloomberg ." time for off the charts. s, had historic currency movers bond yields moves. julie: i'm looking at the major

currencies over the last week. the japanese yen was the big outperform or against the dollar with a 2.7% gain. that is on this yearning for safety that investors seem to have right now. , theove that surprised me british pound up about .3%. that does not capture the enormous swings we saw over the course of the week. over 2.5% -- is at the level that will get the boj involved or the velocity of that move we have to watch out for? keene-islove the tom ms. i took this back to 2008 because that is when the japanese 40 year was initiated. the german 10 year and swiss you're making these historic

into that are going negative -- swiss thirty-year. if we were showing the u.s. 10 year on here, it would still be above. on a comparative basis, still looking more attractive. bitcoin had quite a move. who would have thought? good stuff. , andrey kostin. ♪

david: u.k. prime minister david cameron and labour party jeremy corban making a joint killing. on jo cox's

hovering at two-year highs. alix: connecting the dots. the feds economic projections run rate estimate. now, we know who it was. jim bullard. david: welcome to the second hour of "bloomberg ." we have a lot more news to cover over the next two hours. leading you right through the u.s. open. alix: global markets are rebounding today, back in risk mode as brexit jitters are dissipating. jon: crude oil snapping its longest losing streak since earlier this year. be joinedur, we will

by michael cohen. alix: i love it. let's go around the world. want to check in with our bloomberg and for in-depth coverage of our stories. whichckee reveals policymakers thing that is enough. in the works wrapping up a volatile week in equity markets. -- in new york. david: the fed's missing dots being solved. michael, this is an extraordinary thing where one president comes out and says i will take a different path here and reveal what i'm saying. the remember this ever happening before? t is: no, but the dot plo relatively recent. this week, we saw that one

member was not playing anymore. he made a forecast for one move up this year and then nothing going forward. to be st. louis fed president jim bullard could lookshanging the way he at the economy and forecasting, going towards a regime based -- the new normal will stay the way we are. instead of looking at converging growth, unemployment and inflation and what that means for the future patent policy, he's going to assume nothing changes for right now, which implies one more move this year and then nothing out into the future. since they cannot forecast a change, he's not going to contribute in a meaningful way to the dot plot going forward. reactionat will be the of the other members of the fomc to this? mike: it does seem to be an

implicit criticism. he's long been a critic of the dotplot. the minutes come out on july 6. it will be interesting to see how this has been received. david: is this the beginning of the end for the dotplot? mike: it could be, there could also be some pushback. data is inherently backwards looking. by the time you get the data, maybe it is too late in the fed will be behind the curve. that's the argument he will get around the table, i'm sure. campaigning over whether the u.k. should quit the european union has been suspended for a second day following the murder of jo cox. mattt the latest from campbell in london.

we will have a joint news conference between the prime minister and the labour party leader. what do we know, matt? matt: at this point, not a great deal. this murder occurred about 24 hours ago, very shocking. it was committed with firearms, guns are very rare in this country. coming in the midst of this very, very heated brexit referendum campaign which has now been put completely on pause. there is nothing happening today come except for this joint saidrance which has been by the prime ministers office that the conservatives will not contest the by election to fill this seek. this seek. -- this seat. from the people you speak

to in the coming weeks now when the respecting tension between both sides to heighten -- does the debate shift ahead of thursday? matt: that is a very good question. thee's no question that brexit debate will intensify again over the next couple of days. a reals happened is change in tone and since these events yesterday. nobody knows the motive behind this senseless killing, but it did come at a point when the debate, political debate in this country had become extremely heated, very tense. it has caused people to look back at the way they've been speaking to each other and perhaps tone things down. jon: thank you very much. we will bring you the headlines in 25hat joint statement

minutes time. alix: a very busy week in terms of stock in equity moves. thanks to a 283 point swing on the dow. joining us to break this down is joe ciolli. this shows the swings in the dow. this was a big move we saw yesterday. 283 points from trough to peak. joe: we ended in positive territory across all u.s. benchmark indexes, we are seeing these big swings and the driver yesterday was the that brexit campaigns would be postponed. people had been very worried about that, seeing that as a potential downwind for the market. uncertainty makes people nervous.

aople thought maybe this is chance for relief, we've been down for several days in a row and maybe it is time to cover some of those shorts and get back into the market of it. today, with the extension of the campaign postponement, the market is back down. people every gathered their thoughts and our thinking -- people have re-gathered their e thinkingnd ar maybe this will not change the final outcome. a lot of questions going into the weekend. vix aroundw the 20 -- we had not seen volatility in a wild. joe: volatility has been spiking. securities linked to long vix products at an all-time high. people are bracing for the

worst. they are anticipating big price swings and tried to capture that and generate returns based on that. trading opposite the s&p -- alix: joe ciolli of bloomberg news. jon: one hour 20 minutes away new york.ash open in the dax up by 45 points. u.s.es a bit softer in the the s&p 500 futures negative two points and dow futures -12. yields still at remarkably low levels in the u.s. we do creep higher come up about three basis points. crude snaps a six-day losing streak. a stronger pound story.

let's cross over to get the headlines outside of the business world. ama: there's likely to be showdown over gun control on capitol hill next week. the government be able to prevent anyone on the terror toch list from being able buy a gun? sanders did not concede, but in a speech, he declared his intent to work with clinton during the general election. the major political task democrats face now is defeating donald trump. russian cyber gangs have been linked to bank robberies worth millions of dollars.

authorities have linked malware used by russian and eastern european gangster number of bank heists. one of them come with a record-breaking theft of $81 million from bangladesh's central-bank. most of the banks targeted are in southeast asia. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. jon: coming up, is the era of leveraged buyout deals making a comeback anytime soon? microsoft's acquisition of linkedin. ,e will speak to michael forman ahead on "bloomberg ." ♪

jon: to our viewers worldwide, the beautiful city of london, se up one full percentage point. it joint statement coming from david cameron and the leader of the opposition party, jeremy corban. that coming in 17 minutes time. let's get to the board. futures softer in the u.s. dow futures negative six. in europe command a bounce back in market stability across assets. alix: microsoft spending $26 billion to buy linkedin, increasing the tech giants debt liabilities by 60% because they have to issue new debt to buy it.

is michael forman. they are using this debt to fund a big acquisition. in february come overall, the leveraged buyout market was shot. is that back right now? michael: the market has been much more robust over the last several weeks. that may be changing as we head into the boat next thursday. there's been more volatility in the markets. the market is always open to deal with that. microsoft is an investment grade barware. -- borrower. alix: we had a lot of issues with pe deals. goldman is getting rid of some of that debt. $.87 on the dollar.

what is you are view over the next 6-9 months when we get out of this brexit debate? michael: you have to get beyond thursday. if the vote is for leaving the eu, things will change, you will see a lot of volatility. there will be consequences. if they stay, there will be a bit of a relief rally. there's been a lot of volatility in the markets over the last year or two. a lot of uncertainty. there's a lot of different factors playing into the markets today. walk me through this. we've had this debate a few times about brexit, the effects, the risk, so to speak. there is no read the nomination risk, no systemic risk -- read re-nomination risk --

de-nomination risk, no stomach risk. mike: most of our loans are two domestic companies -- no systemic risk. toe: most of our loans are domestic companies. the thing that concerns us is the volatility in the markets generally. we have exposure to 500 companies. we will be fine, but there could be general market volatility. from a macrooncern perspective than how it will affect our portfolio generally. the one thing that seems certain is central banks not paying much money for yields. doesn't that make your job easier? periodt has been a long of low interest rates. have a publicly traded bbc on the new york stock exchange

paying almost a 9% yield. books looking for yield, that is great for us. aret of our loans floating-rate loans. we invest at the top of the capital structure. in a low growth volatile market, we are good. if we see rising interest rates and inflation, we are good, too. we are careful investors. one of the reasons we've had this success, our folks are looking at equities. you have many folks saying equities may grow at 4% going forward. we think credit is a great place to be. isx: the business cycle turning -- how many times do you guys hear that? is that true? david: sooner or later. michael: i'm not sure what it's theing to or from big

microsoft transaction is a great example of what's going on in the business cycle. companies arewth, looking for ways to grow, very interesting transactions. you are going from a low growth economy to know growth or low growth to low growth. -- low growth economy to no growth. maybe the market is going to change. i'm sure we will see a recession in the coming years. we are coming from a fairly low point of growth today. jon: jpmorgan saying start --king at the u.s. economy things are fine and study. they will continue this way. people are looking at things saying this is the cycle turning. .hings are softening why can't we continue in the next 3, 4, 5 years in a steady rate of growth? michael: people are saying the u.s. is the new china.

as it relates to the global economy, we are doing better than most. in india, we are seeing robust growth. presumably some growth in china. our economy is in a much better shape than most. 2% growth, not enough to drive the world economy. we will be subject to what happens outside our borders. impacty, we will have an . if there is a hard landing in china, that will have an impact on us. if the u.k. leads, other folks will be looking to leave the european union. position gives you a unique vantage point on the u.s. economy because you are more in the middle market. how have those transactions changed over the last six months? what are people borrowing money for? market: the middle

companies that make more than $25 million a year, 97% of our economy. it is the middle market that is moving the economy and we see general health across our portfolio. there are pockets of issues in energy and power -- energy companies have struggled. healingeeing a bit of in that space. retail is struggling, restaurants are struggling. we are seeing the same thing, low growth, borrowers looking to borrow opportunistically. today, markets are tighter mothers opportunities -- there's opportunities to borrow. companies are borrowing to make acquisitions to fund growth. no different than microsoft. to reduce their borrowing costs and balance -- david: rather than rolling over existing debt. michael: in sectors like energy,

you are seeing mna mother transactions. it depends on the company. &a,you are seeing m transactions. alix: the destruction of lending club, what do you think that says about the environment? michael: the peer-to-peer lending space is great in a robust economy where companies are growing. cnbc and saids on wait until we get into a period when we work out some of these loans. we spend a lot of time looking at the companies. we are bottom-up lenders and we feel better about the credits we are underwriting than a peer-to-peer lender. theinternet has changed world in that respect, but

there's a lot of risk in that model. alix: thank you very much. .ood to see you, michael forman david: the commodities craze. after a big run off the february , crude has had its longest losing streak and foremost. will $40 a barrel become $50? michael cohen will join us to give his forecast. that and more ahead on "bloomberg ." ♪

david: this is "bloomberg ." let's get a check on some stocks that are on the move. julie: oracle is on the list. the company coming up with earnings after the close yesterday. the stock up by 2%. cloudgain, it is the growth investors are focusing on, even though it is still a

percent of the country's total sales, it is seeing rapid growth. -- 8% of the company's total sales. it will rise 85% in the current quarter according to the co-ceo. also this morning, we are -- looking at the company as an alternative to medivation. fee shares little changed at the moment. lumbar liquidators has come to a settlement with the consumer product safety commission. liquidators. it did not have to issue a product recall. the company has instituted many of the corrective measures the agency would have called for. a big increase in the shares this morning.

finally, watching apple as well. this is because of a patent ruling in beijing. apple violated the design patent of a chinese device maker. it might have to halt sales of the latest iphone. specifically in beijing. apple may appeal, although the company is not commenting directly. up, we had over to london. -- head over to london for david 'smeron and jeremy corbyn joint statement on the killing of jo cox. ♪ get ready for the rio olympic games

by switching to xfinity x1. show me gymnastics. x1 lets you search by sport, watch nbc's highlights and catch every live event on your tv with nbc sports live extra. i'm getting ready. are you?

x1 will change the way you experience nbcuniversal's coverage of the rio olympic games. call or go online today to switch to x1. >> this is "bloomberg ." i am jonathan ferro. the ftse is up by 1.4%.

as theket stability, brexit debate descends into silence. let's get to the other asset classes. yields are still higher on the session, but still south of 1.6% on the u.s. 10 year. breaking data -- housing starts month on month, better than anticipated, coming in at -0.3%, -0.9%.vey for the previous month was revised slightly. building permits month on month comes in slightly disappointing and 0.7%. -- at 0.7%. the previous month for building permits was revised higher to 4.9% from 3.6%. futures, just turning that

little bit positive on the dow. s&p 500 futures negative, but barely. alix? alix: it's been a very tough week for commodities. take a look at oil. yes, wti is coming back somewhat today. a six-day losing streak not seen since that horrible decline back in february. for more, we are joined by michael cohen and david wilson. i want to start with oil. it did not make sense, the decline. the dollar was weaker. you had some risk aversion. fundamentals were supposedly tightening. what happened? michael c.: we had the i.e. report and the e.i. report, with clear, bullish signs, yet oil still fell. i think we can attribute it to this broader risk-off attitude.

everyone is looking at brexit at a high level of positioning. the shorts have covered themselves and the net longs have advanced along with the respond rally. some of the positioning is getting liquidated. alix: i'm glad you brought up positioning. david, it is sort of the same thing in your world. i charted copper versus oil. this is the chart of last week when you had copper continuing to roll over while oil went higher. the question was went -- which month followed what. it seems like copper won the day here. david w.: we've had some pretty good -- big deliveries. yes, we had it earlier on in the year, so there is a good code correlation between oil and metals and copper in particular co-correlation between

oil and metals and copper in particular. 10% energy-oil exposure. it's pricing down in the last week, but i think the fundamentals on copper have been a little bit softer, largely because of these lme deliveries. some breaking news out of viacom. they have some bad news coming out. they have revised their estimate for third quarter. there adjusted earnings per share -- their adjusted earnings per share is now $1.05. ippe dauman-- philli is not having a very good time of it. alix: we just heard the lme inventories are sort of what's going on with copper. we have had supply disruptions in oil.

do we wind up seeing that deficit in the third quarter, the inventory draw, or is the height -- hype overblown? c.: clearly, some of the canadian outages are returning. that hasn't once on the amount of -- that has an influence on the amount of cushioning. there have been some hiccups in getting that canadian oil restarted, so that's definitely going to result in inventories being less than what the market had anticipated. alix: what's your short-term target for oil? $46 today. c.: as we head into q3, we believe the direction is down. maybe from a slightly higher basis because of the outages in nigeria, but, at least from our

standpoint, the margin environment for refiners is going to lead to some weakness, we believe, at the end of the summer. desolate demand remains strong, but diesel demand is weak -- gasoline demand remains strong, but diesel demand is weak. there has been a lot of stockpiling in china, which will lead to them demanding or importing less later in the year. alix: what does the downside to oil mean for your specialty? you read copper, zinc, tin, nickel. w.: short-term, we have already started to see a correction in most of the metals. the fundamentals had been good, but we have seen that rally was a little overdone. the rally seemed to run ahead of itself. we think prices with soft and a little bit as we go into the summer month -- will soften a little bit as we go into the summer months.

it has everything to do with positioning. position changes. interesting one is perhaps -- positioning changes. the interesting one is perhaps copper. it is slightly softer. we think there is a relatively high flaw. what will make it pick up? that's where it struggles. it's difficult to be positive on prices with regard to copper. alix: at the beginning of the year, all we were talking about was supply. is supply the story, or is it all about risk-on? is it all about the dollar? is a lot of it about the brexit? side in: on the demand china, demand has been better than expected. we've seen very solid buying of copper out of china. this is an interesting issue going forward. a lot of economists now are expecting another period of

period of or another devaluation. last year, devaluation of the rmb prompted the chinese to go out and buy more commodities as a hedge against weaker rmb. we see another surge in buying of commodities. it's quite possible if they continue to use the dollar-denominated commodities as a hedge against the weaker domestic currency. it has not really been fundamentals. it has more been the dollar situation, the macro situation which has been moving prices. alix: talk about investor sentiment. we've heard there are some guys $110. call strikes, $80, what is it going to take for us to see those prices? michael c.: it's part of our medium-term view. these outages get worse. the structural problems we have

a nigeria and libya are not getting better anytime soon. if we see disruptions there or more unrest in eastern saudi arabia, for example, the sky is the limit. alix: thank you very much. watch those commodities for potential downside as we have that risk-on and dollar trade. michael cohen, good to see you, as well as david wilson. >> since 2008, the vast majority of flows into and out of etf's has been the result of what the fed has been doing. joining us is eric balchunas. you follow these constantly, fortunately for us. tell us what you are seeing and what's different. eric: it seemed like the thread god, -- the fed was a lording over each dollar. this year is completely different. it's from day one of this year.

there has been a fear of stocks collapsing in this market. here's what -- the phrase i like to use. untilout four years, up this year, we have seen people fed-proofing their portfolio. now they are stock-proofing it. they have bigger fish to fry. the ultrashort and short leveraged 500 etf's are bigger. people are not hedging for risk. they are hedging for a collapse. >> where are the funds coming out of and going into? gold had been taking in money like back in 2011 or 2009, 2010. it was more of an inflation hedge. is the money going into gld a crisis hedge. these are people looking to offset a possible stoploss. we've seen a huge craze into low volatility etf's. people who want a taste of the

stock market are looking for some of the risk to be taken off the table. >> give me an example of a low volatility etf. eric: the ishares minimum volatility etf. it's 20% less volatility than the s&p 500. ishares and powershares have a into suite that go emerging markets and small-caps. volatility etf's have taken in money this year. that's a bigger hot trade than hedging currency. the fed is on the back burner now. >> what are you seeing inflows into etf's that are cash or cash equivalents? eric: normally, we see people rush into those. there have not been many flows. i've heard money market funds. there are no true money market

etf's. the flows have been going in bonds to the aggregate bond etf's, the kind that a lot of us would have as our poor von slug -- poor bond slug. those are people selling their stock position, taking profits, and beefing up their fixed income positions in their portfolios. it is a rebalance, not a dance around the fed. >> i learn something from you every time you come here. let's look at headlines outside the business world. emma: thank you. searchers have now recovered the second of the black boxes from the egyptair plane that crashed into the mediterranean. the flight data recorder was found with it's important memory unit. that comes a day after the voice recorder was recovered.

investigators hope this can tell them why the plane crash. -- crashed. thens have criticized policies regarding syria. it says u.s. policy has been overwhelmed by the civil war in syria and argues that military action is needed to pressure syria into engaging in peace talks. the real estate market in san francisco is starting to lose steam. in the last four years, the median price of a home has risen to $1.2 million. now, the inventory of luxury homes is at a high. prices were driven by hiring boom for well-paid tech workers. global news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. the program,up on we will head to yorkshire for the u.k. prime minister david cameron and labour party leader jeremy corbyn in a rare display

of political unity in the wake of the tragic murder of labour mp jo cox. they will be speaking in her constituency eminently. -- imminently. we will bring you those pictures coming up on "bloomberg ." ♪

david: this is "bloomberg ." i am david westin. coming up, andre coasting -- andrey kostin joins us from the economic forum in russia. >> this is your "bloomberg business flash." appletors said that

violated a patent. it may have to stop selling its iphone in shanghai. it is appealing the ruling. there is a deal in the specialty chemicals industry today. selling ais treatment. the price is about $3.2 billion in cash. that's your "bloomberg business flash." jonathan: we bring you live pictures of prime minister david cameron alongside the opposition, labour party leader jeremy corbyn, both of them in jo cox's constituency, alongside the speaker of the house as well, laying flowers for jo cox, the murdered labour mp. those individuals, prime minister david cameron and the labour leader jeremy corbyn,

about to make a joint statement. ur,i first met jo in darf where she was doing what she was brilliant at, saving the lives of vulnerable refugees. here we are today, commemorating her life that has been lost. the most profound thing that has happened is to children have -- two children have lost a mother, a husband has lost a loving wife, and parliament has lost one of its most brilliant and passionate campaigners, someone who epitomized that role is about serving others. it is a moment to stand back and look -- think about some of the things that are so important about our country, the fact that we should treasure and value our democracy, where members of parliament are out in the public, accountable to the public, available to the public. that's how jo died. she died doing her job.

i think the second thing is that we should recognize that politics is about public service. people who go into public life, they want to act in the national interest, to pursue the national interest, to do things for other people, to make the country, the world a better place. politicians disagree with each other. we often disregard each other. but at the end of the day, that's what it is about, and that's what jo showed it is all about. but perhaps most important of all, we should value and see as precious the democracy that we have on these islands where 65 million of us lived together and work together and get on together. we do have peace. we do have stability. we do have a measure of economic well-being that is better than other countries, obviously still to be spread far more widely. it is all underpinned by tolerance. where we see hatred, where we find division, where we see intolerance, we must drive it

out of our politics and out of our public life and out of our communities. and if we truly want to honor jo, then what we should do is recognize that her values, service, community, tolerance, the values she lived by and worked by, those are the values we need to redouble in our national life in the months and years to come. corbyn, yourself another senior politicians are granted a level of security greater than that of the rank-and-file. what about for mp's who are concerned about their day-to-day lives? jeremy: we need our whole society to be secure. jo was murdered here 24 hours ago in a town she loved and grew up in, serving the community she loved. in her life, she had worked for anti-slavery campaigns. she had worked for oxfam.

she was a campaigner for human rights and justice all around the world. she was taken from us in an act of hatred, in a vile act that has killed her. it's an attack on democracy, what happened yesterday. it's the well of hatred that killed her. she leaves behind a husband, who made a truly wonderful statement yesterday, a statement saying that, in her memory, we will try to conquer hatred with love and respect. she also leaves behind two young children who will never see their mother again. they will only be able to grow up knowing what she was, what she stood for, and what she achieved. i've asked the prime minister and the speaker for the recall of parliament on monday, and they have accepted that request, and parliament will be recalled on monday so that we can pay due tribute to her on behalf of everybody in this country who

thees democracy, values right of free speech, and values the right of political expression free from the kind of brutality that jo suffered. that's why we all need to come together, to understand that everyone must have protection and security in order to function in a democratic society. jo was an exceptional, wonderful, very talented woman, taken from us in her early 40's, when she had so much to give and so much of her life ahead of her. it's a tragedy beyond tragedy what has happened yesterday. in her memory, we will not allow those people that spread hatred and poison to divide our society. we will strengthen our democracy, strengthen our free speech. she was a truly wonderful woman. i'm deeply sorry, deeply sad for what has happened to her. my condolences to all of the people she represented so well and of course to her wonderful

family, her husband, children, and all of her wider family. >> to the events of yesterday cause you and parliament -- do the events of yesterday cause you and parliamentarians to look at politics differently? do the politics, squabbles of the past seem that much more trivial? >> today, i think everybody is united in grief, in horror, and in an overpowering respect for somebody who we came to know, whose talents we admired, whose passion we observed on a daily basis. there are legitimate differences, as the prime minister and the leader of the and those have said, differences on matters of policy will always be there. that's part of the democratic dialogue. but we are able to come together and to say two things. first of all, as everybody here

knows, jo cox was a quite outstanding member of parliament who, in 13 months representing her constituency, made an extraordinary impression on her and,agues, on the media, i'm quite certain, on her constituents. as has already been said, she had a huge amount more to give and she was inspired by a moral passion, purpose, and a deep-rooted conviction. her children and colleague and constituency -- colleagues and constituency can be incredibly proud. secondly, it was a despicable and appalling act, which has shocked not merely the people in the constituency, but across the country and, i suspect, many millions of people around the world. evil cannot be allowed and will not be allowed to triumph over

good. and we just have to underline our determination as politicians across the spectrum that free speech and the right of people to go about their business and the pursuit of principle will continue, and it will not be billed or -- dulled or dimmed or cowed in any way by people that think that violence and the spirit of hatred can be allowed to triumph. that has not happened, as i think we are demonstrating today, and it will not happen -- not now and not at any time. everybody here must be incredibly proud of jo cox. from my vantage point, i got to see her, i got to hear her. i knew of her passion, her commitment. i knew of her quite

extraordinary hard work. everyone here today knows that. we have come together in grief, in admiration, and in respect. >> thank you very much. dallas u.k. prime minister david cameron, labour party leader jeremy corbyn, alongside speaker of the house john bercow, addressing news organizations around the world following the tragic murder of labour mp jo cox. a show of unity, david. david: deeply somber and measured, encouraging people to be rational and reasonable and tone down the rhetoric. alix: something we have not seen in the last few weeks. david: joining us is richard stengel. we want to talk about the global entrepreneurship summit.

before that, it is particularly appropriate you are here today. among your responsibilities is public diplomacy for the united states government. you deal day in and day out with that line between free speech, aggressive advocacy, and violence. what's your reaction to what you just heard? richard: i would commend what they all said. the prime minister reminded us, which i'm aware of every day, that people in government are in public service. they do what they do at great risk. one of the things that has been unfortunate in the environment in the u.s. and the u.k. is this merging of public service and government service, this "house of cards" narrative about what people do. i think that's unfortunate. the tragic death of jo cox reminds us, here is a woman out on the barricades, preaching free speech, preaching help for refugees, all of these issues important to our respective governments, and she paid the ultimate price for it.

jonathan: we are seeing rhetoric getting increasingly ugly on both sides of the aisle, not just in the united kingdom over brexit debate, but here in the united states as well ahead of the presidential campaign. are there any lessons going to be learned? is anything going to change? richard: the coarsening of the dialogue is not a good thing for anybody. i think voters respect the people in public service need to be rational and calm in dealing with all these issues. i think, ultimately, that's what people will get. i do think the whole point of the first amendment is not to protect the speech that we love, but the speech that we don't like, and i think people have to realize that and remember that. alix: the other sort of issue here and over in the u.k. is immigration. jo cox, obviously a big defender of the syrians. when you are looking at this

year's presidential election and you are overseas or thinking about coming to work here, what do you think about? i think the thing that people need to remember, particularly about the united states, for refugees to come to the united states, they have the strictest, most rigorous analysis of their safety, of their values, other ideas of any people who come into the united states. there have been 750,000 refugees who have come into the u.s. since 9/11, not one act of violence or terrorism among them. it's an extraordinary record. ihink people don't understand exec and what that really means. david: i want to make a slight turn. you can to talk about this global entrepreneurship summit. describe for us what that is. you are bringing together small business and startups with government officials from around the world to talk about how they can work together better.

richard: this is one of the best things we do as a government. it's the seventh global partnership summit since president obama proposed it in 2 009. there will be 700 social entrepreneurs coming together with investors. it's inspiring. they are social entrepreneurs. they are doing what then franklin said, trying to do well by doing good, help their communities, health their country -- help their country, bring prosperity to their families. we are not dictating anything. david: if it's a total success, what comes of it? richard: great businesses that help different countries around the world, not only their economies, but their public health. it's a silver bullet for all these things we are talking about, whether it is violent extremism, the coarsening of dialogue -- these are people doing positive, optimistic

things. the fact that we are bringing them together is one of the best things we do. 10,000we have had the small business initiative. the thing we hear from small businesses and startups more than anything else is that the burden of regulation falls disproportionately on their shoulders. can the government help in that respect? richard: innovation is universal. rule of law and opportunity and investment are not always universal. we seek to level the playing field around the world with rule of law, changes in bankruptcy laws. people in america get a second, third, fourth chance. that does not happen everywhere else in the world. david: thank you for being with us, richard stengel. there will be a big summit out in silicon valley next week, june 22 to 24. thethan: let's get to markets. futures a little bit soft. no drama.

s&p 500 futures down by about three points on the session. the ftse 100 is up by over one full percentage point. some marketability as the campaigns to send into silence after the tragic -- some stability in the market as the campaigns descend into silence. dollar-yen is still around the $1.04 handle. aso addressing the japanese parliament without much effect. rude pushing higher by a full two percentage points, $347.13. we are turning to the three big stories that matter to markets. james bullard says models involving long run forecasting are no longer useful. campaigning for brexit is still suspended.

the yen is facing declines. with us is troy gayeski. good to have you here. let's begin with the first story, st. louis fed president james bullard saying that he is the missing dot we have been worrying about in the so-called dot plot chart. in a statement, he says "the st. louis fed is switching to a new forecast style that does not incorporate the long-run interest rate projection." does this make a difference? remarkablenk it's a admission. all along the lines, particularly last year, there has been a debate, does the market rise as -- is the market right, is the fed right. he is admitting that you have no predictive power over that. stop pretending that you do. alix: it seems like sep projection, the dot-plot --

bullard's thesis gets adopted by the fed, does that make your job easier or harder? models think most discount anyone's predictive power 18, 24 months out anyway. i don't think that will change people's views on the forward path. i think they will be data dependent. jonathan: does the rest of the fed come with him? is that what we are going to see now? do the rest of the fed become jim bullard? troy: i think that's hard to say without having an inside track to the thinking of the governors. they clearly don't have predictive power. they've been severely overestimating wrote -- growth,

inflation, the path of interest rates. perhaps it would be constructive to say stop pretending we don't know -- stop pretending we know things we don't know. the brexit campaigning suspended for a second day after the tragic loss of labour lawmaker jo cox, who was shot dead on thursday. she was an advocate for staying in the eu. looking at how the campaign evolves from here. there are two ways of looking at this. one, some people will say this could change the debate fundamentally toward remain. two, that it was so ugly that it was damaging market sentiment on both sides of the debate. for you, how much is it hurting market sentiment in terms of the rhetoric coming out of the u.k. and europe and beyond? troy: up to a week or two ago, most investment professionals that there was no chance they would leave. oddsmakers said there was a high probability they would stay.

most professional investors still think they are going to pull the lever to stay. if you get an exit about, you are going to see 3% to 5% down in the s&p, even more damage in europe, because it opens up a pandora's box for europe in particular. it won't do a lot of fundamental damage. it opens up a pandora's box of, do we go into a second or third round of euro crisis. alix: the traders are doubting japan's ability to rein in the yen after it rallied to a 22-month high against the dollar. what's the number one asset you would be buying right now? one safeyou had to buy haven asset, it would probably be the longer end of the yield curve. the yen has had such a dramatic move. it's difficult to predict.

moves to predict those day-to-day -- with treasuries, you know if there is more pain in markets, treasuries are more than likely going to rally, and they are cheap compared to other government bonds. we are not advocating that. but if you had to, that would be one thing. uplied volatility has come substantially, but is still relatively low given where treasury yields are, given where the yen is, so that's another thing we would think about. jonathan: looking at the japanese yen, how dangerous is it to go along -- long? we are hearing more and more verbal intervention. is it a matter of time before they deliver with something off the back of it? troy: they more than likely will at some point, but the question is where. you have come back dramatically, despite negative interest rates, despite more to eat promises -- more qe promises.

out andmomentum peters you go into a short-term weakening trend. it's a very tricky market to predict. jonathan: thanks for having -- being with us. troy gayeski is with us through the open. over to russia where the st. petersburg economic forum is in full swing. isomberg's ryan chilcote standing by with a very important guest. n: i'm joined by the ceo of russia's second-largest bank, andrey kostin. thank you for joining me to discuss the president's speech. he said that nato is acting contemptuous towards russia, the west could not care less about russia's position, russia did not start this geopolitical process, that the cold war is

possible, but russia doesn't want it. in other words, he is not saying anything new. what am i missing. ? andrey: i think there is a better mood at this conference than the year before. somehow, we see that there is a big interest from foreign investors. as far as the sanctions are concerned, for example, we didn't invent the sanctions. it is not us who should raise the question. effect onave a bad the economic relation between russia and western europe, for example. i represent the bank. the sanctions should be relieved. on the other hand, the general --ition on it's probably nothing new.

we are interested in fulfilling the minsk agreement. our position is that it is not because of us, but because of the ukrainian side that those agreements are still not fulfilled. ryan: you mentioned sanctions. the eu, maybe to rain on russia's parade, maybe two rain forum,o rain on the extended sanctions against russia for a year -- the sanctions connected with crimea. what do you say to that? andrey: we don't expect sanctions against crimea will be -- that's a different story. but, definitely, we will be looking for another decision. personally, i don't expect the sanction will be moved this time. probably after american election. ryan: the sanctions that were just extended by the european

union, you consider those to be -- those were going to be extended anyway. as far as you are concerned, they are no big deal. andrey: it's a big deal for crimea, because crimea is now restricted in developing. ryan: the ones that affect you most are the ones -- andrey: the much broader sanctions. they cover important economic issues and russian banks and russian big companies. we don't accept sanctions anyway, but there are two separate kinds of sanctions. ryan: those sanctions have not been extended yet. the eu will decide on those in the next month. your view is they will extend them. andrey: there's a lot of information coming in that they are considering may be softening or removing them -- considering

maybe softening them or removing them. ryan: what would attract residency mean -- a trump residency mean for russia? ago, thee minutes russian president said that he made those comments in passing. he said that trump was "a bright personality." is trump good for russia? andrey: all of us think that russia will work with the president that is elected. trump sounds much better for russia, but we don't know him. we've never worked with him. mrs. clinton maybe sounds much worse, but there is a record of having a relationship with her. definitely he had a good relationship with bill clinton. hillary and bill are two different people, though they are related, so she might have a

different view on russia and what's happening now. it's a difficult choice between the person you'd know and the person you don't know. the person you don't know could be better or worse. nobody knows. at this moment, pugin is telling tin truth when he is -- pu is telling the truth when he says we will wait and see and work with any president. ryan: you wake up on june 24 and learn the british people have voted to exit the eu. what does that have to do with russia? andrey: there is an effect on the markets and the european economy that is not good for us. we very much hope this won't happen. i would buy sterling today to sell them on monday, probably. ryan: a guest earlier said he thought russian equities would fall as much as 10% if we got a brexit. andrey: maybe temporarily. ryan: your banking operations in

london -- are you going to keep them? even if there is a brexit? andrey: i don't think that london will cease to be an international financial center after that. itn: the ecb itself, is adequately positioned -- provisioned? andrey: we think that, starting from next year, we will go back to good profitability. ryan: can you quantify "not too much profit"? andrey: maybe tens of billions of rubles. ryan: thank you very much for your time. russia'sthe ceo of second-largest bank, vtb. the russian president is still speaking. we will continue to monitor that. alix: thank you for that great interview, bloomberg's ryan chilcote.

we will take a look at what kind of credit is most attractive right now for creditors. this is "bloomberg ." ♪

jonathan: this is "bloomberg ." i am jonathan ferro. let's get a check of the markets. futures, a little bit softer throughout much of this morning in the united states. dow futures, -18 points. nasdaq futures, down about 1/3 of 1%. let's cross over to julie hyman to get some stocks on the move. julie: we will see what happens at the open. let's take a look at viacom.

we learned a few moments ago the company was forecasting earnings below analyst estimates. this is a midst of battle between the man who controls the company, sumner redstone -- this a battle between the man who controls the company, sumner redstone, and dauman, who is in the process of being removed by the board. "e company is blaming this on teenage mutant ninja turtles: out of the shadows," which did not do so well with moviegoers. european banks are rebounding. the rebound is gaining some steam compared with when we checked earlier. rising about to the highs of the -- session. succe we talked about gunmakers who tend to see a bump up in their stocks when you see these mass shootings on speculation that

there will be some sort of increased regulation. smith and wesson is rising on earnings as well as speculation. earnings per share rose i-65 percent, beating estimates -- rose by 65%, beating estimates. that's causing the big bump up in the stock. it turns outahead, microsoft was not the only one. we will look at salesforce's failed bid to buy linkedin. ♪

jonathan: this is "bloomberg ." i am jonathan ferro. with all of the global uncertainty, investors are searching for havens from market volatility. troy gayeski is still with us to talk about where to go. a lot of people are missing the point. there have been tremendous

capital returns so far this year, one of the best-performing places in the market. does that continue? : when you are talking 15 years and beyond, that is more credit driven. we are talking about credits that are trading at a very wide spreads related to cash. you have a lot of technical dislocation. edu have had weak-hand crossover selling. some people think, wrongly, that china is going to implode, so they don't want to belong on the asset. we've seen a tremendous amount of dumping of structured products. so, basically, assets backed by kevin commercial loans -- by commercial loans, real estate, or the commercial housing market. improving,omy keeps

prices could run up quite a bit. very little risk to a lot of the things troubling the globe today, whether it is china hard landing, china devaluation, brexit, which none of us thought was a high probability two weeks ago, but is looking pretty dicey now. perspective, and in u.s. assets that will only struggle if we have a deep, dark -- perspective, owning u.s. assets that will only struggle if we have a deep, dark recession, that's looking pretty good. david: will we have a deep recession? troy: unless something changes dramatically, it's hard to see us having a recession. is groovy struggling. trade is struggling. manufacturing is struggling. year, which5% to 2% is a big difference from rece

ssion. alix: you brought up the cielo -- clo's. in the beginning of the year, that issuance was drying up. that market has slowly reopened in the last two months. what happens in the next six months? troy: issuance will remain slow. in order for issuance to speed up, you have to have someone step into by the tranches. so, if i'm an investor and i can buy secondary market double bb's get950 over, then i have to paid something similar to that for new issue. it is hard to price deals to give investors enough return. issuance is not going back to the lows of this year, but it's going to be much slower this year, 1/3 to 1/2 of where it was last year, but that's healthy.

until that market comes back into balance and prices are reflected in fundamentals, issuance will be much slower. jonathan: how will you play next week? how will you set up ahead of that? how do you want to be coming out of the other side? troy: at this point, the die is cast. we have been ramping up our strategies for quite some time. we have a little bit of volatility exposure, which still looks to be relatively cheap if the outcome occurs. the question is what do we do next? if we get a brexit out vote, we will ramp up volatility exposures even more, not to chase the near-term implied vol. you will have months and months of uncertainty. if they say remain, which we expect, we will ramp up cash exposures. there could be a pretty significant risk-on move. alix: when you take a look at

the market, in particular the credit market, what distortions are legit? what is due to regulation? you mentioned the risk retention for clo's. they have to keep that risk on their balance sheets. troy: it's hard when you look at any asset class that has been beat up. here, you have a reasonable idea where the ver -- various trajectories of the u.s. economy could go. you can look at history, fall cycles, losses. it's almost 100% technical. clo's is about 80% technical, 20% fundamental. you cannot underestimate how important regulatory reform has the "marketout makers. if you are an investor, you have better long-term opportunities, but every now and then, you're

going to get punched in the face. when fundamentals turn, you can have a big gap in price action. jonathan: the gap in price action is something we can talk about, especially ahead of next week and in the fx market as well. troy gayeski will be sticking with us. the open of the dow is coming up on "bloomberg ." this is the state of play. futures firming up a little bit. now relatively unchanged. futures negative by only about 0.1%. the ftse, a small rally. the cash open in new york is next on bloomberg tv. ♪

jonathan: this is "bloomberg ." i am jonathan ferro. here is the global financial scorecard. futures soft. s&p 500 futures down.

nasdaq down by 2/10 of 1%. dow futures also lower. [bell ringing] let's cross over to julie hyman to get some of the market moves. julie: we don't see the boards moving as of yet because they are just opening up. as you talked about, it looked like futures -- a looks like futures are lower -- it looks like futures are lower. it's a little bit serious we are seeing such a bounce back in european stocks that is not following through in the u.s., even though the u.s. has been experiencing a selloff in recent days as well. it already maybe had its bounceback. we are watching crude oil bouncing back. for six2% after falling straight sessions. that's helping some of these big oil companies, exxon mobil,

chevron, conoco phillips. we will see if that helps give stocks a lift. we are watching albemarle, a chemical company. they are selling a metal coatings business. it will help the company pay down some debt of its -- from its acquisition of rockwell -- rockwood holdings last year. we have been talking about the new soda tax in philadelphia. they had -- the city had a big fight with big soda, if you will, some of the large soda companies, over that tax. we are seeing a decline in coke, pepsi, dr peppersnapple. we will be monitoring whether it affects soda sales in that city. alix: it's quadruple witching. it's going to be crazy today. jonathan: the yen erasing

earlier declines. traders think japan needs to rein in the currency after it rallied to a 20-month high yesterday. let's hear more from alan ruskin. still with us, sky bridge -- skybridge's troy gayeski. some people said 105. we went to $1.03. there was no evidence the boj was doing anything. alan: if the yen was moving through 100 against the dollar and it was some sort of brexit-related event, then i could certainly see the bank of japan saying, look, we are subject to all of these external forces, we are a pretty special country, in as much as we have a much stronger currency here. some of you guys are dealing

with a weaker currency. we are dealing with a stronger currency. surely we can intervene in that context. japank that the u.s. and and the g-20 would give the go-ahead. david: does japan wants to intervene, but they feel constrained by b-2? the secretary has been holding the reins back. the deputy finance minister said overnight that he would like to consult on g-7. is severeink there constraint as to what japan can do. it's not just the other countries and what they are saying. japan is weighing would intervention be effective. you don't want to get in this fights with this market. i say they -- in this fights -- in fistfights with this market. the: coming inside

bloomberg. the white line is u.s. yields versus japan real 10 year. you back out inflation. that gives you the real yield. u.s.it rises, it means the real yield is rising. the blue line is dollar-yen. in april and may, they tended to move together. that makes sense. we are seeing an enormous divergence right now. the u.s. yield level is rising, yet the dollar keeps falling against the yen. does that make sense? alan: there are a lot of distortions in terms of the real yield story. things, whenide of you have a risk-off event, you have a flight into treasuries, treasuries go lower, and people by the yen as well. well.ple buy the yen as but then, there are also effects in terms of inflation expectations as well, and sometimes the inflation

expectations effect can outweigh everything. alix: is there in version? -- inversion or reversion, where the yen winds up moving towards those real yields? alan: i think there is something more going on. i think this is a balance of payment story. in japan, this current grant -- account surplus has been growing. last year, there was recycling. that has come to an end. when the yen is strong, it tends --reinforce self we are in that loop again. we just made another low. life insurance companies and pension funds are thinking, wait , we have to hedge that for an exposure. getting out of that -- hedge that foreign exposure. getting out of that loop --

where does it stop? david: if they wanted to intervene on the yen, how could they be effective? as you said, there is a question whether they would be. when they went negative in february, it had the reverse effect. what would they need to do to be effective? alan: in terms of intervention, i don't think it will be effective. if the fed was intervening with them and doing -- not just the bank of japan's half of it. it's not going to happen. it's the reason the yen is still cheap by a lot of different metrics. basis, it should probably be trading in the low-90's. that's the pushback that japan gets continuously. alix: we've seen a lot of repatriation of funds back into japan, which is why we've seen

the yen continue to rally, in part. do japanese stocks at some point become interesting? troy: they are so correlated to the yen weakness. it's about getting the yen right first. in the short-term, the moment in this to a stronger yen. you have -- the momentum is to a stronger yen. until you see it bought them out or top -- it bottom out or top out, form a base, i don't know why you would take that adventurous that when there are some -- that adventurous bet when there are so many other things to do. jonathan: next thursday, we are going to have a referendum. not going to ask about the politics. what is the potential that we have a serious risk event? are we set up for a severe gap lower? where does the price come? who is established as around an event like that -- who

establishes the price around an event like that? it is particularly difficult to set up for events which are 50/50. there is a gap risk, enormous gap risk in this one. is the market taking account of it in terms of incredibly high volatility in the foreign exchange market, euro-sterling? it's a bit of to the roof -- of it -- it's a bit up to the roof. people try to mitigate their exposure one way or another, in part by having very low notional positioning behind it. you don't need very much to be hit very hard in terms of p&l. emma: -- jonathan: i spoke to --

did you ever think we would have the gap lower? he thought that liquidity, the volume would be there and that he would not get that kind of gap lower. you talk about gap risk. rmbtalk about euro-swiss- style. alan: i think we have learned from the swiss experience. i think the authorities know what's coming up. alix: this is all we have been talking about for the last three months. troy, how much do you think that cash will play a role in the next few days? or when will that get put to work after the referendum? troy: people are already in position. cash positions could be built. the consensus was that brexit

was not going to happen. now it's a clear and present risk. there could be a big rally back. cash could be deployed pretty rapidly. the key is making sure -- to us, if it does go south, you don't get your head chopped off. you are not terribly overweight european equities, european banks. we have a tiny position increase that we love -- in greece that we love. that's going to rip if there is no brexit. and if they stay in, you can capture some of the good carry. don't be too defensive. there are a lot of people these days who are just too defensive in general. alan: it will be very well received. the markets -- china pushed to the side, the fed probably pushed to the side as well. jonathan: give me a currency pair to play the squeeze.

other than cable. alan: euro yen would do very well, i think. almost anything with the yen. alix: short-term. great to see you, alan ruskin, fx research atof deutsche bank. troy is staying with us. david: next on "bloomberg ," shares of viacom are higher. we will have the latest on "bloomberg ." ♪

david: "bloomberg ."

-- this is "bloomberg ." i am david westin. emmanuelle.ulian emma: this is "bloomberg ." latesta chandra with the "bloomberg business flash." apple may have to stop selling its latest iphones in the chinese capital. apple is not commenting. it can appeal the ruling and still be allowed to sell the phones during the process. there is a deal in the specialty chemicals industry today. albemarle is selling a division a germany's -- deivision to germany company. albemarle is looking to pay down its debt from a recent

acquisition. they are selling the garden shane -- chain. tesco had been trying to revive its main supervisor business. that's your latest "bloomberg business flash." david: let's go to bloomberg's abigail doolittle on stocks that are moving in early trading. looking at are weaker open. shares of apple are down 1.4%, although off of the lows to some degree. first, china did order apple to stop selling the iphone 6 and iphone 6 plus in beijing on a patent infringement issue. secondly, price targets were lowered. bearish news on apple, shares down about 8% this year. trading higher are shares of smith and wesson, up 8.6% after

the gun maker raised its outlook for the fiscal first quarter. tops017 forecast now estimates. shares have been upgraded. there is a 15% bearish shortage. some of the strength could be short. those are two stocks moving here at the nasdaq. alix: we are watching viacom. shares are higher as sumner redstone is reasserting his controlling stake in viacom, setting the stage for the really -- the removal of philippe dauman. alex sherman and troy gayeski. i heard tom keene compare this to "game of thrones." can you help us understand what's going on with viacom? troy: maybe it's like the end of the "titanic." is just a complete disaster. even in today's earning results,

viacom comes out and says we have revenue coming in from subscription video-on-demand deal that we were unable to collect on because of the corporate governance mess. not only is this playing out at sort of the family level of who is really running the company, is sumner redstone competent, etc., but it's starting to affect their day-to-day business. partners don't know what they are doing. you are also seeing it with the paramount sale. philippe dauman has said, look, the best in for this company is to sell 49% of paramount, our film studio. sumner redstone says, i don't want to sell paramount, unless there could be a broader overall transition of the company. tome, arguably, these moves remove the board of directors and potentially remove philippe dauman as the ceo are the right moves for the company to make. viacom has struggled. you can make an argument that

this is the right thing to do. under the subterfuge and question marks about who is doing this, is it sumner, is it shari, the right moves maybe mean made -- being made in a way that's uncomfortable. david:hat's what is -- that's what is so unique. you have courtroom struggles. i don't remember a circumstance -- i think shari redstone, his daughter, is doing all the talking. that have to be resolved in the courts. alex: it's a weird situation where you have someone who is still in control, but who is not capable of speaking. some of the viacom directors who are being asked to leave want to see wu -- sumner face-to-face. alix: viacom was in trouble before any of this happened.

the idea that companies are finding increasingly difficult to find that organic growth -- some wind up paying really high prices for that. troy: the problem for investors is it's very hard to figure out exactly what's going on beneath the hood. clearly, they have been underperforming. in the big picture, corporate governance reforms and shareholder pressures have been on the rise for quite some time. that fits in the narrative. there are so many unique characteristics of this, it's very difficult for investors to make heads or tails of it. alex: it turns out that microsoft was not the only bidder. couplee the story -- a days ago, we picked up that goldman sachs was working with a mystery other bidder. we figured out it was salesforce they were working with, which is interesting. it's a much bigger bet for

salesforce than for microsoft. that has to indicate they were thinking about a bet-the-company thing. they bought a much smaller company instead. they decided to go in that direction ultimately. the other interesting thing here is that, last year, microsoft was thinking about buying salesforce. we broke that story. microsoft started to hear from its shareholders and realized that was too much of the -- a big bet-the-company event for ceo satya nadella. there is a lot of looking at your rivals and figuring out what we want -- want to advance in cloud services and how big of a bet are we willing to go. thethan: alex sherman, best-kept secret in silicon valley in the last six months maybe? coming up, it is "bloomberg

markets" with vonnie quinn. speaking onill be global markets. campaigning is suspended today after the unfortunate death of jo cox, the mp. the market seems to be calming slightly. we will speak with the ceo of the margaritaville, the jimmy buffett empire. and richard jones. david: thanks so much. more "bloomberg " coming up right ahead. ♪

jonathan: this is "bloomberg ." i am jonathan ferro. s&p 500 is lower, down by about 2/10 of 1%. beginning with equities

worldwide. the dax is up. the ftse 100 is rallying towards session highs. european equities and u.s. equities still heading for a weekly loss. a bit of market stabilization as the campaigning in the u.k. descends into silence. yields in the u.s. still remarkably low, higher on the session, though. even with some verbal intervention in japan from the japanese finance minister addressing parliament today, the dollar-yen still with a $1.04 handle. euro sterling is pound strength. david: what strikes me this week, we came into the week thinking it was all the central banks. i think it was all about brexit. central banks stood back, did not do anything.

the markets, particularly the fx market and sovereign debt, goodness knows, responding to risk. alix: how many asset classes had a selloff like the february lows? european banks, around the federal -- the february lows. suisse. bank, credit oil selling off. it encompassed the risk-off world. to take onilling risk in the weekend. jonathan: i think you can make it about risk aversion. the trend has not been just a few days or months. it's been a few years. in the fx market around dollar-yen, the market is starting to shift. we don't believe it's going to have the effect. david: i would say, james bullard, pham -- from st. louis -- i don't believe the models we have had.

we are going to have to rethink the entire way we are modeling the economy. jonathan: the very idea that one hike is all that is needed for the next 2 1/2 years -- the idea that is around the table at the fomc is a big deal. i wonder how that debate evolves. alix: talk about data dependent. david: it'll be interesting to see what the other members of the fomc do in response to mr. bullard. jonathan: i'm looking forward to their comments. david: that does it for "bloomberg ." thank you for joining us. stay tuned for bloomberg markets. join us again next week. ♪

>> it is 3:00 p.m. in london and 10:00 p.m. in hong kong. >> i am mark barton. this is "bloomberg markets" on bloomberg television.

♪ >> we are going to take you from new york to london to rome in eight of the next hour. this is what we are watching. campaigning for a brexit is being suspended for a second day after the murder of labor lawmaker jo cox. prime minister cameron says it is time to treasure for this democracy and drive hatred out of politics. >> oil recovering from its biggest drop since april as bob dudley speak to bloomberg. when will markets finally rebound? a classic song margarita inspired more than a happy hour don't drink. we look at the global conglomerate made of