guy: welcome to "on the move." 7:30 in london. caroline hyde is sitting next to me. welcome to "countdown." i'm guy johnson, and i'm alongside caroline hyde. we are watching the final countdown. the bookies on the fx market are betting on remain, but the polls put it in the end. who has it right yet co yellen leads the retreat. a subtle change puts a dovish .utlook

volkswagen faces investors. the people get their say in the first ag m since the emissions scandal. will shareholders grab the wheel? than 24 hours away. the polls will be open this time tomorrow. it is getting quite exciting. matt miller wants to amp up the story. caroline: he is american. he can look with interest. guy: we are british and reserved, but nevertheless, the financial markets are not feeling reserved. the bounce we have seen over the past couple days has been sensational, and today, it looks like we are going to carry on. for the euro stocks, it's called up another 1%. it was up 0.8% yesterday. european market pretty much across the board are up 0.8%. the remain bounce is very much intact this morning. caroline: it's being played out in the fx market. we are seeing the pound, one of the best performers, currently thing percent.

on the flipside, you are seeing money going to the young. is this a haven trade? yellen sounded all the more dovish yesterday, of course coming out yesterday with her testimony saying, they are watching for weather rather than when the u.s. economy would show clear signs of improvement. you are seeing the yield on u.s. debt coming down slightly for the first time. .we've got a halt in the declines. we've got the longest losing streak in u.s. treasuries since april. that dovishness, being offset. brent, up 6/10 of 1%. energy stocks going higher. selina wang has the bloomberg first word news. selina: thanks, caroline. janet yellen has sketched a cautious and uncertain few of the u.s. economy in the first of two days of testimony to lawmakers. the fed chair says she sees near

and long-term factors clouding the outlook. she warned of a possible fallout if britain votes to leave the european union. >> this is a unique event. parallel.close it is hard to know what the consequences would be. of course, there is always uncertainty domestically and globally. we operate in an uncertain environment. selina: volkswagen will face investors in its first agm since the emissions scandal. a lawsuit was filed in germany on behalf of a california losses.fund over volkswagen's share price is down almost 24% since admitting to cheating on emission tests last september. hong kong's richest man has told bloomberg that corporate taxes should be raised to tackle wealth inequality. or 2% couldke of 1% be used to help the poor

although he opposes higher taxes on individuals. the bill, hillary, and chelsea clinton foundation was among organizations breached by russian hackers. that is according to three people familiar with the matter. the attacks on the network, as well as those of the democratic party and hillary clinton's presidential campaign, compound concerns about her digital security, that as the fbi continues to investigate her use of a personal e-mail server while secretary of state. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. guy: thank you very much. polls open for the u.k. referendum in less than 24 hours. both campaigns have entered their final and most passionate stages. some polls remain that can. we heard from both camps. >> our extraordinary country has always made its influence felt not by walking away from the

world but by engaging with it. brits don't quit. >> if we vote leave and take thatcontrol, i believe this thursday can be our country's independence day. guy: boris johnson and david cameron, their respective sides have passionately held views. the market has been fascinating over the past several sessions, looking at how the risk is priced in. jonathan bell, chief investment officer at stanhope capital, joins us on set. another note how this morning highlighting the asymmetry of the risks, stockton talking about the fact you could see big directions -- corrections. to have somems pretty big numbers when it comes to the downside. i am trying to understand how the symmetry works. those are big numbers on the downside.

what does the upside look like if we were to remain? walker we threw the next day, week, month. >> the first thing to look at is sterling. that is where markets are looking. what happens to sterling? if we have a remain vote, we will see sterling bounce. the odds increase for remain. maybe we get to 1.50. i can't see it going any higher than that. quicklywill go to 1.50 and then maybe up a little bit more against the dollar. if we leave, there is a big fall in sterling, and i could see us going to about 1.30. the odd thing in the comment just talked about is what goes to the ftse. 10%, look atalls u.k. earnings on the ftse. are you saying u.k. earnings would be wiped out to zero? that is what you're going to

need if you see the footsie go down 15%. i suspect what we will see in the equity markets is, having had the sterling fall, the ftse doesn't need to move much there will be a knee-jerk reaction down, but it doesn't need to move much. caroline: what about the flipside, if we have a rally in the currency? exactly. that is why you won't see much of a rally. 6200 to may be 6500, but you can't get much further. caroline: is it midmarket play? >> when you look at the u.k., you have to say it is more medium-sized companies that have a bigger impact. the main impact is the currency, and that is where most people are looking. this morning, when you are talking about the yen and sterling, that's an interesting trade. the chances are we have a remain vote and sterling goes up. if you are betting on getting the best return, you by sterling. if you are worried about the

risks, you look at dollar-yen and cold. -- gold. you can have both going up at the same time. with the difficulty is is what happens in europe. if we have a brexit vote, that is also bad for the euro and bad for european equities. guy: just to muddy the waters moreguy:, there are some high cash allocations out there at the moment, and the weight of money story, from a flow point of view, could alter the dynamic you describe, people talking about piling into european equities. i wonder whether or not that would slightly mess of the model you describe. >> i think it is eurozone equities you go into. in the currencies, you see the biggest bounce in sterling. caroline: on the other side, your hedging. you are using the yen.

if we do remain, do we see some falloff in the yen? you start looking at japan in it of itself -- >> the interesting thing is, come next week, if we have a remain vote, we will stop talking about remain and brexit and start looking at other issues. you will have issues about, is china going to have a significant slowdown, and is there a financial crisis there? those start becoming further a people's list of criteria. i agree with you that the yen -- i can't see the yen suddenly falling off significantly on a remain vote. we look somewhere else. caroline: we will that 6% rally we've seen? >> japan is interesting at the moment. the yen is really hitting the japanese economy. they needed to weaken again. -- what action is the bank

of japan going to be able to take to try to stop it going through 100? caroline: we will be digging into all the ramifications of remain or exit. we want to be looking at bonds, and -- as walter jonathan bell is staying with us.up next , a subtle change in fed speak could mean a run girl -- longer rate half. how to interpret janet yellen, coming up next. ♪

caroline: welcome back to "on the move." a rather gray, gloomy city of london. 23 hours, 17 minutes to go until the referendum. we are relatively optimistic on the futures numbers. let's have a look at what is going on in the rest of the world. here is selina wang. h&m has reported a decline in second-quarter earnings, missing estimates. the swedish fashion retailer marked down merchandise that was not selling in europe because of wet and wintry weather. mitsubishi motor has forecast a full-your loss of $1.4 billion. the company says the fuel testing scandal will cost it to $2lion dollars this year -- billion this year. it will be the carmaker's first loss in eight years.

tesla motors has made an offer to buy up firm in, which elon musk is the biggest shareholder. this deal for solar city could be worth $2.9 billion. tesla'sng to musk, vehicles would return home to batteries in the solar city system. that is your bloomberg business flash. guy: thank you very much indeed. yellen, let's talk about yellen, leading the retreat. she is sound and less and less dovish. the federal reserve chair offered a subtle but meaningful update to her outlook. >> proceeding cautiously in raising the federal funds rate will allow us to keep the support tolicy economic growth in place while we assess whether growth is returning to a moderate pace, whether the labor market will

strengthen further, and whether inflation will continue to make progress towards our 2% objective. guy: the devil is in the detail. in case you didn't catch it, she says the fed will assess where the growth, the labor market, and inflation will make progress. last week at a press conference, she had said, verify economic improvement. are we reading too much into this? sometimes, these words are important. jonathan bell, ceo of stanhope capital, joins us. mr. dudley has. at the bottom of the dot plot chart. he says effectively we are going to see a low rate environment from the fed for a very long time. do you agree? i think it's going to remain low for a very long time. the question is, what do we mean by low? they're talking about going up to 2% by the end of next year. i suspect they will under shoot that number, and that is low.

his numbers are lower than that. another governor, james bullard, said, don't try to make predictions. we know we are in a low rate environment, and that is going to continue for the next two years or two and a half years. we are in a low rate environment, and of course, there's been a big change in what janet yellen has been saying because of these may payroll numbers. the whole time, she has looked at the labor market, what is happening in the labor market. you've got a disappointing payroll number, and that changes her wording. it is subtle change in, but that subtle change more or less means we are not going to have a rate rise in july. i can't see us getting employment dated that justifies a rate rise in july. in september, we will have to see whether there is sufficient improvement. caroline: w.a.r. p/e on the world interest rate probability says, no, we don't get any rate hike at all this year.

>> we're close to whether there is one rate hike. in december, in terms of the odds. we may have one in december. probably not two. it is all dependent on what happens in the employment market. caroline: just the u.s., not global risks? is she looking at brexit? she was talking about concerns and the u.k. > she talked about the said, don'tshe overstate the importance of brexit. that is one short run risk. by july, we will know the answer to that. there are things in the u.s. they are concerned about. -- they haverowth revised their growth forecast. inflation isn't yet hitting the target. employment is the one that you need to focus on, and the other one near employment is, what is happening to wage growth?

up until now, we haven't had the although we had a survey coming out of the atlanta fed looking at and implying that wage growth might be as high as 3.5%. if that number comes through, rate hikes will be back in the cards. guy: i want to throw this in because matt miller is interested. this is the taylor rule. many people who happen to and studied economics know that the market doesn't pay too much attention to this, but it is fun nevertheless. we are at a 30-year low on the taylor rule. what does that tell you about what normal economic theory would dictate about where we should be in rates and the weird world we live in? >> we are in a weird world in terms of the natural rate of interest. its much lower today than it was 15 years ago, and it all comes back to productivity growth hasn't come through. if productivity growth isn't aming through, you've got

demographic headwind. if you haven't got the growth, there isn't a demand for money for people to invest. guy: how do you break that cycle, with lower interest rates? it doesn't seem to be working. >> how you could break the cycle is if you get back to full employment. then you get wage pressures. you have companies saying, hold on, rather than paying up to employ more people, let's start investing in being more productive. we could be on the cusp quite soon that you get to the point were actually wage pressures start picking up. guy: and it starts kicking in. >> you start to get people investing. if that happens, that is a big turnaround. caroline: what about the political environment in the united states? will there be caution about investing heading into the auction? >> the problem is we haven't seen investment. we had been hoping to see investment. there is an optimistic view that you get wage pressures picking up, and then you get investment.

there are many reasons why you haven't seen investment. one of which is political uncertainty with europe and brexit and with the election in the u.s. that delays it again. when you are looking at rate rises in the u.s., you have to think, where do you fit in the political spectrum? we've got an election in november. do you make it just before hand in september were afterwards? - or afterwards? staying: jonathan bell with us. we are minutes away from the open, 10 minutes to be precise. up next, we will look at the potential corporate movers, including volkswagen, which holds its first annual general meeting since the emissions scandal. ♪

caroline: eight minutes until the market open. a beautiful hong kong. we've got your check on how the hang seng has performed today. there was a bit of risk appetite, excluding japan. we are minutes away from your open in europe. let's get our stocks to watch guy. the hang seng right around the 20,000 mark. let's talk about vw. i suspect this could be a little bit heated. after this kind of a scandal, you would have thought that maybe shareholders would be exercising a little ire when it comes to management.

the other thing i want to say on the car front, we've got an interesting light out of daimler. daimler is going to raise its investment. it says it is going to unveil an e-car with a 500 kilometer range. caroline: i was in drive now, bmws everywhere in berlin. i took the bmw electric car. silent. the talk is sensational when you drive. caroline: you've got to get one if you are out there. meanwhile, let's take a look at retail. back of itshe numbers the climbing. we are seeing the weakest sales in three years. first-quarter profit misses analyst estimates. keep an eye on devon ends in the u.k.. overall, there seems to be an earnings decline going on.

clearly, some key concerns. guy: a quick question for jonathan bell. if you are going overweight in europe over the next few days, where are you going? >> the call would have to be germany. that is going to be a major beneficiary and would be a loser if we had brexit. caroline: autos, which sectors? caroline:>> the autos, there is so much going on at the moment. , ishave to think long term that somewhere i want to be? you could do it as a short-term trade. longer-term -- caroline: are you worried about liquidity come friday? >> liquidity in terms of the volume of orders everyone might be putting through and whether you get a glitch. guy: do you think you can execute your trades onguy: friday gekko any indication there will be a pride a -- prob lem? >> you won't actually know until you get there, whether the volumes are too high for people

to deal with. i haven't seen it before, so i suspect we will be fine. caroline: the countdown is on. coming up next, markets to open. futures are once again in the green, guy. ♪

guy: good morning, you are watching "on the move." is sitting next to me. we are moments away from the start of european trading. caroline: from london, the final countdown. the fx markets are betting on remain. a day away. we have it. yellen leads a retreat. volkswagen faces investors. the people get their say at the first agm. will shareholders grabbed that wheel?

guy: let's talk about how this market will open. we are expecting a positive bout today. let's talk a little about how this open will work. we expect the ftse 100 to open up nicely. we set a couple of days ago. we continue to climb. ftse, whichat the is just beginning to open. we are starting to climb. thepean equities on upside. we are seeing french equities as well. yesterday'suite at session highs. let's get the details and talk some with matt miller. we're looking at a positive open after a positive session in the u.s. yesterday. we are looking at mix trading in

asia right now. it is interesting. down, we are comes seeing big gains across the board. all of the industry groups are doing well. materials of, and the standout i would look at as we see some commodity prices rising. you have copper and oil rising. let's take a look, you like to use mrr a lot. here you can see the moves. shouldthe sxp move, we and losers ons this index. you can shift back and forth in the news and the details. you have the commodities companies and materials companies rising this morning. losers, zodiac

aerospace, not as much of a theme on the downside. let's take a look at some of the movers we expect to see. i am following volkswagen but also h&m, which missed on earnings and sales. the wet, would to reread there is keeping people out of those stores. volkswagen also up 1% as they prepare to hold their shareholders meeting. it could be a rocky day for executives at volkswagen. mentis looks to be unchanged right now. chromium production will be materially lower outside of north america. they are a chemicals company. that stock hasn't quite opened yet. it should be changed on the news. it does look like a rising tide is lifting all boats right now.

guy: now, prisons is drug vote vote on eus historic membership takes place tomorrow. now who is speaking out. >> the financial market reactions that would be unleashed by the decision could result in a kind of risk sentiment that we would see impact on financial markets. we might see a flight to safety that could push up the dollar or other safe haven currencies. i don't want to overblown the likely impacts. we are aware of them. we will watch them. consider those impacts as we make future decisions on monetary policy. is very difficult to

of -- thee impact various dimensions in which the vote in the u.k. would impact of the markets, and the economies of the euro zone. be difficult to speculate about one outcome instead of another. so, let me just say, we are trying to be ready to cope with all possible contingencies. bell is still with us this morning. biggest problem in terms of managing the next couple of days? look at what yellen has to do, sit there and do nothing. draghi, it is still too early to tell. he has a 24da, hours ahead of them.

jonathan: he has a longer-term problem them perhaps have. guy: did you see dollar yen go through 100? what does he do? jonathan: he has got to go further. the question is whether he can fiscalfitme -- some spending going. can you have central banks helping government finance investment spending to boos the economy -- boost to the economy? thjere is certainly below 100 where they will have to start acting. we have seen qe measures. you can push those further. but you could also go more unconventional. caroline: in terms of outlook for the japanese economy, is it not being moved much by monetary policy at the moment? is it going to come down? will we get general change?

this is a long-term problem. how long have we been talking about this? japanese bondage deals cut below 1% ind deals got below the 90's. starting with the three arrows to get things going, where are we with that? monetary policy has done what it can't. you need other measures than just a central bank. that is, when we look at the world generally, monetary policy is running out of effectiveness. people are thinking if we don't get the growth, what else tcan the authorities do? people talk about looking at helicopter money as an option. caroline: in terms of other asset classes, as we move into -- is it all money into

emerging markets? jonathan: the biggest is to europe. and european up, equities go up. after that, the connection with the u.s. is the problem. a betterto see improvement in the u.s. for emerging markets. i like emerging markets. caroline: u.s. economic benefit? and the currency issue, as well. they are tied to the dollar. the strong dollar is a damage. emerging markets are reasonably priced at the moment. concers onhe commodities forced at many of those are linked to commodities. to look artave

the major elements. china is a problem. then, in fact, you either have a commodity issue, or a china issue. it depends on the chinese economy. i would buy him merging. it is a longer-term story than what is going on in the next couple of weeks. you might as well just it with euro zone. caroline: stay clear of japan? stay clear of japan. by euros on equities. if you believe any remain. caroline: that seems to be the initial call for now. up next, volkswagen faces shareholders in the emissions scandal. investor sentiment is far from recovered. we check in on vw next. ♪

guy: welcome back, let's check out what is on the move. it is a wednesday morning. we're waiting for what happened on friday. the rally into the referendum continues. we have the stoxx 600 up, the dax is up. if we go to the bloomberg and

take a look at what is moving, the miners are bouncing back a little bit. caroline: oil as well. guy: oil also coming back. doing reasonable well. daily mail and trust, also trading down. so, the rally still intact. it has been over 5% over the last couple of days. they have been strongly correlated with each other. caroline: the opinion front of you is still very close. it seems the bookie polls are showing a clearer picture. the odds a look at check. it will show you where the bookies are. let's get the first word news now. the u.k. isays likely to establish profitable

trade relations with the european union in the event of a brexit fuss of the same way switzerland did. they spoke exclusively with bloomberg tv. >> we took a different approach. it might be also that is could be worse to get out of europe. it could be very efficient, and popular. europe it could work. selina: hong kong's richest man has told bloomberg taxes should be raised to help tackle wealth and equality. it could be used to help the poor. he opposes higher taxes on individuals. seven out of 13 economists have indian central

bank governor. he is currently chief economic advisor of india's finance ministry. current governor will step down in september. global news 24 hours a day powered by more than 2600 journalists in 120 countries. caroline: thank you very much. volkswagen made progress into the emissions scandal. there is one group it has yet to impress. that is the investor base. auto -- resident auto geek joins us now. this seems to be a lot of anger, still aimed at the ex-ceo. wintercorn seems to be absorbing the press. matt: under investigation right

now, that is intensifying. many are wondering how it is possible that he couldn't have known about this. engineer when faced with mechanical problems would take a car apart himself to figure it out. you will see a lot of institutional investors criticizing the plan volkswagen put forward. create 32 electric vehicles by 2025. it is going to combine its parts businesses from all 12 brands. it hasn't said what it will do with any of those 12 brands. it hasn't made any revolutionary changes. will be a vote of confidence. it will be interesting to see if iss typically stayed company able to get through this. guy: a lot going on in the auto sector. geek,ne calls you an auto

but let's talk electric motors. what is elon musk up to? matt: this is one of the most exciting stories out there. tesla is bidding for solar city. that is the company elon musk helped found. he is the biggest shareholder. biggest shareholder in tesla, as well. his pitch is that this will bring the two energy companies under one roof. when you drive the tesla home, the solar energy collected with the panels to charge up your electric car. which of course, you already could have done. the consumer doesn't care if they were owned by the same company for some i would wonder aloud. elon musk would tell you it is easier to do this as one business. it helps him to combine these

two empires. the problem is for investors, them rampwant to see up production of the model 3. that is the hardest task for this company to achieve. this looks like a expensive distraction. guy: you talk to there is so much going on in the auto industry. ew in the diesel scandal and what is happening with this shift, this paradigm shift. e proposing new vehicles coming forward. how do you invest in a sector going through such a revolution? we are talking about huge numbers of startups. there's only one, but the whole industries going through massive change. how do you make money from that? the moment, and conventional ways. there is a lot of development. time before some

that is a profit driver. it were looking at companies that can sell good quality cars in volume. andel and petrol cars, avoid scandals. you can't tell which company will announce a scandal at this point. some people would argue perhaps if volkswagen had a proper board of governance that perhaps it would improve. in goodout investing quality companies. longer-term, there is a paradigm shift. you can see one car on wall street in 1900. 1920, it is all cars system in 30 years time it will all be electric vehicles. between then and now you're making money through conventional automakers. matt: or from speculating. if you invested in tesla you would have got a 700% return. not because they're making any money, the ratio is still -- it

is impossible to calculate. money. would have made caroline: is it still all about luxury when it comes to autos? jonathan: at the moment. i think for tesla, it is about getting the model 3. the news today is a bit of a distraction. orders,can get 400,000 if they are able to deliver on those orders efficiently they will get more coming through. that will be a successful of all the manufacturer. it is the execution issued that is the biggest conundrum to deal with right now. who will execute better? who will execute best? also announcing they're looking at electric cars

and driverless cars. that is the next area which perhaps is another 15 or 20 years from there before you get to it. att: we could do a whole show on this. guy: one to get brexit out of the way, we will. don't you worry about it. is going to stay with us right now. we are talking at the next 20 minutes. the gap between the u.k. government benchmark and spain is narrowing after touching multi-month highs. ♪

guy: welcome back, you are watching "on the move." i have a bunch of charts i want to show you. guild market has been fascinating. i want to show you some charts. this is a spread between the u.k. and the german 10 year bonds. i can bring you the numbers in just a second. that is the first one. is widening between the u.k. and germany. the other fascinating trait, you have seen peripheral bond yields actually rising. u.k. has gone down. that has started to reverse.

another chart has been made. that is starting to tighten up. seecans ee that -- can that more clearly. u.k. guilds are beginning to sell off. caroline: we said was basis points today. guy: yes. big news happening. jonathan, how does this fit in the trade pattern you would expect over the next couple of days? the market has been buying guilds, but it is selling them off now. how does that fit into the trade? isathan: the easey one peripheral european. everyonet a brexit, worries about what else happens. the spreads between italian and german get much wider. that is easy.

the u.k. is more complicated. people were saying if you get a have to pay may for our debt because it is a lower rated country. but if they fall significantly, what does that mean of a policy response in the u.k.? where do rates go? short-term, where does inflation go? it throws up a lot of uncertainties. what could happen to bond yields? they should go up on uncertainty. if you have uncertainty should be paid more because of that. sterling wouldor be a logical response. there are so many questions around the guild market just on brexit. it is a difficult market.

caroline: where do we go in the scenarios if we have the euphoria that we stay there? is it still an ecb trade? an ecbn: it is still trade. nationally, it is a safety trade. it is the safest asset class. caroline: do they then come after it if we do remain? jonathan: you would expect a bit of a selloff in bonds. you can afford now. at 10 yearready zero, give or take. you have already got a low-level. i can't see a big move if we have a remain vote. guy: thank you very much for spending some time in giving us so many of your thoughts. jonathan bell, chief investment officer. up next, he resigned for british

chamber of commerce after saying the u.k. could have a brighter future outside the eu. why is he backing a brexit? ♪

caroline: welcome back to "on the move," let's have a look at how the markets are shaping up. ution market ca appetite. a little bit of risk in the stoxx 600. the miners are outperforming at the moment. oil trade is also above. a decline in the united states once again. the ftse is basically flat. the dax is up. cac 40 is also up. now, let's get over to matt,

with what we are watching. matt: remember jonathan ferro? he used to anchor this program actually. he pointed this out to me. i thought it was really fascinating. verses a cost of puts calls for one-month options on the dax. basically, we talk about asymmetric risk. it is much more expensive to hedge against a downside in the dax than the upside. . you would expect with brexit. but the shoot up here implies that unlike the rest of the markets, the run in the ftse, this has not come back down since the polls have shifted to more to a remain stance. that betting indicates

bettors expect the u.k. to stay in the eu. yet, it is still much more expensive for downside risk in the dax. suggests a problem beyond brexit. there are still a lot of bearishness out there. are you with me? guy: always, constantly. matt: there was a look on your face. i couldn't tell. guy: that is the look on my face when i think about things. excellent come my -- excellent, my day is complete. know, hittingnow the polls in less than 23 hours. the u.k. referendum starts tomorrow morning. many still undecided.

we think it could be around 10%. the final campaigning is absolutely crucial for both camps. anna edwards is in westminster. anna: we will talk here in westminster to guests throughout today. and in the studio we will get both sides of this debate. let's bring in one of the prominent they get in the leave the campaign. theear a lot about excessive red tape and legislation from brussels that a escape.leave would what does that mean? >> in the treasury's own estimate, the business community has a burden of 125 billion pounds per anum. theprime minister is advisor for the negotiation. the regulations were worth 33

billion pounds. if we shave that, it is a tenth of the treasury's estimate. that will be massive. anna: we need to know what those regulations are. one set of regulation to someone else's workers rights contingent. might decide they want to keep it those. >> that is what we're saying a 10th. we will want to keep some of them. there is a myriad of small regulations. for example, the requirement to get dossiers on very small ingredients for perfume and flavorings. other countries don't require that. they require them to make sure that the ingredients are safe. a british manufacturer of ingredients what

you're doing is asking an american company, of which you are small fraction of their business, to provide a small dossier. anna: if they sell into europe they would want to do that. >> no, that is not correct. a finished product they would have to do that. for an individual ingredient they don't have to do that. it is not worth their while. that is a small example. examples.many other the ergonomics direction which requires businesses to draw up dossiers about sitting arrangements. the angle at which the computer screen is. whether this chair is ergonomically sensible. the angle of the chair. up oure all have to make minds about how we feel about those. wet is about trade, and how are missing out on trade opportunity. who do we want to trade with a more? >> the first thing to remember

is that we do not need to be in the single market. the vast majority of trade in the world takes place without any trade arrangements whatsoever. all the goods that china sells to europe and the u.k. they do without any trade arrangement. how does us being in the eu stop us trading with the rest of the world? >> if we are in the european union, two things happen. make trade arrangement with other countries and we are not allowed to do that. australiatries like can make a big trade arrangement with companies like china. creating trade deal. we could do that. there are lots of countries that of trade deals with more countries in the eu. it also, the eu has a big customs barrier around the outside for specific products

like food and consumer products like clothing. british consumers are paying way more for their footwear and for food that we cannot produce in the u.k. because the european union has a tax on those goods. thing,ack to the export in terms of trade to china. veryll, germany has been successful selling good to run the world. we have been successful selling services around the world. we have a no trade deal, which is twice as big as the service and services we have with the eu. that demonstrate what i said before, you don't need trade arrangements to trade the world. trade arrangements -- we can make a with other countries around the world that suit britain and we can do more business around the world. the european,

union prevents us from doing that. a single market in europe is not designed for the u.k., it is designed for others. impossible. i worked the brussels for 32 years. they are incapable of reform and everywhere. the commissioner for trade last year. i asked that very question in brussels. they said there is no appetite in the european union for reform. not toward services in the foreseeable future. very much foru sticking with us. sorry about the weather. caroline: another in-depth analysis as we head up to that important wrote. ♪

caroline: welcome back to "on the move." they're coming off our highs on the stoxx 600. let's get more the business outlet with the bloomberg business flash. has reported a decline in second-quarter earnings. the swedish fashion retailer that waswn merchandise

not telling in europe because of winter he weather. after hve ave fallen falling shares have weakened the uncertain trading conditions. sales were down 1.6%. the company says profit margins for 2016 will be lower than expected. mitsubishi motors has forecasted a four-year loss. the company says the fuel testing scandal cost it to billion dollars this year. that includes payments to its major clients. it will be the carmaker's first loss in 80 years. it comes after it admitted falsifying tests from as far back as 1991. instagram has passed half a billion users. says 300 sharing app million of those people use it everyday which is double that of after and snapchat. facebook but instagram in 2012. it succeeded in growing its

global reach with around 80% of users outside the u.s.. >> what is interesting is that it is happening mostly overseas. you're seeing countries light up the united way states did. android is taking more shares as well. it is a more global growth. what you see is a global diversity. you can see amazing people doing arts and crafts in france. you see a diverse group of interests. that is what is cool about the growth happening today. selina: that is your bloomberg business flash. guy: let's get back to the brexit. let's talk about the betting odds. with just a day to go, what are the latest odds? what size and volume are we seeing? let's check in with alex, from the bookmaker lab brooks.

he joins us now from westminster. good morning. we have less than 24 hours to go. give us an idea of what you are seeing in terms of the size of the bets being placed? things -- how do those correlate? technical issues. guy: let's go to the green in a minute. let's look at the bloomberg tamerlan and figure out what exactly is going on. to run you through the details, let's look at the stoxx 600. these are -- caroline: a little less. guy: coming off of the highs. those are back down. also having a little bit of weakness this morning. the top end of the story, it is a real next. minerso have some of the

bouncing back as well. the mining stocks sold off yesterday. we are seeing a rotation back into those markets for the let's go back to westminster and talk about the political betting we are seeing. alex, can you hear me, first of all? alex: good morning. guy: excellent. we have achieved liftoff on the technical front. what are you seeing in terms of the big bets being placed? run us through the last 24 hours. significante seen volume across the board. we are confident that thursday will be our biggest today from a nonsporting betting perspective. the 10 million pound of that. this is a big event. it is a highly liquid market. the real volume is being seen in terms of actual stake size. they're taking bets of 10,000

pounds, 20,000 pounds. the theme here is very large individual stakes remain. but a large number of much smaller bets. the average to remain is 400 pounds. the average stake to leave a 70 pound. the weight of the money is on remain. that is pushing that price down. bets,that large volume of many from highrolling clients, that are person that remain price down. give us a sense of how this is heating up. i we seeing a rush to get bets at the moment? other thing tohe remember, thursday will be the first day that they will be no football since the championship.

that is the only referendum and is the only story in town on thursday. that figure across the industry, probably 60% of that will be online. about 40% of that will be in shops. in londonre money almost exclusively on remain. we are seeing is in other parts of the country and very strong trend for lots of smaller bets. maybe 70-80%.don, the thing we cannot of lord, this is what is affecting our incredibleket is the volume of large stakes in the thousands and tens of thousands. most of that is being placed close to around here. there was a 25,000 pound bet on remain in south wales two days ago. this is quite interesting. if you look for correlation between the odds and the size of

bets, and how people vote -- it sounds like you're telling me significantly more people are voting with their wallets to leave. only a few, you would expect this because of income distribution, and london are betting they would remain. we know london is likely to be a remain. it is the rest of the country that is very interesting. is that your analysis of the situation as well? alex: yes. if you look at the individual number of bets, the majority of those are for leave the. isn't thet we look at individual number it is the weight of money. that is an remain. the weight of individual bets is also votes is for leave. the distributions are up the is lots of people in london and other parts of great

britain cannot see anything other than a victory for remain. lots of people and others think 3-1 for leave. those look good in a two horse race. that is the fascinating part. we only look at the weight of money, not individual wages when it comes to pricing our markets. caroline: great to get your take. potentially, we are living in a bubble. guy: the financial markets are clearly on remain at this point in time. and you look at the betting markets, and the correlation, that is quite interesting. tightlls are still very fist at we will have more on the referendum campaign. ♪

let's check in on the markets to show you what is going on. talk about the equities, we are seeing a rally. early on and looked fairly solid. it is just beginning to fade a little bit. time, we at the same of stop seeing polls when it comes to the betting on showing that we could see a real force for remain. but then you look at the geographic vote than it seems as though maybe it is just london talking to itself. interesting to see

what the big money, does that have a better view of the world? i don't know. you can't necessarily assume one from the other. mr. ferro is here. what is your view on the world? markets are all over the place. there is a definite heard mentality in place. it is hard to call the separate positioning from accurate views of think it is difficult. jonathan: the spread where cable is trading is quite remarkable, actually. plays out.how it we will be scratching our heads on friday morning. we will that thing we say what did the polls get wrong? how do they have the so close on the market had it exactly where it is right now? really captured where the fx market has traded so far. but the dollar in there, look at

how the pound has formed this far. the fx market is not shifted to the point that if you look at this year to date, with the debased currency god, the pound is the only laggard you today. -- year to date. that is the only one versus the dollar. the conversation had going forward that [laughter] jonathan: you are seeing that it is only laggard so far this year. guy: i am very happy. we have had this shift. if you get the remain, what is the upside? in pound hasn't participated the rally against the dollar. it has been down there because of the brexit risk. if that shifts now, how much upside is left on sterling given that it hasn't participated in that rally? ftse, you say what does that mean for

earnings? about 3% at the moment. we haven't seen the move surrounding brexit nearly as much as you have seen on the back of the fed a moves. that is in terms of the downgrade of the united states or the asia fallout for stop volatility hasn't been seen as quite that much. in then: there has been session in the near-term risk. we saw that on the dax earlier. that speaks to the concerns be on the brexit. that is a conversation still about china. look at the equity benchmark. the federal reserve yesterday, janet yellen didn't make it terrific amount of noise about brexit risk. but there was looking at a weaker u.s. domestic economy. after this will talk about the same things we have all year. of moneye is a weight argument that says the people

in more than they have been a long time post that i wonder what the flow story will look like. at negative that on the dax, hedging theirople positions. it is not necessarily what they believe is going to happen. it is just hedging their positions. back to the absolutely massive. jonathan: and the cash allocation as well. the highest cash allocations. what is going to get people to get money back to work? i'm done, aren't i? guy: you really are. you're done on this show. i have some skills. very few. jon is coming back a little bit later. that is pretty much it. caroline: see you tomorrow. guy: constantly on the move is our caroline hyde. she will be back in berlin.

buy a decent amount of the equities. it is a reasonably nice day today. i hear it is going to rain later. that could have an effect on polling later. ♪

-- 20 hours to go until the referendum. investors bet on a vote to stay. london markets brace for brexit. yellen leads the fed and retreats as she retreats -- as she signals another hike. welcome to "the pulse." live from bloomberg's european headquarters right here in london. i am francine lacqua. let's get to the