>> it is midnight in london. the city at the center of world attention as we wait on the outcome of the referendum on the eu. this is "daybreak asia." ♪ >> choice made, searches on speculation that the u.k. has decided to stay in the european union. stocks have gained, leading the s&p within 1% of the record. the pound is above $1.50 the first time since december.

>> the fed's latest says all 30 banks have enough capital to survive a severe economic show. raid onn early june china shows that stabilization is largely intact. small companies are slowing -- showing signs of strain. asia, i'mlive from yvonne man. >> and i'm betty liu in new york, where it is just past 7:00 p.m. let's get straight to our markets are reacting to the referendum. as she mentioned, the pound climbing above 1.5 zero dollars, likely to cap its best week since 2009. likelynce here -- $1.50, to cap it's best week since 2009. confidence here that it will continue to gain. the pound has also strengthened against much of its major peers. bloombergndex on the will show you, as you can see, just how much it has risen.

yvonne, how about in asia? how are the markets shaping up? , risk iseggie -- betty on the rise. the new zealand dollar is actually taking retreatment right now. 7/10 of 1% down. it is said it could likely blast through the 72 handle. in australia, we are expecting gains on the aussie benchmark, but the aussie doar also retracting a little bit of its gains as well. 75 u.s. cents right now. higher onen 2.5 to 3% the nikkei 225. yen, this took a slight overnight, but we are seeing some gains again. 106of 5.93, just below that 10605.93, just below that

handle. as we look ahead to the referendum, the weeks of waiting are over. the united kingdom has finally had its say on its 43 year membership of the european union. if a range of indicators can be believed, that membership is going to continue. let's get straight to london and there a chair and. -- and near a chair at. -- jejra cheric. what's the latest? nejra: newcastle voted 51% remain, 49% lead. -- leave. newcastle was projected to have a 12% remain lead. we are seeing just a two-point remain lead here. it is too early to interpret what this means for the writer -- for the wider results, but remain, 49% lead, projected to be 12 points ahead. this comes after gibraltar showing 96% remain and 4% leave.

are getting remain ahead, but these were areas that were expected to remain. the only slight supplies -- surprise is that in newcastle, there was less of a margin towards remain that was expected. what is going to be the first area that we will watch, that will really sort of give us an indication of where the country is headed? we are going to get a slew of results at around 3:30 a.m., 4:00 a.m. london time. there will be a few hours before we get a really clear picture, and even then it might not be as clear. i was talking to matt seeing from number crunch. he said at that time, we might not get a totally clear picture. these city of london due to have its results in about

about 40s time -- in minutes time. it is britain's most pro-eu district, but also the smallest. shery: thank you so -- yvonne: thank you so much. we've got coverage from our teams across the world. using the team life go function, you can follow the latest headlines. u.s. stocks also went along for a ride. banks led the s&p to within 1% of a record, while oil settled above $50 a barrel. joining us is su keenan. we saw the reaction to the vote on thursday, and tensions are heating up as well. su: green across the board. 9.7 5% and the s&p. it is rising with a lot of asia stocks. -- 9.7% in the s&p. it is writing the rave -- the wave withing

a lot of asian stocks. it is being asked, could we already be in the rally? betty: take a look at the banks, leading the s&p higher. was this because of the stress tests? su: there could have been, but there is a lot of optimism. stocks across the board are higher. we also had an interesting story for bank of america. they got hit a little bit with a find for using fonts, and they still rallied higher with the group. it was more of an industrywide move, i think. betty: talk to us about $50 oil. what does that mean? su: it is a positive. you breakthrough that they can mark, a lot of traders are seeing more conviction, and that is big. we closed well, which is important. a lot of traders have been saying it will be at $60 or $70 by the end of the year.

oil has been a place that many have shied away from in the past few years. betty: it is, given that volatility. all right. we will check in on other stories making headlines this morning. china is slowing growth is hurting small companies, even as early indicators suggest economic stabilization is largely impacted in june. the manufacturing indices fell this month, in contrast to a separate survey of executives at bigger companies that show conditions are improving. china's first official pmi reading for the month is expected on july 1. millionaires in the asia-pacific or even richer. private wealth in the region surged almost 10% to $17.4 trillion last year, thanks to strong economies and property markets. wealth topped north america for the first time. european wealth rose about 5%, but turmoil in brazil mid-decline in light in -- mint

decline in latin america. betty: and volkswagen has a that -- has agreed to pay owners of i its scandal.ed sources say it is part of a $10 billion negotiation with the u.s. government. the vehicles involved emit as much as 40 times the amount of pollutant. bank of america has made a wrongdoing in settling allegations that it misused billions of dollars in clients' funds to finance trades that benefited the economy. it will pay $415 million that merrill lynch engaged complex deal to review funds it should not have set aside. the regulators say had the banks failed, customers would face a massive shortfall. u.s. banks have won that thumbs up from the fed. all 33 of them passing the latest stress test indicating

they would be able to withstand a severe shock like the 2008 unanswered crisis. however, some notable names are still under scrutiny. ramy inocencio is here with a look at the results. who is doing great, and who is doing just good an average and needs to get better, right? ramy: definitely. all 33 banks did pass with mostlygood colors, flying colors. let me go through the numbers with you here, in terms of the best of the best. citigroup, wells fargo, and bank of america were the top three in terms of the amount of capital minimum that the federal reserve had mandated in order for them to pass these stress tests, mandated by dodd-frank. the mandatory minimum that the reserve had put out is 4%. as we go down, morgan stanley is at the bottom here, coming in at 4.9% against regulatory minimums of 4% will stop -- the regulatory minimum of 4%.

they still are above the minimum, but as you can see they are flighted yellow, indicating that they are just a little too close to comfort. let's take a look at what is happening with foreign banks as well. they are doing better in terms of the range. deutsche bank coming in at 12.2 percent against the regulatory minimum of 4%. across the board, good, but a couple under scrutiny. the first ofis is a two-phase process, right? tell us what comes next. ramy: this comes up against the dodd frank act, but the next phrase -- phase is the cca are, comprehensive analysis and review, and these tests will tell us if these 33 banks have enough money to share dividends toout

shareholders and buy back shares. according to analyst estimates, if they pass with flying colors, the top six banks could shell out $60 billion. ramy. thank you so much, still ahead, stairway suit. led zeppelin's copyright case reaches a conclusion. yvonne? yvonne: up next, the markets are betting on a remain result in the u.k. referendum. we will head to london for analysis. ♪

betty: the first results have been announced in the u.k. referendum. let's go to bloomberg's london bureau. simon, i know it is very early on, but what is the picture at the moment? --we got his polls strode this whole straight -- poll stra

suggestedand yougov remain was ahead, but we have seen some of the results trickling in the last few minutes. gibraltar a big place for leave, unsurprisingly. newcastle up in the north, 51% for remain, which was a narrower margin of victory than some of the experts had predicted. the margin of victory we saw might be enough, it was predicted, but it might be slighter than we first thought. upty: are the markets set for some sort of danger, we get any kind of indication that things did not go the way they fought?

theertainly the markets in last few days have been pricing a victory for remain. if you follow the money, believe that, and look at the bookies' odds as well, you would think remain would have it in the bag before votes or even cast. -- were even cast. yvonne: simon, it seems like the markets are starting to turn as we edge closer to the asian session. we are seeing some of those markets -- margins are narrower. if it is close, what does that mean for david cameron? bige will want to win by as of a margin as he can. , 54%,nly above 50%, 52% he will be disappointed in that. it is not a comprehensive victory and does not put the issue to bed, perhaps. some in his party might be looking to push him out, but in the last few hours, the lesson ,as emerged from skeptics

asking him to stay on regardless of the result tomorrow, so that kind of punctures is positioned a little bit. -- his position a little bit. betty: we are seeing the pound come down slightly. $1.48 against the dollar. in theseeing this surge british currency. does that mean anything to you at the moment? suggestingto $1.50, that maybe when they went to newcastle, they did not get the comprehensive victory they were hoping for. hear sunderland's income of the city of london, and in a couple of hours we will follow a of that will better picture than what we have at the moment. betty: simon kennedy in london for us. more live results from the brexit phot still to come. plus, early economic indicators

and china are showing stability, but also some string. we will be live in beijing, next. ♪

betty: welcome back. i'm that he will in new york. yvonne: and i'm yvonne man in hong kong. we are an hour away from the opens in new zealand and australia. china is re-stabilizing, but smaller companies are still feeling the pinch. tom is looking at the divided fortunes. we will get a lot of these economic numbers. parse out for us what we are going to get. that's right, these are early indicators for june. we get the official data in early july for this month. what the overall picture is from

these indicators is continued stability in china's economic recovery, though it is a fragile stability, probably the best way to phrase it. what is interesting is this divide that we see between smaller and medium-sized firms feeling less confident and seeing fewer orders and lust a man's, versus an update -- and less demands, versus an uptick in bigger companies. we have manufacturing, pmi, and services, both of those are lower and pointing to small and medium-sized enterprises. we have this executive survey by mni that shows an uptick in confidence. we also got data that showed a mild uptick, and ada from sales -- data from sales managers across china, and they remain broadly flat in terms of their confidence level. bit of there is a little disparity, i guess, between

small and large businesses. how was the economy likely to shape up going forward? it seems to be suggesting is that the stimulus that we saw, whether it was official stimulus or this off budget stimulus we were talking about yesterday. whether we see that is impacting were benefiting the larger state does not surprise us, but the smaller firms does not benefit according to the state of. analysts said, look, we are going to continue to see weakness in the sme sector here in june, and we are likely to see a slowdown in private investment. the economists at bloomberg investment say that this points to a continued l-shaped recovery for china. continuity is what they say, and what that means for chinese policymakers. betty: yeah, what does that mean? what is the likelihood of from

your -- of further stimulus in china? bloomberg intelligence has been looking at this. they say the data is not really strong enough to suggest that policy are going to remove the support that they have been offering, and it is also not weak enough to see any further interest rate cuts. that is from bloomberg intelligence. of course, we have seen so-called stealth stimulus measures that are being taken by local governments, for example, to boost demand at the local level. for the moment, bloomberg intelligence says we don't expect to see major cuts. what we should be looking to is the official pmi data that comes out on july 1. betty: tom, thank you so much. tom mackenzie in beijing. let's get across to remake -- ra my, because we are seeing the

pound taking a beating. ramy: that's right. let's pop into my bloomberg terminal. i will show you the massive fall off that we are seeing right now and reaction to some of the brexit phot. we are down about 1.2%. we had been down as much as 3%, but even as the votes started coming in, you can see we were about 1.5 to the dollar, but now we are coming off of that off of session lows. i also want to show what is happening in terms of safety trades. similar fallee a here. 1.5%apanese yen is about off against the dollar. you can see these massive fluctuations. i understand the u.s. treasury is falling in tandem in terms of yields. we will keep you up-to-date him a but we can see these massive moves in regards to what is happening with brexit. our own reporter, we see that newcastle has 51% stake, 49% we've, -- leave, one

of the biggest factors pushing these moves. i find it interesting, because it shows a lack of conviction. even though the pound did rally ahead of this, believing that we have a victory. the fact that the pound dropped so sharply speaks to the lack of convictions in the market. ramy: if we hop to the terminal again, i want to show you another thing, brexgo. i want to show you not what the this one thing, odds checkers. earlier, they had been higher than 75%. they are dropping ever so slightly to 68.5%. 37xit is rising, now up at point 5%. you will want to remember, over the course of the past few months, odds checkers into -- on checkers and bookies were saying it is unlikely that people would vote for a stay.

even as the numbers come in, there is a lack of conviction that potentially be story is still not over -- the story is still not over. yvonne? yvonne: thank you so much. let's go back to london with marriage a rich -- nejra. markets are acting in an offensive way right now. nejra: yes, they are. he might be looking at the odds checker probability of remain versus exit. -- brexit. this is what the bookies are expecting. the percentage probability of the u.k. remaining in the eu has come to 68%. we were looking at a probability of over 90% earlier this evening. that probability of the u.k. remaining is coming down, according to the bookmakers. it is 69% right now. this is after some results. wasy was referring -- ramy

referring to newcastle, but the margin was much narrower than expected. we have been expecting a 12 for remain in newcastle. that could be a factor. we also have summerland. lead, 39% remain for sunderland. another 50 in the northeast. those are two things cities we have results from. we also got gibraltar, showing for leave.ain, 4% that was expected to show remain. a few results so far. does not necessarily show what is going to happen the rest of the night. as i say, those bookmakers' odds are coming down, possibly what is pushing sterling lower. yvonne: we are seeing some that widerbut it is margin that has investors

worried. what can we expect over the next couple of hours or so? awaiting are also result from the city of london. -- one the most pro-eu of the most pro-eu areas that is voting, but is also one of the smallest. what we are looking for is the results that will come out of those big cities. that is not expected to come for quite another few hours, at least another three or four. that is what we are expecting of the moment. the final results will come at 7:00 a.m. u.k. time. yvonne: thank you so much. we will come back to you later. we want to mention, the pound falling to 1.45, down from 2%. coming up next, we hear from a trader who beat pollsters in last year's u.k. election. matt singh joins us next. ♪

betty: it is 7:30 p.m. here in new york, where the markets did expecting the rally to essentially carry over into the asian markets. 7:30 friday morning in hong kong, 30 minutes away from the opening of trading in japan and south korea and australia. i am betty liu in new york. yvonne: and i am even on man in -- yvonne man. betty: even though we closed higher here, it is the u.k. you are watching in asia, really dominating trade for you today. the first results are in from the u.k. referendum, amid rising

speculation voters opted to stay in the european union. nejra cechic is watching all the action for us in london. nejra, as we are watching ourselves, not only the external reaction, but the internal reaction from our reporters, particularly our global markets editor, putting out some comments here, essentially saying, everyone is kind of oh wait now to some of these -- awake now to some of these initial results and the opinion polls that came out an hour ago, showing it was really a dead heat. much more of a dead heat than poll.uguv nejra: the poll commissioned by sky. there are no official exit polls for this referendum, the way there are in the general election. that showed 52% for remain and 48% for leave, and we had nigel ukipe, leader of the

party campaigning for leave, calling the result, saying, looks to me like this u.k. will remain in the eu, but since then we had some results. gibraltar, 96% remain, 4% leave, the first result that came out, but that was expected to be a remain. what came as a bit of a surprise was what we saw from the northeast of england, with two major cities getting results. newcastle upon tyne, showing 51 percentage for remain, 49% for leave. that difference of just two points is what caused a surprise, because it was expected to be a 12-point lead for remain. and sunderland since then, showing 61% for remain, 39% -- excuse me, 61% for leave, 39% for remain, though that was expected to be a leave.

so the newcastle result has caused some surprise. what we have seen is bookmaking odds coming down. at 71% probability on odds checker for remain, and it was that over 90% before the results came in. yvonne: nejra, amazing what we see in reaction to these wider, or i should say narrower margins on the voting results. how will this play out now? are you expecting more surprises? nejra: well, you never really know, whether you are going to expect more surprises. to make anyely hard judgment from individual results as to how the rest will play out, because this is not like a general election. it is a very different kind of vote. but would everyone is waiting for is what we will see from the big cities. of course, we had newcastle and sunderland, and we are still waiting for the financial district, the city of london,

which is due to come very soon, but that is one of the smallest areas also the most pro-eu. but where we will get the real flurry of results is around 3:30 a.m. u.k. time, so we should have more than half the results a.m. u.k.. -- by 3:30 time. the busiest time is 4:00, when 100 counts are scheduled, and at that time we will be extremely busy, including two of the single biggest count areas, northern ireland and birmingham. betty: going to be right in the middle of the asian trading session. we will see how things go. nejra cechic, thank you so much, joining us live from london. let's look how markets are reacting to the latest developments. let's go to haidi, watching the action. we saw the session still being underweight in asia, but we already see a -- getting underway in asia, but we are

already seeing a pullback. haidi: 20 minutes away from the open, we see this swing when it comes to the futures. at one point, we were looking at a potential 3% upside for the nikkei, now looking like a flat open. a lot can change. things are changing minute to minute. but this is what we see in terms of the currency. the pound, volatility coming up again, hitting a record high before dropping a little in the early morning is an c -- asian session. we did break $1.50 u.s. earlier today, the first time since december, the strongest for the pound in terms of that cable figure since, for all of this year, and we are seeing that coming down dramatically. is thee know the pound greatest indicator of which side is taking the lead. we are seeing throughout the process, the japanese yen has been trading essentially in tandem, in the opposite

direction to the pound. take a look at the movement we saw there. quite a bit of weakness coming through it, and now in terms of the yen, i will try to bring that up again. we see the yen strengthening again, breaking through the 103 handle at one point today. the australian dollar is looking at a drop of 1%. we had it at a two-month low a half an hour ago. we saw the plunge in terms of risk coming back to the four. -- fore. quite a bit of weakness with the swiss franc, which has reversed course, with an outside of 0.25%. look at gold. it was down almost 1%, and broke through the key support level of $1265.nd now looking at it paints a picture of the uncertainty, things changing by

the hour. oil as well. we did see wti holding, brent and the vti holding onto $50 a barrel. certainly, if you look at the asian markets, bring up the yen, we saw the huge plunge. andre now back above 104, that is something japanese equity investors will be looking at as we await the open. betty: haidi, thank you so much. let's get back to brexit and the polling results coming out. theing us now, matt singh, founder of numbercruncher, who successfully pretty to be landslide in last year 's general election in the u.k. looking at the top live function, some interesting anecdotes.

one that, my eye was reported by one editor, saying the dealing rooms across the u.k., people are putting down, the 382 areas, which ones were leavier than expected, which ones were remainier, so to speak, and the leaviers dominating, so that is spooking the market right now. matt: all of these lists of areas, which are supposed to be leaving or remaining, all these are estimates. it is not like an election where you have previous results to compare to, so if you have something different than expected, is it a surprise indicating the polls are wrong or the estimates were slightly wrong? it is far too soon to say how the markets will react, that it is quite early to say. the interesting thing to note about newcastle and sunderland, two results that should be worrying to the remain camp

given expectations for those results. that part of the country in the general election last year did be have quite differently. so it might be that happens again. it might not. but at the moment, it's very early. yvonne: this is yvonne in hong kong. i want to talk about turnout. is higher turnout better news for remain? matt: it's really not clear. the evidence certainly seems to be that there is a high turnout, very high by modern standards. we get turnouts more quickly than we get votes, and it appears to be over 70%, and possibly could be the highest since 1992. in terms of who that helps, it depends who is voting now who doesn't normally vote. if it's the sort of people who anddisaffected by politics will not vote for anybody or anything, but might come out to vote against something, that

clearly helps leave. but we also know there's a lot of people, younger adults in particular who don't normally vote, and they are the ones turning out, and that's good for remain. we will have to wait and see which of those it is. but certainly on the basis of results from the northeast, it seems some of the leavers who don't normally vote seem to be turning out, certainly in those areas. betty: it's amazing what we are seeing, in terms of the currency markets right now. the market reaction to this, a lot of currency traders have been up all night watching the results coming through. are you shocked by this reaction right now, given the results we have seen so far? it's very early on. matt: well, as a former trader myself, i don't get too shocked by what markets to. people are trying to extrapolate things from pretty limited information at the moment. results inhese two

the northeast in particular are quite worrying for remain, but there are many, many other areas left to come in, and it could be that the predictions were wrong in those areas, wrong in the other direction elsewhere. or, it could be that everything was wrong and leave genuinely is doing better. so we are really going to have to wait to see some more results. but certainly at the moment, yes. the fact we saw the results coming from sunderland, and then the markets turned so quickly, it will be hard for the traders to be trading this, right? this will be extremely difficult. matt: absolutely. i imagine the markets are horribly illiquid as well. the trading rates during the a very closection,

u.k. election coming up and the polls coming out, surprises then. because this is such a big event, this is clearly a much bigger deal. i imagine for them, it's quite a terrifying time. betty: terrifying indeed. thank you so much, matt singh, founder of number cruncher politics. going to be a long night in the u.k. there's coverage from our teams across the world on bloomberg, headlines and reactions as they happen using the t live go func tion, which i have my eye on right now. much more to come, including why some say eu decision-making will be cumbersome and dysfunctional even if the u.k. decides to stay. this is bloomberg television. ♪

yvonne: welcome back. betty: you are watching "daybreak asia." yvonne: we are just over half an

hour from the open in japan, korea, and australia. back to the u.k. referendum. joining us is roland vogt, assistant professor of european studies at the european university of hong kong. great to have you with us on this crucial day. what is your initial take on these results? is it too close to call? roland: definitely. it will be a nailbiter. referendums in general are very difficult to predict, very difficult to declare in advance. one really has to wait for the results coming in from all 382 counting areas and sort of see what comes out. if we have a close call, it might take some time. it'll take a few more hours for us to get a clearer picture. but what is interesting, the results coming in from sunderland and newcastle, the first major metropolitan areas that declared results. the remain vote in newcastle was very marginal.

not a big margin of voting to remain. so that is an interesting result. yvonne: the fact it is so marginal, so narrow, this disparity we see between the leave and remain camps right now, what does that mean in terms of the polls we saw leading up to it? were they wrong? rowland: it's hard to say. because the polls have proven to be quite off the mark during the last general election. in referendums, again, it's very difficult to find reliable data. that's one of the reasons we don't have exit polls, because it is based on previous electoral experience. last referendum of this kind was 41 years ago, so it's not really significant to do this. but i do think it is happening, and it shows a polarized, charged atmosphere, and i think we can also see the -- people were thinking it might turn more strongly towards remain, and

some results come in that might suggest the opposite, so -- yvonne: that's right. roland, we are also watching the pound very closely, and we are, i don't want to say stabilizing, but we are certainly not tanking as much as we were just a few moments ago. betty: swindon is the next area that will report results shortly, and that is considered one of the areas that was very the atmosphere will likely get even more charged. rowland: it's not totally unexpected. in the northeast of england, you have a traditionally strong sentiment of brexit. but it will be interesting to see what the results will be from the southeast. the area around london, an area that is more likely to vote remain, but yesterday we had a lot of weather incidents, and some polling stations had to move due to flooding. that might affect the turnout

and affect the results quite a bit. so if it's really a close call, we have these kinds of factors playing a larger role. yvonne: so, given all of this, given the initial market reaction to really what at this point is just so early in the counting process, what does this tell you about investor sentiment and market conviction? think the biggest problem with market sentiment has been the uncertainty. many people feel quite, you know, favorable toward the argument being made one way or the other, so on the leave side or the remain side. but the problem with the leave side, it basically opens up this can of worms for a lot of uncertainty because there is no clear uncertainty about what future negotiations might be like. what kind of access will the u.k. have to the single market in the eu? what will be the relationship?

what kind of other government arrangements will be put in place? there's also a lot of political uncertainty. what happens to the next government? if there is a vote for leave, can david cameron really stay on as prime minister, or will there be a snap election coming up in the fall? we heard some voices yesterday from conservative party leaders, suggesting david cameron should stay on regardless of the result and that there would be a rallying cry to get the party united again, and these are first steps to patch up the divisions of the last few weeks and repair some of the damage that has been done. vogt, thank you so much. we are watching these results. banks are bracing for the .ossible greg's it -- brexit catherine hayes -- kathleen hays

is here to assess what all this means. what exactly is banking the governor mark carney doing to prepare for this possibility? kathleen: he thought when nigel farage came out, one of the biggest voices for remain, saying -- for brexit, saying remain would be the case, he did a victory dance. we saw from analysis how badly the brexit vote could affect the u.k., worst-case scenario a 6.5% hit to gdp and 10% drop in home prices. bloomberg intelligence analysis of what it means if remain passes for the u.k. our team in london suggesting they agree with the brexit uncertainty already slowing the economy, and if remain carries the day, a quick read that in the second half as wages accelerate. you would see a rate hike coming in the second half of 2017, but obviously it's really, want again, up in the air -- once

again, up in the air. what about the central banks here? kathleen: it remains to be seen. first of all, we know the six nation currency swap arrangement could be activated, and we are getting a taste of what happens if there really is a vote to leave. the central banks will spring into action, with plenty of liquidity. in terms of the longer-term, i think you will see that if remain is the vote of the day, they can sit back and they don't have to intervene now. for the boj, it would be a relief for prime minister abe and governor kuroda, taking pressure off exporters, who would not be happy with a big surge in the yen. for the fed, janet yellen said she's watching brexit. it would remove a hurdle to the next rate hike, but all bets are off for now. kathleen, i thought it was interesting when i was a g-7

and brtexit was not even in the draft -- brexit was not even in the draft, and now we could see a response from the g7 nations if there is a brexit vote. president rock cap and will be speaking in new kaplanhe first fomc -- will be speaking in new york, the first fomc president since janet yellen testified to congress. kathleen: he is concerned with longer-term forces holding down the economy, moving cautiously and slowly on interest rates, so one more in the camp waiting to see how this all turns out. the brags -- brexit vote, we will see in a few hours if the volatility we have talked about so much on the show tonight, if it continues here it you will see potentially a statement from the g7 that they will do something in a unified way, not unilaterally. yvonne: thank you so much.

coming up, more in-depth analysis on the u.k. referendum, and looking at which side the bookies are leaning when "daybreak" returns. ♪

betty: welcome back. i am betty liu, here in new york. yvonne: i am yvonne man, here in hong kong. we are a few minutes away from the opens in japan, korea, and australia, and reactions to the early results coming out from the u.k. referendum. let's see how things are reacting so far. haidi: it has not been a good morning if you are one for motion sickness. we have been swinging from expected gains to losses at the open right now. futures point to a flat to lower open. at one point, the nikkei 225 was almost 3% higher. let's look at the pound. at one point, the pound fell the

most in 24 years. we did break the $1.50 level there, but we have since retreated. it was on track for the best looking at the, highest we have seen since december of last year. in terms of, at the moment over the past minutes, we are still down about 2%. can see the leg down there. let's look at the other plays we have been watching. returning to save havens. we had a decline of gold, falling was 1%, and we have now reversed -- falling almost 1%, and we have now reversed that. we see strong gains bouncing riskin the yen, for commodity related currencies like the aussie and kiwi. betty: let's bring back ramy inocencio.

we have been talking about the u.k. referendum, and you have been watching it through the brex go function on the bloomberg. ramy: i want to walk everyone through what you will see when you log into your bloomberg terminal looking at brex go. on the top left, you can see the main headlines crossing. right now, we see a constituency just reported they want to vote theeave the eu, constituency of swindon, just crossing the headline. also, on the right side, see what is happening with the lead and remain camps. only seven have been reported, out of 382, but 49% versus 51%, just a 2% margin between stay and go. betty: ramy, thank you so much. that is it for me. the end of the day in new york. yvonne, you will be checking these results. 55% did vote 45% remain,

lead in swindon, which was expected, the margin of 10%. yvonne: that's right. more results are coming in in the next

betty: back in the balance as early results put the leave the camp in the lead. all 33 big banks have enough capital to survive a severe economic show. in early june read on china shows that fragile stabilization is largely intact. the small companies are largely in strain. welcome to "daybreak asia." i am yvonne man.

let's go to trading in asia. it getting underway. reaction to early results of the u.k. referendum. you are looking at live pictures from the south korean stock exchange right now, where the end about kospi did .3% down yesterday. we are seeing markets sway a little bit as we see the results between the remain and leave camps narrow. is getting a little bit of momentum as the votes start coming in. the city of london should be getting its results in the next hour or so. let's get straight to the market action. haidi: expect the unexpected is the mantra of the trading day. we have had quite a roller coaster ride even before the markets have properly opened. as we know, things have been changing from minute to minute

when it comes to fx and commodities. .his is what we're seeing we are seeing upside, which is interesting given that we had the nikkei pointing to a flat to lower open. we were expecting upside of at least 3%. certainly not those lofty highs. there are suggestions that we are getting that scenario playing out. sydney up about .2%. the nikkei opening up by .5%. extending the gains of 1% that we saw yesterday. it has been a good week when it comes to the markets in this part of the region. certainly, we will be watching the yen. we're going to continue seeing this strength. 103 panelhrough the that will put downward pressure the when -- pressure when it

comes to the situation in japan. take a look at what we have been tracking. gold, we saw a plunge of about 1%. it has reversed all of that and then some. envelope danger of 1260. -- below 1260. franc.look at the swiss it is also reversing some of those earlier losses to trade higher. of course, we have to take a look at the pound. it has seen so much volatility, .lmost in tandem the pound is down by about 2%. we did see a plunge that was the most in 24 years. 50iefly breaking that 1 handle. the weeks of waiting are

over. the united kingdom has finally had a say on its membership of the european union. could possibly continue. we are seeing the momentum on the leave side. what is the latest? >> that momentum that you mentioned for the leave side could be one of the reasons we are seeing u.k. stock futures tumbled 1.9% amid these early vote results. this is just crossing the bloomberg terminal. down 1.9%. the latest result we have was from the west of england, which showed 45% for remain and 55% for leave to that is a 10% difference. a slightly positive result for remain. we had a different picture in different parts of the country.

in newcastle, we did see a 51% vote for remain and organized percent for leave. it was expected there would be a 12% leave for remain. we are seeing unexpected results from different parts of the country. it is hard to say which way this is going to go. on theve that up bloomberg next to me. what we are seeing at the moment is a very marginal leave -- a aty marginal lead for leave 50 .66%. this is after we got eight results out of 382. it is very early days to make a judgment at the moment. this follows what the bookies are expecting, putting a 69% probability for remain at the moment. yvonne: and that probability has come down a little bit.

we are seeing that this is too close to call. much different than what the polls are suggesting. how do you think this is going to play out? that, i had the answer to i think i would be a pretty special person. farage, the nigel leader of the party which has been campaigning for leave, early on, when we got the poll , which ised by sky tv not an official exit poll, but a proxy for that, that was 52% remain and 48% leave. after that, nigel farage came out and called the result as remain for the u.k. even though he has been campaigning for leave. thanve not had any more that. we have to watch the result as it comes between not even in the busiest period yet.

we will get the results around 330 -- around 3:30 u.k. time. at 4:00 a.m., we will have about 100 or so results coming in. we are about 2.5 or three hours away from that very busy period. yvonne: nigel farage has not conceded yet. let's go back to the market. a sentiment rivers and quite dramatically. let's go back to haidi. imagine traders around the world are tearing their hair out at the moment. what volatility we are seeing across just about every asset class. let's start off in asia. about 10 minutes from the open in's ignition and tokyo. we are seeing the nikkei extending gains. we are notably seeing a lot of weakness when it comes to these export-sensitive stocks. yen again crash -- the

.03 for athrough 1 moment. stocks coming online slowly, but notably be -- but notably. the plunge in gold prices overnight. it is worth pointing out that we are seeing demand coming back into safe haven gold. the nikkei now up by close to 1%. the yen will be a key factor in terms of how this a plays out. regionally, we are up by about .7%. doing a lot better than the weaker open we were expecting just before the top of the hour. this is what we're seeing in .erms of the yen and in terms of what we are seeing in the pound. take a look at the drop we had. strengthening past 103. that is the strongest for the yen since 2014.

we are probably seeing that stability come through when it comes to the equity session as well. we have been watching the aussie and the kiwi. aussie dollar hit a two-month high at one point in the early trading session. in this volatility, it has given back a lot of that. i want to touch on oil, which had a strong session overnight. we did have the lower stock prices coming up -- coming out from the u.s. 1%,seeing downside of over at least for now. you so much. let's go to sydney, where mark wills joins us. we are seeing that the u.k. is really holding its breath as we wait for these vote to come in. how are you feeling about all this right now?

it was risk on and now we are seeing markets turn a little bit. stocks seeing some gains in the early session, but are these moves in currencies a little exaggerated given the lack of liquidity we are seeing right now? >> not at all. -- the poundtse auction markets have seen an explosion in the volatility. the price of those options, for a couple of months now. the pound was always going to be neckne to take it in the one way or the other. yvonne: do you think markets overnight jumped the gun a little bit when it was still risk on? mark: absolutely. it was interesting to see that gold was weaker. have think a lot of people

been disappointed if they are selling out of gold positions. pound: we are seeing the take quite a pounding, i guess you could call it. some were expecting, if this were a leave vote, that this was a win. are we heading down there right now? are these the early signs of that? is very true. that is the scenario that we were worried about. we thought that was highly feasible. if you look at our positioning, we thought the u.k. was an investable.-- un- we were not predicting that leave would win. we were saying that because we had no idea which one could win, you had to be very defensive. seems like we are seeing

more uncertainty as well. i want to talk about the latest moves. they are speculative. is there a risk that we might see more pullback? in terms of long-term, when does the real money start pulling it? about us, wethink are a classic. we are a long real money manager. iran through the positioning their and typically, it would be would before our clients start to say to us that they want to address à la -- asset allocation and that kind of thing. what we advise would be asking us what is our opinion. next year, you have the european elections coming down the pike. if it is extremely close or leave wins and you have the french, german, and netherlands

elections, plus a lot of the smaller european countries have talked about having their own referendum. this is a pretty toxic in terms of europe. being anink about average businessperson somewhere in the continent, you are thinking about spending money to buy more women, that is not going to make you feel more enthusiastic to do it. , thatbuy more equipment is not going to make you feel more enthusiastic to do it. --nne: your concern of exit period ofan ongoing problem after problem after problem. mark wills joining us. up next, more analysis on the u.k. referendum. he bit here. you are watching bloomberg. ♪

>> if it is the sort of people who are disaffected by politics and will not vote for anyone or anything until they come out and vote against something, that helps leave. there are a lot of younger adults who do not normally vote. if they are the ones turning out, that is going to fall remain. we will have to wait and see which vote it is. certainly, it seems that some of the levers who do not normally vote are turning out in those areas. >> it is a very polarized, charged atmosphere. i think we are going to see a little bit of the market jitters , thinking it might turn strongly towards remain now. some results might suggest the opposite. yvonne: a case for the

undecided. we are seeing massive swings across markets this morning. >> we certainly are. we got started with a massive risk on rally that could be dissipating. we are looking at a few things here. with thet started contract on the mix -- vix. obviously, u.s. cash markets are closed, but we are seeing a little bit of reaction here. that is a spike, up 17 spots. that basically takes us back to write before 4:00 a.m. today. can we look at the pound index? this is pound index go on your bloomberg. we talked about these major crosses. this gives you a broader picture. this is the sterling against the basket of currencies. as you can see, that is a two-day chart.

that is yesterday. one or two hours from the cutoff in new york. that is a swing of about 2% on the pound index. as we just talked about, at one point, it was falling the most in 24 years. said, let's flip the charts and have a look at the nikkei vix. last i checked, this was on the way up. we should be seeing it a little bit higher. quickly, the other reaction we are seeing is, in the futures market, s&p futures and ftse 100 futures down as much as 2% at one point. here. just flip my charts --are looking at ftse 100

can we get the chart up for the viewers to see? 1.9% was the latest damage on ftse 100. that is the september contract i am looking at as well. we will continue to track this. it is changing by the minute. these results continue to trickle in. yvonne: thank you so much. we're joined from london by chief economist for emea. good to see you. take a look at the pound. we are seeing quite a different story. a rocky ride as the results come in. >> what we have seen in sterling over the past few hours is the elimination of some complacency. over the past couple of days, pretty much entirely priced out.

that gives people reason to be reassured. the margin of error in those polls is very wide. we are seeing the consequences of that. it appears that the price is closer than people thought previously. that is why we are seeing massive movement in the pound. yvonne: a number crunchers founder, we said that the polls could be wrong once again. you talk about the long-term here, what would it mean for the u.k. economy if the country leaves the eu? and what would that mean for europe? >> we have done quite a lot of research over the past six months here at bloomberg intelligence. the findings we have come up with for the u.k. economy are that, in the short term, we expected a ready major disruption to slower gdp growth, a big depreciation of sterling, which is what we are seeing now. in the medium-term, we would expect the economy to be about 3% smaller as a result.

there are short-term and long-term concerns. those are the main implications. for the rest of you, i do not think the consequences for the rest of the year are that big. if britain leaves, they will get a rough deal with its partners. is that the implications for the wider eu are smaller than people might think. yvonne: certainly seeing disruptions in the markets with these early indications. jamie murray joining us from bloomberg intelligence. >> now to the latest headlines. china's slowing growth is hurting small companies. early indicators suggest economic stabilization is largely intact in june. small and medium-sized business manufacturing indices fell this month in contrast to a separate survey of executives that show conditions are improving. china's first official pmi reading for the month is expected on july 1. the world's biggest pension fund

, losses linked to its accounting scandal. japan's $1.3 trillion fund is seeking damages of more than $8.5 billion. the price tumbled after the company revealed it falsified process -- profits. toshiba failed to comment. volkswagen has agreed to pay owners of cars affected by its emissions scandal up to $7,000. sources say it is part of a $10 billion settlement being negotiated with the u.s. government and which will be presented to a judge next week. committed 40gines times the amount of permitted pollution. global news 24 hours a day, powered by journalists and analysts in more than 100 countries. up next, america's largest banks have had their annual stress test.

we are live in new york to see how they are faring. ♪

yvonne: the big u.s. banks have won a thumbs-up from the fed. all have passed a stress test indicating they are able to withstand an economic shock like the 2008 financial crisis. crawledes only just over the line. let's go to new york for more. a couple good, but could do better. >> a couple were definitely falling under a little bit of scrutiny from the fed. let's go through the u.s. banks first. big cap banks like citibank, jpmorgan, etc., midsize banks, as well as foreign banks that operate in the united states. let's ring up the first screen one.s. banks and tier

leverage ratio. the best include citigroup, wells fargo, bank of america, all coming in at higher than 6%. you can see the regulatory minimum of 4% mandated by the federal reserve. in the orange color, morgan stanley is at the bottom. 4.9% in terms of capital that they would have on reserve if they were hit by a worst-case scenario. in terms of what those scenarios were, there were a couple of things that the fed subjected these banks to. saw these an area doubling of unemployment to 10% and treasury yields that fell into negative territory. let's take a look at foreign banks as well. actually, on the positive, they did better than u.s. banks. deutsche bank trust coming in at 12.2% in terms of the minimum capital that they would have if objected to the worst-case scenario. bmo financiale, coming in at 4.9%. yvonne: this is just the first

phase out of two. what comes next? >> this first phase comes from the dodd frank act. looking ahead to wednesday june 29, they will be subjected to a second phase and that is called a ccar. comprehensiver capital and analysis review. a lot of people think this will be tougher for the banks to get through. if they succeed, it would show that the banks have enough money to increase dividends to their shareholders, which would be a positive for those. they might have enough money to show that they have the ammunition to buy back shares. according to a survey of bloomberg analysts, if those top six banks pass these tests, they would come in at about $60 billion in terms of the amount of money that they might send back to shareholders. we will have to wait and see. six days from now, phase two of the federal reserve stress test.

up next, how central banks around the world coordinate their land for the u.s. -- the u.k. referendum.

yvonne: it is 9:30 in tokyo. we are 30 minutes into training there. we are seeing the yen soaring. you are watching "daybreak asia ." -- the stories this hour u.k. referendum on europe is back in the balance with the latest results putting the leave camp in the lead. the pound surged initially as the first constituencies voted to stay but then fell as the northeastern city of sunderland opted overwhelmingly to reject the eu. the biggest u.s. banks have passed the latest stress test. all 33 won a thumbs-up from the

fed, indicating they would be able to withstand a severe economic shock. wells fargo was top among american lenders. bottom,tanley came passing the test by a whisker. china's slowing growth is hurting small companies as early indicators suggest economic stabilization remains largely intact. industries -- indices fell while a separate survey of rigor companies show conditions are improving. china's official pmi reading for june is expected on july 1. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. for thet results are in u.k. referendum amid rising speculation that voters have opted to stay in the european union. bring us up to date. i think sunderland was where we saw things take a turn.

, and where we started to get the impression that leave could be doing better. in sunderland, that produced a 61% leave vote. that was much more than the expected 53%. in nearby newcastle, we did see a slight edge for remain. it was 51% and 49% leave. we have not expected a 12-point margin there. the leave for remain was much smaller than expected. and then we have some of the results. leave and 38% remain for south highside. that was expected to be pro-brexit. i have a map to show you so you can see the distribution of the results that we have had come in at the moment. you can see we have only had 13 out of 382 voting areas declared so far. it is very early days to make

any sort of judgment. at bret to be looking x-go. i can bring that up on the bloomberg. showing 67% probability so far on remain. that has come down from more than 90% before we got many of these results. there is a slight edge for leave 49% -- at 51%and and 49% leave. clients are seeing a chance that the eu -- the u.k. will remain in the eu. conflicting things coming out and we are very early on in the night. yvonne: take a look at those result numbers. they are quite neck. -- neck and neck.

this is up north to the u.k., next to newcastle, who voted remain. we are seeing different views. , these has happened different views with towns close to each other, even in the northeast of england. this happened in the general election as well. was expected to be pro-brexit. not such a surprise as what we -- inen newcastle newcastle, where we were expecting a 12% lead for remain and we saw a 2% lead. and 38%bar, 62% leave remain. that is slightly better than expected for remain. we are seeing surprises ready much across the board, even at this early point through the

night. we are not even close to the time when we are expected to get a flurry of results, in about two hours time. that is when we are expecting to have more than half the results in. at 4:00 a.m. u.k. time, we are expecting to get a lot of big cities reporting. we could have more than 100 results come in in that window. still a lot to wait for as the night goes on. are just getting started. thanks for sticking by with us. 14 of the 382 counting areas being presented right now. let's go back to the markets. u.s. futures are heading down. it will be a session for the ages, it seems. it seems like when you have a narrative of what is happening,

it goes out the window. we are seeing extraordinary bouts of volatility. the market is starting to turn up after a pop at the open. .hey have given that all back the aussies have turned into negative territory, down by .4%. he we stocks are still up by .25%. but off those session highs. in japan, a shrink in terms of positive sentiment, the surge we had at the open. still hanging onto gains of about .3%. in terms of what we are looking for in the broader region, we are still up by about .25%. when we opened, pretty much every sector in the green. now there is a lot of negative sentiment across the board. given that the jitters and

concerns over liquidity in this market, perhaps unsurprising. some of the big movers are sharp. the company has been getting its fair share of woes. announced it would be moving to the second session. so it would be the smaller and less prestigious session in august. that is a huge move for sharp stock on the back of the uncertainty over the purchase by foxconn. the top loser in the tokyo session. we are seeing some of these energy names surging on the back of the oil gained. are seeing some downside, giving back yesterday's games -- gains. we did have a fall of about 1% in the gold price. we are seeing this return to

safe havens, including gold. this is what we're looking at in terms of the yen. starting to strengthen again. we did break through at one point. that was the highest in 2014 over the past hour or so. it has been trading in tandem with what we are seeing in the pound. what a morning it has been for the british currency. we have had a fall to six-year lows and before that, a fall to the most in 24 years before giving all of that back. let's look at some of the regional currencies we have been seeing. the aussie dollar did reach a two-month high. in the commodities space, this

is what we are seeing. falling below the $50 a barrel mark. some of the weaker stockpile numbers coming through in the u.s. yvonne: banks were bracing for a possible brexit, putting markets on notice that a swap arrangement could be activated. let's go to kathleen hays. she is here to assess what this means. cannot help but imagine what mark carney is thinking about. do you think he is smiling or getting ready for a long night of work? said, let'sink he break open the champagne and then said, let's put the cork act on. the volatility is amazing. it is a taste of what we could see. all of these votes are counted up. the vote to leave is the one that wins. let's look at what this means for the bank of england and the

u.k. the u.k. treasury came out with the latest analysis saying that the vote to leave could cost the u.k. economy 6.2% of gdp and tank home prices. for me, it would have the opposite effect. our an out -- intelligence team doing terrific analysis. uncertainty, remove boost inyou get a nice consumer spending and business spending. the underlying strength of the u.k. economy would come to the four again. again. yvonne: what does remain mean for the g7 central banks? idi mentioned liquidity. i guess they could put it in their back pocket tomorrow.

if the remain vote wins. for the boj, it is surging. very bad for exporters. it goes against what they are trying to achieve. for the federal reserve, officials watching brexit. janet yellen said this week that that was one of the reasons, uncertainty over this vote that kept the fed from going ahead. yvonne: no popping of the champagne anytime soon. thank you so much. up next, reacting to the referendum. how the markets are responding as the results trickle in. dramatic moves we are seeing right now. you are watching "daybreak asia ." ♪

>> welcome back. these are the latest first word headlines. u.k. referendum on europe is

back in the balance. the pound surged initially as the first constituencies voted to stay. northeast city of sunderland opted to reject the eu. protesters vowing to continue their campaign. democrats close down business in the house for 25 hours, demanding votes on various gun-related issues. speaker paul ryan dismissed the protest as a publicity stunt, saying it could set a dangerous precedent. the house is in recess until july 5. circuit boards from the egypt airplane damage recorder are being sent to france for repair. memories can be accessed.

it can done in cairo, killing all 66 people on board. day,l news 24 hours a powered by 2600 journalists and estimates -- this is bloomberg. let's get more reaction from the u.k. referendum. joining us is michael could gino, president of pacific heights asset management. he joins us live from san francisco. thanks for staying up with us as we start to see the results of the u.k. referendum come in. what is your take on it so far? yesterday night, a lot of risk on. did the markets pull the trigger too early and what do you think about the reaction now? >> i think it is really early. the next several hours are going to be key. you have less than 10% of the results coming in at this point. it is very early. in terms of trading, what you are seeing played out is the scenario that most people predicted.

was going to vote go in that direction, the run towards haven currencies like the swiss franc or the u.s. dollar, you know, gold jumped up about 10 months. that is what you are seeing. very predictable so far. i would say that it is still very early and it will be a volatile night. could be very volatile tomorrow depending on the results. you ready to jump into the market now? we are seeing some much cash parked on the sidelines over the last couple of days leading up to this vote. are there certain sectors you are looking at right now or is it too dangerous to be jumping back in? >> for the better part of the week, investors were game planning as the likelihood of remain got higher. i think people were game planning around that scenario. an exit would be a curveball for

the u.s. markets. i cannot predict what is going to happen, but i think you will see a reversal of that and a lot more volatility and uncertainty. in our specific issue, we were not doing any buying. we were sitting on what we had. we did a little trimming in our equity positions because there was a great run up. we are always balanced in our permanent portfolio. bets hedged best -- around a number of asset classes. we think we are very well positioned, regardless of what happens in that portfolio. yvonne: you have been bullish when it comes to gold. i think this week has been taking a breather from this rally we have seen. is this the start of the unwinding of this rally? we are seeing gold up this morning. >> you are talking about a couple of hours after the close. it is really too late. if you look at gold this year and not just this week emma it is at a really good run.

it has touched a low where the production costs and market trading was very oversold in the last six to nine months. i think it was prime for a bounce back. it is an asset that protects against uncertainty and risk in the financial system. granted, there is no inflation right now. money,ffset to cheaper the declining value of money, we think that it is a prudent part of an investors wealth building and maintenance strategy. we have always been a fan of it. we continue to be so. at times like this, it becomes much more prominent in investors' minds. if you own it right now and have a position created, if there is an exit situation, you could be happy over the next 24-48 hours. yvonne: if it is going to be a leave vote, i mean, we have talked about how violent the

move could be. let's see -- let's say there is going to be remain. how do you think the upside is going to be? is aalistically, if it remain, everybody breathes a sigh of relief. everybody quickly turns to all the issues that still remain. fairly anemic growth in the u.s. quantitative easing with no end in site. strong,f good, pro-business fiscal attack policy. those low growth expectations worldwide continue. at least they dodge a bullet in terms of the risks of having england and possibly others leave the european union. the other thing that i think is interesting, the world is still going to trade with britain regardless of what goes on in the long term. in the short-term term, you have a lot of dislocation potential and possibly economic slowdown. that is why the central banks are giving a coordinated front

in case they need liquidity. the world will go on if this turns into an exit. there may be risk to the current infrastructure of the european union or the current -- the common currency if it does leave. the question then becomes who is next, why, and when? and whether the european union, in its present form, remains. how do you do business and game plan around that in the long term? that could result in recession or dramatic decreases in business over the short term. over the long-term, countries and businesses are going to find a way to do business with each other. 2 what of -- the long-termbout for you? do you think that you would be more bullish when it comes to european equities or the footsie -- the ftse? money and ate easy least some growth, and britain has done better than a lot of other countries in the european union, that would be bullish for

stocks at a certain level. you would also have a fairly low growth environment. there may be a ceiling on where that goes. with the rest of the world, stock markets, i think you could have a similar scenario where liquidity, easy money, and a remain situation, stocks trend higher. you still have the growth risk which is not going away anytime soon. the stock market in the u.s. has not done much in the last 18 months. that has coincided with weaker corporate profits, a weaker gdp in the u.s. the question is, what is the next driver for good, dynamic, solid equity prices. more robust is economic growth worldwide. i do not see that occurring anytime soon. potential gains, but maybe limited as far as how far they might go. yvonne: do you think we will see one or two fed hikes this year?

michael: maybe zero. you could make -- reasonable, smart people have been all over this issue. you could make a case for 1, 2, or zero. the vet in the last few months has introduced other variables. global economic growth, the brexit situation. it used to just be employment and stable money. they have given themselves a lot of wiggle room. i do not know if they can come up with any reason why not to move. that has been the case. the other thing you have is the pending presidential election and congressional elections the closer you get to that -- again, that provides a lot of uncertainty in the u.s. we will hear about policy restrictions from the different parties, etc. you could make a case that they do nothing until after the election. orthings turn out to be weak who knows what, you could make the case that they do nothing this year.

if there is a remain, you might see rate increases put back on the table. but you do have questionable u.s. growth in the second quarter. the profit picture remains weak. employment numbers are starting to soften. a lot of uncertainty. yvonne: let's leave it there. thank you so much. fluctuate asencies the vote counting goes on in the u.k. referendum. you are watching bloomberg. ♪

yvonne: we are still waiting for results coming in on this u.k. referendum. and next, the remain and leave right now. tell us about the picture at the moment. we are seeing some big surprises. simon: the polls closed at 10:00 thursday night and the initial opinion poll suggested that the remain camp was going to win with a 52%-40 8% margin -- 52% -48% margin. that has been thrown into question. sunderland and newcastle numbers are coming in much more differently than anticipated by .olling experts the suggestions are that it is a much closer race than the original polls implied. the pound falling as a result. yvonne: talking about the pound, how do you think markets are

reacting right now? is it a of confusion that we are seeing from traders? >> there is a lot of confusion. they are obviously worried about a so-called brexit. results come and from sunderland and newcastle showing a different, less successful performance by the remain camp and down goes the pound. the seesaw we are seeing reflects the ants that the investors have had over the last four months that this campaign has come even closer than anyone anticipated. yvonne: looks like we will angst asto see next -- the votes come in as we see the polls wrong on some fronts. ofn we expect the majority the vote, when do we expect that to come in? is, theloser that longer it will take.

we expect a final result at about 7:00 in the morning. one would hope that between 3:00 and 5:00, he would get a sense of direction. perhaps 8:00 to four we get a final tally. that is how it feels at the moment based on these early results. a much narrower race than originally thought. yvonne: thank you so much. simon joining us from london. that is it for us at "daybreak asia" today. "trending business" is coming up next. we leave you with live pictures out of london, where the votes are coming in very early on right now. about a dozen areas where we have seen results thus far. we are seeing the pound, huge reaction, down 2%. ♪

♪ friday, the 24th of june. i am rishaad salamat. this is "trending business". ♪ rishaad: we will be in london, new york, and beijing this hour. initial results showing that leave campaign ahead in the u.k. referendum. the pound slumping the most in six years after climbing against the dollar. that a brexit might mean a recession.