anna: welcome to "on the move." it is 7:30 in london. we are counting you down to the european open. i am anna edwards alongside caroline hyde. here is what we are watching. brexit means brexit. the message from theresa may as she prepares to lead britain out of the european union. chancellor?the next mark carney will address the u.k. treasury committee this morning, two days before his first post referendum rate decision. is cuts coming as soon as this

his workforce is the right size after thousands of job cuts. >> at this point in time, i think we are exactly where we should be. have,e the environment we to face the forces that we have here it -- we have. anna: where less than a half hour away from european trading. caroline, let's check in on where we are. where had a strong session over in the u.s. the s&p 500 that feeding through into the asian equities session. strong waves coming through in the japanese market. the nikkei up by 2.4%. the topics up by 2.4%. weakness in the japanese currency, one of those factors is driving the markets. we have the equity markets looking as if they will be

weaker. caroline, take us through the other markets. caroline: exactly as you were just telling us there. s&p 500 hits record highs yesterday. the feature signals we could slightly gain on that record. meanwhile you're talking about the asian session. nikkei 225, this is as we see a significant weakening in the yen, down by .5%. the other performer of the day. money moving into the great british pound. ,heresa may factor coming in potentially anticipated is helping u.k. assets. green across your screen when you're looking at that. money out of the havens and into the riskier assets. let's get more from david ingles. david: thanks caroline. let's you started with the imf, because they are earning china to deal with its corporate debt problem. manageable.cute but

[indiscernible] a former bank of japan executive director says the boj will need to reduce the pay for the record that purchases. he says central bank is aware of this. they should start reducing the pay for the bond buying in the near future. tooda says he will expand reach his inflation target. u.s. investment bank -- the workforce is the right size after thousands of job cuts in with recent years. -- job cuts in recent years. he spoke exclusively to nejra cehic. >> at this point in time, i think we are exactly where we should be to face the environment we have, to face the regulation we have, to face the

forces we have. now at this point in time, our challenge is to execute correctly what we have in front of us. i think the firm is very much focused on doing that. baileylaries christopher -- burberry's christopher bailey -- despite the bexar result not being the one he -- despite the brexit result, not being the one he wanted -- >> it is not a decision that i wanted. and i am always a glass half-full and we now need to move on. a weaker pound helps in certain ways. burberry has always it done business globally. any trading agreement is something we will always work with no matter what happens.

global news, 24 hours a day, powered by 2600 journalists in more than 120 countries. this is bloomberg. anna. .nna: david, thank you theresa may will succeeded david cameron as u.k. prime minister tomorrow, taking on the task of steering the country out of the european union. the pound of british stocks -- andrea let some dropped out of the contest. >> during this campaign, my case has been based on strong proven leadership to steer us through what will be difficult and uncertainty -- and uncertain political times. negotiating the best deal for britain leaving the u.k. that's leaving the eu -- leaving the eu. brexit means brexit and we are going to make a success of it. anna: let's bring in our guest, mark urges.

-- mark burgess. great to have you on the program. let's talk about uncertainty and the role it has on shaping your strategy. -- the old adage is businesses do not like uncertainty, but investors really hate uncertainty. some opportunities there. mark: we have given the markets uncertainty over the past few weeks. it has been quite unpredictable but the fact that what we now the prime minister is going to be much earlier than we expected. it will help settle investor confidence, i think. anna: market, the ftse 100 an 11 month high it we know that is -- 11 month high. -- the ftse 100 poised to gain all of its

losses. off that previous high we had on june 23 before the brexit debacle. should this be the case back up the 250 be anywhere near that? should we be buying in? there is a fair degree of uncertainty facing the domestic economy. the ftse 100 has rally because of the translation affect of a weak sterling. the ftse 250 rightly sold off. apprise -- iares would share your surprise. week -- ourview view, there are going to be a number of headwinds facing the u.k. economy as we navigate away from the eu over the next number of years. that will impact domestic

profits. anna: du you buy into this ftse 100 rally entering a full market during yesterday's session? -- do you buy into the ftse 100 rally entering a full market during yesterday's session? is that enough for you to get excited? mark: what we have not talked about is the collapsing corporate bond yields. they are going ever lower and that causes investors to look for yielding assets wherever they can find them. anna: we are going to be digging into those moves later. mark burgess staying with us. up next, there is an elephant in the room at the euro group meeting in brussels. minister saysnce there is nothing to discuss. we are in brussels next. this is bloomberg. ♪

anna: a somewhat gloomy day here in berlin. we got 18 minutes until the open. that's futures called down by 2/10 of 1%. we move away from germany which is the heart land of politics over to the other beating heart that is brussels where there is an elephant in the room at the euro group meeting of finance ministers -- finance ministers taking place.

italy's struggling banks. the imf has urged action on the matter. ryan chilcote is in brussels for us. is there any sign of the euro group that it will change its mind on helping italy? ryan: no signs they are going to do that at this meeting. it is not on the agenda. it wasn't on the agenda when the finance ministers that together yesterday. i spoke to italy's finance minister and he was clear about trying to dampen expectations. the reason for that, caroline, is that i don't think all of the finance ministers believe this is something they should get involved with right now. have a look. >> now it is in the hands of toervisors and authorities work with those rules and the opportunities they have to find precise solutions. any solution for telling banks need to be very specific within

the framework. ryan: the problem caroline is the framework. if you go back to cyprus, that aliens blueprint for how -- it isow bail ins the shareholders they get hit, then the support needed debtholders -- be subordinated debtholders, then everybody else. the problem in italy isn't the subordinated debtholders, the political problem are in very large number retail investors, mom-and-pop investors, that put down as little as 1000 euros. according to the rules for how banks are supposed to get bailed out in the european union, they would be some of the first to lose their shirts. that is the problem for the prime minister. he doesn't want that to happen. they are trying to find a solution where they can support

the prime minister, keep them in office. keep small timesavers happy and always try to look like they are trying to enforce the rules. caroline: ryan, think it very much. ryan chilcote reporting their. -- reporting there. this timewins out around? what are your thoughts on the italian banking sector? mark: in this current environment with a lot of focus on fragmentation of the eu, eventually practice will win through and the banks will get more capital. >> are you expecting that to be from the public sector from the taxpayer? or will it be managed from extreme circumstance rule? article i think they will do -- mark: i think

they will do that absolutely. they clearly runs the risk of uncertainty. that is something the authorities do not want. nor do they want a banking crisis which they will get if the italian banks one capital. the unity that we see from the eu authorities will be undermined by that. anna: do you think the italian banking crisis has the potential to become a eurozone banking crisis? he was suggesting that this is something that would spell out into the rest of the eurozone. mark: the financial system is interconnected. relationships across the region -- an italian banking crisis could spread more broadly. low interest rates and this environment is crippling to bank profitability.

help.eed some anna: the banking sector in japan has been speaking out against the negative interest rate environment there. do you think we'll get through this earnings season? fromvocal commentary european banks about low interest rate environments and how difficult it is? mark: we've got a yield curve at the moment. generating cash flows and capital is very hard. we will get more profit warnings and more downgrades. caroline: mark, give me your outlook for global yields going forward. i got a chart showing. a slight uptick from our record lows when it comes to the bloomberg global index. the sovereign bond index. in the blue, we have japan, negative when you look at their 10 year. german ten-year also in the negative territory. are you expecting a turnaround? the futures market is likely to cut rates and added the stimulus

and we got mark carney doing that later in the week. mark: what we have learnt of the last six months is we are moving toward one global interest rate policy good with negative interest rates prevalent in europe and japan, where there is a yield and corporate markets, we bid lower. investors are forced out of negative interest rates, not only because negative rates, because banks are not buying much in the bonds. whatever the outlook for growth in parts of the world, i think there is just rates will remain anchored because of the global bid from investors seeking the euro. --a: even though the caroline: even though the united states may not be at the center, that they are still going to be -- because of what we saw on friday, the payrolls number. every time the data looks better

-- mark: once we get interest rates into the markets, -- whatever the outlook for the u.s. economy. >> we could be caught up in a sudden shift to the selloff in u.s. treasuries. where is your outlook for potential rate hikes coming from the united states? are you in line with the futures -- 2017?inking 2018? mark: the ecb and the bank of japan are cohesive to monetary stimulus and easy policy. i think that will influence interest rates. having seen the damage that the strong dollar did to financial markets last year, i think the fed is very wary of the impact of tightening monetary policy, a stronger dollar and a volatile

equity market globally and will try very carefully. inflation at the moment is very subdued. wage pressure is on coming through. there's little reason for raising interest rates in the u.s. anna: minutes away from the open of european equity markets. up next, we'll look at the corporate movers in today's trading with daimler beating costs.es despite legal this is bloomberg. ♪

>> it is 7:52 in london. .inutes from your opening let's have a look at some of the stocks we are keeping an i on. germany, it is all about daimler. pronouncement to its numbers looking better than expected. rising 6.7%. the company beating company -- the company beating expectations. calls from some of the analysts -- saying this is the most bizarre timing, people he given brixton -- brexit. talk about bizarre timing and earnings, because also asos also called higher on the back of

some pretty stellar results. these are -- and they include the brexit fallout. their numbers up 30%. anna, it is the united kingdom up 28%. mark, break it down for us. hao: a has announced in the u.s. -- lan: a has been up mark: i would be surprised if it doesn't. decisions have been put on hold as we await the results of the referendum. i would be surprised if we don't see a weaker period for economic growth in the u.k. the: the politics impact cold face of the earnings season . what we know so far about political leadership coming in here in the u.k., does it sound like a positive environment for business? we have to sort out the

relationship with the eu. we had theresa may yesterday talking about getting employees on board. does this sound like something that business can get behind? mark: i think the market feels threatened by that. many have been calling for that for some time. it made the -- we cannot overestimate the uncertainty created by the years we are going to face of negotiating a position. what our trading relationship looks like with the rest of the world. what that means in terms of services. -- as aet may well have becomes more comfortable with where we are going. that uncertainty is good to last for a very long time. that will at the margin defer decisions which is growth in the u.k. and europe. caroline: theresa may was saying

she wanted -- the thing business will not get behind that idea? do you think are ready to turn negatives into positives? perhaps we've got a u.k. government with more strength than previously? mark: the government is designed to face the circumstances we find ourselves in. she clearly has the support of her party. we have a little opposition. she has a mandate from that perspective. we can move forward, yes. anna: mark burgess stays with us here on the program. coming up, it is the market open . five minutes until the start of trading day -- of the trading day. we are going to be focusing in on where these equity markets go. an hour ago, looks like things are pretty negative but things have turned around a little bit. we could be either side of the flatline on the european equity

session. the s&p over in the u.s., a strong story yesterday as that filters through into the asian equity trading day. the open is next here on on the move. this is bloomberg. ♪

caroline: good morning and

welcome to "on the move." right here in the city of london , alongside caroline hyde in berlin. we are moments away from the start of the european trading day and caroline has your morning brief. caroline: i do anna, because brexit means brexit, the message from theresa may. but how business friendly will she be? and who will be the next chancellor? meanwhile, mark carney will address the u.k. treasury committee this morning, just two days after his post-brexit rate decision. chief tellsstment

bloomberg that his workforce is now the right size after thousands of job cuts. >> at this point in time, i think we are exactly where we should be to face the environment that we have, to face the regulation that we have, to face the forces that we have. ismore on that ubs story legal through the program. let's have a look at how the european equity markets are opening this morning. this is the picture coming through from european equity markets. we are in positive territory than come across the european equity space. we had thought perhaps, that the european markets would be a little weaker of the start of trade, but things look like they have gotten off to a fairly flat start. e 100,e the fts fairly flat. the cac is up by.2%. let's check on the details with nejra. nejra: yesterday we saw green

across the board on this imap. looking at a little bit of a mixed picture with the industry groups, a bit of softness coming into equity markets in europe after the risk appetite in the asian session. and u.s. consumer discretionary, leading. and leading the losses, we have telecoms down .3% and financials down .2%. let's take a look at how the gilt market is opening up. we do check this every morning. we are at 0.79% on that 10 year yield. i don't know why britain is there twice, just to emphasize the point, i think. it looks like we are up six basis points on the 10 year yield here at the open. then, let's take a look at the three stocks we are watching today. there is a lot to watch today. i have just pick three. this is not a comprehensive look at the market. have numbers coming in -- we had

numbers coming in earlier this morning. margin remainsth unchanged. it is maintaining its program of reinvestment. it is indeed opening higher come up 3.8%. it was alsothen, being called higher. it looks like it is slightly up there, if that is today's price. it looks like it sees four year production up more above the guidance. and we are just waiting for daimler to move. but overnight, we heard earnings be expectations significantly. benz le of mercedes soared. we are just waiting for that to move there. caroline? caroline: we are always a bit of a laggard when it comes to the german market. we are also getting numbers from

bmw coming up on the june 6 sales, car sales were up 5.6%. the brand of bmw, the sales rose almost 10%. the automobile maintenance today. most of them are on the green on the index that tracks all of the automakers on the stoxx 600. now, let's look at other corporate movers. says despite the brexit result not being the one he had hoped for, the company will move on. and the waeak pound might even e helpful. >> it is certainly not the decision i wanted or believed in, but it is what it is and i'm always a glass half full kind of person. certain ways,s in

but we have always done business globally. we trade around the world and any trading agreement is something that we will always work with, no matter you know, what happens throughout this process. >> that was christopher bailey, the outgoing ceo. he will remain the chief creative officer at burberry. let's get more of a take from mark burgess from threadneedle. the pound, talk to us about how this is going to be affecting some of the businesses you look at. 100 continue to benefit from this weaker pound? mark: i think we willfully a turnaround in the weakness that we have seen. i think this will come under the spotlight following the decision we made a couple weeks ago. i think that will place the pound on continue downward pressure. we will have easing monetary policy for some time. and again, that will take the

pound lower. we may stop falling at the rate we have seen over the past couple weeks, which has been fairly precipitous. but i can't the a strong feeling ang sterling anytime soon. anna: how do you do this when somebody assets correlate? i have a chart here that shows u.s. and european stocks moving in sync. the correlation between the stoxx 600 and the s&p 500. how do you manage that correlation and fun companies that are going to do better than average? a very goods question. at the risk of sounding like a broken record. i think it is forcing investors into equities and when bond yields yield love very much, you look for an asset where you can find them.

that leaves us as core fundamental investors to find the winners. anna: you are looking for yielding assets. are you looking for yielding equities, then? i spoke to an investor yesterday who said, despite all the dreadful news that has befallen the commercial real estate sector over the last week or so, he is now scanning that sector because of what he believes that can deliver. mark: with the gilt yield at 80 basis points and property yielding 5% to 5.5%, i think we have seen this exposed as the key domestic asset. but that yield is going to limit the downside. anna: are you considering upping your investments in real estate? mark: we are not looking to add to that. we are comfortable with where we are. caroline: mark, what about

outside of the u.k. and europe? how much is there a contagion effect? is the eurozone and the wider eu set to perform relatively well? or could the euro start to feel the damage reaped by what is happened in the united kingdom? mark: unlike the u.k., we have a current account. surplus -- we have a current account surplus. that does depend on political unity, avoiding referendums in eu constituents, any form of ban king crisis, and levels of financial instability picking up again. if that is the case, there is no reason for the euro to fall heavily. we have very easy monetary policy priced in. that is supporting financial markets to some extent. but it really is about avoiding a banking crisis.

anna: mark burgess, the threadneedle cio. he stays with us. and then we will move to japan. more analysis on this man's abenomics strategy. this is bloomberg. ♪

anna: welcome back to "on the move." 10 minutes into the trading

session, let's see how those markets are shaping up. the stoxx 600 is up by about .3%. the ftse 100 is a slight underperformer, though the miners are leading a charge today. the dax is up by .5%. daimler is doing particularly well. bmw has been suring, june sales doing well. autos are the best performers on the stoxx 600, as are the miners. the cac 40, that is up by .6%. let's get on to the bloomberg first word news. david: let's get started with the international monetary fund. it has urged china to deal with the corporate debt problems. the spillover risks are huge, but the situation is manageable. the imf will be updating its economic outlook next week. investment backing is the

ubs is finally the right size after many recent job cuts. so says at least, the division president. he spoke exclusively to bloomberg. >> at this point in time, i think we are exactly where we should be to face the environment we have, to fa ce the regulation that we have, to face the forces that we have. at this point in time, our challenge is to execute correctly what we have in front of us. and i think the firm is very much focused on doing so. david: the eurogroup is resisting calls for money to prop up trouble banks by almost 360 billion euros of nonperforming loans. thathairman insists such problems need to be solved

by the banks themselves. >> the rules are set. theit is ain the hands of supervisors and the authorities to work with those rules and the opportunities they have to find precise solutions. any solution for an italian bank needs to be very specific within the framework. david: global news 24 hours a day, powered by 2600 journalists in more than 120 countries around the world. this is bloomberg. anna? anna: david, thank you. we are getting the news coming through from the italian banking sector. mp's reach a deal to protect subordinate bond holders, according to these reports. viewroen dijsselbloem's any deal to bale ou til out the italian banking sector needs to be within the rules. the rules do set out the order in which various

stakeholders need to be bailed out, as dictated by these eu rules. we will get more details to what extent that means the mom and pop investors are protected. we will see whether there is meat to that headline we are getting there from stampa. the yen extended its steepest since december of 2014. abe has an upper house election win last weekend. kevin buckland joins us right now. abenomics seems to be back on the investors' radar. i know we have been talking about abenomics, congratulating abe on his progress. >> i guess the message, according to a spokesman, was to carry on with abenomics.

we are about 15 minutes away from a press conference by the economy minister. so, no real news yet on what he is going to say, but of course, investors will be hungry on anything about stimulus. the size of the stimulus and what it is going to look like. the yen, as you say, a completely different currency from what it was last week when it was back at 100. 3, extendingabout 10 the biggest decline in what is known around here as the halloween shock by the boj. so, a big sized move yesterday. yen is the worst major performing currency today. we actually can see yields on the tenure, slightly stable. we can see a selloff in 30 year debt coming from japan. kevin, give us a sense of the

future moves? are we likely to see the yen selloff further? or is there too much anticipation about the size of the stimulus? kevin: if i could look into the future, i would be sitting here. i would be on a tropical island somewhere, very, very wealthy. but the idea that the yen could weaken further is certainly with us because the speed of the gain this year has been so fast and with that has come a ramping up of long yen bets by speculative investors, approaching the april all-time high. there is plenty of room for those to be unwound. very muchn, thank you for your thoughts today. and mark burgess from columbia threadneedle still what us in the studio. abe is meeting to talk about all kinds of policy. he is asking the prime minister in japan to carry on with abenomics. >> i would probably give this six out of 10.

so, we have weakened the currency. we've got some movement in the economy, but he has been very modest. what it shows you is 20 years of deflation plus, a pretty enormous headwind to overcome. an enormous headwind. has 200 billion yen than n anticipated by one of abe's advisors, is that enough? and as a have to be direct policies, rather than throwing money at the situation? mark: quantitive easing in japan has been 14% to 15% of gdp/ we must be at the upper bounds of its influence, given the scale we have seen. the currency is a fundamentally strong currency. if they had when they are struggling to overcome. i think what we see behind the scenes is more encouraging.

with the corporate governance reforming and japan coming through. companies are increasingly focusing on a return on profits. and i think in the medium turn, that is positive for the economy. that is one of the reasons why one can remain optimistic regarding the outlook of japan. deflationary backdrop, which is not just a japanese phenomenon, but a global phenomenon, is really glaring in jpapan. it is a really significant movement for them to overcome. anna: this chart really reflects that six out of 10 because at least we are making progress on the inflation front. 2013 was the case and point. we never got very high and it is now moving in the wrong direction. this is the fiscal stimulus side of things, something we have

waited for for a long time. we are told it will be bold and big. we don't know much about the details. is this something that could be a game changer? mark: i was just about to say, i think what we have learned over the last couple years is the structural reforms are so much needed by so many places in teh he world, but they are really difficult to implement. anna: up next, u.k. stocks have brexit since the vote. 100 next.e ftse this is bloomberg. ♪

anna: welcome back to "on the move." we are getting some notable arrivals happening for the euro finance minister's meeting. he will be arriving, it seems, in brussels for the gathering that will be occurring for the eu finance minister. allegedly not on the agenda today is the italian banking crisis. he leaves he eu finance ministers today. yesterday he really did talk tough about italy's banking needs restructuring and they need to play by the current rules set by the eu. elsewhere, i want to watch some of the stocks on the move. asos is up more than 6%, the

only u.k. online retailer aimed at the 20 somethings. it seems millennials are still flashing that cash in the run up to the brexit. sales were up 28% in the u.k.. so, asos is doing very well indeed. and b are going to stick with that u.k. theme for your chart of the hour. nejra: we have been talking a lot about how u.k. stocks have been outperforming peers, for investors must have had to put up with volatility, right? wrong. not only has the ftse 100 beat its european markets on absolute returns, but if we divide the total return by the degree of daily price variations, well, the ftse 100's 1.2% gains since brexit is among the best amongst western european markets. this chart shows that not only the british mega cap is rising

compared to their peers, but they are also sparing investors the those wild swings in immediate aftermath of brexit. in dollar terms, the ftse 100 is still below its pre-brexit level. it has also fallen more than the stoxx 600 index in dollar terms. but this does signal that the investor worries are easing. the volatility fell for a third day yesterday to the lowest since may 30. so, perhaps, we will see this story continuing. but it is worth looking at the ftse 250, that could tell a very different story. anna: thank you very much. and mark burgess from columbia threadneedle is still with us. we have the s&p, i am reaching for a chart here, mark, as i am talking to you. we have the s&p, reaching an all-time high.

how threatened is this, for not threatened is this by what good in full politically in the u.s.? mark: as you say, we have got the election looming, which will ramp up over the rest of this year in terms of noise. i think investors will begin to wonder and worry about the political landscape if we get donald trump elected. that is something for us all to contemplate as global investors. but again, we can see courre bod yields driving prices higher. the economy is in better shape than it is in many other places in the world. unemployment continues to fall, earnings growth continues to come through, albeit modestly. the outlook for the u.s. economy looks better set. i think that is one of the reasons why we can see equity prices make highs in the u.s. caroline: mark, give us some sector picks, what you think

there is opportunity to buy. mark: well, i think the large cash-led positive companies are where we continue to see value, maybe in the consumer staples. and i think the energy sector and the metals and mining companies still look relatively challenged. so, we remain focused on the world diversified consumer theles, abvvoiding financials as well. anna: does trump mean buy more treasuries, get away from stocks? mark: i'm not sure i know what trump does mean, actually. we have a fair perspective of what from a business standpoint, president clinton would look like. that we need to get a better understanding of what he looks to do with the economy. anna: mark, thank you for spending the last hour with us. still to come on the program,

theresa may is set to move in to number 10 downing street tomorrow as the new prime minister, to how will she handled the brexit? we know a little bit about her policies, and we will talk about that. this is bloomberg. ♪ get ready for the rio olympic games

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x1 will change the way you experience nbcuniversal's coverage of the rio olympic games. call or go online today to switch to x1. anna: welcome back to "on the move." 30 minutes into your trading day this tuesday. let's see how things are shaping up because the picture is pretty green across the screen. the stoxx 600 is building on that momentum, up .5%. we saw a very flat open, but significant gains in asia. the asia-pacific has seen hope for stimulus coming from japan, maybe even the eu and the united kingdom as well. the stoxx 600 is your laggard today. cac 40, up .7%.

let's get into some of those top stories and the individual movers. what are you watching? nejra: i'm bringing it back to daimler up 4% now, one of the best performers on the stoxx 600 this morning. this is after a second quarter, in which deliveries of the mercedes-benz units soared, even as the company set aside money for airbag recalls and legal charges. theearnings dropeped in mercedes car division. the result does exclude $500 million in takata bag recalls. but daimler did not explain the legal costs, but the company did forecast a slight increase in four year forecasts. we are also seeing shire up.

it has reached its highest level months, up eigast eight 3.3%. shire says it expects to launch its new drug in the u.s. in the third-quarter. and one of the worst performers on the stoxx 600 is dnb, the norwegian commercial bank. it had earnings as well this morning. netaw second quarter actually come in at a bit of a miss. second quarter low losses, higher-than-expected. and we did see the shares fall quite significantly at the open, now down 7.8%. anna: emerging-market stocks have risen to the highest level in almost three months with india syntax the next entering index. india's syntax

tracy, great to see you this morning. what is waiting the gains today? -- what is leading the gains today? >> we have to look at that u.s. payrolls report that we got on friday. and for emerging markets, that payrolls number was the ideal scenario, sort of the goldilocks number, strong enough to indicate that the u.s. economy is still growing, but not strong enough to force the federal reserve's hand when it comes to raising interest rates. that we have to look beyond the payrolls report because investors were turning bullish even before that. we saw data from citigroup clients turning bullish just last week across latin america, asia, and here in the middle east. they can see more bullish on the part of investors. that is despite some significant macro headwinds, or what would appear to be significant macro headwinds. so, really, the question is

whether this is just the payrolls or something more fundamental just rolling over. anna: give us therefore, some of the milestones we can see in the emerging market asset classes. it is not all about stocks. you have been looking at the debt market as well. what other things can we fixate on? > >> i know in the u.s., we saw the s&p 500 reach a record. we have some similar records being breached. in turkey, we have the cost of protection on turkish sovereign debt now at an 11 month low. indian stocks, as you mentioned, they are officially in bull market territory. and turning again to debt, we have the risk premium now at an almost year low. if you think back to the dark days of january and february

when it looked like emerging markets were falling apart, this is a stunning turnaround. if we are talking bonds, i have to mention ukrainian government debt. it is back at a two year high, going back to prices last seen before all the conflict that has taken place over the last 24 months. again, a really stunning turnaround here. anna: tracy, thank you for joining us from abu dhabi. i know the ceo of aberdeen asset management is saying, what a relief. the news coming through from japan, caroline. japan's economy forster will compile this us. japan's evident office released a statement from abe on the stimulus. abe, saying they want funding for stimulus to be discussed

with the finance minister. the imf has been critical of japan's incremental budgets. so, this is another example of that, i guess. for investors a very much primed for what this package will look like. he will have to look at the equity markets in japan and the currency moves in the yen to see that clearly. caroline: and looking at what the yen is currently doing, i have the dollar-yen and we can see continued ramp up in a particular fx pair. we are up .6%, looking at the dollar. we know it is your worst-performing major currency on the day. there is much anticipation about the size of the stimulus package and when it will be unveiled. we know have breaking news that yamaha motors is to replace sharp on the nikkei 225. we just have a plethora of news coming out of japan.

next, we are talking more cobras. w-- up next, we are talking more corporate. .e are talking airbus up next, this is bloomberg. ♪

anna: welcome back to "on the move."

let's have a quick check on the markets. as we speak, we are holding onto our gains. we have had the breaking news coming in from japan. we have the yamaha entering the nikkei 225, pushing sharp out of the way. keep an eye on japan and what is happening in the european markets at the moment. we have interesting moves happening with the italian banks. let's have a look at how the industry's are performing and the sector breakdown. we can see on the screen, grr. here is the stoxx 600, up .4%. the ftse 100 is your laggard today. the dax is outperforming today as the carmakers really do perform. strange timing, given brexit uncertainty. but their earnings are up more than expected, up five percentage points. meanwhile, the cac 40 is up .6%. on your screen, you will see the

autos are your best performers. the banks are also up 1.3%. the miners are also on the upside. digging into the individual movers, unicredit is leading the charge. ascan also see ubibanker up well. so, some building of anticipation over the italian banking sector. meanwhile ,daimler is up four percentage points. let's stick with some corporate movers at the moment. let's stick with movers when it comes to the burberry ceo. christopher bailey is now stepping back from the ceo role to assume the title of chief creative of us there. christopher bailey spoke with bloomberg's francine lacqua yesterday and one of the key

topics, unsurprisingly, is brexit. >> with brexit, it is certainly not a position i wanted are believed in. but it is what it is. i am always a glass half full, and we now need to move on. ithe referendum was done in the right way. the decision was made, but now we need to find the right path to what a brexit might mean. the important thing is getting stability and getting some clarity on the future that affects people's everyday lives and of course, businesses. francine: so, does a weaker pound help? >> that helps in certain ways, but we have always done business globally. we trade all around the world and any trading agreement is something we will always work with, no matter what happens throughout this process. francine: talk to me about

september. this is the first time people will be able to buy directly from the runway. >> this is a change in the way we are thinking about entreating the show. historically, the shows have been very much an insider event for press and the media and of course, all of our buyers. the way we flipped it is we have been doing their intimate and private previews with our buyers and some of the press. and then in september, it will be much more customer-focused. you will be able to buy the collection immediately, just as soon as we do that show. going back to our earlier conversation, change is good. it is interesting, the founder had the insignia on the flag on latin tot, which is

move forward. i have been a big believer in moving forward. i am excited on the changes from an executive level. anna: that was burberry's cheap rate of officer christopher bailey speaking with bloomberg's francine lacqua. 8:43 here in london and it is day two of the farnborough airshow. brexit is still dominating discussions. guy johnson is on the ground for us. airways ceo.the here is what he had to say of the impact on the brexit to his business. >> other than the foreign exchange of evils due t -- other than the foreign exchange upheavals due to this brexit, we have not seen an effect on our company. anna: other people talking then

about opportunities. we heard crystal bailey saying, we need to move on. theresa may is asking everybody to make the best of it. are people talking in those terms at the farnborough airshow , guy? guy: some people are pleased we now have political stability in the u.k. with of the appointment of theresa may. it was the instability that was unnerving people. we had the prime minister outgoing, david cameron , here yesterday, making that point. it was interesting to hear what ceo had to say about the brexit. transatlantic traffic might be one of the casualties of the story. we might see the number going down. it will be interesting to see if more north americans are coming into london to go shopping with burberry products.

stake in owns a 15% that business. he was considering raising that to 20%, but he says he is not in that place right now. >> at the moment, we have 15.24% and we want to stay there at that level. we are a long-term investment. so, we are confident that this relationship between us and them will keep on growing and we will keep on benefiting from each other's purchasing power. him whether he was worried that actually, they would be a downturn in business. he said, absolutely not. he is comfortable with the numbers as they are right now. he is trying to look at the positive side of things and he sees very little effect on his business right now, anna. anna: guy, what are you expecting for the rest of the day? you had some the great interviews yesterday. i know we got a big one, in

terms of a playmaker, coming up. -- in terms of a plane maker, coming up. guy: we are hoping to talk to makers the big plan makere later on. tony fernandez is expected to announce a big deal late r on. he will make a very, very large order for airbus later on. we are hoping to talk to him at about 4:00 this afternoon. we look at confirmation of that, but the fact that we have an airasia is as much confirmation of anybody needs. the big thing, caroline, is everybody is hoping it does not rain again. it was a complete mud swamp here and everything is slowly drying out. back to you. anna: up next on the program, as britain braces for a new prime

minister, mark carney faces u.k. lawmakers later this morning at 10:00 a.m. will he offer any clues ahead of thursday's rate decision? this is bloomberg. ♪

anna: welcome back. this is "on the move." heresa may will have to

navigate thee exit of britain from the eu. there is no doubt that brexit will have an impact on his company. >> we would probably need to consider moving a number of our companies. we would still have a base in the u.k. we would still deal with the u.k. the way we do today. most probably, we will be booking from outer countries, which are not european union based. but the part of the business that is eu business would need to be done from elsewhere. >> now, we are talking about 5000 people whom you employ currently in london. in that scenario, how many of them are you talking about moving? >> it is very difficult to tell because at the moment, the people are not cemented into people who deal with bookings from other countries, people who deal with the u.k. only, people

who deal with the european union. so, that will take a lot of work to establish exactly what needs to move. it will be very much dependent on the agreements that we have. so, it is quite difficult to say. i would say it would have a significant impact and i would say that ubs, which has now been part of the eu, has had plans in place for a long time to follow market developments. but i would not say something that is at our doorstep tomorrow. i think it is something that we have sometime, although not as much as i would like, to adapt and prepare for. >> one thing you have shown an ability to do already is prepare and adapt. that is one of the reasons why i am trying to push a little bit because the world needs to know what the implications are for london as a financial sector and for all the banks the operate their. -- that operate there. so, when you say significantly,

are you talking about half of your people? where they going? are they going to madrid, paris, frankfurt? >> so, when i say significant people, it would be a significant percentage. i cannot tell you exactly how many, but it would be relevant enough for everybody to be concerned that this will require a complete reassessment of our model going forward. the second thing is, where would they go? that is quite unclear at the moment. i'm sure you have followed the french government and the german government, number of governments, are making -- if i could call at this -- a case for people to move to their jurisdiction. at the end of the day, they would like to import wealthy people who spend, earn, who create jobs for their own economies.

it will depend on infrastructure . it will depend on the nature of the deals one can have in each country. it will depend on what the shape of the rest of the eu will have at that point in time. anna: you can hear the clamor of european capitals leading up to roll out that red carpet. that was andrea orcel speaking to bloomberg. mark carney will appear before the u.k. treasury committee later. this comes just two days ahead of the first post referendum rate decision when the first rate cut since 2009 is on the table. here to talk more about that is jill ward. jill, very great to have you on the program. so, what can we expect from mark carney today? what are you looking out for? jill: before he speaks the 10:00 a.m., we get the record from the s&p meeting at 9:30.

the will be questioned by lawmakers in parliament alongside a few other financial stability officials. they will be asking him about the decision to lower the countercyclical capital buffer for u.k. banks, which was taken on july 5. and also probably ask him about the risks surrounding brexit to financial stability, w hichich f course, has begun to materialize here and there. anna: mark carney was very outspoken about the potential risks. what will he highlight once again today, as they do seem to be shining a light on this? jill: he will probably highlight the risks they have highlighted quite a few times before, including the large current account deficit, which is near historic highs. as well as the vulnerability of the u.k. commercial property market, indebted households and

vulnerable households, as well as a potential lack of liquidity and the global economy. anna: so, a fairly long list of things to worry about. how does that all add up to what they might do on thursday? we have this rate decision. it seems economists are literally divided as to whether they should move right now or wait for the inflation report. jill: it seems everyone seems to be agreed that we will get easing over the next few months. the big question is whether that will all take place in august, or if we will get a bid in july this week as well. on the one hand, you have markets pricing in that rate cut and people wanting to get a move on with it because of course, monetary policy acts. that would be the argument for starting now, which actually, mark carney did at the bank of canada, acted quite preemptively before lehmans collapsed.

anna: not necessarily witting it for to show up in the data. jill, thank you. stay with bloomberg television. up next, it is "the pulse." this is bloomberg. ♪

francine: fast tracked. theresa may is given to day notice to prepare for a new job as prime minister. she vows to make a success of brexit. who will make her cabinet? mark carney says -- prepares to testify on financial stability to brexit. ubs's financial chief says the workforce is now the right size after thousands of job cuts. tax this point in time, i think we are -- >> at this point in time, i think we are where we should be to face the environment we have, to face the regulation we have, to face the forces we have.