e.m. and their central banker, janet yellen. ♪ francine: i am francine lacqua in london, tom keene in new york. this is "surveillance. mary: general motors ceo barra says the largest u.s. automator -- automaker is undervalued. she says that gm can handle a downturn and sustain profits if the economy slumps in the next few years. >> we are going to focus on doing the fundamentals, making , andusiness more efficient investing in technologies like autonomous and conductivity and electric vehicles. fuel cells that will change and lead the transformation. shery: we will have more of that interview coming up in the next hour. deutsche bank is normally the go to lender in europe's largest economy but it is missing from the largest takeover. it does not have an advisory or financial role in the 62 $.5 billion bid for bayer. has sat out the merger wave .nd crop chemicals samsung may come out with two new smartphones with a bendable screen according to people familiar with the matter. one of the pho

that means that china's love for the rest of e.m.s going to be that much lower because a lot of these services -- consumption is much less important to them than investment. not everyone understands. where i think people are not paying attention is that within investment if you are moving towards services, that is not going to bring as much as an income boost to other emerging markets. francine: if we focus on china,, and this i have heard a couple of times, they will have to put so much stimulus and they will end up doing what the fed did. zero rates. and so much more. what are the chances of them doing that, and does it mean that the chinese economy is growing at 6.5%? bhanu: it is likely that over time the china's economy will glow at us -- will grow at a slower pace. the template for china will be a decline in assets. the only way you can keep is tolf from exploding bring the term structure lower. i think china will be cutting rates for the next several years. should we interpret that as a positive? i don't think so. china is goi

that is typically supportive of e.m..g these very sizable number of episodes with the fed is driving the market higher. year,: in january of last we had the emerging markets tantrum. of theme cannot speak all as a collective, but are they much more prepared should there be a shock to their systems, or could we see a lot more turmoil ahead? >> it is a complicated question. i think emerging markets are better able to deal with a shock . the fed will move very, very slowly in our opinion. emerging markets are ready for that. given this tremendous drop we 2015, --rrencies and , it has taken currencies delta much cheaper levels. you're seeing a significant adjustment and account deficits over recent months compared to where we were before, and all of that is positive for e.m.. you never know what shocks could be out there. but the biggest shock, which will be barry -- very negative for e.m. is if we fly back into a recession. mark: we are looking at this emerging market chart per year. 27 -- 2007,back to that is where the high

some of the e.m. currencies probably will do better.e saw strong performance from the south african rand after they retained their rating. we are seeing quite a strong ruble that of the will continue assuming oil prices stay sustained. probably you will see a little trade, but again, watch china. there could be some negative news. chaigneau,incent global head of rates and foreign exchange and strategy at societe generale. cindy coming up, including sterling slumps after voters favor a leave vote. we talk brexit with nigel lawson and stephen kinnock. then, the eurosceptic movement is poised to become the italian capital's first female mayor. weakest job saw the numbers in almost six years. will the fed chair trying to rebuild momentum when she speaks later today? ♪ francine: let's bring back vincent chaigneau. more talk on central banks. the plate of politicians and the plate of some of the world central banks. thank you for sticking around. let's move to japan. this is the graphic. this is a circle where governor kuroda decided to going

that is having a nice spillover affect throughout the rest of the e.m. world.onvinced that commodities are off to the race because we do not have enough growth. i think e.m. and the pacific rim will benefit from the pressure taken off of china. i would say have some exposure but tilted towards asia. , thank david joy you. coming up on "bloomberg markets," clinton versus trump. he will be the next u.s. president and what will it mean for the american economy? >> we are repudiating donald trump. we are getting ready for the fall election. we are going to defeat him. if you will vote for me, i will work for you. ♪ mark: this is "bloomberg markets." the german 10 year bund yield hits a record low. david joy was right in saying that yields are heading lower. vonnie: we were anticipating that and it has been coming increasingly obvious, but we are at the low 0.5%. 0.05%low zero point . we have theose and hang seng rising on property developers having a good day. the shanghai composite index was up a 10th of 1%. i want to bring you a couple of comments from paul ryan.

joe: it is remarkable how much we are talking about in fx volatility as opposed to e.m.lly all the action was. i'm looking at what this means for the federal reserve. let's look at the never function. function, looks like the fed will not hike anytime soon if the market are to believe. this goldline here is where the market implied probability for hikes were on the 22nd. you can see this outline is above the green line. you can see the lower line demonstrates the market is really reduce its expectations for market implied the lessee. so the market does not see any rate hikes this year at all, and low income going out to three years, really tells us something about the global impact of this low. scarlet: and joe will be treating up this for all the listeners. -- tweeting this out for all the listeners. it looks like a pancake. coming up, we look ahead to help financial markets will open tomorrow morning. that is next. the currency markets have begun trading, and the pound is getting pounded once again. ♪ ♪ matt: it is 9:00 p.m. here in london. this is special coverage fol

e.m. to that is one of the issues.hink another issue is what is happening with sharing and autonomous. people are seeing it is a cyclical business, and as we come out of the cycle, what will be different? but i think we are starting to really change perceptions because we are really disciplined, and we have been talking to investors to make sure they understand that we are well prepared. it is a very different general motors, and the fundamentals are strong. we understand we are a cyclical business, and we are prepared for it, but we are doing things to get rid of the bottom of the cycle by having businesses like gmf and onstar, to have a profit generation model rather than the core business that fluctuates with the size of the industry. david: to what extent have you anticipated the possibility of a downtown, and what do you make sure that gm can weather the storm? mary: we make sure we maintain a breakeven of a tell my own-11 million market. a 10 million or $11 million market. making sure we have a breakeven point at

. -- between e.m. and dm.s to capitol hill for the first of those two days of testimony. investors are going to be playing -- be paying close attention to what she has to say about the u.s. economy. looking at this, one of the what -- she this is would respond if these numbers pop back up? what do you think she will be saying? >> i think she will hint the need for more than just one pop in the unemployment peril number but regardless, i think she would try to communicate to reiterate this dovish into -- iteration. from the five-year forward metric in the market to the consumer surveys, the long-term michigan expeditions, everything is coming in by half a percent. this is not supposed to happen at a time when the unemployment rate continues to fall and oil prices are rising. already, the way these relationships are working is not intuitive. i think she will reiterate that we remain in a hiking bias but that these will be extremely gradual and it is going to be a tangle with the market. as the dollar weakens, th

pe valuations on the e.m. are at a discount to developed markets.alue proposition revalue trap? >> a think it is a proposition at a much more attractive proposition than many opportunities in the developed market. fear thatople have a eventuallydollar so when they do raise rates, that will be very bad for emerging markets and that has been the dynamic that whenever every have seen recently a reduction in the expected level of interest rate hikes from the fed it is beneficial to emerging markets. that has been the correlation. but in my view that's because historically emerging markets often had excessive levels of extol -- external dollar-denominated debt. particularly in the case of china, chinese companies had a lot of dollar debt. i do not think that dynamic is necessarily in existence anymore . people are fearing a correlation that probably will not be there in the future. for: that is it "countdown." futures are suggesting european equity markets will be a little bit weaker at the start of the european trading day. it's a little bit gloomy to s

there is brexit, eu, e.m. carnage. on to the next screen. popping, 18the vix to 22.10-year making a 1.4145.nd sterling, francine: this is what i am most interested in, the german bond 10 year climbing. to bloomberg quickly. on the u.s. economy, this goes to the idea that it is not just exit -- just brexit remain mania. trending the crisis, we come back. we just get above, and then we have recently rolled over. you really wonder what that says not only about the u.s. but also the united kingdom, the small business economy. francine: i did put a line -- there it is. pink.n see the u.k. is in the white is japanese. the german 10-year -- negative. i do not know if it is a blip or if it is negative. it is a 10-year paper. tom: george goncalves joins a spirit he has agreed to stay over for this section. this morning, we did not know about microsoft, linkedin. robert nardelli joins us. he has provided infinite wisdom , linkedin, economics, and finance. there be honest, i think is a lot on this reporting. i wonder about the salvation of microsoft saving linkedin. i will do t

when the chips fall on the equity market, it is probably not that positive for e.m..int is one data point. so help us. as potential investors, help us do that. what do we do next up with this in perspective and know that this is really a down torn -- a downturn are just a blip? stephen: part of the reason that the forecast was so consecrated is that40 to 160 range none of the usual indicators were telling you that there was an imminent collapse in employment activity. so you would look for some confirmation or contradiction from initial claims, from some of these other indicators that come in. two 38siously, getting in a row would be much more .eaningful these numbers are by nature erratic and we tend to take them as if they are gospel, but they are not. reminded months ago that, in 2000 four, the fed still made the move, still height interest-rate. can you tell me why this is so different this time versus previous fed tightening cycles? stephen: i think in 2004, they had more confidence that the recovery was going and inflation was beginning to pick up. if you look i

understanding is that with ownership caps and index caps that china would only be about 1% of the msci e.md result to about $20 billion a flow. so the impact was probably overstated to begin with. david: thanks very much for being with us. jonathan: next on "bloomberg go," how did you trade around the donald trump presidency? the question that traders are asking. and off the charts. that's next. ♪ alex: this is "bloomberg go." time for off the charts. one of my favorite segments with julie. newline]julie: the election of the united states. but seemingly, we haven't seen that much market reaction but there may be some with the mexican peso because now, we've got citi group and bark clays reameding shortening the peso because of a chance of a donald trump victory and the implication for the mexican currency. we have seen a surge in that volatility. and to be sure it doesn't just have to do with the prospector a trump presidency, it has to do with the prospect of rising interest rates in the united states which could cause ripple effects across emerging markets but the peso is among the worst