let us get to stephen engle, he has our first word news. good morning. stephen: good morning.aul's will open at 7 a.m. -- polls will open at 7 a.m. three out of the four latest surveys show a contest that is too close to call, with two percentage points or less separating. whichr lead for remain, is favored by the bookmakers. the pound has reached the highest level this year against the dollar. the ecb has reinstated it's a waiver on greek banks, using the junk rate as collateral, as the european central bank says it would examine purchases under qe at a later stage. federal reserve chairman janet yellen says it's low productivity growth is a serious concern. and she is not alone in that. she is increasingly in knowledge gains may be the new normal. speaking to the house services committee in washington, she said she was not sending a pessimistic message. janet: we have slow growth and the rest of the world, that is the strong dollar that is negatively impacting on trade exposed sectors. on the other hand, we do have strength in consumer spending. particularly strong. and bala

stephen engle joins us. stephen: good morning.hina's consumer prices rose less than expected in may, climbing just 2% in may from a year earlier. factory deflation falls from april, even seeing deflationary trend now continuing in china for 51 straight months. the bank of korea has unexpectedly cut the benchmark interest rates to a new record low. and lowered the seven-day repurchase rate i-25 basis points to 1.25%. seeing increased downside risks to growth. only one of 18 analysts bloomberg survey predicted a cut today. earlier the kiwi jumped to a 12 month high as new zealand central banks held steady, but further easing may be required to keep inflation within the middle of the target range. u.k. chancellor has hit back at claims he is scaremongering in his campaign to keep britain and the european union. george osborne said there is a lot to be scared about if a brexit takes place. he told the bbc that if we vote to leave, then we lose control. if we lose control of the economy, we lose control of everything. people should be

stephen engle is there for us. at the summer dav os. i want to get to kevin taylor.oblems going on in the u.k., you've probably heard. what was your initial reaction? kevin: initial reaction was pretty surprising. i think we were all a bit shocked. we had already prepared for both alternatives. from our perspective, it is business as usual. we invest heavily in europe. we are operating in 170 countries and we have growth across the globe. it is going to be interesting to ministert a new prime how a new trade deal will be cut. >> that is critical. i would assume you would advocate business having a role in those negotiations. there will be a lot of fist pounding on the stables. >> absolutely needs to have the in thesethe business negotiations. it is critical we have as much free trade as possible. be -- wet is going to need to move forward and take the right investments accordingly. >> what would be the most tangible impact on business? what is the biggest sticking point? >> we have agreements with the operators across the globe. from a technology perspective, we need

stephen engle is here to break them down. stephen: the import number was better than expected. of actually shrank trade surplus, we were expecting a $55 billion surplus. in may.down on exports that is the third month in a row, falling exports after march, i believe. march was up 11.4%. may is the second month in a row of falling. it is kind of a deceptive -- rishaad: it does tell you about what is going on globally. stephen: the world bank that the global forecast growth overnight. there were headwinds in the global market, like in may in the u.s. they were down 12%. there are some headwinds. but the chinese exporters also got a reprieve from the weaker currency over the last year. if you look at the export numbers in the yuan, they were better than expected. in those terms, they rose 1.2%. and that indicates the weaker yuan is during to help exporters. imports was a bigger surprise, perhaps the higher oil numbers boosting there. we're expecting a decline of 4% no, 6.8%.me, 2.5% -- rishaad: it was massive the difference between the expectation and we actually got in the end. te

stephen engle took a ride at a beijing auto racing circuit. creeching] stephen: at track day, anyone can spend 1200 renminbi, $185, to have fun at the track. beijing's goldenport is trying to put china's emerging car culture on a new track, offering an alternative to dragracing on the streets. bloomberg obtained this video of teens being busted after illegal midnight racing in an underground parking lot. >> the consumer market -- basically, we are giving them what they want. it is their needs. they want to go somewhere to drive fast. this is a safe environment for them to do it. stephen: goldenport is planning an ipo as it accelerates into a more assetlight licensing model. they are franchising racetracks nationwide. 7 are built with more on the drawing board, including china's first nascar track. >> growing at 50% a year. with so many cars being sold in china, with the young kids, as you can see today. they spend money on cars and girls. stephen: not all girls are along for the ride. she estimates she has spent $30,000 on gas, tires and tricki

stephen engle joining us live from beijing. still coming up on the show. dubai's property market hit bottom? we will ask where to find the best bargains in the uae. that is next on "bloomberg markets, middle east." ♪ welcome back. rishaad: a quick round up of some of the stories around the region. bmw is working with intel as they joined the race for thomas cars. senior executives are to meet on friday to discuss the project. it has been an early leader in providing cameras and software that allow vehicles to see the world around them. they're working with general motors and tesla. financial interest in saudi arabia is soaring. the kingdom looks to sell off state assets including aramco to raise as much as $15 billion in bond issues. join paid to saudi banks -- jumped almost one third to almost $100 million. turkish shares in the international airport have fallen. this is the latest in a series of blows to the tourism industry. the airport provided tav holdings with 68% of its total passengers in the first quarter. brexitld is focusing on and what the even

rishaad: stephen engle talking to the director of the mckinsey global institute.bs is telling clients to stay liquid, warning of deeper losses in u.s. credit on the .eels of the, brexit morgan stanley recommending patients, saying the bonds are not cheap enough to warrant risk that market volatility isn't temporary. similar advice, saying the british boat has increased the likelihood of a recession in the u.s. to 34%. let's tell you what we have coming up. it is all on the line, or all online. appfavorite messaging at -- should announce the ipo price. what could be the biggest tech opening of the year. plus, the opening numbers next. ♪ get ready for the rio olympic games by switching to xfinity x1. show me gymnastics. x1 lets you search by sport, watch nbc's highlights and catch every live event on your tv with nbc sports live extra. i'm getting ready. are you? x1 will change the way you experience nbcuniversal's coverage of the rio olympic games. call or go online today to switch to x1. you guy's be good[ bark ] i'll [ bark ]later bye. see ya pal. ever wonder wha

stephen engle reports from hong kong. >> china's official manufacturing pmi health eddie at 50.1, theading as april. factories have shown some level of confidence, another gauge of private sector manufacturing in china shows more pessimism. the index came in line with forecasts at 49.2, but is still the eighth consecutive month below 50, indicating bearishness. this shows the recovery in china is tenuous as -- tenuous at best. banks tend to report cash at the end of quarters for regulatory check and that causes cash crunches. there might be a double whammy if the fed rate -- hikes rates. china pmi manufacturing data setting the tone for markets across. the glow it was not alone in releasing manufacturing data. have a look at how the equity markets are faring in europe, right now. second day of declines after five days of gains. the stock euros 600 down by over 1.07%, a harsh assessment from the oecd. there are the best and worst performing industry groups. there are not too many positive ones. just the one, health care, marginally higher, basic resorts down on that -- basic resources

stephen engle taking a look at this.ounds like progress was made, but a lot of hurdles still. >> the strategic and economic dialogue often times is used to shore up ties, also worked out some of their differences. they hit on a number of different topics. north korea, the global economy, market access, overcapacity, and at the backdrop of all these issues is mutual trust. they say communication is getting better, but they need to meet more often then talk these issues through. on the yuan, this is one of the deliverables that the state department likes to use, outcomes from the sme day. basically, china says it will -- foreign institution were institutions raise up to 200 50 billion yuan to be invested in chinese markets. china will also allow one undisclosed u.s. bank to clear, basically be a clearinghouse for the yuan outset of china. we don't know the name of the bank yet. jack lew says it opens up an important door. less agreement, though, was reached because the two size -- between the two sides on overcapacity. the

here is the first word news with stephen engle. >> china's consumer prices rose less than expected inay climbing just 2% from one year earlier but factory deflation from april. even so the deflationary trend has continued for 51 straight months. dung energy has become one of europe's biggest initial public offerings this year. the offshore wind farm operator sold 17 point -- 70% of its shares which gives the danish utility a value of $15.1 billion. have killedian men four is really's after opening shoppinghe tel aviv area. it's the first major terror attack in the city since january. the gunmen have been arrested with one in serious condition. they say they will step up their presence in tel aviv in the wake of the shooting. ubs is a limiting some management positions in the wealth unit in delivering tunable of advisors recruited from competitors. the bank says the headcount production will mostly hit middle and senior managers in new jersey and new york. ubs declined to provide a specific number of job cuts. global news 24 hours a day powered by 2400 journalists in more than 150 news

stephen engle and tianjin. -- in tianjin. how bad is this context for stocks? this with wall street in a moment. ♪ >> it could be in italy, it could be in south america. >> the british people voted for brexit, which it could be for a year, the brexit vote would lead to a downgrade in the uk's sovereign rating, which is currently aaa. be veryhere, it has to clear leadership in order to understand how this implementation is taking. >> it seems to me that with this vote, this is a permanent downgrade, a permanent lowering of the pound. it depends on how far. >> i don't believe this will end up as a long-term drama. all of the market disciplines will be able to cope with the short-term volatility, and we go back to a more considered reaction after a few days. yvonne: some views on brexit from the world of business. we continue to see the pound fall today. there is no panic in the markets, but we are seeing some pain still. betty: that is exactly right. we are still saying some pain when it comes to the currency markets. repercussions of the brexit result, felt all

joined now by stephen engle under, head of global g 10 fx strategy. ard from you yet. give us your initial reaction to these numbers. obviously muchre weaker than the market expected. with the downward revision, making a june hike are unlikely, we know these numbers are erratic. the seasonality could have something to do with it, summer job creation. past, if you look at the history of the deviation of from 12-monthent moving averages, these big shocks, sometimes they tell you that things are turning. most of the times, they tell you it is a data error. but it is not stopping the market from taking it seriously. the market seems to be somewhat sure euros. equities are down. the euro is the big winner on this. when the chips fall on the equity market, it is probably not that positive for e.m.. david: i take your point 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 wa