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Cambridge Global Payments' Casey on Brexit, Currencies (Audio) · Bloomberg Intelligence

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  Speaker 1: Broadcasting live to New York Bloomberg eleventh, Rio to Washington,
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  Speaker 1: d C. Bloomber to Boston, Bloomberg dwell Under to San Francisco,
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  Speaker 1: Bloomberg nine to the Country, Shoe is Exam General one
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  Speaker 1: nine and around the globe the Bloomberg Radio plus Appen
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  Speaker 1: Bloomberg Got Gone. This is taking stock. I'm Kathleen Hayes
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  Speaker 1: along with PIM Fox. By Thursday, voters in the UK
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  Speaker 1: will be going to the polls to vote whether or
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  Speaker 1: not they should stay or leave the European Union Union.
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  Speaker 1: The Brexit vote is upon us. Our next guest says
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  Speaker 1: that even if the vote is to stay and the
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  Speaker 1: polls are leading in that direction, Pim, as you well know,
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  Speaker 1: there could be big moves in currency markets as investors
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  Speaker 1: adgest to that. Yes, we'll also be talking about the
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  Speaker 1: potential for importing inflation into the United Kingdom. Is indeed
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  Speaker 1: the UK voters that decided to leave the European Union
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  Speaker 1: right now, Let's go to Arlie Pello Bloomberg, Bluer Bloomberg
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  Speaker 1: Business Flat and I thank you him, Thank you Kathleen.
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  Speaker 1: The dal the SMP Nez dec Hall advancing stocks are surging.
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  Speaker 1: SMP five hundred index, up the most in four weeks,
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  Speaker 1: after the latest poll show the UK campaign to remain
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  Speaker 1: in the European Union is gaining ground ahead of Thursday's referendum.
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  Speaker 1: Of course, between now and Thursday and Friday, when we
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  Speaker 1: find out for sure, when we get reaction, count on
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  Speaker 1: Bloomberg for complete ongoing coverage. Oil is advancing today, extending
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  Speaker 1: its advance from a one month low last week. Equities rose,
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  Speaker 1: the dollars slipped on speculation the UK will vote to
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  Speaker 1: remain in the up A EU. Scott Bower's senior market
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  Speaker 1: strategistic trading advantage. The oversupply is is kind of gone. There.
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  Speaker 1: There's a balance now between supply and demand, which is
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  Speaker 1: what we want to see, and that's what it's been
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  Speaker 1: shifting to. And that's why we've seen oil you know, rally,
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  Speaker 1: certainly off the lows that we saw in the mid twenties,
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  Speaker 1: but really rally off the last you know, month or so,
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  Speaker 1: and we're seeing high tom and and the prediction is
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  Speaker 1: now for high demand going into third and fourth quarters
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  Speaker 1: of this year. And right now West Texas Intermediate accrued
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  Speaker 1: it is up a dollar thirty five forty nine thirty
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  Speaker 1: three on w t I, a gain there of two
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  Speaker 1: point eight percent. Jaguar, land Rover and Diagio have joined
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  Speaker 1: a growing number of companies warning employees of the risks
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  Speaker 1: of a withdrawal by the UK from the European Union. Down.
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  Speaker 1: Industrial is up one seventy nine, a gain narrow of
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  Speaker 1: one percent. SMP of eighteen a gain of nine tenths
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  Speaker 1: upon percent, has stack of fifty eight, a gain of
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  Speaker 1: one point two percent. The tenure down eighteen thirty seconds
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  Speaker 1: that yield one point six six percent. Gold is down
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  Speaker 1: two tenths of one percent. Now the other stories making news.
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  Speaker 1: Thank you Charlie from the Bloomberg News room. I Rainey
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  Speaker 1: in a cent cio. The FBI has released the transcripts
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  Speaker 1: from one calls between the Orlando nightclub shooter and police.
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  Speaker 1: US Attorney Lead Bentley applauded the officers for how they
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  Speaker 1: handled the standoff. The brave men and women of the
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  Speaker 1: FBI and others should not be second guests. They performed
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  Speaker 1: valiantly during those early morning hours. Lives were saved because
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  Speaker 1: of their heroic work. There's a shake up today in
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  Speaker 1: the Donald Trump campaign. Trump has fired his hard charging
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  Speaker 1: campaign manager, Corey Lewandowski. He's clashed with longtime political operatives
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  Speaker 1: who were brought in to make the campaign more professional.
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  Speaker 1: Parts of southern California saw record highs yesterday and temperatures
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  Speaker 1: are expected to climb even higher today. Jasmine Casillo changed
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  Speaker 1: her plans to avoid the heat easily and I'll be
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  Speaker 1: on a long hike. Can't really do that, so staying
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  Speaker 1: out of the wilderness for a little bit. Just trying
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  Speaker 1: to save by the beats and An experimental vaccine for
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  Speaker 1: the zeke of virus is due to begin human testing
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  Speaker 1: program director of the Port Authority of New York and
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  Speaker 1: Glen Goosey is now an Honorary Member of the Most
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  Speaker 1: Excellent Order of the British Empire for public service. The
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  Speaker 1: Journal News says the New Yorker has been taking members
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  Speaker 1: Center site for fifteen years. Global news twenty four hours
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  Speaker 1: a day, powered by our journalists in more than one
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  Speaker 1: news bureaus around the world. From the Bloomberg Newsroom, I'm
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  Speaker 1: Rainy in a cenio, Charlie, and we thank you and
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  Speaker 1: again recapping equities advancing SMP five hundred index climbing nineteen
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  Speaker 1: points to two thousand ninety, a gain of nine tenths
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  Speaker 1: of one percent. I'm Charlie Palaton. That's a Bloomberg Business
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  Speaker 1: slash there on Bloomberg Radio, just underscoring how focused global
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  Speaker 1: markets are on the Brexit vote. On Thursday, the pound
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  Speaker 1: jumping the most today since two thousand. It's spring, a
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  Speaker 1: global rally in higher yielding currencies as the latest polls
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  Speaker 1: are signaling that the campaign for the UK to stay
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  Speaker 1: in the European Union is gaining momentum. Joining us now
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  Speaker 1: here in our New York studio is Steven Casey, FX
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  Speaker 1: trader and senior market analyst at Cambridge Global Payments. Cambridge
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  Speaker 1: is the biggest privately owned corporate provider of foreign exchange
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  Speaker 1: services in the world, part of the burgeoning non bank market.
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  Speaker 1: He spent many years in London trading currencies. Now back
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  Speaker 1: in New York the last few years to work for Cambridge.
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  Speaker 1: Welcome to the show, Stephen. Thank you very much for
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  Speaker 1: having me. So you worked in London, you must still
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  Speaker 1: have a lot of buddies on FX trading desks over there.
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  Speaker 1: What are people saying, not only about the vote but
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  Speaker 1: citizens Londoners? Well, how are they voting? It's funny. I mean,
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  Speaker 1: like the polls, Um, it's split. I've got some friends
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  Speaker 1: who think that it's a foregone conclusion. I've got some
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  Speaker 1: friends who think that it will never happen. So I
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  Speaker 1: guess the polls kind of match what my inner circle
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  Speaker 1: um beliefs as well. Concerning the Brexit, we'll have to
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  Speaker 1: wait and see. Steven. Do you think that investors are
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  Speaker 1: really prepared if they put in place any policies or
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  Speaker 1: any strategy that would foretell what would happen to their
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  Speaker 1: investments if the UK decides to leave? Um? Well, I
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  Speaker 1: can only speak for our clients. I don't think that's
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  Speaker 1: the case. I mean, we've done a good job I
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  Speaker 1: think of preparing our corporate clients over the last few
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  Speaker 1: weeks and months of this situation as it sort of
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  Speaker 1: loomed over the markets. We're trying to make sure everyone's
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  Speaker 1: kind of prepared for the worst but planning for the best. UM.
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  Speaker 1: I think the volatility that we've seen over the last
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  Speaker 1: few weeks really speaks to how nervous the market is
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  Speaker 1: either way on how this will play out. Well. I
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  Speaker 1: think it's interesting and the reason you point out to
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  Speaker 1: us in a note you sent over that the building
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  Speaker 1: of positions currency positions from bulls and bears suggest while
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  Speaker 1: pound bulls maybe regaining the upper hand, the uncertain nature
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  Speaker 1: of the vote will pave the way for large and
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  Speaker 1: ill liquid moves once the votes of intellige I think
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  Speaker 1: that's really important. Think a lot of people figure if
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  Speaker 1: they vote to stay forget about Friday, Friday, even like Thursday,
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  Speaker 1: this could unleash a lot of turmoil in currency markets. Absolutely,
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  Speaker 1: you have to wonder about the time of the year.
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  Speaker 1: It's the summer. Markets have thinned out a little bit,
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  Speaker 1: desks are half staffed, So even if without the Brexit,
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  Speaker 1: we would see a little bit ramp up in volatility.
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  Speaker 1: So UM, despite what happens on Thursday, we should see
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  Speaker 1: um a little bit of a follow through into early
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  Speaker 1: next week. On either side, what is the thinking about
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  Speaker 1: the strength and weakness of the US dollar. Well, the
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  Speaker 1: dollars kind of had a funny run, and I think
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  Speaker 1: it's gonna be, um, sort of a choppy trade through
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  Speaker 1: the summer. You have to remember it's an election year,
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  Speaker 1: so we've got many different things in play. UM. I
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  Speaker 1: know that Chairman Yellen will be addressing Congress tomorrow and Wednesday,
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  Speaker 1: and I expect her to maintain a consistent statement with
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  Speaker 1: what um the Fed came out with last week. I
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  Speaker 1: don't think she's gonna try to rock the boat. UM. Sorry, no.
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  Speaker 1: My My thought process is that over the next few weeks,
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  Speaker 1: once we do get the Brexit out of the way, UM,
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  Speaker 1: if we do see market stabilized a little bit, we
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  Speaker 1: do see oil continue to recover, maybe that should pave
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  Speaker 1: the way for the Fed to begin to get comfortable
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  Speaker 1: with maybe a move in September. In that way, we
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  Speaker 1: could see the dollar catch a bid tone towards the
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  Speaker 1: end of the cucond point and they want to let
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  Speaker 1: the dust settle. But what what could she say tomorrow
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  Speaker 1: that would rock the boat. Jim Buller, president St. Louis Fed,
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  Speaker 1: rocked the boat a bit on Friday when he revealed
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  Speaker 1: that he is the forecast for only one rate increase
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  Speaker 1: now this year, but for the next two years. I
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  Speaker 1: will Janet Yellen do you think be would you like
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  Speaker 1: to hear her away on that? What could she say
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  Speaker 1: or about policy tomorrow that would cause you to buy
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  Speaker 1: or sell some currencies? Well? I think if she made
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  Speaker 1: any direct statements to the next meeting in July, if
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  Speaker 1: she got specific with July or September, I think that
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  Speaker 1: could cause for some volatility in the short term. UM.
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  Speaker 1: That's why I think she's going to be more vague
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  Speaker 1: with her statement. I think she's gonna try to be
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  Speaker 1: very consistent with with what the committee came out with
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  Speaker 1: last week and try to avoid locking down UM the
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  Speaker 1: Fed with anything UM concrete over the next two meetings.
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  Speaker 1: She's gonna want to leave it open, leave it open.
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  Speaker 1: What about the Bank of England? You think they're leaving
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  Speaker 1: it open. You think there's a possibility that Mark Karney,
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  Speaker 1: the Bank of England, will raise rates before the Federal
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  Speaker 1: Reserve raises rates. Uh No, I don't. I don't think
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  Speaker 1: that's all. I like Mark Arney. He did, he did
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  Speaker 1: an excellent job at the Bank of the Bank of
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  Speaker 1: Canada and so far he steered the ship in England
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  Speaker 1: very well. Um, right now, I think it's gonna take
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  Speaker 1: a little bit of time for um, for for the
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  Speaker 1: bridge to kind of see how this Brexit either way
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  Speaker 1: kind of stifts through. And I think in action is
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  Speaker 1: probably the best action. So you talk you corporate clients.
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  Speaker 1: What kind of corporate clients do you have, and what
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  Speaker 1: is there? What is their fear, what is their hope
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  Speaker 1: in all of this? Well, their fear is their hope
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  Speaker 1: is probably for a little bit of a non event.
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  Speaker 1: I mean, most of our clients here in the US
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  Speaker 1: are buyers of f X, their buyers of Euros, buyers
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  Speaker 1: of stone, and they're hedging that direction. So um, you know,
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  Speaker 1: I was just reading the op ed that Muhammad Alarian
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  Speaker 1: wrote this morning and blew Burg noting that we could
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  Speaker 1: see a seven seven to ten percent drop in Sterling,
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  Speaker 1: maybe a three to five percent drop in the euro
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  Speaker 1: should the brexit go through. I think that's their biggest fear,
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  Speaker 1: you know, overheaging or maybe putting themselves in a position
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  Speaker 1: to to miss that move where they're jumping in it
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  Speaker 1: and one twelve in the euro and then we're resetting
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  Speaker 1: midweek next week around one oh five in the euro
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  Speaker 1: and maybe as low as one thirty five in the pound,
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  Speaker 1: So that's kind of their biggest fear. You don't share
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  Speaker 1: that fear at the moment right now. I don't think
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  Speaker 1: it's gonna go through. UM. I didn't think it had
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  Speaker 1: a great job of going through before what happened last
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  Speaker 1: week with with Joe Cox. I know that the sentiment
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  Speaker 1: has kind of shifted to back the remain vote. UM.
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  Speaker 1: But you know, if you look at these referendums historically,
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  Speaker 1: you're gonna need to see that the under side with
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  Speaker 1: about a six or seven percent raise before we see
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  Speaker 1: the uh, the vocal through. Thank you very much, Stephen
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  Speaker 1: Casey for x Trader, Senior Market Analyst, Cambridge Global Payments.
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