♪ haidi: china's industrial profits rose to more than $83 billion. this includes trade strengthening check -- strengthening. dividedresident trump's opinion. angela merkel said europe and the u.s. are drifting apart. haidi: warning lights are flashing in australia with a new record coming to an end. betty: vietnam says growth targets will be met.

we speak with the prime minister later in the program. , wherehello, from sydney it is just past 6:00 a.m. trading at the start of a brand-new week. betty: we have a short trading week in the u.s., sunday evening just past 6:00 p.m. the markets are closed for memorial day. we will take all of the action on friday. look at how it will affect the asia-pacific trading day and the u.s. and in particular the big jobs report. that is something to watch. the fed meeting as well, u.s. pretty closed on friday much mixed. no one taking any big positions ahead of the long weekend holiday. bit,o wake us up a little we had reports of another missile being fired by north korea. that happened at 5:40 a.m. local

time, launching a missile that zone.nto japan's economic this is according to the japanese officials, also confirmed by south korea. in the meantime, south korean officials are convening a national security council meeting at 7:30 a.m.. we have seen this and reaction to multiple missile that have been fired the last several months. haidi: this is your coming to the fore earlier, president moon speaking about this. there were low volumes in wall street. it was the lowest of the year, no positions being taken ahead of the long week. in asia that will trickle through as well with chinese markets closed. it looks like a bit of a light session in asia. let's look at the markets trading at the moment. new zealand, the morning is

underway. futures in australia looking to edge higher, but a pretty light section -- session expected, the aussie dollar pretty much unchanged. let's take a look at commodities. markets have been pretty sanguine, with all of the notes out of pyongyang. so that may weigh more, rebounding with considerations posed opec decision, overdone. $57 aee brent saying barrel, normalization. this is taking into account noncompliance if you will. we are seeing the slide in iron comes tout they commodities. china pmi coming out on

wednesday and the other gauge on thursday. let's get you caught up to date with first word news with haslinda amin in singapore. north korea has fired another missile in the south -- in the south calling a meeting. they also released pictures of kim jong-un watching a new antiaircraft missile system. washington may send a third aircraft carrier to the region. helpsthening global trade china's industrial profit rise 14% to more than $83 billion. 8.5% rise the year before. eight of 41 industries achieved better profits in april than a year earlier thanks to overseas demand and investment. said most of its

computer systems are running normally again after a weekend crash that disrupted hundreds of flights at heathrow and gatwick. allcarrier plans to operate the local services into and out of london today after the effects of the weekend. handling, reservations were effective. merkelchancellor angela has given the strongest indication yet that europe is drifting away from the u.s. under president trump. said relationships forged since world war ii are over. europe must now plot its own course and not rely on america and britain. vietnam's prime minister is confident that key economic growth will meet the goal of

6.7% this year. interview with bloomberg, the premier said the country is taking steps to boost the economy to keep below the strongest growing economy. he will meet with president trump later at the white house. we have a detailed strategy to achieve growth of 6.7%. i will give you a hint of good data in april -- and may showing a pickup in exports and agriculture production. that will work for growth in the third and fourth quarter this year. haslinda: you can catch more of the exclusive interview with the vietnamese prime minister later on the show at 8:40 a.m. sydney time or 6:40 p.m. new york time. global news 24 hours a day,

powered by more than 2600 journalists and analysts in more than 120 countries. i am haslinda amin, this is bloomberg. haidi: looking forward to that exclusive. let's get to what is happening in australia, speaking of the trading week. they are indications thinking about doing something about the shale unit. aroundolding meetings the country, exploring options with what to do with the shale unit. they are not commenting on the talks, but they have growth plans. the background, the pressure that the management is putting destroyingg bhp of value through the shale venture. aberdeen asset management is the second-largest shareholder of fromnd said pressure

allied is pushing them along. is doinge government something for an advance on their mining. how does that work? paul: it is not being received well. they do pay 20 set -- $.25 per ton. the west australian government is in trouble. $30 billion of damage. it will take generations to pay off. the state did squander the root of the mining boom. help them out a said going into western australia in the past decade, we are not in talks with reintroducing the formal discussions but have previously rejected, so not looking good for that. and china's government is

sydney's new airport becoming part of the belt and road initiative, but why? there is lack of interest in australia. this suggestion comes from the chinese government via a think tank. they suggest they would be a good idea making sydney a part of the bill and road initiative. the government's already keeping another project at arms length, the northern australia infrastructure initiative. plan not $5 billion part of hilton road. -- belt and road. australia will keep this project at arms length. for that airport, the commitment of $5 billion to build until 2021, and a gentleman called david said making the airport

part of this would give the impression of chinese support and make attract credit experts. ifwill watch that and see the airport ends up being part of the initiative. betty: thank you so much. the week ahead on wall street will be a shortened week. certainly a lot of data, a lot of earnings to watch for. su keenan here with the headlights -- highlights. su: there are a lot from president trump. couple of big reports on the economy, but the highlight is the jobs report. it always gets a lot of attention. unemployment is expected to hold lowdy, near 4.4%, decades and job growth might be expanding at a steady pace in may. also what is important are the other reports of personal spending and manufacturing. these will take a prime role

andr the weak first quarter many fed members are viewing the economy as stronger than it was thought. in terms of shopping, they say earnings growth will fuel spending in april, expected profits to be strong. factories seeing expansion growth. those will be the highlight of the week. betty: what about what is ahead for the president? he arrived on saturday night from his nine-day trip. su: let's focus on his economic impact. numbersressure the nato -- members to bring up spending. if we go to 2881, over several different presidencies, you can see the rate of defense spending , the lowest being the clinton

administration. then it is starting to come up under obama but is expected to rise under president trump. there are some on wall street saying if he does not follow through with his spending initiative and agenda, that could be something that triggers a downturn in the market. let's go into the other things president trump is expected to do. he ended the nine-day trip by not having had a single press conference, breaking with tradition, though he did send out tweets about fake news. there has been increasing reporting on his son-in-law's possible in communications with russia. it will carry through the week. and on track our meetings with the vietnamese prime minister and the friday jobs report likely to be something, if positive, the trump administration will trumpet as a sign they are moving in the

right direction. haidi: back in the white house, straight to another russian drama. politics aside, what kind of earnings, companies are you watching for us? su: there are significant reports coming out again. generally companies have been ahead. reports are from hewlett-packard, dollar general, ryanair and lukoil, canadian banks reporting. that will be before and after the markets drop. autos will be in focus later in the week. u.s. auto industry reporting good but not great is that the expectation is with general motors does have more gains -- to have more gains. there was disappointment in the sales last month. the markets' anticipation is that they come back from that.

but they caution that the memorial day weekend is a good three-dayuse of the holiday and people go to the beach instead of the auto lot. it will be interesting to see the report. facebook and exxon mobil with .hareholder meetings haidi: some other movies i have not seen. thank you for that. we did sitt down, or down with the prime minister of vietnam. his confidence his economy is on target. economistna chief helps us break down the g-7 meeting and look to the e.u.-china summit. this is bloomberg. ♪

♪ betty: we are counting down to the sydney open. sydney users are up 0.1%.

we have a lot of data to get through and movements not just in u.s. trade but also in asia. and watch out for another big settlement that the world will be watching, the e.u.-china summit in brussels. all.is likely i am betty liu in new york. haidi: i am haidi lun in what you can see is a beautiful morning in sydney. be filledek bound to with news, but it will be a volume light session ahead. we have china, the u.k. and the u.s. close for holiday. a quick reminder of friday, up 0.7%. we had the selloff in oil. that really weighed on energy material resources on the asx. 0.1%. seeing futures up

president trump is back in the white house after the first foreign trip that divided allies and opinions. germany says europe and the u.s. are drifting apart, china needs to step forward as a champion of global trade. we have the chief china economist joining us from hong kong. this does sit nicely with beijing's ambitions to build the vacuumfill the influence that the u.s. is leaving. reporter: trump has started to turn to domestic. right now, even at the g-7 meeting, there are short statements, and they will continue to commit to free trade. leaderseel that global this weekend, they also within the statement have a short sentence and calling that trade

that has not always works to the benefit of everyone. even though china is going to meet the e.u. next week, but at the same time, they would like ,o host the global initiative but whether the you will receive int has completely positive europe, or they will still stay cautious about the belt and road initiative could be an open question. haidi: if you look at the length of the communique, this was a mere six pages. eight sherpa coming along to do communications. does it suggest the fracturing between the u.s. and the g-7 counterparts, does that prelude

more of a global risk of trade the markets have been pricing in? reporter: the way i look at this problem, within the g7, it is difficult to come up with the groundbreaking statement. especially with china in global scenes, china remains to be getting training and global investment. is up to 15% of the total, so it seems that china will try to liaise with that e.u. colleagues in order to gain more power to shape the global trade auestment, so whether the and china will -- e.u. and china will send a deal. this will be an important thing we need to watch closely over the next two days.

betty: i want to bring up a tweet from richard haass, the head of the council, who gave this reaction when he heard angela merkel make her speech saying, i have experienced this the last few days. we are on our own here in europe. this is what richard haass said. if one resultonic of pre-brexit, anti-european policy emerges a stronger e.u., and that seems to be happening. and merkel's comment for a watershed moment here -- given that it seems like perfectly allied relationships are starting to deteriorate, how does that change the e.u. and china? where is the opportunity, and will it look more like the u.s.-zero relationship? -- europe relationship? raymond: i think it gives an

opportunity for china. -- britain has made the decision to leave the cautious aboutis the future and development, whether the e.u. will disintegrate. from the chinese perspective, they will insist free trade and globalization is the only way to and they have assets of $1.8 trillion u.s., they will try to look for other countries as their target for investment in order to upgrade manufacturing and gain more access to advanced technology. i think the chinese approach is they continue to secure the relationship of the e.u. by bringing it closer with economic ties. i won't be surprised in the summit that china will announce high-profile investment views

that they will still try to maintain a closer relationship with europe. betty: and to help them along since traded is top of mind when you talk about countries. i want to pull up a chart that shows something interesting from the last several sessions, which is the central bank has been fixing the u.s. dollar, yuan rates weaker and weaker levels, is result might say of dollar weakness. is there something more political going on? knownd: last weekend we china or the chinese central banks announced they have been studying what needs to change. we know that the formula the pboc has been using is to lengthen overnight the closing

of the renminbi exchange rate. they tried to stop the global market. but we know 95% of trade is in dollars. so they need to figure out how to deal with this and create drastic moves against the u.s. dollar so the impact on the chinese currency itself will not become 100% to the domestic market. wither the next few months all of this political uncertainties and the global volatility and we know the fed decision will be upcoming in june, and that there will be a lot of changes coming on. cautious,e will stay and not try to follow the market. betty: thank you so much. anzchief economist at banking group. one thing we would like to bring

to your attention is the interactive tv function. there is paul allen moments ago. thecan watch them live as previous interviews and dive into any of the securities or bloomberg functions we talked about. you can be part of the conversation by sending us instant messages by sending us messages during our shows. ♪

♪ back. welcome this guy prefers to run a casino when japan legalizes gambling. they have not yet said where they will operate or who will think thebut they region is more fun. gambling is fun for a large number of people including the chinese who have gone to malcolm.

toy have driven that stock be the best casino stock so far in 2017 of all the casino shares. ♪

haidi: it is 8:30 a.m. in sydney. we have futures moderately high, finished the session on friday off 0.7%. i am haidi lun. betty: i am betty liu, it is past 6:30 p.m. on sunday evening. people are getting a break from the markets. let's get to first word news with haslinda amin. haslinda: hong kong has criticized the decision to downgrade the cities debt grading. it was based on shallow evidence they say. close relationship

with china cannot be considered negative as the mainland is a global engine. modi's lowered the mainland and the other. 13 people now in detention in manchester. a thousand people are working on the investigation, trying to determine whether the bomber was working on his own or part of a wider terror network. people killed. and jacob zuma is said to have survived a bid to force him from office. members decided not to call a vote with no confidence despite the president facing increasing pressure to step down. the decision to hire the prime minister sparked protests and caused south africa its

investment grade credit rating. financialng our intelligence program has created a sweep of the human opponent. chess player has been playing since he was 10 and thought no machine could beat him. alphago is perfect, no flaws and no emotional weaknesses. he said it would be years before computers could master the game. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. amin, this is bloomberg. for that.nks let's get a quick check on the markets where trading is underway in new zealand. a little bit down, 0.1%. the kiwi dollar had the biggest gain in previous sessions. we finished the week flat after the move. futures in australia, we are

seeing a positive uptick a 10th of 1% after pricing lower on friday. the aussie dollar essentially unchanged. we are looking at the weak kiwi dollar as well. trading gets underway in asia. we have adam here with us. korea is a big weight in terms of use even, but a fire -- quiet start expected. adam: the interesting move in the south african rand is worth thing attention to. it is a summa negative move --zuma negative move. there were hopes this was it for jacob zuma and the country could move on and replace him. not the case as we are hearing from the reporting sunday night in south africa. there are some speakers this week as we build up to the jobs report. it will be interesting to see their comments, and we are at

record highs with the s&p. maybe a little bit of optimism through the markets in asia because of that but the big markets are closed, china, u.k., u.s. betty: and things seem calm in the bond market with the u.s. jobs report coming up. what is going on? is the low volatility affecting the bond market and bond traders? adam: i think it is. if you bring up the chart on bloomberg, you can see the extent of that. 2.25% level for the treasuries is keen now. is a big week for the u.s. bond market. they are building up to the u.s. job group on friday, plenty of policymakers speaking in the week we are kicking off today

with john williams in singapore, his comments. quiet fed on friday going ahead of the next policy meeting in june. so this is the last chance the bond market can get to price in. looks to be kind of a done deal for june, although with bonds having performed, having rallied the last three or four months, and the debate with future policy and the fed, inflation expectations are somewhat weak with the march and april cpi numbers. the treasuries market is closed for the holiday, so we have to wait until tuesday to see if we get any reaction to those comments by williams in singapore. betty: thank you so much. i want to stay on that.

,ond yields, treasury yields that is affecting the mortgage markets. we got the trump bump, and it was mortgage rates as well. you can see postelection how much mortgage rates spiked up, but they are drifting lower with the expectation for the fed rate as theeming less certain last few weeks than before. the silver lining, in the u.s., if you are back in the market in time for spring, you might want to do that now. good time -- betty: maybe better here than in australia. haidi: yeah, better anywhere than in australia. ,ark: betty: in the meantime china's industrial profits rose

14% from a year earlier. early indicators suggest it is cooling. tom mackenzie has more on the numbers. tom: a divergent and mixed picture in the industrial profits, strong but pointing to forward indicators. , wehing out the numbers have a terminal chart showing what is going on because in .arch they were up 23% at the same time last year in april and march, they were up around 3%. the industrial profits being driven by strong demand, so a lot from the u.s. and europe as well with consumer sentiment strengthening. they have been investing in things like warehouses and production. what they have noted and came

out of the data is they are feeling a credit squeeze as well. the cost of credit is becoming expensive as the deleveraging campaign continues in china. that moves us to the forward indicators, things like investor confidence. they are saying this investor confidence is slightly on china. medium-sizedmaller enterprises also being less confident again, flagging concerns about the cost of credit. these are crystallizing this strength the surprised in the gdp number was the peak for growth in china, that we may be moving to a slow down in 2017, the second half of the year.

we have a mixed picture in terms of the manufacturing side. they were relatively bullish, but we do still have relatively strong house prices. we have strong consumer strength as well. those were areas that continue to underpin the economy but are greater concerns for the second half. haidi: we also have the chinese premier going to europe. what do we expect? tom: that will be part of his messaging. he recently met the foreign ministers in germany, then he moves to brussels for the european, china summit. it is happening on the first and second of june. so clearly trade will be front and center and climate change. we have discussed issues the

u.s. holds back on. we have the g7 meeting where it was ready frank, discussions about climate change. they were rounding on the u.s., trying to pressure trump to not walk away. there is a lot of concerns about the european companies, and we continue to hear that about the environment, the last -- the level playing. there are deep frustrations among companies. , china'shey see china role in change given when the u.s. stands like this. concerns around the south china sea, north korea, there is a lot of talk that trade will dominate. betty: tom mackenzie in beijing. and we are getting headlines on

north korea. they tested their ninth missile so far this year. shinzo abe making comments here, report -- saying it cannot be forgiven and japan and others will take concrete steps on north korea. first series of missiles were fired, the u.s. came out strongly. china did resolve the situation, and prime minister abe and the others talked about it. more toeds to do much rain north korea in. -- rein north korea in. haidi: it is intensifying. ninth of this year, and just kind of escalated. this is difficult for the new

president. he is in the middle currently i believe. in terms of the reaction to shinzo abe comments, saber , we are seeing some weakness from the japanese yen. that will play into the open. that, and asian markets wake up for the brand-new trading week. despite the weaker growth, vietnam's prime minister said he is confident about hitting his target.

♪ good morning.

i'm betty liu in new york. haidi: i am haidi lun in sydney. a look at the business flash headlines, western australia could raise billions of dollars for mining giants to pay iron or early as a lump sum. this would be made incident increasing the rent tax. the proposal has had a lukewarm response from bhp and rio. the government says it could take decades. betty: struggling italian flag carrier alitalia has been hit by industrial action with hundreds of flights canceled. unions demanded they nationalize the airline which went into administration after years of losses. they lent more than half $1 billion to cap -- keep flying while searching for a buyer. vietnam's dominant

airline could be the first to list its shares abroad. the city have been approached by london, hong kong, and singapore. ony recently eased rules foreign investment in hanover. they could boost the ownership limit to 49% from 30%. >> we have been approached by some foreign stock exchanges including london, hong kong, and singapore which expressed their interest in our stock. we don't want to hide our hope to become the first vietnamese company to list shares overseas. vietnam's first quarter growth was at the slowest day since 2014, but the prime minister is confident the annual target will be met. aheadke to haslinda amin

of a trip to meet president trump. it is true that the first role of the vietnamese economy has slowed down, but there are reasons. we have a detailed strategy to achieve growth of 6.7% even in that scenario. we will take steps and measures at each industry down to the product level. the main goal is to create a favorable and open, enabling business investment climate. i will give you a hint a very good news with data in april and in thewing strong pickup fbi and agriculture production. that will lay the groundwork for growth. reporter: would you sacrifice

your inflation target? 6.7%, we also is have a mandate to fulfill on keeping inflation at the rate that we have committed with the national assembly. was keptat inflation at 3.9% in the first quarter. all of our clients during the first quarter standing up 5.9%. spoke,r: when we last you talked about the liberalization of the banking sector. submitting the national assembly for consideration of a resolution on restructuring the data in the anon. shinsl allow for its two to take over commercial banks in vietnam if they express

interest, and for the commercial banks in which the state holds any significance, we will also invite you to take investors to come in. that was the vietnamese prime minister speaking exclusively to haslinda amin. we will be hearing more from the premier tomorrow on daybreak australia. we will have more on his plans when it comes to boosting trade. antralia has taken on impressive 26 years without contraction, but the street is a risk of coming to an end. this is bloomberg. ♪

♪ i am haidi lun in sydney. betty: plan betty liu in new york. lou in new york. first quarter growth forecast,

some suggesting an retraction at the possible end of the australia recession. look at the evidence. looks like the economy is on shaky ground, people are whispering the r word again. reporter: they are. it is in hushed tones at the moment, but we never know. we had some very fatal construction data that came at -.47. as you mentioned, the climate is going back to the spreadsheet for what growth might be in the first quarter. they are currently expecting it will be a small positive. the average is probably between zero and five, but we could get negative numbers. weak,les have been very and we have mortgage debt and wage is not raising much.

money has fallen a lot, and that has, has been a drag on gdp. -- capex has been a drag on gdp. haidi: a huge part of that is the china story and the pmi week and indicators suggesting it has been as good as it gets when it comes to china and we could face shaky demand. reporter: that is right. and you have to cut during the cycle in march. that will be reflected in the second quarter. second quarter prospects are not looking that great either. so it probably premature, looking at the recession. we skirted close before. we managed to get back up, so is probably premature, but is back on the agenda. haidi: where does that leave

rba? reporter: things are appropriate for a sustainable growth path and moving back to inflation targets. positive number, it will not panic. it will take strong numbers for them to raise eyebrows. we are looking at steady interest rates for the rest of the year and the market is pricing in less than a 20% chance of rate cut. unless we get a real negative shock, they are on hold. affordability on ility, that will slow things down. reporter: they don't want to bring the market crashing to a halt. the market in sydney is still very hot. there is a lot of demand, but it is well documented that prices are inflated. haidi: mortgage rates are going down in the u.s.

thank you so much for that. that is it for daybreak australia, but yvonne and betty are back for daybreak asia. we will watch developments out of north korea. yvonne: the south korean president meeting with his national security team at this hour to discuss this after north korea fired its ninth missile this year alone. this has fallen into the japan economic waters according to japanese signals. we have seen the frequency ramp-up as kim jong-un tries to accelerate his program. the programs are quite limited, but how will they engage with kim's regime? he has pushed her status quo, but how will you balance that with donald trump? betty: and how the president is likely to react, even an

analysis of his nine-day trip going, we will be speaking with the bloomberg institutional feller -- fellow. he will be weighing in not just on the president's reaction to the latest missile test but also how he did overseas. as you know, the fact that was not anything blowing up on show thather than the was heard around the world -- shove that was heard around the world, he himself did not go on twitter. advisors say that is what made his trip a success. we would get the real take. haidi: we are sort of managing expectations. and lookrap up the g7 ahead to the week that is to calm. it is a calm week despite the slow start.

we are getting pmi. that will pretend a smaller period of growth. we have japanese data coming out , looking at geopolitical risks for the market. and we have one of our 7:40,tors coming on at coming to us from singapore. and he said the fed will tighten every quarter until it is neutral. he is cautious on equities. betty: that is right. it is interesting to ask how he will fit that fed projection with how they will shrink the balance sheet. we heard from their minutes they will do it gradually. but how you can do it in terms of the timing will be a big question. is right.t

we will tackle that in the conversation. that doesn't for daybreak australia. the action in the next two hours of daybreak asia with the trading week starting. ♪

♪ >> a mixed start in the asia-pacific, dollar and the yen rising. 83 billion dollars, signs are global trade is strengthening. >> president trump's divided opinion, angela merkel hence europe and the u.s. are drifting apart. airline may leading list its shares on a foreign exchange. >> we have the world covered here on "daybreak asia" as we look forward to the sig