♪ haidi: the pan -- pond -- pound falls. theresa may has tolerated extremists for too long they say. betty: defense ministers meet in singapore over the weekend. terrorism and trump dominate the shangri-la summit. haidi: the world bank still sees growth, maintaining its forecast for this year and next. betty: warren buffett launching

this year's auction, raising money for the homeless in san francisco again. haidi: hello, it is just past 8:00 a.m. in sydney. betty: it is after 6:00 p.m. in new york, i am betty lou. maybe there might be inflation in terms of the bids for warren buffett, but there is much inflation in the jobs report from friday which led investors to believe may be the fed will not raise rates as fast as some expect it. we only get one, and it will come later this year. the nasdaq and s&p all trading higher. up 4/10 of 1%, the nasdaq also rising close to 1%. you had tech am, health care on friday leading the games. no surprise that financials took it on the chin.

if there is fewer interest rates with tightening. that will not be a great margin for many banks. haidi: the low rate environment globally may be here for longer. but you have this interesting dichotomy. u.s. 10 years at bond rally continue to yielding. they are yielding to the lowest. u.s. stocks near record highs. look at how we are setting up in asia. we had new zealand trading , outside 07%. the kiwi dollar 71.40. futures and australia shaping up like this. there pretty flat. up 0.2%. the asx is 10 points higher. we have the reserve tank of

australia decision coming soon. and from interest, even though you have a 20% chance of a rate hike, the probabilities that they will cut rates have more than doubled from the last meeting. a lot changes in terms of increasing bearishness on the australian economy in the past for bait -- four weeks. here is shery ahn. yvonne: the world bank has maintained its outlook for the global economy, forecasting a modest pickup in monetary policy and rising protectionism. it sees expansive mission of 2.7% desk expansion of 2.7%. manufacturing and trade are picking up, proving financing conditions could be coming back. china's biggest homemaker and one of the biggest coal-fired power generators are in talks of a merger.

the talks are at an early stage and may not proceed. units have been notified by their parent company -- companies' significant matters. saysnn chairman terry google and amazon are supporting him for the stewardship of the toshiba memory chip unit. the out word -- they offered financial support. they had interest in buying the units. japanese authorities want a domestic better to step forward to prevent technology from going abroad. unitba's strictly nuclear has reached a two-week lockout in new hampshire. they had a three-year contract which would run through to may 2020. the deal covers 172 employees who will return to work on

monday. no details have been released. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am shery ahn, this is bloomberg. betty: we have got several big interviews coming up on bloomberg television later in the program. we are being joined by jamie dimon of j.p. morgan chase. that is at 2:00 p.m. in sydney, midnight in new york, 12:00 in hong kong. we are watching mining and commodities, a big heart of the world bank outlook. we have an interview with fortescue mining. that is after 11:00 in hong kong. oili: interesting as we see and iron ore prices were they are. there is a claim to the u.s. -- london bridge terror attack.

several people were killed saturday night days before the country votes in a general election. sebastian joins us now. get us up to date what we know. far isr: what we know so that the vans hit for passengers on london bridge saturday night. populace ando the london, tourists as well. the islamic state has claimed responsibility for the attack. details are still unknown. police continue the investigation and make arrest across london. what is striking about this attack is the frequency, the third in the last few months and second in the general election campaign. a few weeks ago there were 22 killed in manchester, and there was a similar one on westminster

bridge that went on a stabbing spree of his own. that is putting security at the front of this election campaign with four days out from the vote. betty: last time we heard from the prime minister, she seemed to link this to the general election, and she hit out at critics saying there is too much intolerance, extremism in the u.k. how is it for the general election? sebastian: the line from theresa may was extremism reads extremism. -- breeds extremism. it is the upping of rhetoric from her. she sounded exasperated with this second attack of the campaign. she said the home secretary was -- she was the home secretary, so people see her with experience. the counter to that is she has been attacked for not getting

this under control like she could. her opponent has criticized her for the police. he said you can't defend britain, but he has been attacked for being sold on terror. from the market perspective we see weakness in sterling. these are short-lived, markets move on to other drivers. we have seen the pop -- the pound busted in the days leading up to the boat. haidi: that is right. more conservative in terms of trying to get ahead of the election as opposed to reaction. sebastian, what are we watching in terms of the investigation progressing? sebastian: arrests have already been made. the process now is we see containment of the attacks. the metropolitan police have said this current attack is contained.

after the last one we saw the terror level critical, which was the highest in 10 years. severe ineduced to the days following the manchester attack. we see no such education -- indication that will be raised again. -- necessarye seri upgrades. haidi: the latest on the terror attacks in the weekend on london bridge. we have more to come on bloomberg television. ♪

♪ haidi: i am haidi lun in sydney. betty: i betty liu in new york. reeling aftereft the decision to abandon the paris climate deal. but reaction was more relaxed in russia. erik schatzker gauged the mood

at the st. petersburg international economic forum. decisionald trump's in have landed the best thud corporate america. not so in russia. he had a sympathetic audience. putin was speaking at the economic forum, said donald trump should not be criticized for withdrawing and cast doubt on the viability if the united states does not sign on. >> countries with such large issues such as the u.s. are not going to work, not going to. no agreement could be ready for citing a ratifying -- or ratifying. voice,nother supporter the russian oligarchs who controls one of the largest aluminum producers. he said trump is right to be skeptical for the terms of the paris accord, and he questions

the sincerity of u.s. ceo's who criticized trump's decision. >> they want to stay politically the close ofbehind the door, they all want it. a guy who really puts the people accountable for what they said in paris. erik: that is one point of view. oil ceo's i spoke to said they think climate change is real, and more forces will drive the ship without ever donald trump. schatzker. betty: let's get a look at the business flash headlines. allta has confirmed it sold of its holdings in tesla. bloomberg data shows it held a 1.4% stake, but they confirmed the end of their cooperation for the time being.

they got a stake in 2010 as a green card to the u.s. the relationship soured amid culture clashes and recalls. haidi: spacex has taken another step to more affordable spaceflight, sending a recycled rocket to the international space station. the capsule was listed by the felt -- lifted by the cap -- falcon 9 rocket. the ceo elon musk said it is starting to feel warmer to -- normal to use rockets over. betty: wonder woman taking the not -- the top spot in america. million, $100 million on the debut. captain underpants came in second, $23 million. warner bros. had been banking on

wonder woman after the warmer to work hand -- former two work hand. ♪

♪ betty: i am betty liu in new york. haidi: i am haidi lun in sydney. you are watching daybreak australia. friday with the disappointing jobs report, you know all about that. what a miss we had. betty: it was quite a miss, but --did lead to a stock market did not lead to a stock market decline. we saw equities rallying. we focus on the political stuff over the weekend. there was another attack in london. there is uncertainty over the ..k. elections later this week in the u.s., this will be theater. the former director comey

testimony will be closely monitored. this is interesting to digest. it will make the jobs report seem like it was a breeze. here with more. what do you think will stand out for investors? kathleen: on friday, the federal wasrve hikes, we knew this the general election that theresa may called weeks ago would be an important event for the u.k., for the global market. the terror attack put that much more uncertainty and tension around this. in fact, i want to show you a chart as we get started because we know the tories had lost ground. that is theresa may's party. you can see how the pound had been fairly steady. you can see also the turquoise

line that is a composite of the polls. you see the polls started changing, the white line started weakening of it on this -- a bit on this. economics in london did an interesting analysis last night into this morning. theresa may is seen as the stronger candidate on security, on fighting terror. she knows there is a possibility you could delay. they stopped financial campaigning, and that is another uncertainty for the market. she points out it is possible we will see a rocky start. is back onal risk the table. james comey is testifying to congress this week. donald trump apparently thinking to try to block, use executive

privilege. another thing traders are , will it headlines affect their view of donald trump's power and policies? the ecb's meeting on thursday and it now seems like a backwater event. policy change not expected, but some hint of tapering by the ecb later this year. the election is what is on traders' radar this week. asia'swe are getting first opportunity to react to that made jobs report, and that raises questions about what the fed does next. what was the key point in the report? it sounds like it is disappointing no matter what. june came in on the light side, then april had substantial revisions. another chart i want to show is btv 1977. june came in on the

payroll will see is the slowing down over the course of the year. three-month moving average is 162,000.to about it was around 187,000. the payroll, and then what about unemployment? low at 4.3%.ear doesn't that mean the economy is stronger? doesn't it mean we are going to see inflation rising and the need for more rate hikes? week are talking about this a lot because we saw the average hourly earnings pretty flat in the month of may. let's put these together. let's look at another bloomberg chart. this is btv 189. there is the unemployment rate lower and lower. what is happening? the white line which shows average hourly earnings, people's paychecks, why isn't it

going up as the other goes down? it is a mystery. people are working part-time because they cannot get full-time. fixed unemployment is still higher, 8% handle. those are discouraged workers that even looking for jobs. i like what the bloomberg news said. looks like the u.s. labor market , a veryg its mojo old-fashioned term, but the jobs report was disappointing. betty: sometimes those words are best. many words to describe. what does it mean for treasury rally? kathleen: we know the treasury market has been in off of the fed. the fed will probably do three rate hikes. so we are reducing stimulus. bond market has really been focused on the fact inflation is

not rising. we showed you that chart. the question is now, june rate hike, absolutely. they will not back off, far too many speeches and indications. if they go opposite, it is more than a temporary blip. but with references to this in the bloomberg news story, september hike. in the left-hand corner, you see june 14 about 90% now, average 100%. column.over the orange you will see the the hike in september 27%. ,hey have been stuck around 25% 30%. the markets are not buying it. mark chandler was looking at the 10 year note yield. here is a report saying, you look at the technicals, they are

breaking down. the yield is falling further. 2%. who would think if they keep hiking you would have bonds falling? betty: that is not even in the rearview member -- rearview mirror. kathleen: he said at least three rate hikes. in thatstill help happened that things will pick up. betty: makes you wonder how they can say that an sound like they are disconnected from the data. speaking of data, i want to ask you about the world bank and its outlook, which is unchanged. they seem to say there will be some regions that are growing, but there is rising rejectionism to watch out for. they did not factor in trumps tax reforms or infrastructure spending. kathleen: it seems interesting a lot of strategists, the fed

governor is not a strategists, but that is why she is on the economy. she gave two speeches saying the outfit -- outlook is bright. if you want to put it at the most basic level, people say contrast from 10 years ago, with the great recession, no one is looking back to recession and negative growth. everyone wants how strong it will get. with the world bank stuck with that, that is what we see. thank you so much. let's get more on what we should be watching as trading gets underway in asia. we have markets playing with us and events over the weekend and the fed's chance to react to the message from friday. >> with the pound trading at the moment, we see large reaction. we should remember the context around these attacks happening for sterling trading.

the attacks show we expect may to win the majority. that is despite the attacks. we will keep an eye on the polls coming out the next couple of as some of these get done over the next 24 or 48 hours. we can factor in how the public might be responding to london. but the market telling as some e over the us, a huge move in the pound. elsewhere this week, it is a busy week. we have the u.k. election. we also have james comey in the u.s. everyone will be watching that closely. tomorrow,e the rba r.b.i. in india. i think that is key because as we have been flagging the australia isminal, the only place where they will cut interest rates. that is really huge in terms of

the change of the last three months. how we began australia expecting the cut and then the hike, now it is completely turned around. and in japan some of the nikkei has rallied pretty hard, hit 20,000. the question is how far can we push on? will that rely on yen weakness of your this is going off the market this week. betty: continuing on that, why are americans jumping in to the japanese rally? very interesting indeed. i bring up the terminal chart here so we can see how japanese equities are priced in dollar again.utperforming that is quite interesting given we have seen the yen strength and the reluctance among foreign investors particularly in the to basically not get

involved in this rally. there are some things going back . it will be interesting to the.

♪ haidi: it is 8:30 a.m. and sing it -- in sydney. there is a bit of a tailwind from the record high levels we saw in u.s. stocks on friday, 10 points when it comes to the asx opening for the brand-new trading week. i am haidi lun -- haidi lun. betty: you are watching daybreak australia. let's get to first word news with shery ahn. shery: thank you. theresa may will seek new anti-terror powers if she wins this week's election. speaking after the attack, she said there is too much tolerance of extremism in the u.k. it left seven people dead and 21

critically injured. the campaign has been suspended for a second time and halted after the attack in manchester. probably for greater security operation -- calling for greater security operations. the need to contain terroristic sympathetic feelings with the dialogue at singapore. this came with news of the terror attacks in london. -- this group said quotas for hiring women could be something japan considers. shinzo abe is given credit for trying to raise the status of women, but more needs to be done in the private sector. the business culture is male-dominated, but the labor shortage means needing more workers. warren buffett will start his

private lunch option to raise money for the homeless charities in san francisco. the sale starts at half past seven -- 7:00. the big bids come near the end. last year they got three other half million dollars for 2012. they raised $24 million for the glide foundation. global news 24 hours a day, powered by more than 2600 -- 2700 journalists and analysts in more than 120 countries. i am shery ahn. this is bloomberg. ♪ haidi: as sherry mentioned, the u.k. prime minister will start new anti-terror powers if she wins the election after the attack in london. too much tolerance for extremism in the u.k. is what she said. more on the geopolitical topics making headlines. we will bring in a former

australian foreign minister and professor of international relations in sydney. trump president capitalizing on the events with his tweet saying u.s. would be better with a travel ban. what about in australia? is prime minister turnbull playing follow the leader with american policies trump has enforced? is there a danger we wind up on the wrong side of history? complex an incredibly problem and hard for governments to deal with. you have a significant islamic , aority in western countries small proportion of this community being recruited into violent jihadists, and we need to beat it with strategies that recruit the support of more muslims and fair down harder

than we have been for those abdicating -- advocating violent ism.d is him -- jihad people in a van can do so much damage. terrorism is so random. it is harder for governments to deal with than it is in uncovering and defeating a major jihadist plots. haidi: this week in sydney, the defense secretary meeting with rex tillerson. what should be at the top of the agenda? clearly the south china sea has taken on a backseat with other issues. >> north korea is the gravest security threat. some people say it is a matter of years before they launch a music -- ballistic missile to

reach the united states, mainland united states. it can reach places in the western pacific now. and australia. this is overwhelmingly the unifying security problem. australia and the united states have focused on it. the only crutch is one that involves corporation of china. that is the isolation of north korea and the application of stringent sanctions. we cannot achieve objectives with the north korean regime without the support of china. i think they will be very candid, a candid admission of secretary and ministers of australia and united states meet. betty: i want to point to malcolm turnbull's remarks that raised some eyebrows among the

chinese delegation when the hit at china and said china needed .o deal with north korea not to misinterpret u.s. engagement were pulling back of engagement. he was trying to get china to exert strength. that raised the iva -- eyebrows of the chinese delegation. what do you make of that? >> i hope it has an effect. china has been a player in conversations with the americans. withhave less influence north korea than when the -- any of the other nations. i think president xi said a better time explaining to the american president at their conference in florida and the telephone exchange. china explains to the americans this lunatic leadership in north

korea is not one it can control. given that, there is no alternative that we have got on the work with china gender of what can be achieved. trying to turn on or off the behavior of the north koreans is like illusory. my comment should have been more subtle. it seems as though the chinese have explained as you said over and over again. the problem is that the u.s. and australia and others don't believe them. >> that is a problem very largely on the us trillion side. imagine if china cut economic interaction between itself and north korea and reduced the to normal would hope,

relations overnight. why is there a belief that this would -- one thing it has that gives us security? its nuclear weapons capacity. we have got to rely on trump's diplomacy with president xi on this front. after talking with chinese leadership, he said he will meet with the chinese leader. he said he has a good relationship. americans need to build on that. chinese have the not got control over north korea's. if they reduce them to conditional poverty, it will not say when they surrender that they give up nuclear weapons. haidi: it is an opportunity for beijing to step up. after that remarkable speech president xi gave with the idea china is filling in the vacuum

of potential being left by the u.s., global trade, liberal values, is it the opportunity for beijing to show it wants to make a meaningful step towards making -- >> absolutely. on climate and north korea, you have an opportunity for china leadership, leadership about to be confirmed by the party meeting in a couple months' time. you have leadership china with y to be seen as a global leader in a way we never thought possible six months ago. everything president xi said in the speech has been rendered even more likely. very largely it is about very good made for his support on north korea. with tough prime minister

turnbull, i said to them with the postwar alliance with u.s. and germany, the harsh remarks coming out of the g7 meeting, is it a bit of an idea for australia that we cannot rely on the u.s. relationship that mark and turnbull has spoken about? is it a better idea to turn to beijing? >> we will have more engagement with china. are now off according to a coat -- spokesperson for the state department. areralia and other nations relying on the pivot as a symbol bitterness with asia have got to take again. there has been to be swiss -- swift reversals.

asiank what stands out for is that every one of the nations of southeast asia is dealing with china. that includes vietnam. vietnam which was seen as a new recruit or allied has not put its hand up to take leadership of the philippines in resisting china in the region. vietnam is cutting 15 deals with the chinese including those that apply to the maritime territories in dispute. one thing they overlooked is every one of those nations is cutting a deal with china. the chinese have got every reason to be satisfied with where they stand in the south china sea at this moment. the only danger is [indiscernible]

betty: i want to interject. staying on china and going back to the shangri-la summit, what did you make of the chinese delegation? not junior, but they were not the top defense officials dispatched from beijing. they had a senior person making remarks. what did you make of that? >> that has been the case at these defense dialogs from time to time in the past. the other nations in the region would be happier if there had been more senior chinese representation, but they are trying to send a message to us that they are basically happy with where things stand in the south china sea. china has achieved all at once. the one thing for china now it has the it not dealing with it directly, middle asia, malaysia, infrastructure, one danger for

the chinese would be, should they be tempted, start dredging atoll closel of the to the philippines china has occupied with missiles -- vessels. they should not start dredging in that disputed maritime territory. betty: great to have you on daybreak australia. so much to talk about, the former minister from the university of sydney. u.s. energy secretary visiting japan after president trump says he is pulling out of paris. looking at what we can achieve. this is bloomberg. ♪

♪ haidi: i am haidi lun in sydney.

betty: i am betty liu new york, you are watching daybreak australia. james comey will be testifying to congress. he is scheduled to testify this thursday, june 8 the russian investigation moves on to the public stage. he will question about what trump said to him before he was abruptly fired in early may. here to what we can expect, our reporter. any chance that president trump might try to block the public testimony? it is possible they could try to invoke executive privilege in pulling the plug on comey, or they could try to pressure the senator, senator burr, who runs the committee to cancel the hearing. it is a long shot and unlikely. one thing to consider is trump aboutf his -- has tweeted

his meetings with comey. it would see he undercuts the possibility of saying, this needs to be kept secret. betty: we will see how that plays out once the weekend starts here. i want to talk about the events over the weekend in the london attack and trump's tweets where he noted how the travel ban is more important in light of the london attack. we know it is tied up in court's now. how do you link the two? what is the linkage? reporter: trump is very insistent that the court should give him his van, the executive order introduced in january. it is hard to see the correct linkage between the supreme court and this weekend. there has been a lot of people critical of the direct link trump is trying to make the banning entry from people a

predominantly muslim countries because of the kind of terror attacks we have seen in england and across europe have come from homegrown terrorist activities. i don't think the courts will be swayed by that. people in the judicial branch have not been pressured by trump. haidi: in the middle of the political theater, what else are we looking at from congress? reporter: something that bloomberg watchers will be interested in some of this is the week where the rubber hits the road on the rollback for dodd-frank legislation. i bill is going to the house floor that would significantly change the legislation put in place after the financial crisis and meltdown.

that is something trump is in favor of. he said repeatedly we will do a big number on dodd-frank, so we are looking for that, a vote in the house. for trump and the republicans, does not look like his prospects in the senate are that great. victory, but minor maybe don't look for the legislation to go to the head. test, just another litmus adding to doubt that he can push through legislative agenda. thank you. days after he said he is pulling out of the paris climate accord, the energy secretary is making a trip to asia. he is meeting with people in tokyo and visiting the fukushima nuclear sites. goals? hat are the main he wants to communicate

now trump has pulled out that the united states is still a leader when it comes to technology, energy, security. he will be going to china on monday to attend and innovation conference with other world leaders in energy to look at how they can innovate renewable energy technology, which is slightly ironic considering trump pulled out of the paris agreement and cut funding or plans to cut funding to renewable energy, technology research. in japan, what he is doing is gas,ing financial, cap -- exports. they say it will help build to export american gas.

steama started to pick up with that five years ago. while in the air on his way to japan, the doe announced improved exports. he is serious in pushing this message that maybe it renewable energy will not be as shrunk for the united states, but you can see reliable gas, which when you look at it does provide less co2 emissions than coal or oil. it is in a way a better choice for the environment, but when he came to japan at norwich airport -- narita airport, he said he was ok with feeding the renewable energy killer of the -- pillar of the united states and letting china take up the arm.

there is not a big change in this administration and the administration of the past. perry is on his way to clean energy conference, the one in beijing, with what happened last week -- reporter: i think what a lot of folks are explaining -- expecting is when trump went to europe. it is a level of isolation. when he went to europe seeing a lot of leaders that had trouble connecting and agreeing as a whole, he was the odd man out. the same could be true with rick perry in china. he could be the odd man out when talking about her noble energy technology. betty: thank you so much, covering perry's visit. an interview with the

former charter ceo. talking about the u.k. election, exit, donald trump. this is bloomberg. ♪

haidi: exclusive on the political challenge in the u.s. ,> what happens with brexit what happens with the trump administration's approach to paris or trade agreements and so forth, these are the big risk. reporter: how significant is the election coming up? does a minority or majority make a difference and/or peter: it makes the brexit negotiations more unpredictable. they are pretty unpredictable at the moment with a conservative majority. i think we have somewhat of a coalition government go forward, it is harder to work out what will happen. translateecessarily

into business. they hate uncertainty, and a lot of businesses sitting on their hands saying we will force a bit on investment and look for a little bit of clarity with what will happen. reporter: do you think there will be acrimonious negotiations? peter: i think it will be difficult to avoid acrimonious negotiations. there is a lot at stake with money, principles on both sides. and on the e.u.'s side, you have to get an agreement among the other 27 members, all of whom who have their own priorities and issues. it can be really difficult in a short timeframe, less than two years, to get agreement on all these things. prospecthere is a real of a hard brexit, not really

because people have asked for it but because getting to a compromise is more difficult than a position of extremism. abouter: you talked london in light of the terrorist attack, but in the old age, the golden deuce has been the banking system -- goose has been the banking system. is the banking edge ending? peter: i think the city of london will be one of the bits of the u.k. economy that will find it easiest to adapt to brexit. there will be thousands of jobs that will move to other parts of e.u., butut -- the london is a financial center. it is much harder if you are a small or middle sized manufacturing business based in partsd, working with

suppliers or component suppliers in other parts of europe taking advantage of the fact at the moment there is a seamless integration. ♪ a

♪ >> sterling falling, markets nervous after weekend attacks in london. the u.k. hasays tolerated extremists for too long. the world bank still sees growth maintaining its forecast for this year and next. australia takes aim at course of , nations banding together if they are pushed around. >>