♪ betty: the china backed infrastructure bank alleges to step up if the game, boosting membership. betty: i'd gear after the brexit vote, negotiations are set to begin. david davis and another will be in brussels. haidi: comments from the governor, seeing signs of improvement in the australian economy. betty: confusion and contradiction, president donald trump said he is under

investigation. his lawyer said that is not true. haidi: hello from sydney where it is past 8:00 a.m. this is daybreak australia. the first major markets open. betty: it is after 6:00 a.m. in hong kong. i have come all the way here. i am almost where you are. we are looking at all the action on wall street playing into the asia-pacific trading day. all this week we are here in hong kong covering the u.s. and asian markets. along with political stories we are tackling later in the hour including brexit and toshiba's semiconductor unit, a huge corporate story. we want to get viewers caught up with u.s. stocks at the end of the day friday, and it was tech shares. a lot of focus on the big tech stocks and how they traded. they dragged down the nasdaq

0.2%, the dow also ending slightly higher but a little bit dragged down because of -- really the dow and s&p, seeing essentially not just drag down but also the sentiment kind of the big tech companies fear the big news on friday was amazon buying whole foods. we will go further into that story fears that came right out of the blue at a time when we have nothing a lot of m&a. haidi: we were surprised for the markets comedies of the reaction told in the u.s.. we are watching related stocks in australia. this has already been forthcoming coming under pressure now in this part of the world. politics again this week, brexit negotiations for better or worse getting started, theresa may struggling to hang on to her job after the calamitous election result.

uncertainty with u.s. policy again, trump saying he is the subject of a witchhunt on twitter, his lawyer saying he is not under investigation. look at how we are setting up. treating underway, pretty much flat at the moment. we have a position out this week, looking at australia's richest mines, a bit of an update when the city markets open, up about 0.1%. unchanged to 76.21. we saw the u.s. dollar declining against all of its fears -- peers, and consumer sentiment and housing. we had hedge fund getting out of gold before the fed decision and natural losses to the biggest week we decline in over a month -- weekly declining over a month. crude fell in price. opec is struggling to rebalance global glut. 1%. or the 0.1% -- up

let's go to first word news with radio cynthia. brexit,1 days after the formal negotiations are about to start. the chief negotiators will be in britain, 82 days after was planned to leave. splitting, but that he used is not possible. french pollsters are predicting a big win for emmanuel macron's fledgling party in the second round parliamentary vote, but not the majority that had been forecast. they say on march they will get 360 seats in the 577-seat national assembly. marine le pen has been elected for the first time, but her national front is it likely is

unlikely to win. google is stepping up the fight against terror related propaganda in response to u.k.'s lawmakers who say websites are a breeding ground for extremists. new technology would be used identify extremist videos on youtube. they will be more aggressive in limiting content while not officially for bidding is still inflammatory. the finance ministers china and south korea have had their first direct talks in almost a year. they met at the aiib summit, and seoul and beijing agreed to cooperate more closely. that is what we hope for, but given there are still delicate diplomatic issues, it might be too early for us to hope all the nontariff barriers can be released. based on my meeting with the

chinese finance minister in the economic dialogue channels the countries have, we hope non-barriers and the restriction on the barriers would be eased as early as possible. ramy: you can catch our full interview with south korea's finance minister on daybreak australia. that is 6:40 p.m. if you are watching in new york. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. inocencio, this is bloomberg. haidi: thanks so much. looking at what is happening around australia, we are watching the central bank. these are comments. what is he -- what will he say? they will react to another stunning out of left field. by .5%, the unemployment rate from the big surge in unemployment. they are catching up to some of the other indicators that have

been seen. this is boosting optimism around the economy, jobs growth and inflation not likely to pull back with the cuts. the increase is still some way off. but he will be taking part in a panel discussion, who we don't have any speech nuts -- notes that we sometimes get here there could be questions on indicators we have been talking about. we have the reserve bank minutes out tomorrow. betty: there is more detail on the ab inbev sales. what we know? paul: this is a unit that has been looking to unload including insurance and once management. -- funds management. the bidding came in 10 days ago. they were told the pitch and range of $4 billion to $5 billion. zero andude aia group

others thought that anz had conditions here they don't want private equity offers are they want to keep the whole unit together and the products to continue to be sold under the anz brand. there is a number of nonconforming offers, some with multiple bids in the hopes one of them will make it through. been quite through this whole process. particularly on the timetable for the office, but we could have another information on what we are expected to do this week. betty: we'll be watching out for that, thank you, paul allen. trading session will bring a new round of earnings, economic numbers including the snapshot of the housing market, fed speak, brexit, all of that could impact trade. su keenan is here with the

jampacked week. betty: the direct -- su: the direct impacts will be the way we closed, the nasdaq the only sign of weak as, but a lot of it we saw. we saw the tech selloff, the workers will say we came up with a low of the day which shows internal strength. let's take a look at what we the big economic data that will be out. it will be the health of the housing market. so far it has been near the strongest sales faith of the decade -- sales pace of a decade. it will be restrained from a two key reports, sales and homes. their new the strongest of a decade or in any signs of we this will be of note on the reports, expected to show strength. at 177, the bloomberg

we see a big picture of the u.s. home supply shrinking. cityhite line is the 20 composite of prices, the blue line is existing sales, probably supply. the supplycross is is the lowest it has been since the real estate bubble of 2008. on the other hand we have real estate prices high in 2013 when it was higher. totight supply could propel revisit the 2013 levels. that is what many strategists are saying. ? tty: what about earnings we have a trio of big names, blackberry, fedex, oracle. these are tech names, so it will be interesting with the outlook is somewhat anything to give a boost or shot in the arm to the tech index. the store with fedex because this is a company that is a bellwether of the economy.

shipping and packaging going, they are of better than 13% year to date. they are up better than 13% year to date. oracle is a key tech stock. it is up significantly year to date, 17%. you are looking at a different time frames, but they will report on the 21st. some 20% going into this past week, they will be able to reclaim the strength in terms of the returns? there is blackberry. this is one of the strongest tech stocks, better than 50% year to date. they will be reporting on the 23rd, doing well with litigation protecting everything. but people have been buying into this stock, what they have to say about litigation and what is ahead will be very key for the way the stock reacts.

haidi: ready for more trump related headlines, it is another beingnd trump means watched by investors. not the focuss he of the fbi investigation now? the lawyer for president trump issued a statement that he is not under a probe for restriction -- obstruction of justice. trump tweeting up the opposite. there will be more on that. we have seen this before when the white house contradicts itself, they parse statements and come to the middle. trump also holding the panamanian president, there will be a lot of fed speak, reserve officers from william dudley, robert kaplan and the vice chair speaking out to move markets. haidi: all right, thanks for

that. u.k. businesses want the economy to be the top priority as brexit talked get underway in brussels. but xavier various and says they may be facing the sweet spot conundrum. what does it mean? this is bloomberg. ♪

♪ haidi: test betty: good morning, i am betty lou. haidi: you are watching daybreak australia. year afterl this tepid inflation numbers are weighing the fed's announcement it would raise rates, looking to unwind that balance sheet. with brexit negotiations underway in brussels, how does that play out with the bond market? let's bring in the global chief

of this bank. great to have you. it is interesting reaction when it came to u.s. treasuries, because for the long-term it was like bond investors had doubts despite how well telegraphed janet yellen was being. >> but they need a particularly good job, and as you said, two rate hikes so far this year, but with the central banks and data mixing, as soon as possible. it has been a brilliant job. now they are focusing on the unit with unwinding the balance sheet and key question, which is , can you unwind the counterbalance without the effects unwinding? isshould work out when it about to kick off, possibly as soon as july or even september

for this unwind to stop. haidi: i want to show this chart, because we have come a long way from the days when we had the historic rate hike from the fed. you can see points for the fed has hiked and the reaction with the 10 year. are the rates going to take the same until we get more central banks around the world not just talking about normalization but deciding to step up? xavier: i think the central banks want to continue to aretain liquidity, and we in normal time which is what i would call the sweet spot conundrum. you continue to see the benefits of counterbalancing. it has not stopped the fed. it has started its production, and the others, bank of japan,

ecb adding more liquidity. at the same time, we see the global economy picking up, more visibly, a lot of synchronicity, emerging markets in the u.s.. so the top lines, the corporations will have cash flows, but showing a lot of liquidity. it makes us nervous that valuations maybe too stretched at one point. haidi: i think everyone is starting to wonder the sustainability as we start moving to unwinding the trillion sheets.lus balance can we unwind to eat? xavier: i think they would like to for rate hike. they want to convey the messages and policy of how quickly they will implement. they also made it clear they

will always have the ability to stay on hold and start -- stop the normalization process if the impact is is to ask significant -- is to significant. giving investors a clear path for the long-term rates is probably the reason why they have never over reacted. not really, it has been well behaved. betty: looking just over in europe now and moving away from the fed, as we mentioned, monday is the start of brexit negotiations. let's bring up the pound chart here. what has been interesting is seeing how not volatile the pound has been. it has been interesting to the the volatility has not been crazy given what we have seen brexit going into the

negotiations. i wonder what that means the fact we can see the trade in tight range. what does it tell you? xavier: for more general comments i would make before we focus on the pound, markets have showed very little volatility. and the look at the vix u.s., the volatility of the s&p it, it is around 10%, and shows that for investors the actual tremendous risk contagion system has clearly receded because we have this cash still and economic growth is picking up. global economy much more resilient -- it makes the global economy much more resilient for the brexit perspective. argue the recent

elections would probably indicate or would probably be translated by investors as a sign of a softer brexit with the tod for the new government hear the message they got during the latest elections. haidi: you know we have been talking about full attila the is extraordinarily low. -- volatility is extraordinarily low. thatave asset classes usually don't rally at the same time. when that kind of liquidity receipts, what do you think? xavier: i think you need to continue to focus on the aspects that reveals. we continue to like u.s. high-yield because we don't see the unwind balance sheet causing any particular shock.

interesting for the bond market is emerging-market there is still some value, everything looks stretched, except local debt where we see currency is just fair. we believe it can go into that against the u.s. dollar. investors can go the extra mile. they can start thinking for the liquidity premiums and looking loansetas like leveraged and infrastructure for the long-term investment horizon. betty: review the dollar by the end of this year? -- where do you see the dollar by the end of this year? xavier: probably a little bit. seen thenkly, we have euro oscillated between 105 and

115, and we don't see any reason to change the trading range. at this point, there could be a because thekness euro is accelerating. one thing we observe is a greater convergence on the macro front between europe and the u.s. even though the fed is moving quickly more than the ecb is or is the, the reality is differential in terms of incoming growth is now declining . so it could be a boost for the euro, and that could continue to 115 at thewards this upper end of the range. betty: ok, thank you so much. hsbc global asset management global chief cio joining us.

one feature on the bloomberg we would like to bring to your attention is the interactive tv function. you will not only be able to watch us live but also see previous interviews like the one we just did. dive into the securities or functions that we talk about. for bloomberg subscribers only. this is bloomberg. ♪

♪ haidi: a quick check of the business flash headlines, australia's biggest insurer is putting more money into global bonds and infrastructure in a bid to get refuge from low yields. they see opportunities in securities outside australia. the head of investment said they are looking for high-quality debt from no financial companies. betty: amazon will try to keep whole foods reputation for

premium quality while cutting process test rices are you they will change products to help with competition from walmart and big-box retailers. it has been in its worst sales slump since going public in 1992. hong kong's central bank said the dollar has served them well and should stay. germans at the city is a small and open economy and the exchange rate is important. they link currency to the u.s. dollar in 1983 when negotiations between beijing and london spurred a capital exit is. betty: and the third cars moving from disney studios topped the american box office. popcorn says the first film got $54 million, enough to knock wonder woman from the top spot in its third week, finally,

right? the superhero got $40 million. it could make $700 million globally.

♪ sydneyit is 8:30 a.m. in , welcome to a brand-new trading week in 30 minutes' time. partly cloudy today, futures showing up nine points at the open. in hong'm betty liu kong where it is 6:30 a.m. let's go to first word news with ramy inocencio in new york. ramy: good to see you in hong kong. we are following secretary of state rex tillerson who has canceled a trip to mexico to resolve the qatar crisis. he has had more than a dozen phone conversations with the gulf and regional leaders in the

first confirmation the u.s. is attempting to mediate. the u.s. is in a delicate situation with saudi arabia and qatar hosting its middle east headquarters. new zealand is open to a free trade agreement and does nothing major issues. the trade minister spoke after talks in washington with robert ross. -- wilbur ross. they want the u.s. to be an important part of achieving that goal. the talks in washington were encouraging. navy divers have found the bodies of several sailors from the stricken destroyer ss -- uss fitzgerald that collided with a japanese container ship over the weekend. the vessels were towed back support. this home of at the seventh fleet. unclearays it is still

if the leaders of the so-called islamic state militant group killed a body raid in syria. someone was supposed to have been in a group of fighters targeted on may 28. he has rarely been seen since appearing in video in 2014 when he talked about tel aviv across the middle east. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am ramy inocencio. this is bloomberg. ♪ betty: thank you so much. finance ministers for south korea and china met for the first time in almost a year, the annual aiib conference in judge you -- in jeju. they agreed to work more closely with each other. >> aiib is held for the first

time outside of china, and of course the location is not specifically chosen in consideration of china and korea relations, but i believe it can be a good sign for improvement in the relations. the chineseing with finance minister, and it lasted longer than planned. there are still some delicate issues between the two countries. i am sure we can boost economic cooperation between the two countries going forward. are tensions easing enough for china to list the current ban on packaged goods? that is what we hope for, so given there are some diplomatic issues, it might be too early for us to hope all the nontariff their ears could be eased right away. but based on my meeting with the

chinese finance minister and the economic dialogue panels the two , we do hopeve nontariff barriers and the restriction on the packaged goods would be eased as early as possible. haslinda: are you concerned trump is renegotiating the free trade agreement between korea and the u.s.? there has been no official request coming from the u.s. government debt, and i understand nafta is currently underway. as you know, korea is a strong advocate of free trade, and we are concerned any type of protectionism. perhaps there are mutual benefits the countries have enjoyed out of the trade group. the benefits have been reciprocal so far. haslinda: can the gdp raised from 2.6%?

if the economy continues as it is today, and a supplementary budget we have submitted is fully implemented, there is a possibility the gdp estimates could be higher than what we expect. given that there are also uncertainties such as the u.s. rate hike and international economic and financial situations, we need to be careful about revising the gdp estimates. haidi: that was our interview with the south korean finance minister. let's talk more about the aiib meeting. haslinda amin did that and joins us. to what extent has the korean economy been hurt by the backlash we saw with the controversy following the employment -- appointment of the minister? haslinda: it has been wide-ranging. -- the rivals dropped 40%

in march. products pretty much filed off non-tariff measures, and companies in particular have been badly hit, sales have declined, but of late the pace of retaliation has somewhat subsided, and that has to do with president mood's election -- moon's election. as you heard from the finance minister, labor relations are not where he wants them to be. the sign they are looking for, according to some people, is this. seeings, if you start streaming website uploading, then relations are ok. look for that, but economic indicators for sure. betty: you have been quite busy .t aiib you spoke to the egyptian

finance minister. what did he say about the egyptian economy which is showing signs of improvement? haslinda: you are right, the egyptian economy is recovering according to the finance minister. confidence in the economy is returning. if you look at the government bond issuance, it is equities in ofh -- as well, billions dollars, but the biggest concern for the egyptian economy is the inflation which is expected to fiscal year.n the here is what the prime minister had to say. >> we need to move fast on bringing down the inflation. if we succeed in the coming six to 12 months, we are under control and in a position to be able to deal with anything. anything less is risky for us. haslinda: if you remember, betty, they raised rates 200 basis points recently, and the

government is planning to remove subsidies for electricity, fuel, which means the people in egypt could be in for tough times ahead. the finance minister said the move is necessary to ensure the economy recovers fast. all right, thank you so much, great interviews from aiib . lots of big news coming up. we will speak to the general electric vice-chairman at the paris air show. we are also hearing from qatar .irways ceo that is at 6:30 a.m. eastern. don't miss our interview with morningstar fund manager of the decade berkowitz. anything he says is line moving. we was her about this at 6:00 a.m. new york, so stay tuned for that. haidi: market moving conversations. target, the kick off

plans for brexit talks as u.k. businesses want the economy first approach. what is expected and at take. this is bloomberg. ♪

♪ haidi: i am haidi lun in sydney. betty: i betty liu in hong kong, you are watching daybreak australia. on $5 is closing in billion worth of workers from two asian carriers with the longest version of the 737 max. the talks for india's spite jack mentari and indonesia's wants 50. they will be released at the paris air show. haidi: malaysia airlines is airing -- nearing a deal with airbus planes, but they have

been haggling over a price. they want details for other parts of the transaction if aning deliberate and order will be placed in paris. they cut back their fleet networks in response to a slump that followed the disasters in 2014. betty: ethiopian airlines is .lanning to buy 10 airbus 350's the order will be announced at the paris air show this week. ethiopian is sub-saharan africa's largest carrier and wants to extend its reach across the continent. it has an order for 12 a350s's and is looking at the boeing triple seven. -- 777. haidi: winglets and other air refinements. it will raise fuel efficiency by 4%. airbus so they will change the

cabin layout allows passengers morsi room. i will be getting more on the information. the boeing ceo will join us from the paris air show. 10:50 in hong kong. and daybreak america, we are hearing from the airbus ceo. stay tuned for those anversations are you betty: lot ahead. brexit negotiations are finally due to start, investors looking for clues how the u.k. will work with the european union as talks begin in brussels. anna edwards is a preview. angie: almost a year after the -- key events on the brexit timeline, talks day-to-day with the brexit minister and the chief negotiator staff starting this week. the session will focus on how

the talks will be structured and moving on to the right of do you citizens living in the u.k. after brexit and those britons living on the continent. and the queen's speech on wednesday, since this party will set out if a legit -- its legislative agenda for the year. the official opening of parliament, the date had to be pushback because of talks with conservatives and the northern irish union party over forming a government because the conservative lost its majority. they need northern islands support -- ireland's support. the rivals labor party leader jeremy corbyn will put an amendment to the queens speech and urge party to back it. the ireland party can get them what they need for their agenda. they will be watching clues on brexit. will they see any change in tax on the joint manufacturing

pledges that they control second trade policy and included the single market? we get a hand on that last week, but brexit talks should prioritize jobs, growth, and prosperity. later on, back to brussels were e.u. leaders will gather. with the formal start of brexit talks, you thought volatility would be high, but the pound has been trading in a tight range. we talked about that earlier with our guest from hsbc. adam haigh also looking into this. what are you reading into this lack of volatility? what do investors expect? adam: it is interesting because it has been a big unknown on investors' radar for some time. we have the latest election with theresa may recently, but the

good negotiations are long and drawn out. there is a multitude of outcomes in terms of whether it goes to a hard or soft result. with plenty of investors having to get through, clearly from the pound and technical point of view, it is about where sterling traits relative to the context of the expanding european economy. the pound is seen to be a poor place to be. we may see some further sterling weakness as the brexit negotiations unfold further. there is lots to find out and information to come out. and global investors are not worried about this. that will u.k. issues be a problem and drag on the global growth, but if you are a sterling trader, you will be watching every headline out of brussels very closely. haidi: msci, it is the fourth

.ime they had been lucky we know not to pay attention to polls and speculations, but are they expecting a decision one way or another? adam: it is a tricky call, heidi, and it is a point across. marginally or say it has been that way for a number of years. when you think it will happen, it gets knocked back. three rejections in recent years so far, but the previous issues around the trading holes and capital controls, changes have been made, so with the decrease in the number of stocks they are expecting and the decreasing number of trading costs that have been significant, so they were split internally last year, now pretty much united.

tomorrow we will see inclusion. victoria is pretty sure we will get it. it is the next move incrementally in china as it opens up and liberalize is its capital markets. haidi: interesting timing. andill be nice for him, they are one of the people we are watching with the asian markets this week. you can get a roundup of the stories you need to get your week going in the addition of bloomberg. you can go to dayb on your available on the bloomberg app. you can customize so you just get news on industries and asset classes you care about. this is bloomberg. ♪ betty: we'll hear more on the special counsel's investigation on donald trump and what his lawyer has to say. why it is introductory. this is bloomberg. ♪

♪ haidi: i am haidi lun in sydney. betty: i'm betty liu in hong kong. you are watching daybreak australia. the most press story on bloomberg at this time is the investigation into alleged russian meddling in the u.s. election, whether president trump is under investigation. lawyerk he says yes, his says no. ramy inocencio has more on this -- another moment of confusion out of the white house. ramy: you see one thing and another. clearly donald trump's lawyer saying, donald trump said one thing on twitter even though sean spicer said we should take these as official statements. his lawyer saying on sunday morning talk shows that trump is

not under investigation. let's go to the twitter that donald trump did put out at the sayinglast week they -- i am being investigated for firing the fbi director by the man who told me to higher the fbi director -- fire the fbi director. he is talking about ron rosenstein. but looking ahead to one of the lawyers, on several media broadcasts this morning, he said the president is not and has not been under investigation for instruction, so contradicting what donald trump treated. he also said the tweet was in response to the five anonymous sources that relate information to the -- were leaked information to the washington post. he said it was a confirmation because twitter had a character limit, so he could not elaborate as much as he should have. he went to another channel

saying that is how we received no notice of investigation or no notice of the special counsel. to the contrary, betty, he has been talking about mr. comey earlier in his testimony, saying he is not under investigation but interestingly on another channel -- i talked about the blitz -- he said he could not read mr. mueller and mr. rosenstein's minds, so he was not sure if donald trump is or is not under investigation. so we don't know. friday, the speech from the deputy attorney general , rod rosenstein, seemed precarious. trump is attacking him again about being investigated. the short answer to this is, yes, donald trump could in fire rod rosenstein. the optics of that in the

following -- and the following could be like nuclear detonation on capitol hill, but in terms of pushback on capitol hill, it is a bipartisan effort. let's remind folks what that tweet -- donald trump saying saying i am being investigated for the firing of the fbi director. but marco rubio, dianne feinstein and others, coming out and say donald trump really can't make this happen. marco rubio saying it will not happen, amy saying it would be a disaster for trump to fire mr. mueller as well as rosenstein. diane feinstein said the president believes he is above the rule of law but he cannot do that. if he thinks he can, he is in for a rude awakening. there is concern on capitol hill.

he can fire one or the other or both of them, and some democrats, they would be the first to come out, saying if either of them or both of them were fired, there is right talks about impeachment proceedings. it has not started yet, democrat staying away from this, trying to let donald trump and republicans figure themselves out, but it is rioting talk they are seeing on capitol hill with the big i word, that is impeachment. haidi: more liquid adventures expected with talks in d.c.. thank you so much for covering that. one feature on bloomberg we like to bring to your attention is the interactive tv function, you can find it at tv . you can watch previous interviews like the one with the south korean finance minister and haslinda amin. you can look at securities on the bloomberg function we talk about and become part of the

conversation by sending us instant messages during shows. this is for subscribers only. check it out at tv . that is almost it for daybreak australia, but that he and yvonne will be in the same place for the next hour. [laughter] yvonne: it has been a long time coming. now you are in new york. we can all have a show together. a lot happening with this. betty: we have known this unit is up for sale, the subject of bidding, westinghouse doesn't want it to happen with the group , theen dane and incj government backed fund. looks like they will go through -- or so.illion for we will see what happens, certainly a huge deal first for toshiba shareholders.

investors would be the key for the green light from the government as well. of inot of people kind the dust, because they've reason that phrase concerns about hoffenheim's ties to china. china, looks like the demand will be in tax for now, but we will see the yen. betty: it will be that, but looking at currency risk, not a lot right now in the chinese currency, the yuan. it has been quite stable. might be part of the reason why our guest leader in daybreak asia saying i -- property are going to soar. i know in hong kong it has already been a huge run-up. people are saying, either direction -- yvonne: maybe the money goes to china. curves might be

relaxed by the government. a lot of questions in the next hour at 8:00 a.m.. plenty to come. this is bloomberg. ♪

♪ >> asian stocks is a unique start to the week. present a macron a healthy majority in france. a year after the brexit vote, negotiations are finally set to begin. the opening skirmishes will be played out in brussels. to stepnt bank pledges up in gains, posting memberships and funds. plus, confusion and contradiction, president trump says he is under investigation. his lawyer says that is not true.