>> boyle faces were pressure as president trump calls for americans to beat the world on energy production. betty: talks in the white house with defense, trade, and more topping the agenda. rio, the top choice for sell more risk upsetting a major customer. betty: takata going to call for bankruptcy amidst the biggest recall in history.

hello from sydney where it is past 8:00 a.m. i am paul allen. we are two hours away from the open from the first major market. su: it is past 6:00, i'm betty liu. we are watching all of the potential market moving event this week. one news event, a big merger, an investment, activist investor dan low from third point targeting u.s. and japanese companies, now putting his sights on a european company, nestle. he is going to have $3 billion -- sayingdominantly they should do other things like sell their state in our riyal. l'oreal.in it is always a pleasure to

have a bit of breaking news to get is underway first thing monday morning. in asia, the story to talk about is oil prices. the questions are reminding test remaining over the debt. we are also having a chat around various commodities with our first guest. he will be in in 10 minutes. julia: let's get a test betty: let's get a quick recap of how we ended friday. pretty mixed right now. onhave been keeping our eye textures, they rebounded. will they go into the week with selloffs that we have seen in the past? lots and lots of news events happening as well as economic numbers. , they in washington

meeting between trump and narendra modi, lots of economic numbers as well, including durable goods. paul: it was a tactic into the end to the u.s. -- tepid the week in the u.s. looking at asia and new zealand, it is off 0.1% for the dollar. the dollar is a little weaker against the u.s. dollar as well. futures are pointing up, three points, flat. the aussie dollar slightly weaker. that new zealand-australia cross rates close to parity. that story will be coming up again. a gain inng a bit of the last session, but there will be questions with the sustainability of that later on with our guest.

now we will get to first word news with ramy. has committed $19 billion to clean up failed banks in one of the wealthiest regions. banks have another lender taking over their assets with $5 billion. the european commission approved the plan, in line with eurozone state data roles. 150 people have been confirmed killed after a fuel tanker exploded in the project profits province. a number of victims will rise higher with local hospitals saying many survivors have extensive burns. that happened on the eve of eid. cia repeatedof the

claims russia interfered in the u.s. presidential election as a part of an attempt to undermine american democracy. he said he could not provide intelligent evidence, but it is there. the white house is playing down russia's involvement, looking into where the trump campaign colluded with the kremlin. the diplomatic crisis is putting pressure on the qatari riyal outside of the central bank's preferred range. that has disrupted offshore markets, leading to a dollar shortage. and there has been given a list of demands, including shutting down al jazeera news network in ties with iran. in asia, thai airways will replace 30 older aircraft over the next five years. they hope that will turn around performances after losses in three of the past four years.

they say it is vital to protect against five -- fuel price volatility. generatione years, aircraft. [indiscernible] this is the way that we have to move forward because it is fueled and efficient. inefficient. this is where we are going to go for this generation . -- generation aircraft. ramy: you can cap that at 8:20 a.m. in sydney. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ thanks. the week ahead on will -- wall street will look at the potential deal, what we call merger monday.

now we have su keenan. what can you tell us? su: dan loeb is a well-known activist investor, calling for strategic infant -- strategic changes. you can see the nasdaq is under pressure. chocolatee many companies have been under pressure from the u.s. consumption and any sugar product has been down as americans turned away from sugar. chocolate companies have been under pressure from thelet's look awat other issues. what we know from the headlines billionut is over 3.5 options, they have 40 million shares. nestle have a market value of $264 billion, so what will be interesting in terms of a target, it will be difficult. but the strategic changes are not getting specific from the

company. we know they have targeted a lot of opportunities, mainly in the u.s. and japanese companies but recently drawn to european opportunities. that is according to the first investment letter. you see the latest chart with nestle. dan loeb, a high-profile hedge fund or in the u.s., generating trading and speculation on monday. betty: you will see the impact monday morning. we have also the impact of a fresh round of economic words. -- reports. su: let's get to that, because the statement phase is more than the first. -- second phase is more than the first. capital the minimum requirements. this was in place after the financial crisis to make sure the banks had enough capital reserves to endure shock.

this had more strategic requirements to see if the banks have enough money to fund buybacks and dividends. in terms of other things, looking at major reports of economic data with durable goods orders, economists. they do say the income will have a continuing trend which is positive to the economy. we have another round of monsanto and nike earnings, and many say they are selling tech shares to restore decade-long trend. it will be a big oak is on growth stocks versus tech stocks, cyclical rotation continuing, or whether tech stocks rebound. not only looking at corporate news and breaking news, but also washington, the agenda. su: we have trump meeting with major world leaders, india's

prime minister and also the head of south korea. a lot of focus will be on the indian meeting. in a bloomberg, looking at foreign equity into india, it has been increasing. that is an interesting chart. u.s. supremethe court. another turn to show you. they will look at u.s. travel ban, adjusting the current trump'sions, allow vision to go forward, or step through the issue? that will grab headlines and impact trading this week. betty: thank you so much. and paul, let's look at what to watch in australia. rio tinto has something. paul: hobson's choice, looking to sell its coal mines up the

road here to the north to yank goal. better the last was even . so rio is going to consider that . have already some holdings. -- may take the money or stick with one of their biggest customers, improving verification in china as well. a lot for them. betty: a big day for crown resorts as well, the trial of 19 staff members, gambling related offenses. that starts today. are we expecting fireworks? paul: the whole thing has been opaque, and the fireworks would be inside the courtroom because the chore -- the trial is

closed. what is at stake is the 19 crown employees, markets the gambling services. cross that line, you could be in serious trouble in china. we may have a verdict later today. crown has been doing what it can to find high-profile lawyers. this is one of the best in china. pharmaceutical companies several years ago. it will be an interesting day for crown. betty: very interesting, and certainly the next step in the ongoing saga. we have a lot more ahead on daybreak australia, president trump meeting with narendra modi. and these of topping the agenda. what will come out. oil fell for a

fifth week, but is there an upside for opec? this is bloomberg. ♪

♪ betty: good morning, i am betty lou in new york. paul: i am paul allen in sydney. you are watching daybreak australia. oil spill stratasys week, with concern from the rising production in the u.s. in libya that are taking down the opec cuts. let's discuss the outlook with this man from the bank of australia. he is joining us in melbourne. we did see a little bit of balance on the oil price, but all of the expectation says that

will be short-lived. where do you see it having? -- heading? >> we see the pressure in the supply and nigerian supply adding 5% or 6% to global supply since april, and that has put downward pressure. u.s. supply is added to that, so we can see why will prices are now the low 40's. our positive view in the next six months is based on what opec can do and opec countries based on this deal. if they cut straight on exports, we can see potentials for prices lifting. what we saw was these opec countries would be having stockpiles instead of concentrating on production cuts and export cuts. if we see that strategy move to the export focus, we can see oil

prices moving up to the $50 or $60 a barrel range again. paul: can you explain the idea more, because it seems counterintuitive if opec focuses on exports, 1000 make the price go even further? -- want that make the price goes even further? vivek: it was curtailing 1.8% of the supply for the first half of this year, but that is being extended to march. what made that deal with executives, by the deal month they were cutting production but not exports. we see that in u.s. import data which remains healthy from opec countries. if they concentrate on opec as well, exports, when you see as the production cost go through the global market. supply sidelines. we can see potential for a short

squeeze. paul: can you see potential risks here? it seems to be a full setting in the -- false setting in the middle east, and going up between saudi arabia and qatar, the kind of risk with raising the geopolitical temperature? vivek: that definitely has lifted geopolitical tension in the region. in terms of historically what has happened as we are seeing political risks always rise. the issue with qatar reminds us of the risk mainly between saudi arabia and iran. this split is based on religious divide. what we have seen the last 30 years as being a shared economic interest has trounced the individual political agenda. as long as that is the case,

what will happen in qatar will be a lot of pressure on qatar for saudi arabia. in terms of the deal, it is clear. betty: very quickly, on the u.s. side of things, let me pull up a viewers, our bloomberg #btv 407. we have been looking at this oil slump. sometimes you see wti crude, it is in direct inverse correlation with how much production has risen in the u.s. and how much export as are presented by the yellow line. so one big factor is the u.s. no matter what opec does, the effect could be? vivek: in terms of the u.s. story, absolutely.

the longer-term story has been u.s. shale. surprising how much supply they have added as opec and non-opec countries with belonged -- beyond $50 a barrel. if these countries are targeting price but the larger cost of u.s. shale is lower than that. you are defeating more shared. how can that strategy be sustainable? we have doubts. with the u.s. story, we are looking for $40 or $45 a barrel. betty: i got your point. i want to move on quickly to iron ore. you actually see a short-term rebound in iron ore prices, even though we have seen inventories in china hitting yet another record, houses: for another

price. calling fore another price. vivek: mid 2018, prices falling to $45. the reason we are optimistic in the short run is the opening of a steel mill. the steel sector is very keen to the story. they are very reactive and competitive. what we have seen in the behavior, they will do what they can free u.s. output. that's what they can for u.s. output. that will push up oil demand in the short run and have higher iron ore prices. we saw this already in six months. betty: thank you so much, the cba mining associate director. don't forget to check out the interactive tv function, because you will not only be able to

watch us live but also see previous interviews. also dive into securities are bloomberg functions. this is for bloomberg subscribers only. this is bloomberg. ♪

♪ thai airways is revamping its fleet to spread its wings across asia. they will get 100 new planes from airbus and boeing hitting 30 in the next five years. -- including 30 in the next five years. >> we have 100 aircraft right now, so in the next five years we want to replace the old ones, almost 30 aircraft. that will make of the portfolio of our airlines 100%. we will say that for the moment.

then at the same time, so many competitions in the world, we are very good the factor is very high. they are quite confident in the future we can sell it. the company dish and prophets might increase, but if we do it better, we can expand beyond their grasp. reporter: the airlines are buying new fuel efficient models. are you saying the same? >> all of them will be new generation aircraft, airbus or boeing. this is the way we have to move forward to be fuel efficient. now. this is subject to volatility, so we want to go slow for the new generation aircraft.

reporter: so what is the future for your a 380's? >> it is still a significant part of our portfolio. a lot of destinations we fly [indiscernible] 380 can accommodate this strategy. reporter: so will you get 747, will you tire them completely? in five years, we are taking them out and replacing them with new generation aircraft. reporter: the big plan for thai currently, how about thai cargo? partly it is agriculture product, so it is not worth the aircraft cargo. for the airline to really be ,ble to survive in the future

the revenue is so important. 40%of the areas we know, will come to this area, asia-pacific. there will be more competition in flying. but we look at the opportunity. there will be more planes to repair. we will look areas at, but eac and thailand. reporter: there is a huge competitor in singapore. are you saying you are prepared to take them on? needs thane more capacity available these days. there will be 600 planes each area 600 come to this alone. we are expecting to grow 10% in this area all the way. reporter: when the long-term, is there a case for thai to be

[indiscernible] >> government is holding 51% of the share right now. this is part of the way forward.

paul: it is a: 30 a.m. in sydney, beautiful perfect winter's morning where markets open in 90 minutes' time. it is calm in the harbor. i am paul allen in sydney. betty: it looks too pretty to be winter. i'm here in new york where it is a hot summer. it is daybreak australia. let's get to first word news with ramy inocencio. will crown resort staff appear in court charged with illegally promoting gambling. they were promoting to toeigners, getting citizens

gamble. 19 individuals including the head of international operations will go on trial in july. they face three years in jail if convicted. britain is turning to market -- emerging markets. the statement from the prime minister's office shows improved access to u.k. markets for the harbor countries. -- poorer countries. they, sierra leone, haiti. bangladesh. the world's second-largest frommy stopped buying coal pyongyang back in february in response to the nuclear program. china exports to north korea rose 33%. they provide 90% of the north's energy supply. 100 people are still missing after a landslide in southwestern china.

homes ande is held 62 a hotel. bodies were found, but many people remain unaccounted for. the government estimates 8 million cubic meters of earth and rock fell. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ramy inocencio, this is bloomberg. wel: let's get more on what should be watching as treating gets underway in asia for the week. reporter adam haigh. we are almost halfway through the australian equities, but a notable underperformer. why did it do so poorly? adam: one of the big reasons they have been underperforming as financials have been trading week lately, there has been a lot of news. extra regulating risk. it is still coming under pressure.

performe managed to globally low. but they are still pretty weak very clear that spending future decisions on the big-ticket items are starting to get delayed in the australian economy. but the aussies are holding on reasonably well. international investors willing to keep bringing money over here. appetite still for australian debt as well on a global interest rate environment. , in theou know, adam u.k., they have this thing on u.k. bonds. why are they recommending investors turned bearish now? adam: let's bring up this bloomberg terminal chart off the yields, the 10-year gilts. -- yields. you see yield again pushing back

to 2%. he does that really. gold is overvalued. any strength he sees he says that. the context is the u.k. physical features are uncertain. brexit negotiations continue with theresa may as recently as yesterday when i interviewed her. the brexit secretary, it is very tricky for investors. you can easily see the 10 year yield push back up. for him, that is where he sees it. betty: thank you so much. a look at the market ahead including europe. the fed will vote on the new republican health care bill company this week. the bill may be in jeopardy again. joining to discuss this is ross krasny in washington.

so is this bill going to get -- oror are there enough i guess opposition as we mentioned it might go -- might not go through? >> we can identify five or 10 republican senators that one changes to the bill. whether they will push against mitch mcconnell's measure is uncertain. there is some suggestion mcconnell left the draft of the measure which will allow senators to make demands, have been met, then see the constituents have an impact on the legislation. it is too early to say the bill cannot pass. we expect there will be procedural votes starting on wednesday. we will know more of that point. betty: we have another big issue take a look at, which is the travel ban.

what are we likely to hear from the court? the last day for the supreme court to issue a decision for the current term, but the travel ban is on a slightly different track. that decision could come any time. the supreme court will say yes, we will hear arguments on the travel ban in our new session which starts in october. say the current ban or lift the current ban, which would allow it to go ahead in the interim. we would have to know how the court will act on that. and we have to know who is voting for what. court doesn't give them result president trump wants, he seems utterly determined to push this through. what would be the next move?

we have seen two versions already in the five months he has been in office, so i think if this were not chosen, the white house try again. what form might that take? two i think they have had executive orders, maybe the third time is the charm to rewrite the order or to change the number of countries affected , or which countries are infected at the moment. these are all problem -- muslim majority countries that have led from the lower courts to assume this is unconstitutional. so the administration were to

just start from scratch, they might have another chance. paul: thank you very much for joining us from d.c. president trump calls india a true friend and talk with narendra modi. is next. this is bloomberg. ♪

♪ paul: i am paul allen in sydney. betty: i am betty liu in new york. president trump meets the indian prime minister narendra modi on monday, welcoming what he calls a true friend to the white house. pretty kind words. they have significant differences. --haps remy innocence you

ramy inocencio, you can talk about this. ramy: people will be steering away from the differences. it is a fundamental difference between the leaders. , the economyhing and the defense with regards to pakistan and the rising deteriorating situation in southeast asia and china. talking about mr. modi here in the united states, he has two dozen executives, ceo's of major companies. ceo's, like sender pichai of google. bezos, ao with jeff lot of bigwigs. something to go into the bloomberg terminal, because this is the trade relationship. this sets the stage.

we have come to the right hand side, china is the biggest trade partner with india $72 billion here. with you leave that here and show the deals that could happen. they are in defense. one has to deal with the drawings -- the drones that a california judge want to talk about. patrol jones unarmed right now that will try to get a deal with armed predator drones, 100 of those. another issue is with f-16 fighter jets from lockheed totin doing production produce f-16 within india itself. not sure if that will happen, but with the jets, that is done. we look ahead to tomorrow. they will both meet tomorrow.

some back-and-forth and forth, and is not just mr. trump that loves twitter, mr. modi does as well. he has 19 million followers. for thethank you @potus warm welcome. looking forward to my warm welcome. mr. trump and looking forward to welcoming you. meet vice president mike pence and the secretaries of defense. a whole slew of things. but will there be a breakthrough, probably not? betty: don't they ever pick up a phone these days? ramy: we all tweet. betty: thank you so much. let's stay with this and bring you the macro economist who specializes in china and india and emerging markets. i want to bring in china to this conversation because i don't

want to take this too far, but the enemy of my enemy is my friend, and i wonder whether trump can leverage his friendship with india to get china to do more of what he wants. both he and modi have china in their sites. right, and it is something fine mr. trump needs to strike fear in his relations with india. north korea has seen very intense focus. they want chinese support. parties, modi and trump, want to avoid, if any impression of combining anything what appears to be an anti-chinese alliance. that is important. they are concerned about the rise of china, increasingly strong and more assertive china, particularly from india's perspective, the way that plays

into pakistan where china looked at pakistan. that making a more assertive pakistan which is a core issue for mr. modi. betty: we know a big issue has been the u.s. trade deficit with china, but when you look at the i want our viewers to look at bloomberg, the trade deficit with india has been on a steady climb higher for the last 20 years. it may not be as large as the the with china, but how is sentiment? richard: i would see it as half full rather than half empty. 38 -- if you look at the last three years, they have been steady around $38 billion with the latest data for 2016.

you can put that in context for your viewers. with china it is about $300 billion, so it is 10 times smaller. there is further angering around that germany and mexico are twice as big. i don't think this will be a key area for trump to focus on compared to yawning trade deficits with china. from thet the comments trade department, goods and services arresting to 16% over the last year, but that is a healthy growth rate. if i was mr. modi, those are factoids i would be bringing to the table, saying we are a key export market. betty: and certainly you are correct the numbers, the numbers are kind of related with how much noise and criticism goes

into that. on the other side, personal relationship. we know that modi and obama were very close, got along well. what are the personal chemistries between trump and modi? richard: he will be interesting to see how they get along. what we know is that obama and modi struck out warm relationship bordering on a bromance. they will do well to replicate that, but there should be common ground between the two. as you were highlighting in your introductory piece, mr. trump has professed admiration. ,ast year, during his campaign he kept one of mr. modi's campaign slogans and was speaking hindi, which was a first. back, theher populist, nationalist that they

seem to be addicted to twitter, i think the two should get along pretty well. it will be difficult to replicate that. one last point is interesting. you? can i interrupt can i just interrupt you before we make that last point resort we have breaking news, takata the trouble airbag maker has decided to file for bankruptcy protection. this is according to nhk. this has been widely expected to happen friday or today, so have it monday morning. takata filing for bankruptcy bring more details as we get them. sorry to interrupt you. one final point to make a narendra modi. richard: i don't think there is a formal press conference

scheduled. that is unusual. it will be somewhat lower key for mr. modi that his previous visits. last time he actually addressed a joint session of congress which was a tremendous signal. nothing headline grabbing on trumprip, so i think mr. doesn't mind sharing the limelight with others. upl: we saw him packing madison square garden last time. visas whichhe h-1b narendra modi will be pushing for, so people can continue working in the u.s., but given energy,p's strident what will he get? richard: we will see, but this for india.a crisis looking at data on the h-1b the south, something like two thirds

went to india. 160,000 indian nationals working on these these us. -- visas. it is crucial for the tech industry. and for u.s. tech companies as well. modi, this- for mr. means to be on the table whether the americans want to discuss it or not. this is a lose lose for india and the u.s. with companies like you know facebook. they will lose as much in consulting assistance and other stuff with the tightening on this vision. area where they might see eye is the one belt, one road initiative by china, seeming lukewarm about that. any headlines? richard: i don't think we will see any.

both countries at this point don't want to give any impression of combining what could be an anti-chinese alliance. as you say, relatively lukewarm on the one belt, one road initiative. they did not send a representative to the recent summit in beijing. u.s. only spent -- sent junior representation. pakistan andsis is the economic corridor there. that is a hot button issue for india. we have to infrastructure projects going into disputed territories, but more generally pakistan and the chinese getting a more aggressive assertive pakistan which india is keen to push back on. pressing see mr. modi support from the u.s. on this

try to get it to take a harder stance, but this will not get much in the u.s. on that front. the relationship between india and pakistan is tense at the best. we have seen shooting wars. any potential risks or flash points that might come up for discussion? richard: you have got the issue of broader defense coordination between the two, the u.s. and india. your going to see the u.s. pretty leery making headlines grabbing announcements that could irritate the chinese. i think where you will see a clear win and the scope for tremendous gains going forward is commercial contracts in the defense sector, one of the key backdrops to the summit is the news that lockheed martin and the tartaric group are moving f-16rd with plans to build

fighter jets in india. the shows the scale for win-win relationships between the two countries moving forward. mr. modi will be in that moving mr. trumpnd i think will be supporting u.s. jobs, the technology of design. he will be safeguarded and kept in the u.s. it will be a key focus at the summit. right, thank you very much for joining us on daybreak australia. you can get around it of the stories you need to know to get your day going in daybreak asia. bloomberg subscribers can go to day be go. this is also on mobile in the anywhere. you can get news on industries you care about. this is bloomberg. ♪

♪ paul: that is almost it for daybreak australia. we have more with daybreak asia. let's take a look at what is coming up over the next two hours. yvonne, we have been waiting for a long time. looks like we have confirmation to, has filed for bankruptcy. -- terra-cotta has filed for bankruptcy. yvonne: we will hear from the company i takeover offer as well coming from key safety people. this could pave the way for the sale. a big wild card remains, who will take the brunt of responsibility when it comes to global recalls? one of the most complicated in the automotive history? takata not off the hook after this sale. we have a lot of debate covering

the cost of this $5 billion, some of the automotive experts. $1.6 billion,e in so who will cover the shortfall? betty: we will be following that story is on. -- that story, yvonne. and we have someone joining us, the managing director. a lot of use what this means -- , for thet this means company. they say the company is too big to sell in china. the government has a vested interest to make sure the company continues. they are not making as many offshore sales as before, they will continue business as usual. morgan's we have j.p. asset management strategist. we will have more on what oil

will mean for the fed cycle of rate hiking and the asian markets heading this week. that

♪ a flatres pointing to start in asia, global stocks near all-time highs. takata will file bankruptcy in japan, then the united states. toshiba hopes to reach agreement on its chip sale by tuesday.