♪ >> the united nation's sanctions on north korea. confident they will bring the nuclear program to a halt. regional tensions in manila. they say beijing's actions in the south china sea have you wrote it trust. >> gathering for the annual conference. m&a and strengthening the agenda.

>> it is just fast 8:00 a.m. this is "daybreak: australia." after 6:00 p.m. on sunday evening in new york. we will look at how the action on wall street will play into the trading day. a reminder for our viewers in asia how the jobs report came in economists estimated. all parts of the economy are doing better on the jobs front, including areas that economists thought were left behind. they seem to be coming back. that is why you saw markets higher on friday. you can see closing out the week, the tao of 66 points, s&p higher by .2%.

very key earnings to watch out for. it is not earnings i want to look at. let's hop into my bloomberg. we are looking at the dollar, which has been on a percentage decline. a lot say that expectations for a rate hike are fading. look at this click pop in the dollar. many wonder if this is based on the economic data or finally a reversal of the long trend of or therer falling, have been a lot of dollar shorts collecting because of the decline in the dollar. we will see if the trading will indicate with the greenback is headed. that is the effect of the trade going on in asia this morning. betty: it is the reverse -- haidi: the reverse situation for the dollar.

potentially seeing a stumbling point for the emerging markets equity pushing higher. a lot of that is fed expectations. we are getting a lot of said speak this week. -- fed speak this week. it is risk on taking the cue from the wall street session on friday. looking to open higher by .4%. 29, aussie dollar at .79 still down 9% on the year, but the dollar gaining on all g10 rivals and that space. .ew zealand, down we do have the our vm with the policy decision on thursday with no change expected on monetary policy out of new zealand. a quick look at interest from safe haven. .1%.down by

we have a meeting in abu dhabi between the russians and the saudis and non-opec members talking about compliance. it is a platform for the saudis and the russians to pressure. the question is how much more upside resilient you get in the crude price. iron ore lies extensive 1%. we saw the miners driving that higher. and good morning. general deputy attorney says the special counsel he appointed to probe alleged russian meddling in the 2016 election is not a mere fishing expedition. findsed if robert mueller evidence of criminality, he can pursue it further.

venezuela claims to have defeated a u.s.-backed attack on a army base in a southern city. the government says several people were arrested after social media showed images of soldiers declaring rebellion. independent observers say the story echoes an alleged attack on another base earlier this year. foreign deposits in a bank in fall further. some are refusing to rollover holdings because of the qatar saudi-led diplomatic isolation. they are concerned they could face repercussions from their government qatar to continue to do business with --business with qatar after ties were cut on june 5. of000 alleged breaches alleged laundering and terror financing laws. he says he remains committed to the job.

failing tosed of monitor deposits. he says faulty software was blamed and the authorities were informed as soon as possible. the un security council voted for to have sanctions on north korea in response to the recent icbm test. or $1cut exports by 1/3 billion a year. it will punish some of the biggest companies and cap the number of citizens working abroad at current levels. news 24 hours a day powered by 27 hundred journalists and analysts in 120 countries, this is bloomberg. haidi: north korea -- betty: north korea was on the agenda. international correspondent was at this meeting. what was the reaction among the delegates on north korea?

the senses that the un security council did what it needed to do over the weekend. foreign minister's issued a statement calling the missile launches a grave concern and a threat to peace and stability, not only in the region but the world. reaction from china said it is confident that the sanctions will eliminate north korea's nuclear program. they are confident that those sanctions will bring north korea to the negotiating table. a note of caution, at the sanctions may escalate tensions in the korean peninsula and put it at a critical stage. china has maintained that the nuclear is asian of the -- the enuclearizatio of the korean peninsulan must be done through diplomatic means.

agreement those sanctions could not be implemented. china holds the veto power in the un security council. china's agreement to the sanctions reflect that china understands the gravity of a pyongyang nuclear threat. the question is if those threats will work. remember that this is the third set of sanctions imposed by the u.n. security council in 18 months. i put the question to the australian finance foreign minister over the weekend. listen to what she had to say. a step in theinly right direction. the united states has been upling on all nations to hold the un security council resolution on sanctions. overnight, we have seen great progress, not only on the

permanent members of the security council, unanimous on this point, but they are extensive sanctions. there seems to be a lot of confidence among be international community and the delegates here at the meeting that those sanctions will work. haidi: there were bilateral talks. did anything come out of that meeting? the meeting was not privy to that meeting, but we were told that the chinese foreign minister and his counterpart in the sanctionsged and for north korea not to carry on with the missile launches. we have no indication of how north korea reacted to it.

what is interesting is that he southto the u.s. and korea, encouraging them not to escalate tensions with north korea. he said negotiations and talks are key. heads will-- calm prevail. it is about finding a solution earization issue. secretary tillerson and his russian counterpart, sergey avrov, those talks come amid background of worsening relations between the two countries. we know that syria was discussed. rex tillerson has come out to say that he would like russia to put pressure on syria. tillerson has said he does not see a future in bashar al-assad continuing to govern. we will see what transpires, what that leads to in the end.

that. thank you for a lot at stake. setting up for another week of heightened geopolitical risk for markets. mining hotshots in kalgoorlie for the annual conference. aul, take us through the agenda. what are we watching for? aul: this is happening in kalgoorlie, australia's unofficial gold-mining capital. we have three days of talks and networking. there is a bit more representation from the services industry in the 2000 delegates we have. the backdrop is rising commodity prices, particularly iron ore. most of the miners will have some connection to gold, which has shown some strength since

december. the gold price in australian dollars is off of tony 16 highs hasks to what is being -- been going on with the aussie dollar. we watch the deals end of the conference. australia's gold miners are cached up looking for acquisitions. the top 10 have about one point 4 billion dollars in cash. bloomberg was running a story about how some of them might be looking to the u.s. and canada for a few acquisitions. i am sure we will hear more about that in the next couple of days, and in the next couple of hours. northern star, the number three coming up, will be 8:30 hong kong time. we will have an exclusive with the former president mr. zoellick. at 11:10out the guests hong kong time, bob vessey.

plan to hear in the cold space it is a big day in kalgoorlie. that is not something that you get to hear very often. haidi: big names, looking forward to it. we will be getting more from their little later on. the scramble to secure lithium canada, -- in australia, and the oil race to the middle east. jobs data beat forecasts for july, what that means for the fed and their tightening timeline. this is bloomberg. ♪

good morning. i am betty liu in new york. in sydney. haidi lun the third quarter gdp growth above 2.5%, but the question is

is it enough to translate to inflation and support another fed rate hike. we are here with analysis. does this mean that wage growth, does this mean inflation? >> i have all of the answers right here. i will start by giving you the numbers. 200-9000 on payroll was above the forecast of 109,000. july headline, stronger when you add in the jobs and provision. job unemployment down. people are coming back into the labor force, that shows confidence. they are seeing signs there are jobs available. are 209. bars the three-month living average upthe green line, 195,000, 15,000 from where it was. this is the u.s. unemployment

rate dropping to 4.3%. bloomberg intelligence is looking for 2.5% growth in the second half. it is still far from the 3% or 4% donald trump said he would hit in his administration. the man who might be the next fed chair was on bloomberg television. >> we need to get rid of the regulation that is bogging down industry. we need to televise companies to invest in america. we are committed to doing it and feel confident we could get that done between now and the end of the year. y cohn also acknowledges not bad but not accelerating. now we turn to the u.s. cpi report.

deflator is cutting down to 1.5%, pulling away from 2%. the cpi, the companion inflation report moved in that direction. bill gross was on after the jobs report. he says that he does not think that the fed is going to make the next rate hike this year unless, and until, inflation gets back to the 2% target. haidi: stay with us. i want to bring into the conversation chris weston. good morning. happy monday. answer this question. is this reversal a persistent one? does it move the needle for you when it comes to fed expectations? not.: absolutely if you look at the fed funds future for january, giving us a

fairly good guide on the pricing . for the december meeting, that has been stuck at 126 for seven days. 10 basis points or a 14% chance of a december hike. it did not move after we saw the good relative to expectations payrolls report. we only saw a 2 basis point increase in real you. it is moving very modestly higher after the payrolls number . we saw the biggest move in the dollar index this year, one of the biggest. that screams the positioning. the market has been so bearish on the dollar. an absolute position for the traders report. i think that just that little bit of good news with wages, 10 basis points above expectations, headline jobs creation slightly better, but they didn't need a lot to move the dial. the moment that they think this is a short recovery rally within

a bearish trend, but they say let's listen to what dudley fleet says this weekend if we get a cpi number 1.9% or 2% or above. then, perhaps, it becomes something a bit more tangible. betty: need to see more evidence and more sentiment. chris, i want to pull up a chart for our viewers on the bloomberg. 491. chart g #btv it shows how long a bear market cycle is for the dollar. if you look back to the 1980's, it is on average 10 years the 2000's.k in the early of course, relatively speaking, we are the green.. -- green dot. it shows the beginning of the trend, the decline in the dollar. whether we are headed to another bear market cycle. do believe if the evidence is

that there is trend will continue could we possibly see one as long as another decade long decline in the dollar? well, pretty much got my chopping block. it depends on the euro contribution to the dollar index. on the euroull longer-term. there are risks around holding the euro dollar long position. then we go to the jackson hole symposium and mario draghi looking at the prospect of becoming more concerned. he was not concerned recently, buyng us the green light to euros. there might be a risk. he came out a number of years ago saying a 10% increase in a trade weighted basis in the euro will subtract 40 basis points or 50 basis points from inflation in europe. that is something we need to

consider carefully. while inflation is lacking in so many of these countries. growth in europe will continue to be above trend and inflation expectation should not be too bad. positioning is stretched, the prospect of it becoming more stretched. i remain a euro-dollar bull, and i think longer-term there is done inside -- downside risk to the dollar. this has toin what do with fundamentals. the european central bank is a long way from hiking rates. i know that mario draghi will be in jackson hole. i will be there covering it. three years ago he open the door to quantitative easing making bond purchases. people are thinking half, three years later he is getting ready to tell us he is done. he is going to start tapering off. inflation is low in the eurozone. they aren't having success in getting their inflation up.

japan can't go anywhere with their balance sheet. the fed made it clear they will start unwinding. how does that make it bullish on the euro and bearish on the dollar? i think that you have to look at the longer-term valuation metrics like purchasing power parity which puts the euro was overvalued in the dollar somewhat undervalued. we all see that for a longer time. morgan stanley recently came out with a note suggesting the longer term fed value on 1.33.ollar is around we need the catalyst to do so. the market has been pessimistic for a while on rate hikes. we profit out of the dollar. the trump trade has come out quite clearly. we are pricing in just over one hike. rate hikes are not being priced

in. balance sheets are probably the key for the moment. the fed will not start normalizing in september when the ecb will look to curb the upside or the balance sheet expansion in the new year. for me, longer-term, in euro-dollar, what we're seeing with the mention that they will taper, with the mention we are getting better growth in europe, seeing the euro-dollar revert back to longer-term fundamentals, which are back up. two market strategist coming to us from melbourne. kathleen hays joined in the conversation. or to come on bloomberg daybreak australia. this is bloomberg. ♪

betty: a check on the latest

headlines, toshiba has taken i stab at western digital saying they had no right to do chip production crucial to both companies. the latest active concerns a new facility. to shiva said it will be built with no input from western digital cutting the company all from new technology. they had a stake in the venture when they bought to shiva partner sandisk. is beginning to reap the benefits of a five-year $3.7 billion investment in technology. the biggest bank is seeing significant savings because new customers -- acquiring new customers did surely is cheaper. he admits that alibaba is a competitor. >> our culture is becoming a little more startup like. there are formidable competitors. one of the advantages that we have, any of the platform companies of the world have, is

that the cost of customer acquisition is low. you are sitting on a massive full of hundreds of millions of customers who will who knew that phones would start doing everything? entertaining us, getting us back on track and finding us dates. phones really have changed. so why hasn't the way we pay for them? introducing xfinity mobile. you only pay for data and can easily switch between pay per gig and unlimited. no one else lets you do that. see how much you can save when you choose by the gig or unlimited. call or go to xfinitymobile.com. xfinity mobile. it's a new kind of network, designed to save you money.

haidi: markets open for the week in 90 minutes.

futures pointing the positivity points.pen, of 24 a beautiful day here in sydney. 6:30 p.m. in new york. you are watching daybreak australia. is confidentchina new u.n. sanctions will bring north korea to the negotiating table and and the drive for nuclear weapons and ballistic missiles. beijing is urging pyongyang to react calmly, curbing the exports of coal, iron, and seafood. a stockpile of international cash rising further above the $3 trillion mark. 3.0 $5sts reserve a trillion about a trillion dollars from june. a rising trend from january's

depreciation,an tighter capital controls, and better than expected growth. most banks are planning to raise funds. most have cured government permission and most have started raising capital. they must find $17 billion to meet requirements which come into effect march 2019. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. haidi: north korea was front and center at the meeting in manila. the u.s., china, japan, and south korea welcoming tough sanctions against the country against its nuclear weapons and ballistics programs. australia was saying the restrictions were the right response. the biggest risks to global stability. i think it would be the

slow and uneven economic growth around the globe. we are seeing that economic growth, or the lack of it, is leading to instability and a number of areas. i have been speaking to people around the world in recent months. so often, one of the drivers of instability, one of the drivers of extremism, one of the drivers of terrorism is lack of economic opportunity. we haven't seen the growth we 2008oped prior to the global financial crisis, but slow economic growth is one of the greatest drivers of instability. >> some might say that north korea is causing instability with the launch of 2 ballistic missiles.

the un security council has responded with the toughest sanctions yet. will they be successful? in the rightep direction. the united states has been calling on all nations to uphold the un security council resolution on sanctions. overnight, we have seen great progress, not only on the permanent members of the security council who are butimous on this point, they are extensive sanctions, including the banning of exports iron, andron ore, seafood. that would affect north korea's ability to fund its programs, but also the restriction on foreign workers. it again with have an impact on north korea's ability to continue with these dangerous and provocative ballistic missile tests. these sanctions are the third

set in 18 months. what makes you so sure they will work? north korea has shown to be resilient to all these sanctions. >> ultimately, the north korean regime must focus on the needs of its impoverished people. we have been urging north korea to abide by the international laws. by the un security council resolutions that prevent north ballistic pursuing missiles and nuclear weapons programs. the activities are illegal. focusing on improving the lives of the impoverished people of north korea, these sanctions in addition to those imposed in the past, the message is clear. all five of the permanent members including china and russia are determined to prevent

north korea from continuing down this path. we will see how effective they are. they have only just been announced. we must maintain pressure on north korea to change its behavior. it is a risk to the region and a global threat. >> there is a sense that the global community is running out of options to deal with north korea. is it safe to say that america's nonproliferation policy has failed? is the not think that case. i think we have seen progress. north korea's ability to carry out the tests has increased and the frequency of the tests has increased. now, we are seeing a united effort from the key five in particular, a unanimous un security council resolution that further sanctions is a positive step. we must prevent north korea from becoming a nuclear empowered

nation. nuclear of another state to exist is unacceptable. other nations would feel they to gainve no option but nuclear weapons as a defense. it is very important that we continue to work collectively and ensure that the sanctions are not only agreed but implemented universally. using force to neutralize the threat and option? the united states has maintained all options are on the table. worsty, that would be the of a series of bad options. what we are looking to do is ensure that all nations abide by the un security council resolution on sanctions and implement them universally. hopefully, to an

opportunity for dialogue with north korea. haidi: that was the australian foreign minister speaking. let's get an update on the markets setting up on the start of this brand-new trading week in new zealand. a weaker start. .1%.by we are going into a week that will yield a monetary decision from the bank of new zealand. they are not expected to move on rates. the kiwi dollar .7414. 9% this year.wn it upset when it comes to some of the asian currencies. points at the open. we will get more on the cbo story. the cbo ceo says he plans a stand that role. they allegedly breached

financing antiterrorism laws. this eeo saying that this could damage the re reputation of australian lenders. largely unchanged. betty: it looks like the greenback, the short spike in the dollar, how that is affecting trade. pretty much unchanged against the yen. the pound is also slightly weaker, as we heard from the boe. thatightening path, seems to be pulling back a little. the yield on the 10-year spiking sawhtly, not as much as we with the dollar. finishing on friday with the equity market. pretty much bullish through this session after the jobs report on

friday. the better than estimated jobs report. that leaves the week ahead promising more headlines, more economic numbers dominating the agenda. even as donald trump is in bedminster vacationing, he promises it is a working vacation, so we are likely to get more headlines on the politics front. >> earnings mostly positive. 72% have been positive surprises. 18% negative, the rest no suppresses. we have disney reporting on the eighth of with a 3% year to da te. it has been relatively flat. priceline up. they also report on the8. 9th.report on the we also have --

10th, thet on the third 3-d graphics processor and related software. softbank reports on the seventh, glencore on the 10th. they are one of the strong performers up to date. one other aspect that is 3994.sting is g #btv let's talk about momentum. we talk about record levels, but are the stocks as good as they appear? the white line is the s&p 500 index. the yellow line pointing negative as the s&p goes flat is between the advanced decline line in stocks that have declined failing to move past the prior year to date peaks. are we seeing a diversion where the s&p goes negative and goes flat?

weight watchers blowout earnings. the stock was up 15%. aside from the fact that oprah winfrey is a huge stakeholder, let's listen to why the stock is doing well. has been investments in technology, investments in the member experience, a focus on products, and certainly the partnership with oprah. , a 10% owner took a stake in 2015. they say that it is beyond that. betty: thank you. another earnings. berkshire hathaway came out with their results. finding it hard to grind out higher profits even while sitting on a $100 billion in cash. .hat's right, count them, baby

we will find out why, next. this is bloomberg. ♪

haidi: i am haidi lun in sydney. in newi am betty liu york. berkshire hathaway finding it hard to grind out higher profits. that is thanks two slumping results. here to break it down in seattle , covering berkshire hathaway and warren buffett and a longtime investor in berkshire hathaway, goes to the meeting every year in omaha, tom russo. berkshire hathaway is 12% of the total holdings. let's break down the numbers first with you. the insurance unit was what dragged down the profit. what happened? >> like you said, there were two things going on.

insurance businesses had a tough quarter. most of the problems as geico and berkshire's namesake. there were a variety of reasons for that. one of them was forex. one was a weird accounting charge on the large contracts they do with other insurers. resultsthe insurance which weighed heavily on the operating earnings. you saw a lot of berkshire's other businesses like the railroad, energy is mrs., manufacturers did that are in the quarter. it is a mixed result. betty: how do you feel about these results? we have been talking about berkshire for 30 years. minimalu get is a amount of agency cost. he runs the business for the long term intrinsic value and hoot about quarterly

hits or mrs.. misses. -- hits overr it means nothing at berkshire hathaway. geico had the great success of one million policy holders added to their book of business. the reason they were able to add is holdingolders back from underwriting the private car business. berkshire picked up that business. it cost them the first year, but for the long-term they built a tremendous amount of present value. betty: that is very well known about warren. i know a lot of long-term investors respect the fact that he is such a long-term investor. quarter by quarter and

year by year is meaningless. what is not meaningless is the $100 billion cash pile he is sitting on. i have been hearing the same question over and over without a great answer. the more money he has the harder it is to move the needle with the money. he has to buy something. even he has no idea what it is out there. responsest interesting in light of what is going on in amazon and the technology world, there's a big positions. billion input $20 apple. there is a transformation underway. work sure we'll have an opportunity to take advantage of it. there is no question that some days that $100 billion will be extremely valuable to berkshire shareholders when another " their numbers,

warren will be there. he will not have to worry that this week is called a miss on his earnings and has nothing to do with the value of the company. haidi: continues to abide his time. that patients strategy. his time.es to bide that patience strategy. he has been investing in other areas, energy mortgages. have they worked out? noah: you see a lot of different things at berkshire. to answer your question, it is not like they all of a sudden stop investing. they just produced a prodigious amount of cash and the opportunities recently haven't made a huge dent. the thing as of late was a deal that they struck last month for encore, and electric utility in texas. the parent company is in bankruptcy so there are hurdles

to jump over to close the deal. if they get it done it is nine plus billion dollars out the door. that would be a sizable addition to their collection of electric utilities. i think that that is an important piece of context to have. the money is piling up, but they are finding a couple places to put it to work. haidi: just to complete the picture -- go on. i would echo the point of that at the annual meeting this year i think that warren talked more forcefully about the possible use of share repurchase to direct some of the excess cash back to the shareholders in a way that can build intrinsic value per share basis. sorry. no, quickly, talk to me about ibm.

that did not work out terribly well. a realt has been disappointment and was ahead scratcher for a a lot of berkshire investors. buffett invested in ibm in 2011, it $11 billion into it, and did not perform. he said in may that he reduced his position by 30%. there was in the report on friday that you get back out roughly what it was. it looked like he sold a touch more than 30%. we will get a more complete picture next week when berkshire puts out a separate filing about their stock holdings at the end of the second quarter. i think that the big picture is buffett has said that was not a great bet and that he may trim a bit more. it seems like he is

trimming his ibm holdings. beeni am curious, much has said before about how buffett has avoided tech stocks. he has invested in apple. he mentioned a few months ago that it was sheer stupidity that he did not invest in amazon. all that heat missed out on giant returns? that you could be making more money on your berkshire shares if he had turned the tables are on buying some of the big tech shares? tom: absolutely. at the annual meeting, it was clear that there was a phenomenon that had transpired people focusak as on amazon as a technology company. they were really delivering in a to make sure that you reason backwards on how to invest and build the business.

methodically, amazon has built that business. onay they have logistic immense. have a sense of what the customer wants because of the data. they have the dominance of the cloud. recently, warren told his entire -- sold his entire position and walmart. he was hoping that that would remain the everything store. it looks like amazon is the more everything store. there is no question that businesses like duracell, kraft foods, in which they have a position, even in nebraska march, they have to be looking over their shoulders wondering if you would seal launch of amazon as a luxury jewelry website. or maybe they offer their own private label battery, which it has been rumored that they would do.

it is an extraordinarily powerful franchise. however one chooses, it is disrupting so many areas of business. talk tolways great to you about berkshire hathaway. we will have much more ahead on daybreak australia. this is bloomberg. ♪

haidi: a secure supply among the lithium market's biggest players. bloomberg's asia metals and money reporter joins us from kalgoorlie in western australia at the diggers and dealers conference to explain. how fast is the sector developing in australia? we are here in the heartland

of the australian gold industry. to the north is the hub of iron ore, but they are also undergoing a lithium boom. we have seen recommissioned minds and new mines, with other projects in the pipeline. they are moving into australia seeking to secure supply to do deals, enter into projects, and secure products from the new mines. it is a fast developing sector and australia. betty: what can we expect from the new supply? >> you would expect new supply to you for lower prices on the but that is not what people are expecting. prices of lithium carbonate have

doubled. we're seeing the prices advance this year. fallts do not expect any at least for the next three years. demand from china is so hot they can take all of the new supply material from australia and they are still undershooting demand. betty: thank you so much. that is it from daybreak australia. we will get all of the action in daybreak asia. this is bloomberg. ♪ what should i watch? show me sports. it's so fluffy! look at that fluffy unicorn!

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betty: the united nations putting sanctions on north korea, confident they can bring the nuclear program to a hau lt. in manila,nsions saying chinese actions in the south china sea have eroded trust. positive payroll numbers expected to lift asian markets. the yen little changed after friday's slump. upnda in braces