anchor: now is not the time. the fed's jim bullard is saying sluggish inflation is putting rate hikes on the back burner. he is: a return to -- still looking for deals. anchor: iron ore and steelmakers on the move. commodity traders betting on tighter supply. not lie.he numbers do disney expects movies and theme parks to offset weakness in media. numbers do not lie.

this is "daybreak asia." i am betty liu in new york, where it is just after 7:00 p.m. charlie: it is just after 7:00 a.m. in hong kong. it feels like summer. quiet in the markets. we have the trade figures of china and the trade balance in japan. betty: those are the big numbers to watch. big market moving event. in terms of here in the u.s., it mergers of a focus on that may or may not happen and specifically a look at berkshire hathaway and what they may be eyeing out on the horizon. oil prices -- energy prices in particular -- in focus. despite the drag, the market still managed to get out the gain. we will go through that in a moment, but that is setting up for a slightly bullish tilt for you in asia. yvonne: let us look at how things are playing out here. cpi figures out of the u.s..

new zealand, we are seeing the stock with weakness. 7356.wi, the traders are worried about the dollar edging up. the worst currency in the g10 space, ahead of the decision this week as well. we are seeing australia, the 7909, far away from 80. oil is slipping as attention shifts to compliance among opec members. 4927 for wti. japan, the trade balance expected to swing back to a surplus in the month of june. we are seeing dollar-yen. 110.76. we are seeing equity futures not doing awful lot either as well. ish.ty slumber--

we did see record profits coming out of taiwan and vietnam as well. allave seen the g20 nations kind of expanding at the same time, so big question is, is that going to be sustainable? betty: absolutely. we will be analyzing that as we head towards those numbers in china. in the meantime, back in the u.s., wall street remaining at those record levels. mergers.f potential su keenan has more on the wall street action today. su: we saw stocks modestly higher. the s&p and dow extending their gains. some of thet standout stocks, clearly, m&a was at play. avionics, five-year high. withare said to hold talks the company. shares rose as much as 8%, closing with 7% gain. netflix making its first acquisition, miller world, appearing to focus on superhero

stories, and nvidia, reporting on the 10th, hitting a high for the year. a lot of investors looking forward to that report. let us go to the bloomberg 5900, quick at g #btv because there is a lot of talk about what the two-year is doing to inflation and interest rate hikes. the outlook rolling up his what we can see in this chart. the white sort of bending forward where the red is outlined. you have two titans in the market saying there could be higher inflation. the market appears to be complacent about this. they think traders again are too complacent and the tips are cheap. the economy has improved, but the inflation level, not at the level that would be consistent with improvement. let us go also to the oil chart, because oil has stayed below $50 since the close one week ago

today, above $50 for the first time. a lot of concern about whether glut can be reduced and what happens in abu dhabi with all these opec and non-opec producers. that will be very telling. betty: let us talk about warren buffett because a lot of people are starting to talk about how much money he has. he has almost too much money and need to do something about it. su: he did have a bit of a disappointing earnings announcement, but the take away people focused on -- look at all that cash. let us go into the bloomberg one more time because if we look at this chart, it shows they are nearing $100 billion in cash on hand. it is unusual for them to have quite that much. they are a bit behind in their company, and there are about eight companies analysts say that are on the table to be targets for buffett, and the money is there to do it. in terms of how the company performs, if we look at the

chart, you can see it has not been a great year for berkshire hathaway. they did have a bit of an earnings -- operating earnings fell another quarter. manufacturing did rebound. we did see a little bit of strength in insurance. there we are year-to-date. it is not about performance, but not one of the better cortisone the company. yvonne: we are starting to see positive hedge fund performance is after the chart with all this year. several mega fund are reporting big gains. anythinghe standouts, from biking to renaissance. the large funds coming in with 9% to 11% year to date gains, at.h are nothing to sneeze these hedge funds, the member funds, under great pressure earlier in the year. many are flat if not negative. we saw the large commodity fund that was -30% year to date and had to shut down. the market had some concern there. when you look at the offshore

fund, it reported 11.7% gain. according to the firm's website, the main wellington fund, 7%. hedge funds, do not count them out yet. they are coming back in the second half of the year. anchor: all right, thank you, su keenan from new york. first word news with ramy inocencio. and good morning. softbank beat estimates in the first quarter, reflecting his transition to a company that makes deals. operating profit was $4.3 billion, lifted by sprints return for the first time in three years. his dealmaking is said to continue with sprint said to be in merger talks with t-mobile. softbank has been up and down this year, but shares remain in the positive, up by 13% year to date. to severalalking different companies about sprint's business tieups. i can say the final announcement

will come very soon, but i cannot give you a time frame at the moment. sprint is now in a much ialthier financial state, and have become much more confident this deal will be successful. ramy: china's foreign reserves thought a sixth straight game. the pboc says the stockpile to 3.0 8 trillion according to the bloomberg survey expecting 3.0 7 trillion. new data on exports are due .ater the consensus is shipments rose 11% in dollar terms. north korea has condemned new york's sanctions, saying it will not negotiate over its nuclear plans. state tv denounced america for what it calls its "hostile strategy," and said it would pay dearly for his crimes. in a separate statement in manila, north korea said president america first program is dangerous and pyongyang need weapons to avoid the fate of iraq, afghanistan, and libya. prosecutors in korea's

wide-ranging corruption inquiry are demanding 12 years in jail for jay y. lee. he is accused of authorizing the payment of millions of dollars to a confidant of toppled president park geun-hye in return for political favors. park is also in detention, accused of abuse of power. she has refused to testify. venezuela's opposition dominated legislature -- the national assembly has rebuffed nicolas maduro by refusing to recognize the trees from his new constitutional assembly. lawmakers voted to ignore the decision to face the prosecutor with a loyalist and create a truth commission. been givenamily has virtually unlimited authority. 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.

for more on the fed and the officials' dovish comments on inflation, i want to bring in kathleen hays,. -- bring in kathleen hays. kathleen: bullard made it clear that inflation is too weak. here is what he said earlier today. "recent inflation data has called into question the idea that u.s. inflation is reliably returning to target. the current level will remain appropriate over the near-term." jim bullard went on to say that he sees little relationship between inflation and on employment, so even if unemployment falls and the economy is going along, he does not see that boosting inflation much. he does think it is time to look at the balance sheet. able toe going to be get going on this process. it is going to be very slow. i do not think there will be a lot of impact on markets, but i think it is the right thing to do and i would support getting going on this process. kathleen: he says it should

start in september. the president of the minneapolis voter, basically agreed that inflation is still weak. it matters because it has to do with fed credibility. he said if it should boost inflation, it should do it. hour, japanr this is releasing its account balance. kathleen: let us take a quick look. the current account surplus on 1.3sively adjusted basis is ¥9 trillion. #btv 9194. you can see the main number was about 1.40. you can see how the yen was weaker. this is the yen dollar rate on this chart. it has gone stronger, so maybe the peak you got will disappear a little bit. bloomberg intelligence pointing out that one of the biggest risks here, besides the

reversal, is good old u.s. protectionism, yvonne. yvonne: hang on for a moment because i want to talk a little bit more about this. not just japan, but what we talked about with the fed. us now.ent is joining david, where do you stand on this inflation? betty: is it gone? guest: it looks like it is tame for the time being. we had a lot of conversation about this over the weekend in maine, and there was a lot of discussion about why should the target be 2%? what is wrong with 1%? what is wrong with 1.25% inflation? you heard that from folks like my colleague, bob. i don't think anything is wrong with it. it is an arbitrary number. the interesting thing was, in the group, in maine, the conversation was below two. there was no one talking about inflation risk. that was different from prior meetings or gatherings up there.

guys, take my chart here, my bloomberg, g #btv 8924, which is showing just how treasury yields usually follow along with where cpi is headed. you have seen that pretty much throughout 2017. a little bit of a change here. it looks like we are resuming that path for yields. there is a debate right now. i know you are aware of this. you have some of the asset firms like blackrock, who say it is just a matter of time. look at the jobless rate. it is a matter of time before we go up and you are going to see inflation back up. then there is the other study which we just talked about here. david: what is the direction of causality? does a rising wage cause inflation? or does inflation caused

pressure that therefore triggers the rising wage? and that is a very, very difficult debate. there is a lot of evidence -- betty: you some a qr with the latter. -- you sound like you are with the latter. david: i think so. anchor: a lot of people argue the world has changed and there is technology and fierce global kotok, you, but camp were talking about a fed debate. how many people are saying "do not raise rates?" and how many are saying there will not be another rate hike? david: they divide between don't and one. we take surveys up there. we have surveys about future fed funds rate and when will the peak take place? and the kind of numbers that are two and maybee

three, and when is 2019? it is a very subdued group this year. anchor: can you tell us who was the one and who were the four? david: i will cut you this, there was a public debate. we suspended the rule. megan greene,en, ianco, and the distribution of opinions was the entire spectrum. anchor: what about the ecb? is mario draghi going to signal he wants to drop the policy by ias, or is it too early? david: banking system problems, and he will signal that he is eventually going to signal. 1 anchor: -- [laughter] anchor: ok. but he mentioned how this is

tracking were inflation goes. can yield is still go that much higher from here? david: i think it is slow and it stays low. we may be in this environment for a while. if you look at the savings rate in the united states, it is higher than it needs to be to finance the demands of the country. pressure on a interest rates. there is a question if the fed ofgorges a lot government paper into a market, can it absorb it? but if it doesn't, in we are going to proceed at a very slow p ace. it is being priced in low-interest rates. anchor: david, stay with us. we are going to continue the

conversation in a moment. looking ahead on "a break into," -- "daybreak asia," we will discuss the results. betty: the diggers and dealers conference. goldfield ceo nick joining us at 10: 10:00 p.m. sydney time -- 10:10 sydney time. this is bloomberg. ♪

anchor: this is "daybreak asia." i am betty liu in new york. yvonne: i am yvonne man in hong kong. washington is in favor of a clean increase in the debt ceiling. the treasury market is not buying it. take a look at my bloomberg. you will see disruption in the market that shows the yield expiring in october, which is in red, and that, you are seeing traders willing to pay more for

debt expiring in that month versus the october -- the november 1, i should say, in white. you will see the yield. we do get closer to more debate about this potential debt ceiling. let us bring back david kotok. do you think the market is paying enough attention to this debate? the ceiling debate? david: the market is starting to, yvonne. question is, can we look at places like you just did in that chart? can we look at the credit default swap on the u.s.? the trades in europe, up five or six basis points? that does not seem like a lot, but when there is 150 trillion in u.s. dollar denominated debt worldwide, and that google the derivatives, a basis point -- billion at an

annualized rate, 6 billion per month. and that is what this congressional charade is imposing on the u.s. and the rest of the world. so the market is worrying about it. it is politics at its worst. just seeing the house of representatives. they are already in recess. the senate, unlikely to talk about this next week. 12 legislative sessions to resolve this issue when they return. do you think the impact of this will be limited to the short end of the curve or could this spread further down? david: i hope so, if it is not protracted purity secretary of the treasury has said "here is what i am going to run out of -- here is when i am going to run out of money." it is a narrow target, but it is narrowing. at what point does the brinkmanship end?

the united states is going to -- is not going to default. [laughter] anchor: are we back to that again? are we getting back to that, david? steve was on with us earlier. this is what he said about washington and the appetite for more debt. >> the problem is, everyone wants to do tax reform, but no one can find a remedy to pay for it, and i do not think there is that much appetite on the hill for any real increase in the deficit. is notgiven that, it saying anything new. we have been here so many times, over and over again. how do we get past the issue? how do we impact this? david: do you remember the children's story "the never-ending story?" this is our way -- how america governed itself. it is absurd and we pay a price for it. betty: are you surprised we have

not paid a bigger price for it? i guess we are all used to it now. we do not expect the country to default. ask people and they will say no. you see changes in pricing and a market-based price and you wonder, "the market is saying the risk is rising slightly." why? someone in the freedom caucus worked and they are -- caucus burped and they are afraid. betty: what will we get for not defaulting? david: the u.s. interest rates will still remain low. when we get beyond the hole that ceiling debate, we will go on to -- debt ceiling debate, we will go on to other issues, i hope. there is a rumor about that. to see you., good david kotok of cumberland advisors, chairman and cio. that story and many more you need to know in today's edition

of daybreak. bloomberg subscribers can go to mobile, or the bloomberg anywhere app. you can customize your settings so you only get the news on the industries and assets that you care about. this is bloomberg. ♪

anchor: a quick check on the latest business flash headlines. tesla is making its debut in the bond market as elon musk bolsters his bets on more affordable electric cars. money onnning to offer unsecured notes. the proceeds will help tesla rollout the model three, it's cheapest car yet. it will test tesla's fervent following among investors. alibaba is beefing up its travel service by heating up with marriott, creating a joint venture with marriott's entire

lineup. the companies will link their loyalty programs and offer promotions for travelers. china is the largest source of tourists in the world. entertainment has sold the distributor of oscar-winner spotlight to a media company backed by investors that include tencent. they confirmed they bought open road films. they said the deal is part of a larger half-billion dollar expansion plan. china's continued interest in hollywood despite beijing's recent crackdown on overseas investment. netflix announced its first acquisition, picking up a comic book publisher and moving into the ever popular world of superheroes. it is by miller world for an undisclosed amount to reduce films, theory, and shows based on comic book characters. netflix is hedging against the possibility that disney will not renew its deal with marvel.

coming up next, softbank transitions into deals. better run through the numbers, coming up next. this is bloomberg. ♪ we check our phones 85 times a day.

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price... ...on the hotel you want. go on, try something fresh. tripadvisor. the latest reviews. the lowest prices. ♪ >>; 30 a.m. in hong kong. looking outside. we had 30 minutes away from asia's first major market open. a beautiful morning there. it is now not shaping up to be too bad. raining all day in new york. 7:30 p.m. monday evening in new york. we are pretty miserable. markets close a little bit higher. i'm betty liu in new york. in hongi am yvonne man kong. let's goes ramy inocencio. ramy: comments from two officials make it more likely that the fed will keep on hold

next month and only edge toward an unwanted of the balance sheet. james woolard says any movement will be slow in order to cause a minimum disruption of the market. >> we were telling a story and inflation was going to gradually return to target. on this measure, you can see the gradual return to target seems to be going according to plan until we got to this year. this year, this number has fallen way off. at least on the scale that you have here. a commonwealth bank has scrapped the bonuses for ceos employees. the board says the overall reputation was about the bank. -- they wereious

suspicious deposits and atm. russia and kuwait have begun oil talks to figure out why some producers are falling behind on their commitment to produce output. they are meeting separately with iraq, the uae and malaysia as a representative from saudi arabia attending. last month, they said they would turn up heat on producers or not comply with a deal to cut the global oil glut. samsung is getting tough with phone buyers. metal body, a larger battery and a shatter resistant screen. they were supposed to pass military grade testing. they made his debut just to his before samsung is supposed to watch the new galaxy note eight. the first redesign since the galaxy note seven debacle. day in moreevery than 120 countries. i ramy inocencio.

yvonne: we are counting down to some of the major market opens. let's get to the global markets editor, adam from sydney. good to see you. you have been looking at the big leverage graphed out in china. so far, they seem to be shrugging it off. adam: that is right, yvonne. as we have been discussing on this program, you can see all these deleveraging campaigns in china is something that we had not seen before. the fact that the global investors are largely looking through this does tell you quite a lot. let's cast our minds back a couple of years. idea in in 2015, the the markets is that you would have a more continuous decline or devaluation of the chinese currency. the same timeat that the equity market was going through a huge crash.

the authorities were stepping in with all sorts of unpredictable maneuvers. year, although much of the deleveraging has surprised people, they are largely taking it in stride. i think one of the key things is that this is coming at a time when the economy is largely improving and not slowing down as much as many had feared. in terms of economic surprises, they are beating expectations. this goes from gdp numbers to that assets. whenis coming at a time you are into a profit upgrade cycle for chinese companies. we haven't seen this for many years. adding to the sense of it around china is more of a investor friendly place to be and not the big worry that it was a few years ago. korea, over in south

his time heading of the bank of korea, that is drawing to a close. is this the opportunity to change course on rates? especially as we talk about rate hikes in the u.s. adam: the jury is still out, as li goes into his final few months, is tenure is expected to come to an end in march. a strange situation for him and the bank. inflation is are running pretty quick. in june.ices up 2.2% rates have been brought down to this record low of 2.15% during his tenure. at the same time, he has to balance what is happening in the local economy and also bear in mind very closely what is happening overseas. especially with the fed into its

rising cycle. careful aboute capital outflows and make sure they don't get left behind. yvonne: thank you so much adam. let's talk about softbank. there is improving performance at sprint. they are moving away from being pure attack and into investment and other deals. the chairman and ceo is mulling various options to merge sprint with t-mobile. let's take a look at this tech reporter -- with tech support a selina wang. been talkings about it for quite some time now, talks are resurfacing, it shows how desperate and how hard he will try to makes rent a leader to beat out the competition, the deal was shut down by u.s. regulators and in this new administration we are seeing a better relationship between them and trump.

who knows what will happen? we know he is committed to having sprint merger with someone. he said it could go at a loan but we want to be a leader and order to do that we have to have consolidation. >> trying to get into his head, but does he want to do with softbank? what is his grand plan? he wants to be the planet's biggest, most ambitious tech investor. he was to be at the forefront of every disruption and innovation over the next several decades. he is trying to get into ride hailing. >> it is so much farther be on that. he is talking about a world where every inch of the earth is covered in satellites, there will be devices meeting information into the cloud. he is thinking pie in the sky as well as the next five or 10 years. >> i know we have been talking

about this potential takeover from softbank, this will diverge away the focus from the vision fund. what investments have we seen out of that fun so far? selena: -- did a dealrecently with we'd work and they will do a joint venture in japan as well as further ride hailing. we are seeing that he is interested in potentially investing in over or left. he was to get into the u.s. market as well. -- uber or lyft. those are all technologies that are very real. he wants to make sure that he has both sides of that technology. as a tech that will power these cars in the future. yvonne: thank you for joining us from new york. moving add to the data coming up

in asia, we are expecting the latest trade numbers from china. it is a point to further strengthen the economy. let's talk to tom mackenzie to bring up the numbers about when they are released. i think we saw the early indication of south korea exports jumping 20%. what are we expecting out of china? south korea is something of a bellwether for chinese exports as well as as you suggest. they will take up 11% in july from around 3% -- 11.3% in june. still marginally low. imports will be expected to increase 18%. we are looking at a trade balance of 45 billion u.s. dollars. we have a chart that shows china's imports and exports over a longer time. you will see that there has been a few dips but in general,

particularly toward the end of last year, really high. those imports have been resilient for the past six or seven months. we are expecting further resilience in those numbers today. they indicate that south korean exports were strong. the component is part of the pmi showingks at experts strength as well. we are looking at a stronger global demand picture, whether that is the you -- eu, u.s. or other countries in asia. all of that and these numbers are expected to really solidify this idea that we are seeing stronger growth in the second half of china. it surprised many economists looking at this economy. yvonne: what are the risks of the trade friction with the u.s. ? tom: bloomberg intelligence says there is a greater risk that some kind of tariff will be imposed by the u.s..

that terrible and what kind of terror and what sector the targets will be is going to tell how important this will impact china's trade picture. they are looking at steel. we have another chart that looks at china's steel exports to the u.s.. showing over a longer time horizon. large imports for the u.s. in 2009. that has ticked down. for china only make up 2.5% of its total export picture. by theffs were imposed u.s. on steel, it would have much of an impact on overall chinese exports. are actually lower than both south korea, mexico and canada. there isnow that potentially an investigation underway in washington into llectual property

violations by china. that could result in tariffs as well. that is the key risk for china's tariffs going forward. right now, momentum seems to be picking up in china. months of stronger ethics reserves picking up that three has a million-dollar level and increasing around 23 million. of course, we'll get inflation data. if they remain relatively strong, that is a good news story for corporate profits, they will be able to pay down some of their debt and push of those profits. what we are looking at the date is the trade numbers, the export numbers, the trade balance expected out in the next few hours here in china. >> coming up, the earnings for hong kong's major electricity

provider. we will ask ceo richard lancaster what happened. this is bloomberg. ♪

♪ we are counting down to asia upon first major market open this morning. we are watching japanese futures. they are unchanged right now. we are less than 15 minutes away from the opening bell in japan. this is daybreak asia, i am betty lou and new york. yvonne: i am yvonne man in hong kong. holdings reported a 3.5% decline in first-half net profits, dragged down by weaker earnings in china and australia. let's bring in which a lancaster. -- richard lancaster. the deceived. you had higher coal prices in

china. what is your read on the first half? richard: generally inconsistent . coal prices have risen more than 80% by last year. has been aa, there very challenging market condition there. the prices have risen quite steeply because of an imbalance in supply and demand. that has caused a lot of volatility in the market. we are primarily a beach tell business with a portfolio of generating plants. at times, we will have a surplus of power. at times, we have to buy power from the market. generally, with the exemption -- exception of coal prices in china, it has been quite consistent.

mentioned about china, saying about all of the country's coal-fired power profit.an't make a what is the rationale behind these tariffs? richard: it is very simple, coal or fuel is the biggest cost for electricity generator. if the price of fuel rises and tariffs will need to rise to make the industry sustainable. in china, there is a mechanism to adjust prices. there is sometimes a lag that comes in. i think there is a delay in increasing tariffs that has caused a squeeze. yvonne: will china have to raise tariffs? will there be special subsidies? how will the lower prices in general? richard: the price of fuel

depend on supply and demand. as there is increasing demand and the economy sees some forlation and demand electricity is growing, there has been some closure of coal mines as well. that has caused the rising prices. fore is a mechanism regulated tariffs in china to be adjusted. it is not always adjusted in a timely fashion. that is what we are seeing. yvonne: the hong kong utility market is regulated, it is transparent and that, accords to some analysts, it will attract more chinese investment into the market. i am curious if you're getting power companies calling you in china, trying to raise their stakes or by a bigger piece -- buy a bigger piece? >> we have a partner with the chinese stalingrad in the

generation part of our business in hong kong. having signed a new scheme of control agreement with the hong kong government, we have a clear regulatory path up until 2033. the task in front of us in hong kong is to help hong kong meet its climate change objectives. the government has a climate action-2030 plan. it puts a lot of the energy owners in the sector on notice to contribute to that. we are well set up and we are confident to be making that investment and we have a very clear pathway. the challenge in hong kong is not a lack of capital or lack of investment. we have the clarity, we have to plan, we need to get on with it. betty: there is a plan and you are getting on with it. i am curious with this scheme of control that is set to take

place in hong kong. are you going to make up with some of the hit you will tak eei n hong kong with further investment or expansion in asia for clp? that has always been our approach, to diversified outside diversifyng -- to our investment out of hong kong. we are focused on the clean energy sector in both of those markets. in mainland china, we are looking to close our investment in the nuclear power station, we are continuing to grow our renewables portfolio in china and also in india, we will be sure the commissioning our first solar arm and continuing to make investments in their renewable energy sector in india. >> this is the current account

balance for the month of june. coming up a little higher than expected and $934.6 billion. thanis now or -- narrower what we saw in the previous month. this is not what the economist were expecting of 860 billion. we were expecting some downside here. it looks like it is overlooking that when it comes to those balance numbers. thatw that 1% gain in month, that could be reflected in these numbers as well. go,ard, before we let you one last question, we talked about renewable energy in india. in china, is that a key focus for you? richard: definitely, it is a big focus for us, power and renewable energy in china is the clean energy sector.

we want to do carbon is our portfolio and diversified away from coal gradually and we will be replacing that with nuclear power. >> you still gradually draw some coal? >> we need to, we will manage the transition. it is building the replacement capacity before you can close down coal power stations and make sure they are retired in a responsible way as well. >> always good to have you. we have more coming up on bloomberg daybreak asia. stay with us, this is bloomberg. ♪

♪ yvonne: this is daybreak asia, i am yvonne man in hong kong. betty: i am betty met in new

york. that his hoping performance at movies at the parts will outweigh its ball in unit. fall in the miedia >> we hear a lot about its media networks. that represents the biggest size of the pie. this is at 45%. you can see the next biggest slice is steam parks, that is 32%. then the movie studio and is consumer products. thenthere have been huge subscrr losses ever since 2010 or so. for the past three years, espn has lost 9 million subscribers, even when factoring in tv over internet services. recently, when you look past june, even though streaming losses,is hoping the

yes p.m. has been losing subscribers in that last month. pessimismays the around espn was how the exaggerated -- highly exaggerated. that is despite falling ratings. espn is down 14%. espn2 is down 38%. disney channel is down 23%. disney tv networks are bracing for a drop in at network -- ad revenue. it is good that disney theme parks are doing just a little bit better. a big driver is shanghai disney, take a look at this, this is actually the fourth most popular one in asia. looking at disney's movie studio, that has released a number of hits this year. these are some of them that you may have seen this year. this earnings. does include guardians to coming

in at $851 million. pirates of the caribbean and cars 3 as well. disney will release the biggest or installment as well as star wars, the last jedi after wrote one came on the screens back in december. disney hopes those new movies will offset some of the concerns over his media unit, it's total company stock is up 2% you today. it has missed out on the double-digit rally on the dow. we are going to get a better sense of disney's movie magic and possible media static after they closed on tuesday. >> this will be on bloomberg technology at 5:30 a.m. in hong kong. stay tuned for that. we are coming down to the start of training underway in australia, japan and korea, just moments from now.

we were right -- there is a stalled summerlike area on wall street. we will look ahead to the opening in seoul, tokyo and sydney. more to look at the head on the next hour of daybreak asia. this is bloomberg. ♪

♪ >> on the back burner, j says sluggish inflation says now is not the time for another rate hike. softbank profit beat the street. the ceo says he is still looking for some deals. prosecutors demand 12 years for samsung's jay y. lee. at u.s.rea firing back sanctions, announcing dangerous america and its hostile policies.

this is the second hour of daybreak asia. i am yvonne man in hong kong. betty: i am betty liu in new york. we are getting closer to those china trade numbers. that is what we are watching. that would be the biggest impact on trade in asia. a pretty bullish session in the u.s.. their are continuing records, they are shrugging off those energy prices. you have the current account balance in june. that was slightly more than what economists are raise have estimated. >> still on the downside of the month. we also see that trade balance coming in, slightly off estimates as well. there is this boom we see across the globe. the market opened and what we should expect.

we have a building on monday paused gains. electronics are in focus, given the trial of the samsung chief jay y. lee. this is largely unchanged after those trade numbers for june, we have the yen also little changed. earnings optimism is also looking to drive a sentiment in tokyo. we have softbank getting estimates of a softbank share. they are falling at the start of this trading day. we are here for the likes of olympus and tokyo marine when it comes to earnings on the radar. when it comes to sentiment in asia, we have trade figures from china later this morning. we have the offshore one. fairly steady, holding onto gains.

check out what is going on in australia. this is 2/10 of a percent. they will be divergent themes. fred is falling about 2/10 of a percent. this amid the opec talks that are ongoing in abu dhabi. this falling about a 10th of a percent. the kiwi retains its top spot as the worst performer. after the falling policy meetings later on this week. it is coming off of a two-week low of 7348. that is holding near august lows. this, as the dollar is study as a gives of gains on the fed.

we have the likes of david bloomberg looking upward. that was an early look at the markets. let's get to the first word news. softbank reflects is transition to a company that invests and makes deals. operating profit was $4.3 billion. lifted by sprint's return to the black for the first time in three years. sprintll continue with said to be back in merger talks with t-mobile. softbank has been up and down this year but shares remain in the positive. >> we are talking to several during companies about's sprints -- sprint's business tieups. an announcement will come very soon but i cannot give you a timeframe. sprint is in a much more healthy

financial stake. i have become confident this deal will be successful. ramy: ramy: china saw a sixth straight gain in july. the stockpile climbed almost $24 billion to 3.0 8 trillion. exports later, the consensus is that shipments rose 7%. north korea has condemned new u.s. sanctions, saying it will not negotiate over its nuclear plans. they denounced america for their hostile strategy and said that it would take -- pay for its crimes. firstent trump's america rim is dangerous. erous.gram is dang the u.s. may widen sanctions against venezuela.

freezing the assets of up to 20 people. announcementn could come tuesday. it could be delayed as washington awaits a coordinated announcement. global news, 24 hours a day, powered by over 2700 journalists and analysts in over 120 innocencio -- i am remy innocencio. >> kathleen hays with a look at what happened. kathleen: i don't think there were any dramatic moves, it it was expected. people thought it might not be as strong because of the yen each had nice weakening is, it recovered a bit. it start with some of the $946rs, the surplus hit

billion. the forecast was for a 60.5. at least it didn't shrink as much as expected. trillion.1.5 2 1.54 trillion in may. we did get a look at the latest numbers. i will quickly call this up on a very special page. you inread from it to terms of the trade balance on a balance of payments basis -- it billion in june. that is better than 115.1 billion in may. it is not quite as big as the forecast but still looking better. as i said, exports did gain some ground.

they are still growing some 6 trillion, not quite as fast, imports picking up a little ground. let's look at a chart now, it is 1194. you can see the latest numbers for the current account balance adjusted to around 1.5 trillion. you can see the movement in the yen, maybe a little different here. i think when you look at the full breadth of this chart, there were worse times in 2014. the current account balance has had some volatility. the question is where it goes next, the dollar has been weakening. rising,has been bloomberg intelligence has been saying that in addition to that, that is certainly something that the government is watching. there is a question over donald trump and his team go on trade.

i know the overtures from president trump to prime minister abe have been positive in many ways. that is something that they are watching very closely. >> we have some comments from jim. he says it is ok when unwinding the balance sheet. still pretty cautious when it comes to raising rates. more than cautious, he says inflation is still week, we don't need to move. the current level is probably appropriate for the rest of the #69 -- 6897. you can see that this is down to 1.4 from 2%. the court has also moved lower. this is what jim bullard is watching. this is what he said about it. recent inflation data has called into question the idea that u.s.

inflation is returning to target. -- newrent policy great -- curb, manye fillets say that it is broken. he has called for the balance sheet. but take a listen to what james bullard said earlier. james: i think we will be able going on what was have any before. i think it is the right thing to do. i would support getting going on this process. >> gimbal and said that he thinks that september is when the fed should get started. echoed jim in many ways. has been trying to get that number up to 2%. what does that say about the

intentions? balancing thisat and by roll off will be very orderly. fed officials are not concerned. it will see how this barclays off. yvonne: thank you for doing this live from new york. samsungwe are seeing shares bounce about 1% right now. jay y. lee could spend 12 years in prison for his alleged role in korea's wide-ranging corruption scandal. this is the harshest criminal sentence ever shot by a major corporate figure. peter, good to see you. it is interesting, they have dubbed the special prosecutor, the windbreaker.

peter: this is a change in public sentiment, people don't recall that jay y. lee's father was convicted twice. he served a suspended sentence and was pardoned by the they were back then, viewed by the public as the fuel that drove the economy. there was some leniency when a misdeed occurred. this time, we saw that with the massive protests. the former president was eventually impeached for the cozy relationship between the government and then. this is coming as a very sluggish economic condition -- youth unemployment is at double digits, the public sentiment has

shifted. they have stifled innovation, they have squashed startups. it is not helping with the economy. seeme: the investors don't to feel like the sentiment has shifted. they know seem unnerved by this case at all. they say it is much bigger than jay y. lee. do you think that the eventual loss of lee? peter: during the testimony, what was telling was that this executive was saying that jay y. lee was not really leading the company, he was more of a figurehead. strategic strategy was put together by the samsung executives. as a result, executives look at

the bottom line. the bottom line is that they had record earnings in the second quarter at the end of june. their shares are up 32%. they are looking at the bottom line and the bottom line is that these executives are doing a great job right now. they're keeping samsung profitable. timeline,ll us the where are we in this case? peter: the 12 year sentence was a request by prosecutors. the prosecutors request a sentence before a verdict. panel is going to convene for the next several weeks and will issue a verdict if he is convicted, they will put -- they will pass the sentence. it is expected around august 25, mainly because jay y. lee will be released from detention on august 27. again, under korean judicial

law, you can only retain someone for six months. more onthank you peter, this case. much more ahead, we are looking ahead to the latest trade numbers out of china. >> up next, gold fields ceo, nick holland joined us live in a moment. this is bloomberg. ♪

♪ asia.s is daybreak i am yvonne man in hong kong. betty: i am betty liu in york. here is the money conference. -- mining conference. they have completed acquisitions worth $4 billion since 2015.

south africa's gold fields are the largest underground gold prospector in australia. before we get into possible activity for your assets, i know you are speaking at this conference. tell me your outlook on goals that seem to be stuck in this range, what is your outlook? we never predict the gold price. there are so many different factors. it is a hard thing to do. what i would say is the near term influence on gold is the monetary policy in the united states. we are seeing interest rates move in the u.s.. that could have an impact on the gold price. when you look at the real interest rates, they are still negative. the attraction of gold, relative

to other markets is still real. it still represents a store of value and a hedge against inflation. it has done this for the last 100 years. i think the prospects for gold is still good. it will be a bumpy ride. yvonne: it has been. they are used to that bumpy ride. -- about mna.ut caroline are there other assets in your company up for sale? nick: no. , thate completed dollar was an asset that was small in the scheme of things. we signaled that we would undertake a process to sell that. we are very pleased with the outcome of that sale. the company that bought it has

also been able to acquire something else. i think it will be good operational synergies. we have taken an equity position in that. we are done. that is the key thing we wanted to do. all of the other assets are long-term, quality assets that should generate good cash flow for us over the years to come. everything we have on the portfolio has been acquired. i think at this stage, we are comfortable with our portfolio. we are building a new mine in australia, one in ghana. we have one in africa that is building up. we have a lot on our plate at the moment. we are comfortable with where we are. yvonne: you are definitively not for sale is what i'm hearing. what about separation of assets? the largest share of your

revenue is increasingly in australia. when you look at south african gold miners, they are trading at a pretty significant discount. are you considering separating your assets? nick: one of the reasons we put this portfolio today like it havet is to be able to complete control over the cash flows we have around the world and to be able to channel those cash flows into areas that need to be funded. we are building a new mine in ghana, one in australia. we are able to take the cash flows from around the globe and put them into the areas that need to be funded. the other thing is it increases our debt capacity i having complete control over the cash flows, it improves our equity rate and capability. i think, in terms of perceived theounts, it is not so much

listings that one has to look at. you have to look at underlying assets. if they are performing well, and you are making good cash, i believe you will be rewarded in price as youshare create fundament of value. africa?what about south we have seen deals for them to buy gold in that country have stalled a bit. regulations in that country, what is that mean for gold fields in particular? nick: the regulations are being challenged. the so-called mining charter three that was put out in june, we were not consulted as an industry. the industry as represented by the chamber of mines is represents around 85 or not percent of total output over 30 companies, we have a number of

court challenges that will take place between september and november on the charter itself. a whole judicial review on the charter due to lack of consultation and then the attempt to make companies we do deals that have been done over the last 12 or 13 years. we believe that is against both the letter and spirit of the current laws. we are going to court as an industry to challenge all of that. of course, it is unfortunate that we have had to go that far. we prefer that a sensible dialogue could take place when all the key stakeholders. that may or may not happen. dialogue, there is no we are going through the court process. i can't tell you how long it will take. there may be a requirement to go further up in the court process. that is where we are today, it

does not affect our business right now. we continue to operate as normal. we are not in the game of doing any particular restructuring deals intot -- or africa. yvonne: bridget having a colander -- great to have you, nick hollander. we will be right back to talk more gold as well as copper and nickel. this is bloomberg. ♪

♪ yvonne: a quick check of the latest business flash headlines. -- his debutng his in the corporate bond market. the proceeds will help testable out the model three.

it's cheapest car yet. the sale will test the following among investors were being asked to overlook the company's negative cash flow. itsaba beefing up transportation. the companies will link their loyalty programs and offer promotions to travelers, china is the largest source of tourists in the world. regaltertainment and have sold to media companies that include tencent. they say the deal is part of a half-million dollar expansion plan. it underlies china's recent interest in hollywood. korea ceases to

negotiate over its nuclear programs, saying it is necessary to avoid a u.s. invasion. the latest on the standoff, that, this is bloomberg. ♪

♪ yvonne: 8:30 in singapore. i am yvonne man in hong kong. betty: i had betty liu in your. let's get to first word news with ramy. ramy: the fed will keep on hold next month and as toward an unwinding of the balance sheet. be very slow.ill his words were echoed by neil of minneapolis. sluggish inflation means that now is not the time to move. >> we were telling a story that inflation was gradually going to

return to target. especially on this measure, you can see the gradual return to target seemed to all be going according to plan until we got to this year. this year, this number has fallen way off. at least on the scale that you have here. this number has fallen quite a ways off. >> this bank has scrapped bonuses and other executives after allegations the company breached money laundering and terrorist financing laws. they retain the full confidence suede board, cba is being over failing to report suspicious deposits. becomeand kuwait have oil talks to find out by some producers are falling behind in the commitment to out -- produce output. they are meeting separately with iraq, malaysia and a representative from saudi arabia. turn up theit would

heat on producers for not complying with the deal to cut the global oil glut. samsung is getting tough with buyers. aey are offering a model with activeody, the sa has been tested with the military. samsung will release the new galaxy note eight. prosecutors and korea's wide-ranging corruption inquiry are basing about 12 years. 12 years.about lee denies those charges. corruption andf abuse of power. she has refused to testify at lee's trial.

innocensio. yvonne: let's see how the asian markets are shipping this morning. we feel a little bit of weakness today but we are holding around 10 year highs. >> look at the big picture, we are in this goldilocks moment. the you take a look at what index has fared, this is from the middle of this year, you can see that this has been ongoing since early july, this is just buy signal being flashed to about mid-july. this is the relative strength index in the bottom of this panel. we do see weakness today, we are wiping out what we saw earlier. this is marginally lower. we have stocks in tokyo and sydney swinging. now down about a quarter of a percent. we have a drop in industrial and property taxes.

they are getting support, given the rise in these. the cost is snapping a two day. look at this, this is the second day that it is up. they are trading at 1126. taking a closer look at one is moving, we have i.t. stocks at one of the only main spots here, getting a tense of a percent. we have samsung leading gains, interviewing the most on index point and looking elsewhere we have telco on the back on about 1.7%. dragging as discretionary. earnings are a driver today. yvonne: looking at the geopolitical risks around south

-- or three right now have been condemned. north korea said it would never negotiate over its nuclear program unless the u.s. and it is hostile policies. i think every time we have seen these sets of sanctions, we have that typical response coming up from north korea. this was expected, dan. dan: it would have been surprising if this at ok, fine, we will go to the negotiating table, that is not in the cards. what was interesting is that they put out a statement on casey and a, this is their statement media organization that had the usual rhetoric, very extreme, but of colorful language. at the same time, they issued a statement to the foreign press gathered for this regional security center which was much more calm formant -- four north korea. they just laid out the reasons why they need these. yvonne: i think south korea is urging president trump to have

some diplomatic or peaceful talks looking ahead, is that possible? dan: we are still a ways from that. saying that for us to get to the table, the u.s. has to and its hostile policies. we have military exercises, fronts of war, these types of things, the u.s. on the other hand says we will not sit down unless kim jong-un is ready to give up his nuclear weapons altogether. the north said in a statement last night that there is no way we are giving up that nuclear deterrence until the u.s. acts first. yvonne: what are the chances of pyongyang young -- washington talks? dan: it is still a while away, it is a game of chicken. who will blink first? feel the pinchn

from the sanctions enough to where he thinks "ok, i am ready ." talk your cup these are all things that we will see in the next two months. tillerson said we can sit there to talks if you stop your ballistic missile test. that is another sign, if we see a missile test again in the next few weeks, you can bet, we will not be seeing talks anytime soon. >> are there any indications that despite this response from north korea that we could see an escalation in the next few weeks? dan: that is always a possibility. the u.s. is saying that we want talks and the door for dialog is open. there are administration officials saying that the military option is still on the table. that of analysts will say

that scenario is so catastrophic, the economic costs tokyo and could level seoul and they are too much to fathom. us andat hanging over the window closing for north korea to get a functionally tipped icbm, anything can happen at this stage. yvonne: talking about north korea and the sanctions, the sanctions. the at the next, let's stay on talking about north korea, china, china as it relates to the rest of the world, they are growing strongly in july. in just a little bit, we will ask whether or not that can last a minute rising tension with the u.s.. this is bloomberg. ♪ ♪

yvonne: this is daybreak asia. i am yvonne man in hong kong. betty: i am betty liu in new york. yvonne: economic data has china's foreign policy stockpile rising. let's get the analysis with malcolm scott along with larry who. he is bloomberg's number one rated analyst on chinese trade. malcolm, let's start with you. malcolm: we are looking for exports to rise 11%. 18% in july. this is similar to the numbers we saw in june. we are looking for a trade surplus of $45 billion. the same story, the story of strength. the base effect, the global environments suggest this could continue for several months.

policymakersving this room to dial back some of the infrastructure investment. they're putting the brakes on some of the debt growth and credit risks. yvonne: what are we expecting to see from the trade numbers? malcolm: we will be zooming in on where the experts are going, the macro been environment there, we are looking for the continuation of strength there. , we aremport side looking for what that tells us about domestic demands. the economy humming along quite nicely, that should look fairly robust. we have been talking about house for the first time in a long time, all of the economies will be expanding along the same path. received -- we see that taiwan exports have been at a record.

do think this is sustainable? we see the global economy and the recovery in a path toward this. i agree with my comrade. in the next few months, we will see a steady growth in trade for china's export growth. we will probably see a slowdown. overall, it is really quite steady. yvonne: how reflective is this? see base metals on a tear, the bloomberg base metals index is the highest in more than two years. lending, railnk rate, electricity consumption, do think this is a good indicator of where growth will go?

larry: i don't think it is a good indicator for the whole chinese economy. the chinese service sector becomes bigger and bigger. that index,look at over passiveyou and mistakes in 2015 and over positive about this moment. later, the market will -- we know this will slow down. the trick for the market is how far it will go from now to six months later. yvonne: there is some larry.inty there, you're talking to foreign client in the u.s. or europe, what are they saying about china? what are they asking you? larry: they are asking me to

questions. -- the firstf debt half is about something very tricky and volatile. it has picked up again. it is a volatile market. moment, the commodity prices are doing well. this is about the upside in the near term. from the media, i think investors still care about the structure, such as china, balancing stuff. >> the debt, the property markets, i want to go back to the trade numbers. the u.s., china trade relationship. i want to pull up a chart i have

your on my bloomberg. #8500. line, this bold white line. it shows china's experts by country. that is a predominant export country for china. even though we are seeing tensions ratchet up and pulled back, they will match up again and we're talking about steel tariffs, how likely are we going to see that? how likely will we see these tensions ratchet up even further than what we will look like? term, chinae near will still elevate. it will be finished in the next six months.

on the potential u.s.-china me,e relation, i think for we know it is a risk, it is very hard to withstand probability. i focus more on the side in china because i think this will be the market china driver for the next six months. >> i want to ask you about the data for tomorrow as well. cpi and ppi -- it seemed to fade a little bit. i remember suggesting that it could be coming back a little bit. this is what we see for the world economy. you can see the ppi ask a pick up.

prizes are picking up, i will still say it is a big trend. peaked andat the ppi they will slowdown. we will see some pickup and some slowdown during the process. in the big picture, i still see an inflation trend. does this play into the global inflation story? larry: at the beginning of this year, it was the beginning of the inflation trend. people get disappointed because it is the inflation coming after china commodities. term, the markets will have some hope of inflation trade.

we are seeing strong ppi data from china. in my view, this is largely driven by the poverty market. i still believe in this inflation trend. more about the global economy than what is happening in the china property market. i think the growth is like taking over the global economy. then the u.s., then europe, and in japan. this is order. >> it seems like the risk you see in the climate analysis is quite domestic. you know when it comes to financial regulation, how important is it to forecast the end of this leveraging when there is no indicator of how to measure this right now.

? larry: i think that part is very difficult to change because it really depends on china's investment model. it means that it borrows a lot of money. it is very hard to change that. the other thing is the financial system. this is then wanted to crack down on the market. i think it is very hard to manage the leverage in the financial system. at this moment, i think the market is less concerned about it. for the chinese government, there is the incentive to lower the risks in the financial system. it will probably come back a few months later.

of economist blowout a lot -- economists blowout a lot of packages. >> the real economy keeps on chugging, it keeps on outperforming the bears estimates of many economists, not larry. next year, that is the key, what happens on property, what will determine that, is inventory, demand, where do housing going? moment, isat this already free, they're much more resilient than the market would have thought. forever,k it will last china will probably have to stifle. that is why i am seeing that. we had the cycle lasting into this year. we will most like we have a down

cycle next year. yvonne: great to have you guys. get your day going, today, make mobile andto your the bloomberg anywhere app and customize your settings, you can get apps that you care about, this is bloomberg. ♪

♪ this is daybreak asia, i am yvonne man in hong kong. -- i: high-end betty liu am betty liu in new york. crisis, stressic tests carried out by these regulators say they need to be drawn between 34 and $99 billion in treasury aid. required freddie are to go under tests for their abilities to withstand a deeper session. >> first quarter process -- profits have sold off a profitable business operation. this is 144 million dollars, up and 29 million a year earlier.

to $8 billion. they find extended gains to a record despite last year's split and its underlying technology jumping as much as 21%, most of the bitcoin ecosystem reports this. there's a different scaling it is an called bitcoin cash, split into a different block chain. bitcoin cash has plummeted. it boasted the appeal of his own cousin. netflix announced its first acquisition and moving into the ever popular world of superheroes. you can produce films, series and shows based on comic book characters. --acquiring miller world, millarworld they can join in.

that is it for daybreak asia. it is a look at what is coming up over the next few hours. rishaad, china trade is what is coming up. andaad: anytime between now 11:30.r maybe we are looking at 11% year-over-year gain. as well.with june if we see any softening, he is adjusting that it will be temporary because the global asnomy -- we have seen that so much of the data that has ton released, it does point an economy that is doing pretty well right now. yvonne: part of it is this economy boom that we have been seeing right now.

rishaad: looking at this wrap up taking place, iron ore is seeing a little bit of recovery there. steel, looking at trade at the debate. in a few hours, analyzing softbank. what is the grand plan, what is the master plan that he has? there we have it, we will have that on the way. >> a lot going on. that is it from us on daybreak asia. bloomberg markets is next. this is bloomberg. ♪ is this a phone?

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9 a.m. in hong kong. 9:00 monday evening in new york city. like the good times maybe finally overly. japan return -- recording a 36 consecutive return to surplus, trade turning positive. haidi: i'm haidi lun in sydney. coming up, now is not the time. sluggish inflation has put new rate hikes on the back burner for the fed. this is "bloomberg markets: asia." ♪