♪ betty: a blow for business, warning hisump advisory councils after more top leaders walk away. >> one of said his conscience would not allow him to stay. betty: the fed minutes show members are worried about hitting 2% inflation. cathay pacific rejected the budget route to success despite the loss. ,"tty: this is "daybreak asia

live at from bloomberg's u.s. and asian headquarters. i am betty liu in new york to read it is just after 7:00 p.m. 7:00 a.m.ust after here in hong kong, i am shery ahn. you see equity markets in the u.s., relative calm to trumpet dismissing his two advisory boards. the u.s. dollar did take a hit, especially from the fmoc minutes worrying about inflation. hold: we did see them gains after those minutes came out. on a day it should have been the minutes at the top headline, but it was what was going on in washington with president trump. not war with north korea but with ceo's in his own backyard that dominated the headlines. beene meantime, i have surprised by the shield of armor

it seems u.s. equities have. reactiony movement in to some of the turnover -- turmoil we see in washington. tish open in asia? shery: yes, investors have a lot to digest. of that, the barrage of data we are getting from japan, australia, the philippines, singapore. , nota look at new zealand doing much after gaining the entire week. cents.llar at .7310 u.s. the aussie has been strong and trading at this level. take a look at the aussie dollar. 200 hassee the asx gained all week to the highest level since june. we see futures pointing up by 2/10 of 1%. remember we do get australia's job data, the economy is expected to have 20,000 new

jobs. remember this is a volatile set of numbers. we are also getting data out of japan. the nikkei fell yesterday. not surprising, given the yen has strengthened, closing at 110.09. we do see futures slightly lower. we get trade data, exports expected to gain more than 13%. we are seeing great news out of the japanese economy with quarterly economic data coming in pretty strong. it is all about what is happening in washington, data coming out, investors have to out for all they have to digest this morning. we get to what happened here in the u.s. and the market i want to bring you breaking news from wesfarmers. out, earnings are pouring

it is slightly under what analysts had expected. the final dividend per share of $1.20. they are talking more about the consideration of selling the us trillion: mine, saying they are undergoing strategic review of their resources business. there is no certainty this review will result in a transaction. they are saying the sales and margin pressures in coal is expected to persist. accounting foron 60% of their revenue. they say the margin pressure will continue to persist. let's get back to what happened in the u.s. with market numbers in the reaction to the fed. but also to what has been happening in washington with president trump and his fight with of the business community. i want to bring in su keenan. su: you hit the nail on the head

when you said it was an interesting day on wall street. look at the market, we close with gains. the rally that was in place stayed in place despite the fed minutes. normally we see reaction in the spot -- in the stoxx, but the the stocks. urban outfitters up the most in several years because a positive performance in their various chains. much better than expected. it target boosting their in spite of some difficulties retailers are having. that underscores the strong july spending report. it will the spotlight, be planning investment in tv shows and films.

they have hired executives and are going big with content. g #btv 1994. when we talk about the equity rally scene thoroughly in place, they kept moving higher today. where is the weakness is the big question? from a historical perspective, the rally has room to run. it is now the s&p 500 on its for the longest streak without a 5% decline. you see other reference points. purple is from 1963. it has further to go before we see pullback. let's look at after hours. spotlight, that will likely transfer into action tomorrow or in the tech. it is the major machine maker for the internet and it is falling, forecasting sinking revenues. it has been down more than 2%

after the growth margin missed estimates. revenue forecast shows growth remains elusive for this company. let's talk check to what the fed minutes told us. janet yellen and company having a bit of a debate. there is a split between the policymakers on inflation. sticking withe the forecasts, a gradual rise to 2%. others are concerned it will take longer than the fed thinks. that is going to be an ongoing, large question, when we look at when the fed may raise rates. shery: what is happening to the phillips curve is the big question. su keenan, thank you. let's get first word news with rami inocencio. >> president trump has taken aim at america s -- one of america's most successful cut -- companies, saying amazon is killing jobs. ande is concern amazon

other tech giants have become too powerful. some propose they should be broken up. said amazon is a monopoly he would pursue if elected. the u.s. saying it wants far more than a simple revision of the accord. negotiators say president trump once a whole thing stripped bare to address it deficits, trade, and jobs. that contrasted with comments from mexico and canada. for countless americans, this agreement has failed. tradenot ignore the huge deficits, loss of manufacturing jobs, businesses that have closed or moved because of incentives, intended or not, in the current agreement. china driving ahead with the overhaul of state-owned enterprises, selling its second-largest mobile carrier. it is said to be privatized in a deal valued at $11.7 billion.

it includes tencent, alibaba, and others. the unlisted state run parent will remain the biggest partner but give up its majority shareholding. tencent is reaping the rewards that marry social media with gaming. its best growth in seven years and profits beat estimates by 30%. tencent has cap to the earning games, helping revenue for mobile games past that of desktops for the first time. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am a ramy inocencio. this is bloomberg. shery: president trump firingtwo of his advisory councils. four ceos resigned

following the deadly protests in charlottesville. greg, this announcement came within the hour as a report surfaced this group was planning to defend. trump is trying to get ahead of business leaders. greg: obviously, trump's following high-profile departures from his manufacturing counsel -- council. held ahis council conference call and took a poll on whether to leave the council. 10 voted to leave. they said they would give a trump a warning they were going to be departing the council. but trump got out ahead with the tweet and disbanded the council, thinking the executives. have not really seen

these councils recently. will there be any impact on policymaking? is one thing. the councils have not met in a long time. trump created them up outside of his administration, he was looking to tout his business experience and have business leaders advise them. -- theseclearly now executives are losing trump's ear by not being on this council. betty: i want to talk about this other story they got buried a little bit in all of this, which is the new communications director. what do we know about him -- about her? tog: they named hope hicks replace anthony scaramucci, who lasted in the job less than 10 days. she has been with trump for a

while and remains in the white office.mmunications she is not new to the trump orbit. the new york times said she is close with ivanka trump and president trump's son-in-law and advisor, jared kushner. betty: a lot of merry-go-round going on in washington. thank you so much, greg sullivan in washington. we will talk about what this means for the agenda going forward. we are turned -- we will be joined by an analyst that worked with bill clinton. and his relationship with business leaders. and how the nafta talks will help set the tone for trade relations and asia. we will talk with a former rbnz director. this is bloomberg. ♪

shery: we are counting down to asia's first major market open. it japan futures looking marginally lower. the city, a beautiful sunny day. a second day of strength for the japanese yen. equity markets could be pressured a bit. in less than 40 minutes we will get trade numbers out of japan. a tradeooking for surplus, that is the expectation. this is "daybreak asia." i am shery ahn in hong kong. betty: i am betty liu in new york. trump abolishing his advisory you afteraying, thank more ceos walked away. sources said of the dozen executives on the call, 10 had voted to quit. with aake a closer look former senior policy advisor to

bill clinton who often in his role helped coordinate meetings with business leaders. richard, great to have you here. richard: glad to be here. betty: when you see these policy council disbanded and the huge risk between the business community and the president, who will be the big loser here? well ceos no longer have a voice there? richard: it will be the american people that are the big losers if the president is shut off from mainstream america. these are important mainstream business leaders. to give you context, the reason any president would bring in business leaders to be part of his team is to get there good advice and understa what americusiness thinks. the president has a big agenda that includes business reforms and tax agenda. he is a busy president, by most standards.

the market is doing well because businesses think they will not be regulated as much under a republican president. but because donald trump is so and became president with 3 million less votes than the winner of the actual these were particularly important for them to add to the white house a sense of normalcy. now that trump was in there, business would be -- betty: to have rational, logical thinkers and advisers. richard: it is a tremendous loss. both a symbolic loss, but a loss of all this input and great advice for this particular president. betty: when you were in the clinton white house you noted you had put together these councils as well and liaised between the white house and business community. what does it take to put these councils together, and what does it mean when he disbanded them? what does it mean between the

relationship between these ceo's and the white house? richard: these are frayed. not you resign, you are welcome anymore. you have to be appointed to a presidential council, it is a great honor, no matter who the president is, to be asked to serve your country. i am sure these chief executives thought it was a great honor. betty: they have to worry about getting targeted. richard: here is what i think happened in this instance. even though it is an honor to serve on the presidential council and give the country the benefit of your thinking, ployees spend a lot of time as saying, why is our ceo on this business council with the president saying this crazy stuff? it is difficult for a ceo. if you are working for a company and all your folks are talking about whether you should be there, work at your company is

not getting done. it is difficult for these ceos. no, they are not welcome at the white house. but it is a great loss to all of us. their insight is not available to the president and there are divisors. it is a loss to the ceo's. shery: exactly, black rock ceo was one of those first to try to get to the door. take a look at what he said. he had disagreed with the president in certain instances this year but continued to participate because he believed it was important to have a voice for the people and investors including our clients. who will be the voice now that everyone has left? richard: you are right. for many people this was a bridge too far. the latest remarks were so incendiary it became too much. it takes a lot.

we have seen other moments were president trump has gotten into trouble and people stood by. it took a lot, but this was a bridge too far. do other people resign? do members of the administration on the white house staff resign? we will have to wait and see. these next couple days will be interesting. shery: president trump has called the people who have left grandstand are -- grandstanders. but they have clients to face, don't they? richard: i do not think this is grandstanding, they do not want to be in the public eye. grandstanding suggest someone wants to get their name in the paper or pick a fight because they want publicity. none of these people wanted publicity. it is interesting the way the council did this. they took the vote in private and all stood together, no one stood out.

the main council steve schwarzman runs is the more important of the two. president to only disbanded when it would be disbanded by the members themselves. betty: what about the relationship between president trump and his republican members? i want to play for you the very awkward situation vice resident mike pence finds himself in. he was asked about what happened on a trip. let's play what he said. mr. pence: what happened in charlottesville was a tragedy. and the president has been clear on this tragedy, and so have i. i spoke at length about this heartbreaking situation on sunday night in columbia. and i stand with the president and i stand by those words. it is interesting because we have had him and other republican leaders that condemn

the neo-nazis and white supremacists but do not address the bizarre news conference yesterday by president trump. richard: vice president pence is in a difficult situation because he has tried up until now to stay above the fray and not engage in the tweets and other stuff to come out of the president's mouth. in this instance he says the president has been very clear. saying it does not make it so. the president has been anything but clear. he posted one thing and then set another thing. who knows what he will say next. hear some clarity from him the other day when he was speaking from the heart and not the teleprompter in trump tower and said, both sides. look at how uncomfortable the men and women in the cabinet behind him looked. that was really something. shery: people have been

uncomfortable about trump for white some time. we have seen him survive many scandals, the firing of comey -- will this time be any different? the mostthat is important question and one no one can answer. disbanding ofhe these councils. stuff that is very difficult in america for many people to face. we have seen in these last couple days around the water coolers and in family people have been affected by this deeply. other ceos put out statements assuring their employees they stood for inclusiveness and diversity. an issue companies and the heads of companies will be dealing with for the next couple days. one that all of america will be talking about.

there are signs on the street in new york urging everyone to have a discussion. every night, protests there outside trump tower. former special adviser to bill clinton. one feature on the bloomberg we would like to bring to your attention is our interactive tv function. you can find it at tv to watch us live, but also see previous interviews and dive into securities or bloomberg functions we talk about. you can become part of the conversation by sending us instant messages during our shows. that is for subscribers only. ♪ shery: welcome back, let's get a

quick check of the latest business headlines. spends $1 billion on original programming in the next few months, stepping up its

battle with amazon and netflix. a los angeles-based team will buy content for apple music and other streaming contents. apple's budget does not compare with its rivals. amazon's outlay at $4.5 billion. rejectinghay pacific -- declining passenger numbers fares.aper f -- the ceo world out becoming a low-cost carrier, saying they are focusing on airport lounges, more wi-fi on planes, and better food. they say times are tough. spacex has successfully completed its run to the international space station, delivering three tons of scientific experiments and ice cream. linking up some 400 kilometers above new zealand.

they took over shipments to them fleeten that shuttle retired. their next launches in november. another global investment house looking for ways to directly that on chinese debt. we will have the details next. this is bloomberg. ♪ whoooo.

you're searching for something. like the perfect deal... ...on the perfect hotel. so wouldn't it be perfect if... ....there was a single site... ...where you could find the... ...right hotel for you at the best price? there is. because tripadvisor now compares... ...prices from over 200 booking... ...sites ...to save you up to 30%... ...on the hotel you want. trust this bird's words. tripadvisor. the latest reviews. the lowest prices. ♪

shery: it is 7:30 a.m. thursday in hong kong. a sunny day outside. we will see how the labor market is doing this afternoon. in this bright city, the unemployment rate expected to come in at 3.2%. we are 30 minutes away from asia's first major market open. betty: it is 7:30 p.m. wednesday evening in new york city. we are in late summer. markets shrugging off turmoil we have seen in washington. the focus on the fed obliterated by president trump and all that news. we will be talking about that and the impact, the reduction of

the balance sheet will have on the market. i am betty liu in new york. shery: and i am shery ahn in hong kong. you're watching "daybreak asia." president trump has abolished's advisory council as more high-level figures walk away. his strategy forum held a conference call wednesday to ask who would stay on board. of the dozen executives on the call, 10 voted to quit. among them, blackrock ceo larry think who said he resigned following his conscience after the president's remarks on charlotte bill. -- charlottesville. agreed the fmoc inflation will gradually rise to the 2% target but many fear it will stay below that level for longer than expected. the decision on balance sheet reduction was deferred to a later meeting. the reserve bank of india

governor pushing commercial banks to cut borrowing cost to boost investment after a final rate reduction for a while. he and his deputy voiced concern over inflationary pressures and warned that could overwhelm private borrowers. the r.b.i. closed -- cut its rate this month. the u.k. employment rate fell to 4.4%, the lowest since 1975. earnings picked up 2.1% in the second quarter, slightly ahead of estimates. that has implications for the economy and the boe, acting on a drag -- as a drag on spending. 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. wery: let's get more on what should be watching is trading gets underway in asia with

bloomberg's global market editor, adam haigh. we have seen emerging markets rally this year. index up more than 20% this year. does the rally have legs? that is certainly the refrain your hearing from the fed, testing the valuation argument in equities. performed particularly well, up 25%. that is relative to the s&p 500 at 11% or 12%. have a look at the chart g #btv 9388. it shows you the extent of that rally. now that the argument is challenged by people being skeptical of the run-up, given in their view, it has not kept up with increases in prices. even if you track of the average

ratio over 30 years, you find it is one standard deviation below what it was over that period. in the mind of the bulls that offers value and emerging-market equities are still cheap for them. it -- we continue to see inflows into equity funds. last week, 21 consecutive weeks of inflows continuing to hold up. looks like we just lost adam there, we will try to get him back in a few moments. let's stay on the markets and focus on the fed minutes, showing policymakers engaging in a detailed debate about inflation last month. they deferred talk about the balance sheet. many fear it may stay below that

2% target for longer than expected. lower for longer seems to be the phrase. we will take a look at the minutes with steve matthews. inflation continues to confound economists and said policy makers. steve: that is exactly right. the minutes really tell the story that the fed is uncomfortable with where inflation is right now. they have been going on for five months with inflation missing targets, with it continuing to get worse over the last few months. they have been predicting for five years that inflation would bounce back to their 2% target. it has not happened. year after year they have been saying, and another year or two it will go back but now we see doubts come in. the committee is trying to say there has been a deep belief in

what is called the phillips curve model, where unemployment goes down, we now have unemployment at 3.4%. when unemployment goes down, inflation is supposed to go up. that is not happening and it is confounding the fed and they are grasping for explanations. there is still belief that there are transitory factors and we will get there by the end of the year. out,inutes as you pointed many of the fmoc members say it will take longer than expected. some are starting to doubt it will happen at all. change at there any all in the tone of these minutes? i would say the tone of these minutes was a little bit dovish. therefore, while in the june minutes in the june meeting, the

said therethe fmoc would be one more rate increase this year which they predicted for december. now there are doubts about, will there really be one more increase in december? the other big revelation out of these minutes was, wall street has been saying we will get a balance sheet starting to shrink announced in december. these minutes said there was a members thatfmoc wanted to move in july. the fact there was big movement for a july announcement, which did not happen, suggests that september is a lock, as to there being some big economic shocks between now and then. you can just market down, you will get it back in september.

shery: it was surprising, we were debating september or not. but actually we were thinking july. what about financial conditions? -- fed officials have talked about the rally. was some of the fed staff gave a briefing and said the valuation of equities is now elevated. the fedsed the concern, staff is saying maybe we are seeing a bubble develop. maybe this is something we should be concerned about. had interviews and individual speeches. and in these minutes seemed less worried about equities. but they are worried about bonds. they say low long-term interest rates could cause a reach for

yield, that you could be causing excessive risk-taking. several participants are worried about commercial real estate. there is an undercurrent of worry about asset prices. this is important because in the absence of inflation, and inflation is not a concern for this fed, you have to have a reason they would raise rates. asset prices and the potential for a bubble is the reason they would go in december, if they go. shery: or not. steve matthew, thank you so much. let's turn to china. attractingis international investment houses with principal investors. the world's third-largest bond market. take a listen. >> with the bond connect, the fact of the coolers have been

relaxed and the size of the chinese mark -- bond market, provides an opportunity. how we will be led by this is our clients, that push us to get additional yield in their portfolio, but not necessarily in the most traditional form of that. shery: our corporate finance reporter joining us from sydney. tell us more about china's debt market. what is attracting these money-management it -- money-management giants? in many ways it comes down to size or scope. china has a $10 billion market, the third-largest in the world. if you are a fund manager looking to put money to work, it is something you have to work at. at the same time, chinese regulators have been pushing for more foreign investment into their bond market. sensears are aligned in a for money to go into that

market. betty: what kind of bonds does principal go -- principal global favor? ruth: they would be most interested in state-owned enterprises and their debt. they are not as interested in corporate ones like alibaba. it is much better to do private deals they say, if you're going down a corporate route. betty: in terms of risk for foreign investors looking to tap the onshore china bond market -- what are the risks? ruth: the one that is really obvious is transparency from underselling financials, to operations. chinese companies can still be quite opaque. if you are a bond investor, risk mitigation is important. the other barrier we know about

is china cracking down on leverage. while this has slowed recently, who knows how long it will last. those are some of the risks investors have to bear in mind when they enter the debt market. betty: but they want to be there long-term. thank you so much. the nafta negotiations get off to a testy start. we speak to a apec director. this is bloomberg. ♪

♪ ,"tty: this is "daybreak asia i am betty liu in new york. shery: i am shery ahn in hong kong. the u.s., mexico, and canada renegotiating nafta, with the trump administration taking a combative tone.

asian economies are paying close attention to north american trade talks, and there is a reason why. >>asian first, the region is hiy trade-dependent. nafta talks may have implications for trade talks in this part of the world for the likes of vietnam, japan, korea. good to have you with us today. president trump seems obsessed with it talking about the trade deficit it is one of the key areas that will have to be met. >> the u.s. administration has put a focus on manufacturing trade deficit, not covering services or intellectual property returns and stuff in -- silicon valley has been successful at doing. i am sure that will be the focus for nafta. but these are not nafta changes.

we will not know until a couple years after signing. said that nafta has been hollowing out the manufacturing sector. -- jobs ofed from a moved. >> yes, there have been jobs lost, like autos. something like 5 million jobs associated with the nafta in the u.s. currently, there are big job gains, disruption, supply-chain developments. quite a lot of positives and most economists would say it has been net positive. >> what issues are on the? table -- what issues are on the table? are the red lines for mexico and canada? for surever know because negotiating positions are not taken public. but canada has talked about the need to maintain a resolution body.

the others have not, so much. but they will be clear where there really interest are. a lot of that was about updating nafta. could agree about the desirability of doing that, it is 23 years old. >> e-commerce? >> absolutely, and services trade. how do we do services trade for e-commerce, digital movements, across borders, security come up cybersecurity? have gothe players some innovative ideas about and othertal, labor, standards in all of this, as well. >> this optimism that talks will conclude next year -- they call it overly optimistic. a tough negotiator involved in the talks with japan back in the

1980's, it will be tough. >> they might get there. the record is 150 trade agreements. it takes longer than leaders think they will. the devil is in the details. like it or not, you have to let your officials get into those, and it takes a lot of time. they can also hold it up for strategic reasons, if they want to. >> what if there is no conclusion, agreement? what is the best outcome? >> we would like to see this developing and a way that promotes trade, is potentially open-ended. it could be potentially nafta plus others. tpp was the scene is a good quality template. that nafta would pick some of that tpp. we will be looking at that and ask how they all come together.

towant to see them converge this day, trade-given growth machine. >> do you think it is hypocritical the u.s. pulled out tpp as and now are using a jumping point for nafta negotiations? >> i do economics. it surprised us -- why would into? it is negotiated primarily from the u.s. on tpp. it looks advantageous to the u.s. president obama positioned nafta as a way of competing with china. do you expect president trump to take the same approach? in some stage of the negotiations there are three economies that will say, it is not just us against one another, it is us against our trading partners, particularly north america against east asia.

those issues are going to come up. is positioned as a political feature, not an economic one. there is a combined auto industry against asian exporters. >> i want to go to china. -- doent trump has said see a trade war between the u.s. and china, given trump's position? >> no. but we all know the risks. we just had an apec meeting in canada and they are quite concerned about these things. i do not think it will blow up suddenly. u.s. has year when the examinations of trade with other partners. some of those will come up roughly at the time we have the apec leaders meeting in november. tpp leadersif the

will change the course. bollard, interesting conversation. thank you for your insight. apective director of the secretariat. betty: interesting times, to put it mildly. breaking news on the japanese trade front. the trade balance surplus at ¥418 billion. that is above what economists had expected, a shrinking of that surplus. it has declined from a month before. but not as much as expected. exports claiming 13.4%. imports receding, that may be the reason we did not see the surplus shrink as much. imports at 16.3%. the expectation was for imports

to rise by 17.1%. the trade balance coming in at a ¥418 billion. that is a small decline, not as much as economists had expected. we are seeing the dollar undercut any decline in the japanese yen. how is the currency trading with these numbers? the dollar, but geopolitical tensions. the chart 4320 showing japanese yen is holding steady at 110.05. but we have seen net short positions growing a bit. receding in the past few weeks. it is a stronger yen issue. we have seen a strengthen 5% this year. bloomberg intelligence is pointed out the main risk to the trade surplus could come from the reversal in the yen's decline. it is not just u.s. dollar

weakness but geopolitical tensions. still a good number, second consecutive month of a trade surplus and an eighth consecutive month of export growth. betty: thank you. we will continue to watch how japan trades. we will have a roundup of that story and others in today's edition of daybreak. subscribers go to dayb on your terminals. it is also available on mobile. customize your settings to get the news on industries and assets you care about. this is bloomberg. ♪

♪ betty: a quick check of the latest business flash headlines. hearings began thursday into japan's move to legalize casinos, with a period for public comment. mgm and caesars want clarification.

they are weighing regulations to be debated in september. more than 2/3 of japanese people do not want a casino in their neighborhood. shery: former softbank president says uber's new ceo must fix the company's chaotic corporate culture. uber'sk, after backing rivals, have signaled that investing in the u.s. ride hail hailer.ide betty: paul singer's investment fund has boosted bhp shares, hitting pressure on them miner. a dutch chemical firm may be key to a takeover. shery: plenty more to come with asia's first major market open moments away. we just had japan trade

numbers come in, a surplus here. shery: bigger than expected. the japanese yen continues to strengthen. they could break that 110 level. there could be pressure for the japanese market at the open. have a potential lower open for the japanese market shares given the latest numbers. coming in higher than expected. nikkei futures looking to open higher. coal, and others, treasury wine and wesfarmers, quite a bit when it comes to the sydni trading session. look out for what is going on inh shares of hanks -- banks tokyo. widened.n 2017 the gap

a lot going on with the micro sentiment. but we have the dollar softer on the back of the fmoc minutes. the more optimistic side of the asian session. this is bloomberg. ♪ ♪

track your pack. set a curfew, or two. make dinner-time device free. [ music stops ] [ music plays again ] a smarter way to wifi is awesome. introducing xfinity xfi. amazing speed, coverage and control. change the way you wifi. xfinity. the future of awesome.

♪ ♪ a blow for business, winds up hismp advisory council after more top leaders walked away. the fed minutes shows concern about hitting 2% inflation. signs of stability in japan, trade numbers matching expectations and a surplus of $3.8 billion. anchor: and it is game on at tencent, thanks to millions playing "honor of kings."

anchor: this is the second hour of "bloomberg daybreak: asia." i am shery ahn in hong kong. betty: and i am betty liu. have had trade numbers coming in, another month of surpluses in japan, and later, we will be getting some singapore numbers or data coming out of singapore, as well, so there will be a lot more news on this front. that might be more market moving that what we saw in the u.s., with president trump and the war he is waging now against ceo's in the u.s.. interesting enough, as much as it has been in the headlines, it did not affect the markets at all. yes, it takes a lot to surprise markets these days, doesn't it? the threat of an all-out nuclear war. to be honest, you have to think

there is not much that could be worse than that. president trump, as you mentioned, not making any impact on the equity markets, although we did see some impact on the dollar with these fomc minutes showing concern over inflation, but as you said, you mention singapore exports also gaining, the australian job mark it australian job numbers, and tons of things that investors need to digest this of how, and for a check markets are starting to trade, sophie, of course, we have seen that surge of the yen. how is that affecting the market? yenie: yes, we have the trading higher, and that has some pressure on stocks in tokyo, the nikkei 225 opening 1% loeber, and we have

the trade surplus coming in and we have the trade surplus coming in higher. this is gaining one quarter of 1%, and with earnings, we are looking at the big ones, like tencent, and a report from cathay pacific. the reaction to there is anutes, and gain of half of 1%, the offshore gaining, and asian bonds, they are gaining, although we continuingtreasuries to drop. in the commodities space, we had a surge in industrial metals continuing overnight. surge on the back of the fed minutes, but it would todifficult for the aussie

break that 78 to 80 range. august has typically been a tough month for the aussie dollar. copper, they are trading at multiyear highs, and but ore up, as well, "bloomberg intelligence" is istioning that one thing instilling some caution. going on.k at what is this is above the 3000 level. reaching that mark for the first time in eight -- in a decade. and palladium, that is continuing to lead. russia's metals higher, surging -- precious metals higher, surging. and geopolitics at play, and there is the citigroup's forecast, and a last look at oil. crude just york

below that 47 dollar per barrel, and gasoline prices also rose, betty. y: all right, let's get to the "first word" news. taking aim atp amazon, saying they are killing jobs across the country. his twitter comment echoes some that day and other tech giants much.ecome too one person said amazon was a monopoly that he would pursue. anchor: the u.s. saying it want s more. negotiators saying president trump wants to rebuild to address american concerns about deficits, trade, and jobs. there were comments from mexico and canada, about the benefits

of the 23-year-old pact. americans, this agreement has failed. we cannot ignore the lost manufacturing jobs, the businesses that have closed or have moved the cousin of incentives, intended or not, in the current agreement. removedhave closed or because of incentives, it incentives,not, -- intended or not, in the current agreement. anchor: alibaba. the partner will give up the majority shareholding. is reapingcent rewards, posting its fastest revenue growth in years and record profit that beat estimates by 35%, tapping into

the spending power of players for their marquee title "honor them to," and helping surpass that of desktops for the first time. global news 24 hours a day powered by our 2,400 journalists and analysts in more than 150 news bureaus around the world. you are watching bloomberg. and a managing editor for japan and korea is joining us, so this surplus did not shrink as much as some economists had estimated, but what were the takeaways? think the numbers are a little bit better than expected. overought we would see , with imports of fossil fuels driving the import side. the numbers were better than we thought. looking at china shipments,

there was about an 18% increase. that was a little bit lower but still pretty close and better than we thought. another number i thought was 11.5%sting was the increase in shipments to the u.s. that could -- that is higher than we have seen over the years. and it could cause some kind of trouble. we have got a newly imported -- a newly appointed ambassador, and this afternoon, he is going to meet with the press for the first time, so we will look for any kinds of indications or concerns of the u.s. trade balance. has hadyou know, japan some good numbers, with the longest string of growth that we have seen in more than a decade, brian, and that was driven by the domestic consumption, but what about the room from a strong exports? fromat about the boon strong exports?

in the latest quarter, we sub rising consumption, rising public investment -- we saw a rising consumption and increasing public investment. i think there is a thought on the ground that the domestic side has kind of peaked. keep in mind, the gdp growth was well above the potential growth rate, so there is a sense that that might come down a little bit. it was a bit of a worrying sign the other day, toyota once again trying to squeeze their suppliers, which indicates some kind of bearish sentiment on toyota's part, and that could waging and domestic demand going forward, so i think japan is going to have to keep an eye on exports, as well as domestic demand, if it hopes to maintain growth through the rest of the year. anchor: with that bears

sentiment have more to do with the yen? we have seen the currency change . it is considered a safe haven. brian: yes, that is exactly right. the geopolitical tension, the a possible easing, the fed backing away from hiking interest rates, we saw that overnight, so that is one factor. there is also the expectation that we are going to see a slowdown in asia, particularly china. that should have a negative impact on exports, and then, i think even if the exports dufault domestically, as well, so that is another problem if they are looking at -- if exports did fall to messick we, as well, so that is another problem if they are looking -- if exports did fall domestically , as well, that is another problem. there are some bounce.

brian, thank you so much for joining us out of tokyo. right. our other top story, president two of hislving economic advisory councils after prominent business leaders walked away following the president's comments on charlottesville. so this is pretty much coming. i do not think he had a choice here. >> know, he did not. he defended these two groups. many of the that executives felt they could no longer serve after the comments he made about charlottesville, and they took a poll on the business council, the strategic counsel, and 10 of the 12 people that talk to us told us 10 of the 12 were planning to leave, ,o he was preempting the rebuke

and it is a very public rebuke from the business leaders, saying they do not want to serve under trump anymore. anchor: these councils, they have not really met recently. there was the original intent of having them. yes, they had a meeting in april. business leaders were saying we want to help the president. we want to back the president as he goes to trying to do things reform and infrastructure spending. he needed them. he needed their support. time, he is long our first ceo president, and he really hitched himself that way. "hey, i have got the backing of the business community," and this is very symbolic. jodi, talk to us

about this new interim communications person, hope hicks. jodi: yes, she was named after anthony scaramucci. to both jared kushner and funk a trump, and so -- and evolve the trump -- and rump, so she is on the inside, and they wanted to move quickly and have some sort of comedic asia and after the very short tenure of mr. scaramucci. anchor: ok, thank you, jodi. all things washington. looking ahead, cathay pacific facing turbulent times after its largest loss in decades, and we will look at why they are still rejecting the budget route to recovery. next, more reaction to the fed minutes, with a possible other rise in rates this year.

this is bloomberg. ♪

♪ "daybreak: aisa -- asia." apple may spend $1 billion on original programming. the batter with amazon and netflix. the los angeles-based team will place -- will devise content. the apple budget does not compare. spend $6ays it will billion this year. and tesla mayle help stocks hit a record high this year in taiwan. .he taiex the fund is betting the rollout iphonemodel 3 and the will help.

it would make 2017 the best year for the index since 2000 nine, when it rose nearly 80%. successfullyx has completed its cargo run to the international space station, delivering tons, including ice cream. flight from-day cape canaveral. shipments, and the next launch is in november. shery, let'sight, turn our attention back on the fed and the minutes that came out today and what it will be doing about unwinding its massive balance sheet. our next guest says october is the best month. joining us from melbourne is a jpmorgan global market strategist. so why do you say october? >> well, the federal reserve

likes to move in the start of it month, so i think it sets up very clearly to outline the discussion in september and then indicate they will start in the beginning of the next month. i think when we look at the outlook for inflation and growth, the fed is very much on inflation, thinking of interest rate hikes, but thinking of the balance sheet, they are thinking about the alice of the economy, and they will naturally start to one why -- they are thinking about the balance of the economy, and they will naturally start to think about it. anchor: the sort of fishers you are seeing in d.c., -- the fissures you are seeing in d.c., what are you attributing this to? kerry: i think they are sort of insulated from the political rhetoric. looksentally, the economy

good. corporate earnings look good. a still are putting their hopes on fiscal spending and deregulation -- they still are putting their hopes on fiscal spending and the regulation to some extent. we have not seen that completely wash away. we could see something on tax reform, even if there are some nominal things shaved off of the tax rate. politicalware of the developments. they are aware of how that could potentially undermine, but we are not really there yet. with the backdrop, you have the rest of the world, and that is not really anything to do with u.s. politics. anchor: maybe it has a little bit, but what is factored in with the u.s. dollar, we see this continued weakening, which is also affecting currencies in asia. i want to pull up this chart. 24, at it shows

that hedge funds are now the sinceullish on the euro 2011 -- and it shows that hedge funds now are the most bullish on the -- bullish on the euro since 2011. is that surprising to you? seeing a slow decline in the u.s. dollar? slowdown or decline in the u.s. dollar? kerry: the u.s. dollar weakness is not only due to pricing out interest rate hikes but also the in differentned regions around the world, the fact that the european economy and the eurozone is going strongly. as well, the u.s. has had some political troubles, and the data has been somewhat softer. as you mentioned, it has been about dollar weakness.

i think a short position in the the fact that we still believe the federal reserve will hike rates in december, as long as inflation supports it, then you will see them positioning in some dollar strength. i think the long-term view is the one that should define. it is overvalued if we think about the difference in standard deviations and how far away it is, and we think it should be a longer-term defined for the dollar, but that is not going to change in the next couple of months. him we i think the left saw this, it lasted about a decade. is that something you are predicting will happen? mostlyis be multinationals? kerry: it does go to seven or

eight years long. there are reasons it could over the long-term. it could be a multi-your run, and it could be heading towards recession in the next new year's, and that would weigh on the dollar, but i think fundamentally, the difference we have seen -- in the next years, and that could weigh on the dollar, but i think fundamentally, the difference we have seen is something we could focus on. generating revenues from offshore. thosel boost some of revenues, and that is not necessarily a bad thing. with the rate hikes, one this year and some next year. that extends the scenario that we are in. the dollar may enter a downward period, it does not mean it will change a huge amount of the outlook. how aboutrry,

geopolitics, just quickly, if you can? i think that is something we should not focus on. it is very much in trump -- very much into rum -- interi volatility. it really doesn't have a lasting impact. we saw a quick selloff over the last few days. north korea. longer-term horizons. craig, thank you so much for joining us, from jp morgan. of course, we will have more discussion on the fed and the markets. plenty more to come on "daybreak: asia." this is bloomberg. ♪

♪ earnings areba

likely to come up roses when it reports later today, strong growth expected. it is seen growing more than 100%. here is bloomberg's ramy inocencio with a preview. 's profits rocketed more than 80%, and that makes them the biggest chinese company by market cap, and we start with the stoxx story. alibaba has outpaced the world's biggest companies this year. its stock is sitting at this all-time high, but the company is looking riskier when it comes to evaluation -- when it comes to valuation. the yellow bar is rising faster than its earnings estimates, which is the orange bar, and the same tencent is true for its -- and the tencent, same is true for its counterpart, tencent.

one reason for the stock surge is the alibaba revenue growth, topping every single analyst's estimate, forecasting 45 percent him a 49% growth in the year ending march. % growth in the year ending march. 80% in its most recent fiscal year. looking ahead, alibaba is looking for its next big driver of sales. it is pushing into southeast asia and investing more in entertainment as well as the cloud. cloud revenue may be small now, but rbc expects that to double year on year. again, the numbers crossed before the opening. ramy inocencio, bloomberg news, new york. anchor: we will watch out for alibaba.

ahead, cathay pacific. our next guest has an outperform rating on that.. hear why from a ceo next. this is bloomberg. ♪

0 in singapore. 28 degrees out here and a very hot. quite warm here. you are watching "daybreak asia." export numbers from singapore. economists expected. electronics asked boards, robust. of 16.3%. expectations were for a 15%

increase. that is a slight slowdown from what we saw in prior months in singapore. shery: what is interesting about these numbers is not all nondomestic numbers fell. economists have said we are seeing this uneven growth and that is problematic, given this is not a mental inflation coming in. it could be seasonal. get other headlines from the first word news with paul allen. paul: president trump has abolished his business advisory council as more high-level figures walked away. his strategy forum held a conference call asking who would stay on board. of the dozen executives on the

call, 10 voted to quit. ceo. them is blackrock say --est trade minutes fed minutes say policymakers may make a decision about -- most agree inflation will rise to a 2% target. the decision on the balance sheet reduction was deferred to a later meeting. japan post a second consecutive trade surplus in july as exports rose from a year earlier. -- increased%, 16%. that left a wider than expected trade surplus of three $8 billion. domestic demand drove growth. the reserve bank of india governor -- increased 16%. is pushing commercial banks to cut borrowing costs to boost investment.

they voiced concern about about inflationary pressures. overwhelm it could private borrowers. rate fellnemployment to the lowest number since 1975. up 2.1% in the second quarter, slightly ahead of estimates but lagging inflation. that has implications for the economy and the boe. global news, 24 hours a day, powered by more than 2700 journalists and analysts, i am paul allen. this is bloomberg. another day of regional gains for asian stocks. we are seeing me regional benchmark gained 0.5%.

0.5. get -- gain yen stoppingrong those equity markets. sophie: the latest trade numbers. perhaps lending some support to what is going on with japanese shares. we also have gains from the earlier debt. i want to quickly point out what is going with the sing dollar. did get the domestic exports coming in, slightly weaker than forecast. and check out the qe, while the aussie dollar is remaining -- aussie dollar is remaining steady. let's check out what is going on here. i.t. stocks, tracking that rise. financials are falling 0.7%.

is japanese banks are vulnerable to the narrowing we yield curve.the broadly speaking, while japanese stocks have lagged the double-digit growth in asian shares, mitsubishi, they see a silver lining in the underperformance as profits have topped estimates. economy, that is growing. valuations remain cheaper, leg in the u.s. and europe. are somethere naysayers. they say they are looking a little too good. take a look at what is going on in australia, giving the earnings on slot. miners are jumping. notll show you the one day, the year to date, because i want to show you what is going on with the laggards. telcos, dragging today. falling over 9% right now. after they are saying

they are cutting their dividend policy. it is trading at a september, 2012 low. and earlier, it all over 20%, betty. that is telstra. betty: thank you so much. sophie kamaruddin watching the stocks. chinese tech giant tencent. estimates, the fastest growth of sales in seven years. stephen engle joining us. this big giant. what stood out? fact that it is such a huge company and posted these numbers is what everybody is chatting about. revenue, some 35% higher than the median forecast.

doing, theye really have been a juggernaut with online gaming. they are moving more into mobile of king'sh this honor game which has more than 200 million users. platform, ong this top of which they have more than one billion users. helps create kind of an ecosystem on the mobile. and gaming. that helped drive a 54% surge. in the quarter, for the first time ever, mobile gaming death top forssed the first time. number.way sales rose 59%.

this is quite an impressive set of results. shery: especially honor of kings. i still haven't tried it. have to try it. from earnings, we are also hearing tencent will be hugeting in this privatization. >> this is part of what the chinese leadership has always talked about. the telecoms sector is going to be the next testbed for carrying out further privatization. infusing private capital and expertise into these state owned sectors. willhanghai listed company sell about 35%. china life will be one of the stakeholders.

alibaba, also. a number of big tech companies, going to buy this. private expertise into the company. make it, supposedly, more professional on a global stage. those board seats are going to go to these companies. engle, thank you. let's talk about cathay pacific, reporting the largest first-half loss in its history. woes look at their current and potential future. with crucial perspective, the founder and ceo. she also thanks -- thinks an

error china takeover is likely. you think it is going to outperform. have you changed your call after this loss? surpassed expectations. is this the bottom? >> we believe this is the bottom centlyis is why we re upgraded the stock to outperform. mosttors have made the money when things were terrible. cathay is even though going to remain lossmaking the second half, 2018 is going to be a turnaround year for cathay. they are going to make handsome profits of 2.5 billion by 29 teen. also, the transformation program benefits.

it is an attractive takeover target. a union takeover waiting to happen. the second largest passenger airline in the world. >> i have to be skeptical about that call. you have to consider cathay pacific is part of the legacy of hong kong. having a massive chinese airplane come and take it over, how feasible is this? invitestentially political backlash. cosco shipping has proposed a iconicry offer for -- an

-- cathay is losing it's a role as china's gateway airline as beenof the carriers have launching flights. cathay is facing such a huge challenge. , has actuallyr increased because the margins have become more volatile. airill definitely help china as an acquirer as it is trying to expand its international operations. to fast-track way access to premium travelers. let's talk about

management. is rupert hage the right person to continue to leak cathay? >> he has a wealth of experience. if you look at what they have presented during the briefing yesterday, rolling out initiatives that will help cathay to trim their nonfuel costs over time. they are simple fine their fleet structure. restructuring management. also, looking at various ways to save cost and lunch new products. we have a fairly forward-looking management that is hungry to turn the airline around. you will start to see better results. betty: is it going to come quick enough? are shareholders patient enough? 2018-2019 be when we start to

see the fruits of this labor. betty: thank you for joining us. what do the latest results mean? we will hear from the ceo of tektronix. what does he think about the -- standing of the manufacturing counsel? this is bloomberg. ♪

this is "daybreak asia." tektronixtron -- industries reported income from last year. the power tools maker mainly manufactures in asia and exports

to the u.s.. are ready to respond to any change in trade policy. the cejoining us. ready to respond to any change in trade policy. the ceo joining us. thank you for coming in. we are looking to get your results. let me get your take as a ceo. of course we have trump. ing hisanning -- bann advisory groups. how difficult is it for a ceo like you to work with the government and having to please customers? focus on things we can control. we focus on new product development. hiring fantastic people. that is why our results continue to be great. don't get distracted by headlines and political noise. what about the infrastructure project? optimisme is great

about his program. this week, completely overshadowed. how are you pricing that in? >> the good news is the u.s. economy is flourishing. if there is additional infrastructure activity, that is gravy. we are not counting on any help from the government. momentum.e we are not just in the u.s., a u.s. supplier. geographic expansion is working so well, i think that offsets potential issues. shiftingu talked about your production to the u.s.. how much will it cost you? shifted selectively products. the cost is built into our financial model. growing continue to see gross margin from the company.

you have already started producing more in the u.s.. >> we have. we will only do it if there is a benefit to our shareholders. the key is new product development. we have so much new cordless product coming in. thatwill overwhelm issues we encounter and the macroeconomic environment. while the manufacturing is something we focus on, the real key to this company is the new product machine we have created, which is world-class and unprecedented. nafta we are starting renegotiations, i guess you could call it. export driven thesey, how do you view negotiations? what do you hope comes out of it? i don't get distracted by

issues, issues where i take control. canada is one of the crown jewels of tti. our business has grown well and that is not going to stop. we export from china to canada. i believe our results and canada will continue to exceed expectations. shery mentioned about infrastructure in the u.s.. president trump had tried to talk about infrastructure but got derailed with the news around charlottesville. aboutu worried infrastructure getting off track? maybe some of the plans you had on that, might be derailed? >> i have zero concern. if there is no additional investment, our business will still flourish. the key to our growth has never

been macro economic growth. that is why we are not concerned. that is why i feel very confident the next five years of tti will be an outstanding phase of this company's development. about some ofalk the things you can control. operating costs. that could be problematic. what we are seeing here on the chart, a function, operating costs. they have been more than double the pace of growth of your revenue growth. could this be problematic. programs inctivity the manufacturing arena are so well done, so effective, we can offset these costs with productivity.

again, the most important is the flowing of new products that have growth margins. if we continue to bring products, cordless that offsets inflation. i'm not concerned about them. president trump is looking into launching an investment into chinese intellectual property violations. >> it will only help us. occasionally, our innovative, exciting products get knocked off i may be a chinese manufacturing company. this will only help. shery: what about the strengthening wilyuan? this is a completely different scenario. how much has that hit you? >> it has had an effect that it

has been offset by sales growth. you see the results. i'm very confident we can offset currency effects. i have to continue to ask you about the u.s.. the economy. decides to delay their rate hikes, do you see that continuing to propel the economy? >> i mean, certainly. lower interest rates are a plus. you have to remember, we are leading a revolution from gas powered products to cordless. ac products to cordless. that is a once in a generation revolution and that will dwarf any short-term interest rate changes. this is why we are so confident. pipeline new product

that will blow you away. i am just not concerned about it. it is because i am so confident our team's innovation process is so well-managed. betty: thank you so much, the ceo of tektronix industries. one feature we would like to bring to you is our interactive function. you will now not only be able to you can become part of the conversation by sending us to messages during our shows. our bloomberg subscribers only. this is bloomberg. ♪

shery: this is "daybreak asia are co- asia."break betty: headlines coming across, saying they stand firm on their buyillion offer to on gore. this has been a controversial bid. bonds in the market to try to block this deal.

management opposed to the deal. case, saying they are going to stand by this $9 billion offer. let's of headlines. also lots of headlines coming out of asian economies. all the job numbers. we will be discussing all of that. we are expecting those numbers to look pretty good. the economy is expected to have added 20,000 other jobs. we will discuss this along with the philippine gdp with the finance secretary. betty: is it from "daybreak asia." this is bloomberg. ♪

david: you are now both former presidents. mr. clinton: nobody plays a song when you walk into a room anymore. mr. bush: i did not bring the coffee. david: what do you say to each other? mr. bush: generally, when does this program start and when is it going to end? mr. clinton: he'll say to me give shorter answers. david: what was the biggest surprise the first day you are in the oval office? mr. clinton: it really surprised me how easily i could be turned into a two-dimensional cartoon. mr. bush: in walks my dad, i said, "welcome, mr. president." and he said, "thank you, mr. president." >> would you fix your tie, please? david: people wouldn't recognize me if my tie was fixed.