♪ >> 7:00 in hong kong. live from bloomberg's asian headquarters. welcome to daybreak asia. steve mnuchin says the white house is having productive negotiations with china, which might just avoid a damaging trade war. president trump is ready to expel russian diplomats. moscow's expect -- is expected to hit back. it is just after 7:00 p.m. this sunday. says china is able to withstand external threats. investors brace for another rough ride after global stocks suffered their worst week since

the route in early february. ♪ betty: if markets were not nervous enough we have geopolitical tensions as well the middle east. headlines out a few moments ago from saudi arabia saying they have intercepted missiles fired from yemen. we will keep our eye on those headlines. that is likely to keep the mic or -- these market gyrations happening in the u.s. and asia. look at g #btv 2839. the worst market in two years on friday. shows you the level of nervousness. you have lots of measures to show you the amount of nervousness in the market and anxiety. this is a chart that shows you the price swings on the s&p and

how much they have now widened over the next several months. look how quiet it was for much of 2017. people were quite complacent. goldilocks conditions in the markets. not so much now. yvonne: it seems like what we saw last year was a similar situation. largely ignoring the political risk. now we are pricing in more about any kind of turbulence we see in the white house. trade tensions as well. we are going to be testing a lot of those lows we saw in february. be likes of japan already breaking below that. going to get interesting from here on. betty: speaking about technicals and where the markets ended, what levels we were at, let's quickly show you how we traded on friday before the weekend. s&p down 2%. the dow losing 425 points. the nasdaq also just getting slammed, down almost 2.5%,

likely a rough ride in asia as you guys are waking up. yvonne: looks to be the case. let's look at new zealand so far. down close to 1% right now. vicki we still holding strong. the kiwi still holding strong. 1%.es down a third of the aussie as well at 7708. mostly seeing broad usd weakness. we have been talking about the bid for treasuries has not been that strong. japan coming up, interesting as well. 4.5% selloff on friday. a pronounced downside from last week. we could see about a 400 point drop once again at the open today.

probably not as bad as what we saw friday. we were talking about how we are seeing more calm back in the market. dollar-yen still well above 105 against the dollar. president trump is poised to take his most aggressive actions yet against russia on monday. he is likely to announce the expulsion of double -- dozens of diplomats. however, the president said he still wants to get along with moscow. joining us from washington is bloomberg's mark. react.we expect putin to mark: we expect a vladimir putin to retaliate. whenhas been his m.o. something like this happens. we also expect other european countries to follow suit with their own diplomats. setting up kind of an interesting showdown, particularly because we have not seen president trump aggressively going after russia

for the interference in the 2016 election and the recent poison attack on the spy and his daughter in britain, which is precipitating this response. betty: let's move onto the other issue at hand that is affecting markets, which are the trade tensions, the trade war. steve mnuchin said he is cautiously optimistic the u.s. can reach some sort of agreement with china on the tariffs. are they or are they not proceeding with these tariffs? mark: they are proceeding. what the treasury secretary was that he has been having conversations with the chinese vice premier and he is encouraged by the discussions and he is cautiously optimistic it will have a deal. but he said they will proceed with the tariffs. we havesaid was a must an acceptable agreement the president signs off on. he is at least holding out hope they can strike some kind of deal that will be beneficial to

both sides and a voice tariffs. -- and avoid tariffs. betty: seems like the mood is better than last week but the also- but the president tweeted they are close to a trade war with korea. mark: secretary mnuchin made some news there too, confirming what we heard from the south korean trade minister that there is an agreement in principle on both the six-year bilateral the trump, as well as administration's position of steel tariffs on south korea. mnuchin said there is a productive understanding with south korea. he didn't get into details but said he expects to sign the agreement soon and south korea will reduce the amount of steel they sent to the u.s. yvonne: mark, thank you. setting of what to expect the next couple days. in the u.s. china trade tensions, they were top of --

policymakers and academics in beijing. our correspondent is covering this development for us. we are hearing more improvement. at least better on the side of the u.s. what is the mood in beijing? they are certainly concerned. from the business executives that had been gathered here the past few days, policymakers and academics we have been speaking to. here that broad view the approach taken by the trump administration is not the right one. that seems to be the consensus view, even if the issues around tech transfers and forced tech transfers are real issues that companies face year, issues -- face here, issues that most say need to be addressed. in which the method

the trump administration is going about addressing those concerns that is playing into the angst here. a ceo who said they were watching very carefully, what effect this might have on gdp. whoeard from another ceo said they remain constructive on equities but are keeping a close eye on this. in terms of the academics we we spoke to a nobel prize winner who said in a trade war, china would likely win because they have more tools at their disposal. we spoke to former treasury for hisy larry summers views and he said he was not surprised by the market reaction that we saw and said the selloff does not need to be sustained, when it will all depend on how this plays out and the psychology of the trade tensions. think the trade sanctions need to have a large impact on the global economy.

impact of thecal degree of friction there is right now could be serious for markets. so it is both a matter of what actually happens in terms of tariffs and the psychology. i hope the temperature will be taken far down on both sides. tom: the other issue that has come to the fore at this forum is the immediate concern around these trade tensions of course, but longer-term, the impact of china's determination to upgrade its manufacturing sector and compete on a global stage in areas like artificial intelligence, robotics and electric vehicles. whether or not it has detected do that and how that will impact global trade further down the line. betty: we also heard from the new pboc governor. what was his message to business leaders? tom: that's right. the first public comments in a forum by this. he reiterated his stance

that there will be further reforms and further opening up of the financial sector here. he said those reforms would be rolled out, though he did not give any details in terms of the specifics and the timeframe. he also talked about their determination to continue to press ahead with greater convertibility for the yuan, though again, we do not have a timeframe for that. in terms of monetary policy, he said policy would remain prudent and neutral, again, continuing from the former governor's stance set up here in china from the pboc. the other important piece of news around the central bank was the developments reported by the new york times that the head of the newly merged banking and insurance regulator will become the party secretary of the central bank, essentially a step up in terms of the role overseeing what egong does. havee analyst put it, you

the vice mere here overseeing economic and financial affairs, he is the key strategist. and you have the enforcer, you have the head of the pboc who implements these policies. that appears to be the structure. that is significant news that he is the party secretary. if our he -- a very powerful position. the three key men now to look at. betty: tom in china with the latest. now let's get to the first word news. rami: first to facebook. taken out ads to apologize publicly for not doing more to prevent the mishandling of user data by cambridge analytica. mark zuckerberg has been called to congress to explain what he has been doing. facebook has fallen more than 13% ever since the scandal broke. social media companies are under increasing pressure to ensure user confidentiality.

tim cook has saluted china's growing tech prowess as a trade war looms with the u.s. the apple ceo told a business forum in beijing that china's 2 million strong after developer community now earns more revenue and makes more downloads than any other single nation. he said china no longer simply builds things, it dreams things as well. chinese state media has listed companies that would be most vulnerable to a trade war and apple is on that list. to japan, prime minister shinzo abe has apologized for cronyism that opposition lawmakers say could hit his chances of changing japan's pacifist constitution. public anger over revelations that officials alter papers relating to a land sale link to abe's wife incentives poll numbers plummeting. he said that such a thing would not happen again. to europe, and protesters angry at the rest of former catalonian

leader has clashed in barcelona. he has been living index file in brussels since last year's aborted declaration of independence but was arrested in germany and might be spent back to spain for trial. aroundbeen traveling europe to press the case for catalan independence. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. up, we are going to speak to a former clinton administration treasury official and ask whether rising tensions between china and the u.s. are likely to explode into a full-blown trade war. yvonne: later this hour. what next, the out that -- this is bloomberg. ♪

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betty: this is daybreak asia. yvonne: last week was a rough one. s&p losing the most in more than two years but that is now behind us. optimistic analysts note it is getting plenty of attention. is there a light at the end of the tunnel? sue: the outlook appears positive that there could be a recovery. but the warning is look out for the trade war. let's go into the market snapshot because the story was bleak last week. .% drop for the s&p 500 worst in more than two years. red across the screen. the j.p. morgan chase analyst sees a couple factors impacting this positive outlook. one is a less hawkish fed. tamer inflation. and stable activity data.

but no trade war is the caveat to have this scenario play out. take a look at what trade war looms we appear to see on friday. were hit hard.s you also saw a lot of steel and metals down on friday as china shot back with his own countermeasures. let's go into the bloomberg dril-quip g #btv 9677. this is a strong showing of gold. when times get tough investors turned to gold. highest in five years. internationally we're seeing big holds as well. let's go into some of the earnings stories for this coming week, because earnings and eco data will be some drivers. a number of stocks from monsanto, blackberry. they will be reporting. in terms of eco data, you have consumer spending, u.s. consider

considered to be coming in strong but somewhat tamer than the last quarter. it is a holiday-shortened week. how much can happened? that's the question. what we will not likely see is this direction play out. will investors be spooked in taking money off the table after last week? betty: that's a big question. thank you, su. let's get more with oliver, chief market strategist at reutimann brothers joining us from stanford, connecticut. would you say at all that we saw last week might be a knee-jerk toction, or are we going have to get comfortable with swings like this. oliver: probably a justified knee-jerk reaction.

historically this happens about once a year and we have not seen it in quite some time. this is not entirely unhealthy or uncalled for. the trouble as you have been reporting is the pending trade war, because that could really impact economic growth both here in the u.s. and globally, and that is what markets are concerned over. some of the unease and turmoil in the white house is really throwing in some kinks. bolton could easily drive up oil prices, and that changes the inflation picture and a lot of things. there's just a lot of uncertainty right now. i think over the next week or two, investors should be pretty or for more volatility but also should be looking out for great companies that are going to be available to buy at very good prices. yvonne: certainly some things have gotten cheaper, indeed. mean, whatly -- i presents now good value?

have there been stocks or sectors that people have been on the sidelines and now this presents the perfect buying opportunity? oliver: some of the sectors that have been hit hardest had been financials as well as materials and industrial shares. think about companies like jpmorgan, boeing, 3m, caterpillar. they have all gotten beaten up sharply in the last week or so. and if you believe that they are going to avoid a trade war, it is significant one. and if you believe global growth will be relatively strong, then those stocks should fare very well on an earnings basis and drive share price is high. what are going to see more volatility in the short-term. seene: oliver, we have some key builds -- we have a chart here that highlights this here. 494.

our stocks the only asset worth owning at the moment? oliver: no. we own short-term bonds as a volatility moderator more than anything else. we are not particularly bullish on bonds. there are a number of asset classes you want to be in at, i won't say it all times, but steadily throughout your investment career. fixed income, alternatives. looking at precious metals as some commodities i think is always important. keeping an overweight in u.s. equities in the correct environment i think is appropriate and we certainly favor that. but yeah, look, it is only stocks that is available to invest in. there's a lot more to it. within that there will be sharp differences in terms of what to invest in. yvonne: take a look at your asset allocation. you have an pretty overweight when it comes to japanese equities, which has been

interesting because japan seems to be the biggest casualty in these trade tensions between the u.s. and china. we spent much of last year talking about how japanese companies are content with the stronger yen. does dollar-yen breaking below 105 change that narrative. oliver: it could and we are re-examining that. --an is also the u.s. largest u.s. ally which is not been exempt from the steel and aluminum tariffs so that gives us pause if there is another dynamic being played out here. so this is one of the holdings and from an asset allocation perspective we are reviewing, just like we are looking at maybe going out in the yield curve a little more as we see the yield curve flattening. muchr we have been pretty concentrated in less than two year maturities as the fed raises rates, as other dynamics are playing out. it might be worth buying the five-year treasury instead of the two-year. yvonne: i see.

in terms of this correlation we see between stronger yen and weaker equities, are you expecting for the rest of this year to this relationship will stay largely intact? again, this is the problem that wall street is facing and why you saw so much volatility last week. there are so many different factors that there is really a complete lack of certainty and visibility right now for investors and market participants. generally speaking i think you are correct. if the yen continues to weaken you are going to see difficulty with stocks. again, there are a lot of other factors that can input that. not to forget that at the end of the day would is absolutely happening is we are moving away from being able to simply invest in run market indices and sectors and have to be more careful in terms of stock picks. if you look at the s&p 500 here in the u.s., roughly three quarters of the constituents of

the s&p are down by more than 10% and they have been even before this pullback the last few days. there are big differences and you have to be careful here. betty: oliver, thank you. joining us from stanford, connecticut. use tv to watch us live and catch up on past interviews. mr. to check it out at tv . this is bloomberg. ♪

♪ this is daybreak asia. yvonne: a quick check of the latest business flash headlines. uber has reached an agreement to sell its southeast asian business to a rival in a deal that could be announced monday in singapore. it includes all of uber's operations in southeast asia.

it would give them a state within 25% and 30% in the combined business as it retreats from that market. net income climbed almost 10% to $8.1 billion. listing inst since hong kong 18 years ago. they flagged billions in impairment where shifting focus towards natural gas. yvonne: china's biggest coal miner has reported its highest profits since 2012 as robust demand any government drive to help overcapacity help the bolster prices. income rose to $6 billion from about $3 billion a year ago. they had fled the jump back in january. and shuttered some mines restricted imports. joins next, brad delong

us to discuss the simmering trade tensions between china and the u.s. his take on all of this. this is bloomberg. ♪

♪ yvonne: 7:30 a.m. monday hong kong, a few minutes away from the major open. some more turbulence on the trade tensions of course but not as perhaps and that as we saw last week. betty: not as bad at all. 7:30 p.m. in new york, and it is darker later and later here. spring seems to be arriving, but dark in the markets on friday. i am betty liu in new york. yvonne: i am yvonne man. you are watching daybreak asia. let's get to first word news. you and good morning. president trump is expected to take his most aggressive action yet against russia later monday

with the likely expulsion of diplomats, following the nerve gas attack on a former spy in the u.k. that will probably bring similar action from moscow but aligns the u.s. with european allies. several countries are expected to announce their own expulsions of russian diplomats in tandem with the united states. steve mnuchin says he is optimistic of a deal with china that would force all the impositions of tariffs order by president trump. he said that sides are engaged in public -- productive conversations and is hopeful of agreement. the president did announce measures worth at least $50 billion or that is punishment for alleged intellectual property theft. and seoul in seoul -- average in an agreement on their six-year trade deal here that is according to steve mnuchin. he said the countries have an understanding on reducing imports of korean steel, and they expect to sign soon.

the south korean trade surplus was $18 billion last year. that is down from $23 billion from 2016. cars accounted for 70% of that. and a key ally of xi jinping of china, the party secretary of the people's bank. many people have such a person to communicate on performance -- the and coming pboc governor will continue to ease access to its financial sector and introduce more currency reforms. he pledged to retain the drive to defuse risk. risks excuse -- external threaten china, i think the current ranking system, insurance and securities markets and the controls in place leave china well-placed to mitigate those risks. ramy: global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. inocencio. and this is bloomberg.

♪ we are counting down to the open in tokyo and seoul. -- the pain and the equity markets after the close of the quarter. sophie: two roundup the first quarter and last week, we are looking for investors to tread carefully this week, and the light data from asia when it comes to direction guidance. we have trade tensions likely to continue living large on investors' minds. we have chinese pmi and japanese central output among the highlights. with trade tensions continuing to be in the spotlight, china is saying it can defend itself am a but as remy pointed out, south korea is closer. we are waiting to hear details of that agreement between the u.s. and korea from the trade minister in seoul. and japan, domestic politics continue to weigh on abe's approval rating, continues to drop.

that is dampening sentiment for japan. look at this chart, because we that -- the friday japanese markets have the biggest losses, the topics below the worst levels since february, both down over 8% this year. some are sanguine, but it is dashing hopes that the improving economic story could extend losses that have held up to 15% since january 23. and investors are part of the problem. they turned net sellers of japanese talks for 10 straight weeks. they account for a for -- a third of the topix, which has its worst performance since 2011. the nikkei and the kospi the losses around 1%. in sydney, the asx 200 is falling for a third day as well as -- with the financials and tech sector. betty: what are you watching in

that space today? sophie: when it comes to tokyo, i am keeping an eye on japanese semiconductor production equipment. they could move after third-quarter sales numbers disappointed investors on friday. but a glimmer of hope from jeffries who does remain bullish sayhe stocks in japan which there is a continuation of firm memory demand supply balance. keeping an eye on japanese iphone supplies. this is a jpmorgan note saying iphone supplies good -- good compare with heavy impact from u.s. tariffs on chinese goods. sector wide earnings could be impacted if the yen strengthens the aunt 105 a dollar. -- beyond 105 a dollar. betty: sophie kamaruddin with the markets. some stocks to watch out for, let's get back to the potential trade war we are watching between the u.s. and china.

to discuss this is the university of california professor of economics brad delong. he is a former treasury secretary for the clinton administration. steve mnuchin, the treasury secretary, set a trade war is not the objective of the trump administration. but is it not? do you believe him? brad: i don't think the trump administration has a mind and objectives. i think they are a bunch of people who have different objectives. i think the big problem is the people, or big problem number one is the people who trump is currently listening to think that china needs the united states much more to maintain manufacturing employment in and around shenzhen than the u.s. needs china to supply cheap goods, cheap good goods to the consumers of indiana, kentucky, and pennsylvania and also to

fill in crucial labor-intensive holes in value chains. china is right. china needs the u.s. as much as it needs the u.s., but there is in beliefs.tion it is when both sides believe the situation is different that you get huge mistakes and things like trade wars. that is the first problem. problem sois a big to speak. and mnuchin going on, talking about this, the trade war, as you mentioned, there are talks going on between the u.s. side and the chinese side, but it was interesting to see william ferris' reaction to this. he is the chairman in beijing. this is what he said about any talks going on between the two sides. >> what i heard from many sources is the u.s. was not in many -- any mood to talk, and there it -- they are still not.

i am not sure where these negotiations are going on, but i have heard nothing that there is communication going on. betty: brad, with the actions so far between the chinese side and the u.s. side, do they reveal there are in fact no talks going on? brad: presumably there are talks , but talks about what? ask right now is china will do less christening and crossing -- crissing and crossing the line on values. that is a big thing to ask. in the obama administration the strategy to pressure china on this was to sign the transpacific partnership and get everybody else in asia on the u.s. side as far as intellectual property was concerned. so that if china wanted to import things from other countries in asia, assemble

them, and export to the u.s., it would be caught up in the intellectual property protections and rules. trump nuked that, and now if you look at that -- if you listen to what trump's people are saying, they want china to do it by itself without any consensus -- concessions from the united states what the transpacific ownership would have set us up to do relatively easily. the chinese are scratching their heads and wondering what is going on. yvonne: [laughter] yeah. so far the retaliatory export -- response has been mild from china, given that, how does trump move forward? does he go further in these tariffs? you give them an inch and they go a mile? brad: i don't know. more and more people from the white house are saying that what happens is that trump watches cable tv. he reacts to that by doing something.

he then watches the reaction on cable tv, and that does something again. and in the meantime there is an entire administration kind of running around trying to deal with it over the president is saying or tweeting or not saying or not signing on this particular day. that makes it hard to predict what will happen or even to think of the united states as a single actor having gold and some kind of a negotiation. the best analogy i can come up look.s -- i mean, i think william shatner did a superb job at the character captain kirk, though i don't think william shatner would have been very good as commander of the seventh fleet. i don't think the trump administration has figured out how to take a president who still thinks like a reality tv star and yet actually use him to

run a real executive training and recruitment program, say, rather than the one that was the apprentice. these, though,of we have seen not just on tariffs but the president has also directed stephen mnuchin to implement further curbs when it comes to chinese investment as well in order to safeguard the technologies. why do you think there is a need to do so when there already is monitors on these investments? national is only monitor concern. this is a problem for the trump administration because of the purported reason for the steel and the alumina tariffs with national security. but i don't know anyone who believes that. and again, it is not so much clear what he is hoping.

had come to the presidency from celebrity as well as trump. but reagan knew he was the star but did not think he was the boss. reagan thought he had highly trained people around him, directors, writers, technicians and so forth, to kind of tell him what aligns with b and where the set was blocked, and it was his job to go in and give the best performance as possible. but as the star and not the boss. trump by contrast seems to think he is the star and the boss, and that his judgment is better than that of anyone else, even though his knowledge base about the issues is very, very thin indeed. that makes it very difficult to predict what is going to happen. betty: and brad, there are a lot of critiques right now that he

is, you know, leading and being the boss increasingly in his own vacuum, surrounding himself with people so it is a big echo chamber. a final question before we go. a lot of talk and debate about how damaging will these tariffs and youe u.s. economy, know it ranges from very damaging to devastating to only a minor impact. where do you stand? brad: it very much depends on what china does in response. the terrorist themselves are going to be bad for u.s. manufacturing, bad for u.s. value chains that rely on china for steel and aluminum, bad for relatively low income consumers in indiana, kentucky, and pennsylvania shopping at walmart with no potential upsides or no potential upsides that i can see be ablethe u.s. won't

to ramp up manufacturing production in the fine -- and the things china hits at us are not fast at all. if there is an upside it will come only if china in some sense agrees to something that would be very valuable for the u.s. economy. but it is difficult to see what that would be because it is difficult to see what ask trump there are,ecause what the real negotiating positions are are not clear, and it may not be clear because there are no real negotiating positions on the u.s. side, that trump wants to make headlines on tv, and that is as far as the thought process has gone. certainly when we saw mnuchin westfall, -- last fall, he had no idea about what he wanted in the way of tax reform, and he had not made any use of the excellent treasury staff to develop an cost out alternatives

. he was just a rally -- just along for the ride, he and the president, as the republicans drafted something quite strange. in the approved it and signed it -- then they approved and signed it. there was no tax reform policy that matter. it is not clear there is an administration with a trade in tariffs policy that matters. betty: thank you so much, brad delong, press -- professor from university of california. the boss of ubs is starting to worry about trade tensions between beijing and washington. catch our exclusive chat with sergio ermotti next. this is bloomberg. ♪

♪ betty: investors and policymakers are watching the white house for any signs of

easing or worsening trade tensions with china. the fed indicate a more rate hikes to come but that could be affected by the potential trade war. policy editor kathleen hays discussed all of this with the minneapolis fed president neel kashkari. what did he have to say? kathleen: i saw him friday, two days after they raised that rate, signaling more ahead, physical tailwinds from the tax cuts, etc. human fed officials broadly have been playing down the impact of -- even fed officials have been playing down the impact of the tariffs. i had to ask neel kashkari, what if these turn into a full-blown trade war? here is what he said. >> there was a full-fledged trade war, it would have a dramatic negative impact on the u.s. economy and the global economy and we could not shut it off. we would have to look at what it means for the outlook for inflation and growth.

understand. i think i understand what the administration is trying to do. for 20 years we have been in that conversation with china saying you should be responsible stakeholders. it is in your interest to be free traders, and china will do what china will do. we can talk to them all they want, and they will do whatever they want to do. the administration is saying, we want to show that we have some recourse. the danger is it goes down a bad leads to two major economies in a trade war. we have to avoid that. i understand the desire to have a level playing field in terms of free trade around the world. the -- inand terms of terms of the trade war? chairman powell talked about this in his press conference in the context of downside. we look at the upside scenarios for the u.s. economy and what are the downside scenarios that could surprise us? six months ago we were not talking about trade is a downside risk.

now it is, and i don't think we have a good sense of putting a probability on it. it is something to pay attention to. kathleen: i asked neel kashkari what he thought the biggest impact on the biggest risk from trade war could be. he said it would be a shock to confidence that is important to economic growth, confidence that would hit stocks, the bond market, raise bond yields, the cost of financing for companies. that could slow down the economy . it is interesting he did say he can see what donald trump is trying to do by pushing out against china with these tariffs. yvonne: we know that neel kashkari was against the december rate hike, so was he against last week's hike kathleen:? kathleen:i was surprised because he supported it. he said let's see why. he gave me this rate hike surprise. he said the fed have made this very well telegraphed message to the market that they were going

to hike the rate. that was one reason. he wanted more continuity as the fed chair move from janet yellen to jared powell. he wanted to see more inflation to support more rate hikes. interesting he moved from of his stocks forward because of the impact of fiscal stimulus on growth, but for now, he is a little more hawkish. he is not a voter, so he could not dissent, but it is important one of the biggest doves at the fomc at this meeting said he was on board. yvonne: lining up with it seems like some of the hawks and jay powell. thank you. ubs sergio ermotti said he is beginning to worry about a trade your -- trade war between china and the u.s. he said the effect on markets has been minimal so far. he fears things could escalate with serious consequences. neer: they start to get concerned for sure. i think for the time being, of

modest in numbers are respect of the impacts. but we see the proliferation of this tensions on a bilateral escalating.tially this will be good. won't be good for growth, won't be good for geopolitical reasons. so at this point in time, we don't see financial markets this overly impacted by protectionism. i think if it keeps going on, this could be very disturbing. tom: the market selloff on friday was severe. why hasn't it been priced in? sergio: you look at it, it is good to understand there are corrections coming. as a consequence of those, or they are really doing as the market develops, but for the time being we remain

constructive on equities. we remain instructive on growth -- constructive on growth. we have to pay attention that this doesn't escalate and creates retaliation, and particularly if it goes beyond china and the u.s. and starts to touch more, other countries in the war, it would be problematic. tom: looking ahead, how do you advise your clients in terms of positioning? sergio: for the time being, we believe stocks are still a good place to be. diversification is still the name of the game. of looking for this kind diversified approach we love, aoothing and looking up little bit the risk going forward. betty: that was sergio ermotti speaking to tom mackenzie in beijing. the tension happening in trade.

you can get more on that story and more you need to know in today's edition of daybreak. subscribers can go to dayb on their terminals. this is available on the bloomberg anywhere app. you can customize settings so you only get news on the industries and assets you care about. this is bloomberg. ♪

♪ .vonne: this is daybreak asia i'm yvonne man in hong kong. betty: a quick check of the latest business flash headlines, consortium led by tpg near an agreement for control of health care in india's second-largest private hospital chain. we are told the investor includes manna paul health. union authorities are investigating fortis after the sing brothers took more than $76 million out of the company without board approval. have forecast a

full year's loss of $1.6 billion after taking impairment charges. they previously projected it would breakeven, and analysts expect a profit of $96 million. have struggled to grow revenue, and this month they reported to cut 3000 jobs in japan the next year. that is close to the market open in japan and korea. tokyo looks like we could be seeing further losses here today, but we are seeing more stability when it comes to dollar-yen. dollar,eeing a bit for 184.85. seeings like we could be a 400 point drop for the nikkei 225 for that were .5% downside onfriday -- 4.5% downside friday. more turbulence, that as bad as before. betty: not as bad but still

digesting all the news from this past week. much more ahead on daybreak asia. we will have principled global positions. this is bloomberg. ♪

♪ >> 8:00 a.m. in hong kong, we are live from bloomberg's asian headquarters. welcome to "daybreak: asia." investors braced for another rough ride after global stocks head their worst week since february. the yen the strongest in 17 months. train tensions -- trade tensions unsettling markets, the u.s. is reportedly having productive talks with china. just after 8:00 p.m. on sunday in new york k.ewed -- you'r marking ak cured oil

new high this week. we will talk about the challenges to wti and brands. ♪ yvonne: he we go again, it's look at how we are looking when it comes to asia. back to square one when it seems we are looking at any gains. asian regional inch mark a raising the gains for the third time already this year. lack of momentum, a lot waiting on the markets, the fed and text, and trade tensions. we heard from steve mnuchin over the weekend saying he is cautiously hopeful we will get a trade deal with china and they are making progress, but i think until we get more clarity what marketsns exactly, what

the administration is targeting, we will see more of this. betty: the markets are hanging on every word. as you heard from jpmorgan on friday, they said everything else looks great, earnings are doing well, the economy seems to if youging along, but were not for trade tensions, the markets would not be in these situations. hanging on every twist and turn in trade talks. yvonne: the twist and turns also got a big auction as we can the treasury market, one to watch for some of the bond bulls out there. a little bit of a rally last week, we will see if it will stick. >> it looks like we are kicking off week on the back, but there might be some relief if you look at u.s. futures opening calmly. otherwise, losses in tokyo, the tokei 225 missing 7/10 of 1%

-- of 1%. , issues for the yen with trade tensions. on u.s.may add tariffs airplanes and computer chips. -- we wait to hear -- due out this morning. tech dragging the most, tracking the moves we saw on friday. taking a closer look on what is moving the dow, japanese stocks down over 8% this year. nottokyo share market has turned sellers for 10 straight weeks. tech stocks dragging in tokyo down 1.5% and barely a bright spot when it comes to the session in tokyo this morning with all sectors in the red.

let's put some stocks on your radar, i want to highlight ricoh . the copier maker has struggled grow revenue for years and earlier this month, they announced they are planning to cut just over 3000 jobs in japan. nissan losing some ground after saying it is curbing output because of u.s. demand. and credit saison no longer accept credit card payments for crypto. were watching a japanese equipment stock, a third-quarter sales forecast disappointed investors. there's also the continuation of a firm demand-supply balance. over 3% this morning. betty: certainly a favorite

color there today is read. let's get to the first word news. ramy: thank you very steve mnuchin is saying he is withistic about a deal china that could forestall the imposition of tariffs or by president. he told foxnews the two sides are engaged in productive conversation and he is hopeful of agreement. last week, the president announced measures against china with $50 billion as punishment for alleged intellectual property theft. meantime, mr. mnuchin also says washington and seoul have reach an agreement on revising their six-year-old trade agreement. he says they have an understanding on reducing imports of korean steel and they expect to sign a deal soon. abouts trade surplus was $18 billion last year with the u.s. cars accounted for more than 70% of that. meantime, president trump is

expected to take his most aggressive action yet against russia later monday was the likely expulsion of diplomats following the nerve gas attack on a former spy in the u.k. that will probably bring similar action from moscow but a lines of the u.s. with european allies. several eu countries are expected to announce their own expulsions of russian diplomat. prime minister shinzo abe has apologized for cronyism that opposition lawmakers say could hurt chances of changing japan's constitution. finance ministry officials altered papers resulting to a papersle -- tapers -- connected to a landfill connected to abe's wife. he said it would not happen again. 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.

u.s.-china trade tensions top of the agenda. a gathering in beijing. our correspondent is covering the china development form, which wraps up later today. you have been busy, tom. what is the mood in beijing? tom: deep concern, certainly wengst business executives spoke to over the last few days. there is concern about the direction of travel in terms of trade tensions. and of course, there is concern about the impact on corporate profits. there is also a struggle amongst many meeting her to understand the broader implications of the tariffs from trump, which sectors and companies will be targeted and how that plays out. also, there is a fundamental mismatch i think that has been articulated by a number of people here, there are deep concerns among the corporate

players from the west that operate in china about some of the practices, market liberalization or sectors that remain barely closed off, and the tech transfers, there is that concern. there also concerns about the way the trump administration is trying to address those issues. that tension remains. there is also a few here that china could have been more severe and the way it responded, and that was a view articulated by stephen roach from yale university. take a listen. >> china has responded very modestly, given the potential weapons it has at its disposal in terms of tariffs. and the possible shift in purchases of u.s. treasuries. there is plenty more to come if with.s. chooses to stay

this reckless policy. ubs told me he is also looking at this issue closely. he says he doesn't think it will have an immediate, significantly detrimental impact on markets, but he said if it continues longer-term, it could be very disturbing. yvonne: we also heard from the new pboc governor, was he able to calm some of the jitters you mentioned? we didn't hear frankly anything dramatically new on the pboc governor. this was his first attempt to address publicly in his new role some of the watches of the tv oc. he said for example, there would be accelerated efforts to open the markets, we have heard that articulated at the national people's congress and we are still waiting on a timeline and

details. he said the focus would remain on tackling a financial risk in the system here and he said in terms of monetary policy, it would remain prudent and neutral. he was asked about the potential followed of the trade tensions and the impact in china and he said essentially the risk controls were in place to protect many of the key sectors here. take a listen. risksany external threaten china, i think the current banking system, insurance and securities markets and the controls in place leaves china well-placed to mitigate those risks. development over the weekend, reported by the new york times, was the former head of the banking regulator here and now head of the merchant banking and insurance regulator, will be taking on a key role, in many respects more senior, at the people's bank of china.

he will be the party secretary. that is in a way, a chairman to ceo role. as an analyst here says, we now have three people in charge of china's monetary policies, the vice premier who is something of the strategist, the enforcer, and the governor of the pboc who will be implementing the policies. three key individuals to be looking at. pursued shadowly banking and was pretty instrumental in helping to rein in the overseas acquisitions of some of the big conglomerates here. policyearly pleased the makers in beijing, he has been given this senior role at the pboc as well as his role heading up the banking and insurance regulator. yvonne: thank you. tom mackenzie from beijing. roachahead, why stephen

says beijing still has plenty of ammunition in a straight fight was washington. betty: next, we dig into the impact of tariffs on the asian markets with curt west. this is bloomberg. ♪

♪ betty: this is "daybreak: asia." start ofsian markets week lower as trade tensions continue. joining us is curt west, principal global second -- global investors. good to see you. i have a chart to set things up, it tracks the risk appetite at the moment. while things have come down, we had a,ing this index more risk aversion in the

markets. we are seeing a little bit more stability here today, perhaps less the more we friday, but it has been a perfect storm of that news. are we in for more pain? curt: i think we will end up a little bit higher. we are in an interesting time, we are no longer in the peering centralizedriod of globally in the markets are very sensitive. yvonne: what are you focusing more on? the fact that the fed is raising rates, there is turmoil in tech with facebook and it is dragging in the rest of tech, as well. could there be in existential threat to tech overall, and you have trade concerns as well, what should we be focusing on? what is something you should hone in on? kirk: what we should be focusing on if we are equity investors, what we think equity is likely to do over the next 3-5 years.

andhink it will be higher, have a positive return by the end of this year. to behe market is going focusing on i think is the news flow. globally,k at growth it probably peaked mid last year in japan, late last year in china, probably early this year in europe. good clip, anda the fundamentals are still good, but anything just going to maybe impact growth, and this news flow in tariffs could, it will unsettle markets on the short-term. yvonne: i want to talk about the bond market as well. we are going to see the treasury options, debt issuance, which is pretty debt -- pretty gutwrenching. tougher to digest more of these bond options as they get bigger and bigger? how sensitive will yields be? kirk: clearly supply is one of

the forces that will be pushing yields up, and cash is no longer andh, cash is investable giving a good return. we are looking more and those kind of variable-rate set products or believe credit will provide value. betty: some questions are arising, if we see a full-blown trade war, where do you hide as an investor? is there a place to hide? kirk: we got expect there to be a full-blown trade war. certainly if we get more signals that may be the direction we are going this week, and in the next few weeks, they will be quite messy. i think you will see a continuation of what you have seen at the end of last week, particularly with markets like japan. but that is not our base case. betty: as these headlines

continue to dominate market movements and gyrations, does it make it more difficult to figure out what the markets are pricing in in terms of rate hikes and in particular where the fed is headed? kirk: last week, we viewed last , so i fed as more hawkish think that is on the back of people's minds. that's really where they sold rates going in 2019. -- where they saw a rates going in 2019. the market is far more sensitive on the rate front. there could be another one or two rate increases this year. betty: are those slowly evaporating as we are seeing more volatility and as the markets decline? kirk: without a doubt. i think if you see this kind of destabilizing news flow, the fed will be more cautious. inflation is undershooting, and i think they have been candid about how they would be

comfortable in a period of inflation overshooting. they can sit on the sidelines. yvonne: we have an interesting dynamics, when you are seeing stock market selloff not that strong of a bit for treasuries. we did see a rare rally. oil is also holding up. is that sustainable? kirk: in the case of oil, we think it is toward the higher end of its range and that will be supported by growth. and of course that is being supported by supply constraints. for treasuries, we did not see that strong a bid into treasuries given the risk off we have seen. what you think that is the case? because of the bond options coming up and perhaps we will see another selloff and a spike in yields? kirk: a think if you look at the action of the end of last week and particularly friday, all you was quite low. i think the equity has been liquid. you see people clip some of those decisions they put on

earlier in the year and i think treasuries -- i think bond investors feel more comfortable. yvonne: what about tech? this has largely led to the equity gains we saw last year. now we're seeing insiders selling out their own stake in tencent, is that a warning sign? kirk: i don't think so. tech in the last two or three years has had a fantastic run. we still believe it will be a driver of markets going forward. again, news flow driven last year. you can look at the strong performance of dropbox to see that the good stories are still being rewarded. weste: thank you, kirk joining us here in hong kong studio. don't forget about our active tv function, tv go. dive into bloomberg functions we talk about or interviews. you can send us instant messages during our shows. it is for bloomberg subscribers

only, check it out at tv . this is bloomberg. ♪

♪ yvonne: this is "daybreak: asia ." betty: a quick check on the latest business flash headlines. ricoh shares are tumbling after a forecast a full year of $1.6 billion. the company rejected it would break even and analyst expected a profit of $96 million. they struggled for years to grow revenue and this month nikkei reported its plan to cut more than 3000 jobs in japan in the next year. yvonne: the world's biggest refiner will play a record high dividend after a jump in profits. their income climbed over 10% to

a $.1 billion. a payout of have a yen per share is the most in 18 years. , it billion in impairments is shifting focus toward natural gas. betty: china's biggest coal miner has reported highest profits since 2012 as robust demand and the government trying to rein in overcapacity ultras prices. billion ino $6 profits coal prices climbed last year as china attacked overcapacity by shuttering some mines and restricting imports. yvonne: rio tinto says the concerns about trade tensions between -- says it is concerned about trade tensions before china and the u.s. mackenzieoke to tom at the china development forum in beijing. i'm not going to give you any

forecast on prices, but the truth of the matter is we are in business. the way we look at it is [indiscernible] having low-cost and high-grade products. we don't control the prost, but we control the quality -- we'll control the price, we control the quality. [indiscernible] time, those are in the green. tom: it is a different picture we are looking at this your versus laster, we are not going to get 6.9 and it is clear from the government they are going to put a cap on credit. >> that is the key. last time, wee are clear on growth. what it means in the context of steel is clearly [indiscernible]

mean a drop int steel output. [indiscernible] you have seen the spread between high-grade and low-grade, very significant. as well as the opportunities. we have a high-grade product that the industry loves in china. if u.s. me if i have issues with my product in china, absolutely not. for us, the growth in china is very good. tom: are you getting any sense, or is there any possibility that you are going to start to see the mills here shift to lower quality as their profitability softens? is that a likely possibility? happens, bute what our concern, on the back of the last [indiscernible] is at the top of the list.

for them to reduce in a better way, they need to have access to higher grade material. there are very few options available to them. we believe even though it is early days, the spread between high-grade and low-grade is a structural run -- structural one and a great opportunity. was the ceo of rio tinto speaking to tom mackenzie. staying on the theme around trade and a tensions, let's check in on how currencies are reacting to all of this. betty: you are seeing a slight bid as we had been mentioning, under the dollar, the yen softening a bit. an, you are the yu seeing a bit of strengthening as the u.s. and south korea near a bilateral trade agreement. aussie dollar being bid as well as the kiwi. that is a quick check on

currencies trading this monday morning. next, china has been waiting 25 years to launch a domestic market to trade oil futures. in the next half-hour, the dream will become a reality. this is bloomberg. ♪ mom, dad, can we talk?

sure. what's up, son? i can't be your it guy anymore. what? you guys have xfinity. you can do this. what's a good wifi password, mom? you still have to visit us. i will. no. make that the password: "you_stillóhave_toóvisit_us." that's a good one. seems a bit long, but okay... set a memorable wifi password with xfinity my account. one more way comcast is working to fit into your life, not the other way around. retail. under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store

near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. ♪ singapore, a sunny morning today. we are half an hour away from the open of trading. betty: a gorgeous day shaping up there. i am betty liu in new york, you are watching "daybreak: asia." let's get to the first word news. xiy: a key ally to president said to be from the people's bank of china. they say they have a person to report on performance and policy. the incoming pboc governor says he will continue to introduce more currency reforms. he also pledged to maintain that drive too diffuse risk. risksany external

threaten china, i think the current inking system, insurance -- current taking system, placence and what is in leaves china able to mitigate those risks. ramy: tim cook has saluted china's growing tech prowess as a trade war looms between china and the u.s. he says china's at developer community have more downloads than any other single nation. he said "china no longer simply build swings, in dreams them as well." state media listed companies vulnerable to a trade war and apple was on the list. company has taken out ads to apologize ugly for not doing more to prevent the mishandling of user data from -- data by cambridge analytical. there have been calls for mark

zuckerberg to testify before congress. social media companies are under increasing pressure to ensure user confidentiality. and the u.k. brexit secretary says two sides are edging closer to a deal that would prevent a heart border. he told the bbc indications are good that he declined to go into detail. this week marks the 12 month countdown to the split and the eu wants a deal agreed to buy october to allow lawmakers on both sides time to debate and ratify it. he said he is optimistic things are coming together. outcome,al a likely and the overwhelming likely outcome, is option a, which is we get a free trade agreement, we get a customs agreement, all of those make the northern ireland issue much easier. ramy: global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ramy inocencio. this is bloomberg. yvonne: thanks.

time to see how asian markets are shaping up. we are not seeing any let-up from what we saw on friday you'd the losses -- on friday. the losses not as big but we are seeing more than 1% losses in japan and new zealand. >> some misery for markets this monday. the nikkei 225 losing over 1%. sliding to a september low with tech weighing the most on the benchmark. currencies mostly gaining against the u.s. dollar. we are seeing losses for the yen he's somewhat with the yen holding. the dollar yeng remains intact. cabinet is abe's dragging on that. the aussie dollar climbing even as iron ore has come under pressure in a's metals have

dropped five straight weeks. when it comes to the commodities complex, were seeing a mixed bag. in oil, we're seeing prices extending after saudi arabia intercepted missiles fired from yemen. handle.ading above that there is concern over a conflict with the world's largest crude exporter. that is overshadowing a pickup in drilling in the united states. oil continues to gain ground. the gains their sparked by trump appointing john bolton as national security adviser, signaling a harder line on iran. along with oil gaining ground, we're seeing a pickup in gold rises. gold regaining its appeal as a safe haven. it is providing support for gold miners in sydney. it is the best improving stock on asx 200. tokyo, ricoh falling.

chipmakers are among the biggest laggards in japan after macron delivered a disappointing third quarter. steelmakers are a bright spot in a stock snapping a three-day drop. this is likely on anticipation korea has secured some relief from u.s. steel tariffs. betty: thank you. certainly tariff talk continuing to dominate trade. there are reports of more leadership changes in china, a high-profile banking regulator has been appointed communist party secretary for the central bank. here is our economy editor beijing. he was one of the front runners for governor. tell us what a party chief does. we would all like to know

more, i am sure. probably the best way to characterize it is this is someone who is the trip point between communicating from the party to the body they run and also communicating back up to the party what is going on at that agency or company. this is an interesting situation where last week, he was announced as the party chief for the combined banking and insurance regulator. that came out last week. a new central, bank was -- central bank governor was announced. now we have a new party chief of the central bank as well. this is a higher position than the governor. you could see it as power-sharing it, but the party is in charge and that is the key theme that came out of the national people's congress. the party will have a greater role in the state.

yvonne: that was the common refrain we kept hearing after the npc, these officials have the party to answer to. what does this mean for pastor -- faster pace of reforms? it has been foreshadowed, and it is something i think a lot of people are waiting for specifics. the european chamber of commerce has characterized this as promise fatigue, the constant daily emphasis there will be reform that nothing concrete seems to follow. we are still waiting on an official confirmation this will be the case with the pboc, it has not come yet. as far as policy, probably the thing most important to keep in most critical thing for everybody at every level is financial stability. opening up to foreign financial firms has been promised and

there have been changes as late as friday on payments. as far as big things, the financial stability will be the overarching goal, so everything will be done in service to that, so that is the key thing with respect to bring in more foreign companies. you mention certain things we should be watching out for. what are the upcoming policy measures investors are watching at the moment? jeff: we are still waiting to see how these things will be implemented. until less week, we didn't have a sense of even the name of the new banking regulator. these things are trickling out this week. it is happening against the backdrop of the fight against debt and the trade wars. there are a lot of things in motion of the same time, a lot for policymakers to balance.

he was always seen as someone characterized as a reformer, in the mold of the man who left last week after 15 years. that is something he is known for. but we are still looking for the specifics and waiting for more concrete details on what that would mean for foreign financial company excess. they talked about it yesterday in a speech tomorrow but we will be is still looking closely at what will come next. yvonne: we will surly have to wait for details on the u.s. trade tariff from as well. thank you. our economy editor in beijing. been.s. dollar has established as the global currency of the oil market china is about to challenge that i launching a denominated futures market. ine will open in a few hours and here is what you need to know. ♪

♪ [applause] yvonne: let's get to our asian energy reporter. china has been talking about this for 25 years. why now? >> a couple of reasons.

china has overtaken the u.s. as the world's biggest importer of oil. it's one of the the us, most watched economies in terms of global oil prices. as it has been doing this, it fed that of been chuf the global price of oil is traded in dollars and has to worry about the rising and falling prices of oil as well as the currency risk. they hope to eventually be able to have more deals for oil eating done in you on -- being done in yuan to give them more control. betty: we were talking about some of the concerns in the , inage we showed before particular there has been speculation we have seen in the chinese markets as well. will this be popular with investors? we are really excited to see what happens. we think it will be a couple of

different things. one is there will be a lot of interest in domestic traders, the local speculation you see causing apple futures, for instance, to be one of the most traded commodities in the world. we think a lot of domestic traders will jump on this. internationally it will be a little bit tougher to tell. i think only 19 international brokers had applied as of last week. ofthink because of the risks the chinese government stepping in at some point and the uncertainty about these new futures, it will be a little bit more of a tepid reaction at the start. betty: the world's biggest refiner will pay a record high dividend. what is going well for sinopec? dan: a couple of things. one, it is shifting its production portfolio to be a little more toward natural gas than oil. the natural gas demand is

skyrocketing in china because of proenvironment policies pushed by the government. is other thing is, sinopec asia's biggest refiner in oil refining is a big -- is a good business to begin right now. high demand for products. it has helped boost refiner margins in asia and sinopec has benefited. betty: we will be watching shares. dan, thank you so much. our asian energy reporter. next, how will china react to a trade war with the u.s.? we will hear from the former morgan stanley asia chair. this is bloomberg. ♪

♪ towardas been moving domestically driven demand. it has been part of the agenda for china for a very long time. this will accelerate that pace. china has the resources and the

withstand which to the kind of aggressive action. there won't be room for atwth or geopolitics, so this point in time, we don't see financial markets being overly impacted by this protectionism wave. i think if it keeps going come a could be very disturbing. >> [indiscernible] he could have an impact on global -- it could have an impact on global gdp. [indiscernible] >> talking about the potential fallout between a -- in a trade war between u.s. and china. stephen roach says china has a lot of ammunition.

he told us that modest tariffs products, there are more counter munches -- counterpunch is to come. >> i think it is a fairly serious policy blunder motivated by politics and not economics. we have trade deficits for example was 102 companies. -- 102 countries. we singled out one as the scapegoat to fix that, which the president believes is affecting the american middle class. it will not work, because the chinese will go to another producer and tax the people he is trying to protect. there is not a great policyation of economic analysis and the trump administration, and given the changes they are making in their

advisory team, it is going from bad to worse. >> it sounds like you would say the market selloff on friday was justified. do you expect more volatility? >> it is hard to know. when you have to sharp down days like we have seen, it is pretty normal to see the markets try to their wayand claw back as they did in early february, the selloff a month ago. i don't know what is going to happen. i do think the dynamics between the u.s. and china are worrisome. china has responded very potentialgiven the weapons it has at its disposal in terms of countervailing tariffs and the possible shift in purchases of u.s. treasuries. there is plenty more to come if

the u.s. chooses to stay with this reckless policy. think the shift out of u.s. treasuries is something that is actively being somedered, if not now, at point? well ifina suffer as the u.s. economy was dramatically hit by that? >> it is probably china's last attempt. i would not expected to be something deployed. on the other hand, i would not put it past them to talk about that. there has already been whispering from the chinese side that they know this is an option they have should they be pushed. and that is the point. if we keep pushing china, and clearly threaten to do damage to their economy, to their growth outlook, the chinese will view this as an act of economic war

and respond in kind. they are again being judicious and measured in early responses, but the more they get pushed, i think the more we can expect an increasingly stronger response. >> final question on how this may impact the fed. does it change of calculus in terms of the fed and the speed at which it tightens? >> i am reasonably confident that the fed does a lot of contingency planning for a variety of different possibilities, but a trade war is probably not high on their list. i think they are hard at work right now crafting how a trade war might impact them and clearly tariffs are more , and if you are a central bank focused on holding the line on price stability,

that together with the recent widening of the budget deficit would i think push the fed by us -- bias more toward tightening. roach, was stephen speaking to tom mackenzie on the sidelines of the china development forum. a quick check of the latest business flash headlines at this hour. isontortion led by tpg looking at acquiring a health care company. the deal would combine their two businesses. indian authorities are investigating fortis after brothers took money out of the company without board approval. is reducing to 17 hours a trip that took two days. australia top from

london landed. they found a plane with top-tier business passengers. in 1947, it took four days in seven steps to get here. today, we came on the fastest way of getting from australia to the u.k. betty: i don't know if i'm going to be on that flight anytime soon. a battle between human beings and giant robots dominated global box office this weekend. uprising" brought in $150 million, and includes $65 million in china and $28 million in the u.s., when it not "black when it knocked panther" from the top spot.

"black panther" is now the top grossing superhero movie of all-time. yvonne: bloomberg and twitter which -- launched tictoc, provides hourly news reports verified by bloomberg. oc by bloomberg. ♪

♪ just getting some lines coming through on the bloomberg about remington outdoors, the company that has hunting door and out gore -- and outdoor gear, they are filing for bankruptcy. we are getting headlines and details. something to watch through the next couple of hours here on bloomberg. now for a quick look on what is coming up in the next few hours on bloomberg tv, let's see what is happening on bloomberg markets. still with the market volatility. a bit of a follow-through from what happened in american markets on friday, and this trades that. is it a trade war? yvonne: so far it seems like people say it is a skirmish more than a war. guest sayingave a that this is the year we are seeing challenges from china on u.s. hegemony.

we will have a discussion about that and tariffs. it could be affecting the strength of the dollar itself. ,e will also be talking about before we hyperventilate at the thought of a trade war, let's look at the forces that might pull the world back from the brink. were talking about supply chains from other trade players. it is more than the fight over just tariffs. also looking at china oil futures which should be launching shortly. looking forward to it as always. before we hand it over, a quick look at how the markets are trading right now, taking on the chin after friday's dismal close, the nikkei down, almost 200 points.

another index faring better. 200 doing0 -- s&p asx slightly better. the popular color today is read. -- red. yvonne: take a look at things in hong kong as well as china, we see a continued downside, hang seng futures down, but china futures looking better. that could be a bit of a sigh of relief on how pronounced the downsides could be for the rest of the week. that is it for "daybreak: asia."

rishaad: asian-pacific stocks falling for a six-day omicron seven, japan facing its worst month in 2017. trade tensions unsettling investors. china set to have the weapons to hit back. apple and boeing are seen as possible targets. and oil marking a milestone with a new futures market in shanghai. we assess the challenge to wti and brent. in hong kong, i'm rishaad salamat. haidi: in sydney, i'm haidi lun. the new pboc governor pledges further reforms. he says the economy can withstand external threats. this is bloomberg "markets: