♪ good morning from bloomberg's european headquarters. i am anna edwards. manus: i am manus cranny. this is "bloomberg daybreak: europe." these are today's top stories. the u.s. has $50 billion of tariffs against china. beijing thousand to retaliate. moving east, san francisco fed president john williams is tapped for the new york fed position, replacing william dudley. anna: amazon bounces back. shares rise, as white house insiders say there is no plan

for trump to put his tweet into action. ♪ anna: good morning. this is "bloomberg daybreak: europe." 6:00 here in london. we should talk about what is going on in the session in the asian market. markets and investors are asking themselves of the trade story, are we going to remain in this conflict and confrontation mode, or are we going to get the dialogue? we will hear from the chinese, in response to the details from the trump administration on tariffs. we will hear from the chinese at 9:30 a.m. u.k. time. here is where we are on msci asia-pacific. we are not down by much, as onestors try to get a handle the traits. coming in lower than was

estimated. that is a disappointment to some people. the bloomberg dollar index, down this morning. ambition of the trump tariffs, we will see if that is possible. for.to watch out u.s. stockpiles unexpectedly dropping. let's talk about stocks. let's talk about stocks, because i think what will play out here, we will get the chinese response to the united states. we will get a briefing at war: 30 p.m. -- we will get a briefing at 4:30 p.m. mr. navarro, the advisor to the president of the united states is saying into the markets about

smart money is going to buy on the dips. we have an economy that is as strong as an ox. trump's friend, the equity market slightly unraveled. this is your evaluation. the cheapest in terms of the s&p evaluation since the great brexit bastad. -- great brexit bust up. valuations have not been so cheap. the question is for ubs, lower valuations combined with expectations of a positive first-quarter earnings outlook could signal near-term gains for the u.s. jp morgan is bullish. market, jp morgan manufacturing index could be something very different. anna: we will talk more about what the data is telling. despite the rhetoric, what is the daily telling us about the global economy. navarro's comments,

this is what the futures look like today. we will see a little more downside for u.s. equity markets. a lot to talk about in terms of the trade conversation. a lot to talk about whether we stay in the confrontation mode. let's get the bloomberg first word news update, from singapore, juliette saly. u.s. president donald trump said he plans to deploy the border with mexico. he told mexican leaders he would abandon the north american free trade agreement without insurance is -- without assurances. trump said he could use money allocated for the u.s. military to construct the border wall which he has been unable to secure congressional funding.

in washington, white house insiders say there are no discussions about turning the power of the trump administration against amazon, despite the president's twitter attacks on the company and founder jeff bezos. according to people familiar with the matter, they are not aboutof any discussions action against amazon. not on the regulatory front. president of the san francisco federal reserve is going to the big apple. john williams has been named as the new boss of the new york fed. the former goldman sachs executive will succeed dudley, making him part of jerome powell's leadership team. in the u.k., today marks the deadline for companies with 250 employees to report their gender pay gap. minister hit out at the 18% difference between men and women's earnings.

theresa may said the issue is one of the burning injustices in gender equality, and progress . andns too slow california, a woman has shot and injured three people for killing herself at googles youtube headquarters in san bruno. the woman appeared to be dead of a self-inflicted gunshot wound. reported ited press is being investigated as a domestic dispute. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . in on the markets in asia, about three and a half hours until china responds to the broad tariffs we heard from the trump administration on 1300 chinese goods. you have seen a slight -- health care players, it has seen gains. we are looking at the futures at the moment. it has been a mixed session in

asian region today. we see movement in the nikkei index. tech players are coming under a bit of pressure. that's have a look at the stocks we are watching in the session. i meant to the jump in chinese drugmakers. the government unveiling a policy aimed at boosting the genericf quality of drugs that could get a turnaround to manufacturing parts that are used in drugs that could be hit by terrorists. you have the shanghai pharmaceutical company up by 11%. tencent coming under pressure. tencent has not been boosted by the spotify debut in the u.s. tencent owns 9% of spotify. shares are rising after the hedge fund group elliott bought into the group a $1 billion purchase. in 2016 we saw elliott take a

stake in samsung that boosted its share price. a lot of hope it could do the same. thank you very much to juliette saly in singapore. let's update you on the relationship on softbank, they were in talks about taking a stake. we thought softbank was going to make an offer for a 25% stake. that was reporting around the story. softbank's stake is not expected to exceed 10%, which is interesting. they are talking about them .inority stake they are saying issuances of capital is not under consideration. talks remain at an early stage. they explore a potential strategic cooperation. they are limiting expectations to the softbank stake that they could take in the swiss re

giant. manus: that is not the only deal. you got france, a $15 billion deal, american aig in january doing deals. there is a flurry in the space. the big story is on trade, on paris and the u.s. techtake an aim on china's industry with a tariff list. we have 25% tariffs that will hit $50 billion of chinese products ranging from semiconductors to flamethrowers. china condemned the move and said it will respond with the same intensity and scale. this get to jodi schneider, our international editor. what are the objectives of the united states here? long on strategy, short on impact is the title of one of our pieces this morning. jodi: that is right. to reallys attempting

fight back against what we have seen in intellectual property rights abuses by china. it is a theme of the trump administration, something he proclaimed on the campaign trail. he has not done a lot to hit withchina until weeks these tariffs. this is wide ranging. 1300 products. some interesting things were left out, apparel, shoes, which some thought would be on the list. areumer products, there some, tv's, dishwashers among them. cement, wers, dental are not sure why. and the semi conductors, a lot of technology products, lithium batteries, something china is manufacturing a great deal of the. the whole goal, u.s. trade representative also said is to try to make the playing field more level, to try to fight back

against what they see as unjust industrial practices by china. they also said they want to protect american consumers to minimize the effect there. as we see with televisions and dishwashers on the list, there will be effects on consumers. that seemsindeed, the ambition, going after the supply chains to protect u.s. consumers. cementcost of dental goes up, we will see. i do not know about the flamethrowers. what has china said so far about this? we expect to hear from them soon, and we have heard they said they will react with the same amount of force, with the same amount of intensity that these tariffs brought by the u.s. share. seenll see -- and we have this in the past with china.

they had a measured response to earlier tariffs, but they claim they will have an equal response. what is clearly a trade skirmish could escalate, and we could see this going back and forth to some degree. the trump administration has said they are not done with tariffs either. much, jodi you very schneider, senior international writer in hong kong, joining us there, in terms of the trade conversation. let's bring in the chief european economist. very good to have you with us. give us your thoughts on whether -- are we going to stay in this confrontational mode? or does it matter if we move on to dialogue, and progress is made? how do you -- how do you view this? >> 2017 is the year trade accelerated. , and inade was growing

2017, it picked up growth to 4.5% on the year. in january it accelerated further. it was growing up 5.5%. most of the pickup we saw at the backend was in the euro zone. dear zone is the most important trading block globally. but also much more open. , thisy factor to remember trade war between china and the u.s., the eurozone matters more. it matters if these tariffs escalate and they become more extensive, then the concern would be -- pulling up this on china, this is reflecting on the role that the fdi into china had on

the past, and how that is shrinking. it is an economy less relying on direct investments. perhaps this raises questions, but how these tariffs can be, that the u.s. had missed ration is putting into place. we are not talking extensive trade. the u.s. does not trade much internationally. economy gained, we have to ask whether this will derail the u.s. recovery, probably not. we have keynotes coming up later this week with jerome powell from the fed, it will be interesting to see what he says .bout this the data at the movement is moving in the right direction. we do not know if this will derail the recovery. that is literally what i wanted to talk to you about.

i, we may be a part and land on the same story, this is turning over -- and if you look at the detail, it is not just the headline, it is the orders, it is the job, it is all looking the will not say fragile, first off data, the lowest reading since september, 2017 on the index and on unemployment. i would caution on this. we had been here before on the pmi's. they basically did not see the slowdown we saw in world trade 2011. we had a big downturn in world trade and the financial crisis itself, then the big bounce back area the pmi suggest a robust recovery globally. the hard david -- the hard data was coming in differently.

the whole issue of the financial crisis, surveys exaggerating the extent of the recovery we are seeing globally. i do not know at the moment if we will see the global recovery picking up momentum as the pmi's suggest. i would caution too much about this evidence right now, in three months time i may will be proven wrong. disconnecteen this the four. people look at the world trade figures more as an accurate gauge then pmi's. -- than pmi's. manus: i have been looking at donald trump's approval ratings. they are rising. the stock market is down by 8%. there is a correlation between the two. global robust, bellicose rhetoric from him. it is helping, so much of this is political rather than economic, isn't it? david: absolutely.

as well, talking about the stock market declining, we are entering this stage where the fed is not just raising interest rates, treating the balance sheet. the bank of england is raising rates. the ecb is heading for the exit. at the moment, most of the action is political rather than economic. we will see what happens in the next few weeks. anna: david will stay with and myself. he is the chief european economist, jeffries international. if you are heading to work, and tuning to bloomberg radio, go ahead. we are all around the london area. coming up -- anna: changing the guard, the replacedisco fed has in new york. we will talk about what this means for the central bank. hisident trump continues

attack on amazon, but the online retailer shakes off the rhetoric. we will get the latest on this. this is bloomberg. ♪

♪ manus: it is 9:21 in dubai. 1:21 in singapore. let's see what the chinese response is to the tariffs from ,he united states. jp morgan will find a little support soon, iny say oversold territory some of these stocks. we are treading water ahead of that response, are we? anna: how soon is soon? we are waiting for that response from the chinese. there is a new set of tariffs from the trump a $in50tr billion before.

this is the response and asian equity markets, pretty mixed at this stage. doing well in the face of disappointing data. let's get the bloomberg business flash from juliette saly. juliette: wpp is looking into allegations of personal ceo, involvingts misuse of company assets. the amounts involved are not material. in his own statement, the ceo rejected the allegation, while recognizing the company has to investigate. is lookingitted it to acquire viacom, the owner of mtv and comedy central, according to a person knowledgeable with the matter. they say cbs is offering a lower than market value. negotiations will divide the fate of the two media companies. that is your bloomberg business flash. anna: thank you very much.

selectediams has been to replace william dudley at the u.s. central bank powerful new -- he will have a permanent vote on the monetary policy committee. --david owen, chief european economist, jeffries international is still with us. , we knowad this story he is a three hike to for hike man, but the new york fed is entrusted with -- is trusted with briefing the president on everything to governance. any thoughts on this news, a very permanent voice that will -- at every meeting and voting. -- the newfed chair

york fed president is key within the fed structure. one thing about john williams, he published some interesting papers about the equilibrium interest rates. economy for the u.s. but also here in the u k, the eurozone, and so forth. he was arguing interest rates had come down since the financial crisis. the interesting thing now, to what degree he thinks it will be inching higher in the u.s. economy particular. the other thing is about potentially switching to price level targeting. at the moment, the key thing will be his focus on interest rates and how they need to rise over the next year. how much are they watching conditions,hter

being blamed on technical factors, shorten supply in the bond markets, how concerned are you about interest rates? david: all the central banks worry that if you are moving toward the exit, and tighten too quickly, that is a slight issue. the bond yield has been remarkably well anchored. the story this year, despite the equity market being under pressure, particularly in february we had an interesting story of interest rates going up, and the market discounting -- the bond market is a very well anchored. they are watching all these things to read are looking at the data. they want to get interest rates higher. how strong is the consumer in the global picture? the u.s. consumer keeps going, light truck sales have been revised. how long is the growth in

america for you? the orpretty upbeat on casting in the u.s. all this year for rate risers. no reason at this moment to change that view. and also a focus on shrinking the balance sheet. the recovery there is building more legs. have non-payroll data on friday. wages are seen to be accelerating. that is another reason for the fed to slowly had to the exit. the recovery in most economies are led by the consumer, maybe rolling over here in the u k in the terms of most countries it is the consumer that is leading us. anna: thank you very much, david owen, chief european economist, jeffries international he stays with us. we will talk about europe next. italy's president meets with parties leaders this week.

how long will it take to find a government, to form a new government for the country? that conversation is next. this is bloomberg.

♪ anna: this is "bloomberg daybreak: europe." -- 2:30 in tokyo. the asian session has been mixed. dip, a lovelys a line, asian traders are waking up. navarro advises the president. nasdaq, down.

we have a huge recovering rally in amazon, which is a cracking story. amazon, we will talk about that later this hour. get data and we the inflation story in the eurozone shortly. we move on to politics. manus: this is about the formation of the government. i wonder to what extent this could be the pivotal moment for italy. or isere more elections there appetite to form a decent government? what does that mean for reform? what does that mean for italian banks? we will have to watch the

choreography of who talks to the president when. in the u k, 250 employees have until tonight to report their gender pay gap. how has the data change the conversation. let's check in on them market action with nejra cehic. searchingan equities for direction. investors waiting to see how the trade row will develop between the u.s. and china. we have yet to see what retaliatory measures mean. you can see that china and japan are shrugging off the trade row. the msci pacific index is flat. higherthe s&p 500 closed by more than 1% yesterday, but we could see lower trading in the u.s. again today. with the route we have seen in u.s. stocks, it means estimated

earnings for the s&p 500's at 16.2 is the lowest since the post-drop. u.s. stocks have not been this cheap since the post-brexit drop . some say that combined with the outlook for earnings means u.s. stocks are a buy in the short-term. on the next chart, volatility has increased in the last few days. risen is volatility , the search we have seen in the , the fee vix vix how to trade volatility, this is something to think about. speaking of volatility in fx markets, you just show the

dollar-yen unchanged. not any massive moves in fx markets today. the 40 date high lowspeaking ofx range for the bloomberg dollar index is what this chart is showing. that is the narrowest since november. that is fascinating, the lack of volatility in some markets. the italian president is unlikely to decimate the premier after talks with party leaders. according to a state official, the head of state will meet party leaders when they answer his consultation since the last election left italy with a hung parliament. our news editor , kevin. take us through what is going on today, what can we expect? >> the meetings will start today. they're scheduled take place tomorrow. we are hearing that the meetings will continue next week, and what happens after that is anyone's guess. how soon could we see a

government form? precipitously close, or are we going to go into a long summer of prevarication? kevin: i would say a long summer of prevarication is the most likely scenario. the different parties are jockeying for positions. they would form a government either with the currently ruling democratic party, or with the far right northern elite, however, they are excluding an alliance. you see the different parties are maneuvering for positions. nothing is clear at this point. manus: let's see if it is a long summer. and along conversation around the table. back ining david owen the conversation, he is chief

european economist, jeffries international. macron and merkel back in check, does it really matter that italy does not have a government or a robust government? how important to the european story is it? david: not so important at the moment. who knows what will happen going into the summer. thisor the month of may is reinvestment of the ecb is heavily skewed toward this month. you have 23 billion euro bonds reinvested back into the market from this month. that compared to 15 billion euros for the entire first quarter. this is the point mario draghi has made. in terms of reinvestment supporting the market, in terms of the spread between italy over germany, that will be sorted over coming weeks by the

reinvestment of the ecb portfolio. the other thing that is key is the degree to which the italian economy picks up momentum. politics aside, bhi italian economy picks up momentum, the obviously, politics remains a major drag and for the euro more generally. manus: the one thing draghi does not want is a rerun of a temper tantrum. this is germany 10 year bonds. we touched on 5%. it should curve the bullishness for the bond markets. i think there are a couple things driving these yields. they are lining up to get ready on the downside. we still think the euro

zone will surprise on the upside, not just this year going into next year. the surveys have rolled over, but the hard data still has, in our view, and upside. -- either in june or september, and that will help position itself to stop buying the bonds as we go forward into 2019. perspective, there is not much free flow for germany, which of -- which is appointed ecb made. it is one reason why bond yields in germany have anchored. anna: how is that growth engine , this is taken from bloomberg economics.

germans strength to the growth story in 2017. they are questioning whether that level can be sustained read can the german economy do as well as it has done? david: germany could roll over if that global trade story deteriorates. the key thing about germany is , it has goteconomy a corporate sector in a surplus which it should not have in this stage in the cycle. the key for 2019 is whether runs down its savings. if that happens, the eurozone will surprise on the upside, and interest rates even in germany will move higher. notecb can successfully just taper, but stop buying bonds and raise rates. anna: in terms of the broader eurozone story, and trade, how do you see the trade story

developing for the eurozone? an economy that relies on globalization. and i guess, warning to stay --eath the radar, say,: one thing i would the trade the eurozone does internally, that is growing. it has potentially gained to surprise on the upside. the trade in the eurozone could kick in. if germany picks up the running and surprises on the upside. one key issue, not just what is happening with donald trump in -- a keyd whether that trading partner for the eurozone is the uk's --

the extent to which that changes things for europe, and the eurozone it matters to the ecb. manus: the known unknowns. the known knowns and the known unknowns. we will get clarity around those. david owen, chief european economist, jeffries international. abouttalk a little bit tech. president continued his attack on amazon. ae american taxpayer costs massive amount of money. has: the online retailer shrugged off the comments. it had its biggest gain in a week. the white house was not actively discussing taking any action against amazon. who ising in alex webb here with more. this is a lot of bluster around amazon.

any threat that they could be taxed further, our reporting suggests there is a lot of twitter commentary from the president but no actual plan behind the scene. there is very little, it seems there is little they can do. what they can do is prevent amazon from getting the of federal contracts, and that relates to the web services and profitable cloud business. there is a big contract coming up, and the suggestion that could be given to a competitor. with that ceo of oracle, a potential rival on tuesday night. that is the only immediate punishment they manus: can vent on amazon. other big story that is out there in the market. spotify came to the market, the timing of this could not have been more difficult. how did they do? $165 andy opened at

closed 10% down given the valuation of 27 billion. the messaging coming out of spotify was nothing to see here, move along. they wanted it to be an uneventful day. arguably, that is what happened. is billion is about the same what the vendee is valued at, vivendi is the parent of universal music group. one can argue vivendi has a conglomerate discount. it does play spotify up there with the bigger hits of the music industry. manus: let's see how they perform, and how the amazon stock continues. buys, two holds, and one cell. take you for very much for being with us. if you are a bloomberg user, you andinteract with anna myself, and the charts we put

together for you. you can get everything you need, you can ask questions and join in. anna: please join in. we would be happy if you use those functions. has today toitain report its gender wage gap. we will bring you more on what we know, and who are the worst offenders. manus: coming up on "surveillance," this is bloomberg. ♪

♪ the sydney shots of harbour there, the upper house. the reality of the data, is trump being the trade considerations -- the all these are shopping. that is taking consumer confidence up. trumping the trade

concerns at the moment. juliette saly has our business flash. wpp said it is looking into allegations of personal misconduct why the ceo involving misuse of company assets. the company said the amounts involved are not material. in his own statement, the ceo refuted the allegation, while acknowledging the company has to investigate. its bid to in acquire viacom, the owner of mtv and comedy central. a personccording to familiar with knowledge of the matter. cbs is offering a low market value of viacom shares. it will decide the fate of the two media companies controlled by the redstone family. has put moreement than a $1 billion stake, the new

york hedge fund praised the auto conglomerate for simple find its ownership structure last month after drawing criticism. elliott called the moves a first step, and said it is looking forward to meeting with management and stakeholders about the group issues. is injectingnment $9.7 billion into insurance groups after the company's chairman was accused of masterminding a billion-dollar fraud. the money from the giants security funds is aimed at solvency instability, and predicting -- protecting interests. david einhorn's greenlight capital last money across the board in the first three months of the year, matching one of the worst quarters. einhorn told investors it went

against his positions, losing money despite positive earnings, in an analysis of stock wages, einhorn said his biggest long 20itions fell 5.6%, and is largest shorts fell by 5.5%. that is your bloomberg business flash. anna: thank you very much, juliette saly. the u.k. is trying to address the gender pay gap. reportrs today have to wage disparity. companies are legally required to report the differences of salaries paid to male and female employees. hasing us now, nejra cehic been looking at the details. how many companies are reporting and what do they have to disclose? nejra: it is around 9000 companies. bloomberg is tracking this, so you can look on the website and the bloomberg terminal. over 9000 companies reported so

far. we were expecting it would be a data dump on the deadline date today, but it seems like most firms, a majority have complied. any firm with 250 or more employees in the u.k. has to be median hourly and pay for men and women, and the whichence between the pay is expressed in a percentage. they have to report the proportion of men and women retaining a bonus, and the proportion of each and each paid quartile. the has already showed something interesting. what it has not showed is how much a man and woman are paid for the same job, but it has shown that women are generally paid less in the higher ranking roles. there is a lack of women in the top paying roles. 19 out of 22 industries, and the top pay quartile, less than 50% women. manus: how do you change a board room with that kind of

dissonance? in terms of the highlights, you mentioned one of them, the upper banks,, our audience are and they did not come off too well. their women 56% less. recruited -- recruiting there is going to be tough. nejra: a couple of the banks you the average pay gap was 59%. this gets worse when you look at the difference between bonuses, then it tends to go up toward 80% for some of the banks. with hsbc, that highlighted the quartile is well. more than 60% of their employees are female. but less than a quarter in the top quartile. .ldman coming in at 56% for the banks, the average pay gap ranged from 30% to about 60%.

with some of these accounting firms and law firms, they haven't lobbied to close the pay of partners. the average for the u.k. is around 20%. some of the tech firms came off quite well. i showed you glued -- i show you google. manus: thank you for running that all up, nejra cehic breaking down the data for us. advisornce and reward development. there is a business week article. you can whittle the pay gap down. you can control more variables. you can never make it go away. underwhelming line to have. can we ever make the pay differential line go away? >> good morning.

the thing about the gender pay gap was explained earlier, it shows not only help organizations are enumerated -- remove -- selection, development, promotion. some of these things are within the organization, they can look at how they can make those processes fairer to men and women. however societal issues that were talked about earlier, why is it certain careers attract females. airline industry we have more men than women who are pilots. seens it that pilots are as the male career currently and cabinet crew were seen as female. they are challenging those stereotypes. anna: this goes to the heart of

this. one of the dangers of this data. maybe it focuses on a symptom rather than the cause. therey supported here say are not enough women at senior roles. that is why we are seeing this. does that explain the large disparity? that we areshows bias, and unconscious a number in black and white we can address why does that figure exist. wehaps we are doing things thought we were paying people fairly but perhaps we are not. manus: does this make it more difficult for these institutions to recruit senior winning?

charles: i think what senior women will be looking at in these organizations, what actions are they taking where they have in place to reduce the gap over time. if they are coming out with initiatives and not a great deal of movement, then they will know it is a pr a fair. -- pr affair. if they see there are major differences over the years they are putting their money where their mouth is. think we have to have this debate about how we value women's jobs in men's jobs, talking about why is it when it comes to child care, literally women are left carrying the baby while men are not able to take responsibility in childcare. anna: thank you very much.

charles cotton, cipd performance and reward adviser, giving us his opinion on the pay gap. coming up, how will the chinese respond to trump tariffs? this is bloomberg. ♪

manus: good morning from dubai. i am manus cranny. anna: i am anna edwards in the city of london. these are today's top stories. manus: trade dispute deepens. u.s. -- focusing on tech. beijing condemns the move and bowels to retaliate. anna: john williams is tapped for new york replacing one on building -- replacing william dudley. manus: shares rise as the white plans --s there are no in action against the company.

♪ manus: warm welcome to daybreak. this is day to play for european equity markets. small gains. we are on this balancing act. more than 1000 products but have china.he core of china says it is only polite to reciprocate. of 75.is below the line shoes have been spurred from the tariffs. tv's have been hit as corporate america that just these tariffs. the distance between what trump is saying on twitter and the reality of the white house and amazon is heading the markets. china, imf says they should begin to look at their position and deal with those. let's talk about the bond markets.

the equity markets will make up their mind on whether or not it is earnings that will drive the story. let me take you to the u.s. bond side. this is u.s. treasuries. we did see a little bit of a break even. back below 2%. the fed will hit their inflation target within the next one to four hours. one to four months. keep an eye between the bonds and your balloons. unds.d b the start of the second quarter trade. the soft data has run its course on the downside. david own concurrent. soft data has passed its peak. we are back at .5%. will we continue below .5% on bunds?

that.we will return to a little bit distracted here. looking at my bloomberg. headlines crossing around deutsche bank. --tsche bank proposing that will join the supervisory board. getting one comment through at this time. want to open up the release. we've got a new ceo. change at the top for a couple of corpus that we are watching. -- a couple of corporates that we are watching. let's tell you what is going on in the asian equity session. session.xed we are waiting to see if this confrontation around trade turns into a conversation. it doesn't feel that way.

we are waiting to hear from the trump administration details, the tariffs they are going to put on china. we got a couple of hours to go. we've got to disappointing data -- we've got some disappointing data. bloomberg u.s. dollar index, this is pretty flat at this stage. in other asset classes, things look calmer than in stocks. we have nymex crude down. later this morning, speaking to the oecd secretary general. that is just after 10:00 a.m. u.k. time. plenty to discuss in terms of the global trade story. we may have -- we are waiting to hear from the chinese in response to the trump administration. here's juliette saly.

juliette: u.s. president donald trump has said he plans to deploy the military to gaza border with mexico. he told can leaders he would abandon the north american free trade agreement. trump has previously suggested he would use the money allocated for the u.s. military to construct the border wall which he has been unable to secure congressional funding. in washington, white house insiders say there are no discussions about turning the power of the trump administration against amazon despite the presence twitter attacks on the company and jeff bezos. they are not aware of any ongoing discussion about turning trump's tweets into action amazon -- action against amazon. the president of the san francisco federal reserve is heading to the big apple. john williams has been named the new boss.

he will succeed william dudley making him a part of jerome powell's leadership team. in the u.k., today marks the deadline for companies with at least 250 employees to report their gender pay gap's. -- 18%'s prime minister difference between female and male earnings. theresa may says the issue is one of the "burning in justices are go -- justices." in california, the woman who went on a shooting rampage at youtube headquarters was a video creator who criticize the company's policies. police have identified the suspect who shot and injured at least three people before killing herself. the local nbc news affiliates -- youtube channels that criticize the google video unit.

global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . a couple of hours until we hear from china about retaliatory measures from the tariffs. we heard the 1300 goods that were named by the u.s. which we .re going to slap tariffs there is momentum gaining in asia. .2%.hat the msci 300 up by we saw japan's market close higher up by around .1%. the regional index is lower for a third session. let movement on the close in australia. you have seen weakness coming through in a number of key markets like seoul. the china state agency saying that china will be able to deal with any trade protectionism. let's have a look at stocks in detail. we are seeing with the health care players, up 2.5%.

chinese health care soaring after the government unveiled a policy that is aimed at boosting the supply and quality of generic drugs to get around any impact from those tariffs. tata motors in india looking good. actions. 10 product their volume growth up by 83% year on year. we will be tracking this move by elliott, the hedge fund manager in dubai, a $1 billion stake. quite a big pickup coming through from that stock which is lifted the overall kospi. manus: juliette saly, with the latest on the markets. the united states have taken aim --the tech industry and far industry as far as the tariff industry. the chinese makes products

ranging from -- china condemns the move in says it will respond with the same intensity. we've got our editor, jodi schneider. he have been covering the story through the morning. we will hear from the chinese in just under 2.5 hours. what will be the objective of trump? what do you think he really wants to achieve between this verbosity and the scale of what he is implement? jodi: the trump administration, the u.s. trademarks in this office who moves these forward is to tackle, to fight back against what the administration views as abuses of intellectual property practices by china. this is something that president trump had talked about when he was a candidate. it has been a theme of his

against china. he hasn't really done anything until recently with the tariffs. they are really trying to make a statement here that they are going to take action. this is the first action directly against china because previous actions had included a number of countries. this is geared toward china and the sector, particularly technology, they see as problematic. allowing them to make a more level playing field. this is interesting, as you pointed out, there is some weird items. dental cement and flamethrowers. there's consumer items. one of the things the administration said is they are trying to make it -- to minimize the impact on consumers, yet all dishwashers are on their. -- on there. there are a number of televisions on there. can -- not protecting the consumer entirely.

what has china said? how might they respond? china has been pretty clear that they are going to react. the statement we had is that they will react and they will impose the same kinds of measures with the same intensity and scale as the u.s. one could expect a similar amount. we're talking the u.s. amounts are $50 billion. who knows if we will see exactly those kind of things. it's out certain that china is going to react in a significant fashion here. the question becomes, how much does this ramp up what has been trade skirmishes? will this heat this up into a trade war? what does the u.s. do in response? the trump administration says they may not be done yet.

anna: jodi schneider, senior international writer in hong kong. joining us here, alexis gray. very good to have you with us. when you look at the trade skirmish or trade war, what is the assessment you're making about how insignificant this is? responsehe initial from the trump administration on tariffs on steel and aluminum were quite small. the impacts were likely to be relatively limited on growth and inflation, but now we are starting to see an escalation, take this to another level. the chinese government has said they do not plan to escalate themselves, just retaliate. we're waiting to see how bad this could be. the markets considering this could get worse. for now, we need more details. beneed to know if this can

committed under the rules of the w ceo -- wto. anna: china says the have the right to respond and they will be taking action. this chart really paints a picture at the extent of the trade deficit between china and the united states, something that has preoccupied the white house. remind us of what creates this deficit and whether this kind of policy from the trump administration is going to do anything to fix this deficit. my question assumes that something needs fixing. alexis: the u.s. and puts much more than china does. china has been a big exporter. incredibleve this gap between the two. the u.s. government for this fiscal stimulus is going to widen the deficit even more. you've got these opposing policies trying to reduce the

deficit with china through tariffs, but also widening the deficit. anna: because they could drive the u.s. consumer. alexis: you have these policies working in opposite directions which is illogical. the target is to try and reduce the deficit and support the u.s. export business. manus: a lexus, good morning. we have a chart here by global trade. this is jpmorgan's mobile march pmi, 53.4. the piece of evidence here that struck me the most is new orders for -- the headline index, that is rolling over. new orleans is the lowest since 2017. employment is the lowest since 2017. no matter what the outcome is between china and the united states, the united states and japan, the bottom line is there is much more asked and andrtainty -- angst

uncertainty in that is what provokes the air of the economists. alexis: you have seen companies pulling back a little bit. point,off a very strong that is evident in pmi across china and europe. part of that is around sentiment. the actual effects of the .conomy gradually slowing down all in all, we are in very good shape. the global economy has been resilient. although we are concerned about the potential for a trade war which is a very low likelihood, i don't think this is anything to be majorly concerned about. we are likely to see, said raising rates, and other banks own suit. -- following suit. manus: this is something that is distant to us. -- that has been sent to us.

if trump does get better access to china, it is good for the american economy. it is a more level playing field in regards to tariffs and the imf suggests is not unreasonable to consider that, it is going to be quite progressive. we should look at the bunds side of this. alexis: it is possible that this is a ploy from the trump administration to get a better deal for the u.s. instituting trade barriers hurts. i don't think the u.s. wants to isolate itself altogether. that can be pretty hurtful. if we can get a deal that is more favorable for the u.s. but not cutting them off, that could benefit. perhaps at the expense of the chinese. anna: fascinating whether this competition turns to dialogue. we have seen this in after. -- in nafta. alexis, she stays with us.

she will get her take on other matters. change in the guard. john williams has been chosen to replace william dudley in york. what this means for the united states -- in new york. what this means for the united states. later on anna will guide an interview. the u.k. teamin -- 10:00 a.m. u.k. time, join the u.k. team. this is bloomberg. ♪

anna: this is "bloomberg daybreak: europe." around 39 minutes to go into the start of the european cash equity trading session. let's have a look at those markets and see where we are expected to open up. flat.l that

the german ten-year bund, 3.0751. s&p futures were expecting to be weaker when we get to u.s. trade. caught between an incisive asian session and a u.s. session that threatens to go lower. here is juliette saly. said it ispt has looking into allegations of personal misconduct by the ceo involving possible misuse of company assets. the company says the amount involved are not material. in his own statement he rejected the allegation while organizing the company has to investigate -- while recognizing the company has to investigate. has -- that is according to a person with knowledge of the matter. they say cbs is offering a below market value to buy viacom shares.

swiss re says softbank is likely to take a stake of 10% or less in the company as it seeks to gain a foothold in the cash reinsurance industry. the company says negotiations about something investment are ongoing and remain at an early stage. masayoshi son is reshaping japanese mobile phone carrier -- areas of potential cooperation with swiss re. that is your bloomberg business flash. manus: some breaking news coming in from china. was -- theization u.s. is guilty of willful distortion of the facts. this is the chinese wto. the u.s. measures gross violation of wto rules and they pledge retaliation over u.s. tariffs. it is going to 22 in dubai.

we are going to hear from chinese and other two years time -- two hours time. this is the rhetoric, it is building up as a willful distortion of the facts. let's bring our guest back into the conversation, alexis gray. very first response here. the rhetoric, the action of wtoica being met clearly by , being called a willful distortion of the facts. alexis: i think that is right. these countries operate under the wto and imposing tariffs goes against those rules. it is natural for the chinese to push back and argued that this is not permitted. expected. is to be as this moves forward, this along the tech selloff is taking the edge of stocks. not necessarily other asset classes.

your take over at vanguard and with his head, how much this this nervousness affect other areas of the market? alexis: we have seen a return of volatility is. where in a correction in equity markets but that is not a surprise. we wrote a note are going there was a 70% chance of a negative market correction this year. .e have stretched valuations the market taking these risks as being more credible. the risk of a trade war and of higher interest rates which have taken the edge of the market. not entirely surprising to see some of the frost is gone. alexis: manus: let's have a look at this chart. i know you have written on this. it is just under 16. we're offering value in theory, the p -- peter navarro says by the equity markets. alexis: p ratios are rather high

at the moment. a common way to look at the shiller. it is above historical averages. you also need to take account into the fact that interest rates are very low and that tends to encourage investors to stocks. that is one justification for the p being at a high level. we are not in bubble territory of the u.s. market, violations look somewhat stretched. for investors that implies over the next five to 10 years, equity returns will be lower than to have been in the past. past.n they have been the anna: i was reading that talked about the powell pushed into the extent in which that exists. a bit of a pivot to the more dovish side of the fed. unruly was the word. is it premature to ask that kind of question question mark -- the

kind of question? alexis: does it affect consumers? does it potentially bezel inflation? they believe the outlook has changed, they may choose to raise rates less than what they planned. see.ll have to wait and the market could be bound. depends on what we get in the marketplace. alexis, thank you for being with anna and myself. we will finish off our day with china's initial reports to the u.s.. -- u.s. moves, willfully distorting the facts. do they match those levels of tariffs from trump? will flamethrowers he reciprocated? anna: -- be reciprocated? anna: just reiterating what you are saying. and gross violation of wto

rules. it will be a tliv blog. follow the press conference we're expecting in a couple of hours from the chinese. this is bloomberg. ♪ welcome to the xfinity store.

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guy: you are watching "bloomberg markets: europe open." i am guy johnson in our london headquarters on site at miller. castrated less than 30 minutes away -- cash trade less than 30 minutes away. ♪ escalating trade tensions, washington proposes 25% tariffs on $50 billion worth of mainly high-tech chinese goods. beijing has scheduled a news conference for 9:30 london time to deliver its response.