♪ 7:00 a.m. here in hong kong. welcome to "daybreak asia." thetop stories this monday, imf warns rising protectionism threatens the global economy. things are still good but the risks are out there. stephen mnuchin hits on a trade truth with china. beijing says they welcome a chance to resolve their spat. kathleen: just past 8:00 a.m. hearing tokyo. -- here in tokyo. president trump dials back on the optimism. the white house says opec is keeping the oil price artificially high.

they say it is not true and the market will decide. ♪ kathleen: what a way to start the week. we certainly closed the week looking at trade. imf, central bankers saying it will be more deflationary than inflationary if we had a trade war. oil prices rising again. donald trump lashing out. and of course it did hit the stock market, and bonds back up nearly to 3% now. yvonne: you can see we had a close on the dow jones. theleen: let me run through real quick. s&p 500 losing nearly 1%. that was another week where we

had three up days, two down days. people are really wondering where the bull market and stocks go next. so much geopolitics, commodities, so much for investors to digest right now. yvonne: not to mention the bond yields. we are set to see about $96 billion in these options this week. are we going to see more of this yield curve flattening this week as well? take a look at what we are seeing in asia so far. seems to be a good sign that the many futures in the u.s. are bouncing back a bit after some geopolitical tensions have eased a bit. a potential china truce according to stephen mnuchin. new zealand of about 1/5 of 1%. 7209 for the kiwi.

morbid bond of story today. we are seeing futures down a fifth of 1%. take a look at the aussie 10 year yields following treasuries, up six basis points at 2.87. $68. also holding around we have a boj meeting this week as well. futures pointing to a slightly lower open here today. dollar-yen 107.80. meantime u caught up with the first word news with ramy inocencio. ecb policymakers seem to be waiting until the july meeting to announce how they will wind up banks stimulus program. governing council wanted to judge of the euro area economy is overcoming its first-quarter slowdown. formal also say no discussions have been held on a rate strategy. the euro briefly dropped to its

level -- lowest level in two weeks on the news. theresa may is fighting to avert a rebellion inside her own conservative party. euro skeptics are concerned she may break her promise to take the u.k. out of the european union's trading block. a senior government official says the prime minister's inner circle thinks she made be forced to stay in the eu customs union because parliament will reject her plan to abandon it. iran says it will restart its nuclear program if the u.s. breaks the deal struck with the so-called six powers. president trump campaigned on strong opposition to the 2015 agreement and has threatened to drop it unless it what he calls serious flaws are fixed. foreign minister says that would leave america isolated diplomatically and trigger quote, unpleasant consequences. --everybody has adviced advised the administration that

it is not a bilateral agreement between iran and the u.s., and withdrawing from it would be seen as the entire community as an indication that the united states is not a reliable partner. iran has many options and those options are not pleasant. rami: at least 57 people have been killed by a suicide bomber in kabul. the attacker targeted a voter registration center. at least half the victims were women and children. more than 100 other people were wounded. the so-called islamic state group claimed they carried out the attack. the bombing comes just one month after militants killed 31 people celebrating the persian new year. global news 24 hours a day on air and on tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ramy inocencio and this is bloomberg. yvonne: president trump is

tempering the enthusiasm on nuclear weapons -- on north korea. it asian north correspondent has the latest. a long way from conclusion the potential is a big progress. >> progress is always good but there is reason to have a little bit of a pause as well because north korea has made a lot of promises in the past. keep in mind this is more a statement from north korea establishing status quo. missilee not had any tests in the last five months. they are basically establishing they are steeping -- keeping the status quo. they are not promising denuclearization. basically just no escalation of the status quo. they have agreed to dismantle the testing site in the northeast, a secretive mountain site which is widely believed in the last h-bomb test in september to have imploded on

itself, rendering it fairly useless. so that might have already been taken care of by itself. keep in mind that kim has made no pledge to give up the 60 estimated nuclear warheads they have, as well as an unknown number of icbm's. but it is a good gesture ahead of what will be a momentous occasion on friday with the president of south korea meeting with kim jong-un. yvonne: what has been the reaction so far? why would anybody -- stephen: let's first get to donald trump's tweet. on friday he said very good news, big progress. but that has been tempered a little bit with his most recent tweet saying it is a long way from conclusion. i believe we have this graphic. it is a long way from conclusion

on north korea. maybe things will work out, maybe they won't. only time will tell. in this case, it truly will. but the work i am doing should have been done a long time ago, tweeted the president. calling onction, u.s., south korea and the to immediately lift all unilateral sanctions on north korea, given north korea's good gestures. japan eating a bit more pessimistic, as they all along have been. they are more skeptical of these north korean promises. yvonne: when people say sometimes it is not best to get your hopes up too high. hope for the best, prepare for the worst. we shall see how this unfolds. let's move on bringing in park strategy senior strategist sean king. he was senior adviser for asia

and the u.s. and foreign commercial service. we so happy you could join us on this important story. i want to follow on something stephen was just saying. why would kim jong-un say anything about giving up nuclear theons before they two -- two teams sit down and start negotiating? nuclear --se the denuclearization for north korea does not mean what it means to us. kim jong-un's grandfather was talking about denuclearization before the even had nukes. what it means to them as u.s. troops off the peninsula and into the u.s.. south korea defense treaty, south korea's removal from the nuclear umbrella and in some cases an end to the u.s. japan defense treaty. then they might take down their nukes but then in that case the nukes would have served their purpose.

when he talks about denuclearization he is not giving away any. -- giving away anything. so what can the u.s. expect, what can anyone on that team hope to get out of negotiations with north korea? they have spoken to people like you and the understand this. so what can they reasonably get that would not only serve the u.s. interests but the interest in china and japan and other nations? sean: believe it or not the administration has not spoken to me, but thank you for the plug. i think they're going to get nothing, which is fine. i don't expect anything from this. if we get out of this with status quo and no sense is lifted it will be a positive. i'm cautiously optimistic about the whole thing. the trick is the offer came through south korea. southrth has ignored the

as an illegitimate puppet state. but because trump froze them out, the north had to come through the south and bring the invitation to drop. if he then turned down the invitation it would be a slap in the face to our south korean ally. to expect anything out of the meeting, north korea cannot give up its nukes. without its nukes it cannot survive. hopefully they will just say hello then go back to better and better sanctions. i don't expect anything to come out of this. nexteen: i wish we had our guest to pair up with you on these discussions because it seems like gordon chang, he was saying maybe this will be different given the fact that we have actually seen one dramatic occurrence after another from north korea, showing more diplomacy. secondly, he thinks that sanctions are having an effect. we are seeing some slush funds that kim is running low.

north korea is running out of hard currency reserves. he desperately needs sanctions relief. sean: no one really knows how much hard currency they have because they don't have statistics and anyone who does know is not telling. i do agree that the sanctions must be having some effect. i would collect it moderate pressure because we still have not sanctioned china's enablers and north korea. it could be it is the 70th anniversary of north korea so maybe they want to make a big propaganda gesture at home. maybe they feel like they have a liberal president in the south at a u.s. president who has a disdain from the alliance. now is the time to split south korea and the u.s. it could be a combination. but whether or not they can actually do anything and give anything up, if they don't have the nukes, then they don't have cover if they invade the south again to keep the u.s. and they and make them think if we really

want to sacrifice san francisco for so. -- for seoul. up theally cannot give nukes because it would mean the end of the regime. i believe trump has pressured them, i am all for the meeting, i just do not have high expectations. >> you say a peace treaty makes you nervous. as we look ahead to the summit, what do you think kim jong-un essentially wants from moon jae-in? , he hasm jong-un wants always wanted a peace treaty with the u.s., which would put it on equivalence with the u.s. and play into the north korean propaganda narrative it was defending the korean peninsula from the united states. i have no problem with them signing the surety treaty with south korea but under no circumstance should we sign a peace treaty with north korea. you have to recognize someone to sign a peace treaty with them.

is north korea going to accept and recognize south korea? i don't think so. we recognize north korea without north korea recognizing the south? i hope not. invadent to ask you, south korea again, really? you have a younger leader, you have a world where china and the -- a communistg company and it capitalists country. do you think kim jong-un realizes that he can some tell -- if you can somehow make this work, you can get korean anestment, he can have economy in the country he is head of that becomes a prosperous, more prosperous country it is now. sean: he cannot. north korea is not east germany. it is not communist. it isn't ultranationalist xenophobic state. there is no reason for it to exist beside a wealthier, larger south korean state.

if he opens up his country to outside information he has no reason to keep a hold over its people. north korea bans even chinese and russian media. it is an ultranationalist korean-only state. he cannot exist long-term is south korea is there. the nukes give them a chance -- if we sign a peace treaty perhaps we would have to withdraw our troops. that then leaves the south vulnerable, if not for outright invasion. they invaded before, why wouldn't they before, especially with china? again,y wouldn't they especially with china? >> thank you. very interesting when so much is on this focus. sean king is senior vice president at clark strategy. as you would expect the north korea breakthrough headlines today's edition of daybreak. bloomberg subscribers can go to daybgo on their terminals.

also available on the app. trumpahead, president accuses opec of oil price rigging. reaction later this hour. >> next, watch out for risks. this is bloomberg. ♪

♪ what everyone is saying this week one way or another is very simple. things are good, but they are getting risky. risks are main protectionism and trade tension, and on the other hand -- definite --

extentot know yet what of damage to growth would be. >> nobody would benefit. tradse what we believe is e will benefit everybody. somebody will benefit. >> we have a strong economic benefit with the u.s. and china. indeed, from our point of view we are keen to ensure there is no such thing as a trade war. there are no winners from a trade war. we don't believe there will be a trade war. >> the right solution is not to engage in any kind of war against china. the right solution is to engage china, to have china onboard, as much of ourve institutions related to trade. >> we know that free trade, open markets, and staying away from protectionism have lifted so

many people out of poverty. so it will not help us. we need moreail if protectionism because -- an impressive array of key policymakers speaking with bloomberg at the imf and world bank meeting in washington. this is "daybreak asia." treasury secretary steven mnuchin says he is considering a trip to china in an effort to diffuse the trade spat between the world's top two economies. a hint at a truce comes as the imf warns an escalation intention would derail the global economy. let's get to jodi schneider joining us in hong kong. does this signal a potential breakthrough? jodi: it could if each it happens and the treasury secretary said he is considering a trip. he also met with the head of china's central bank at the imf meeting.

they said they talked about central-bank issues, not trade. but this does signal perhaps a softening in the rhetoric. we have seeny, this ratcheting up of tensions. the u.s. started with steel and aluminum tariffs, not directed only at china but certainly partly at china. that has threatened to impose as billion in trade tariffs against china and chinese imports. china has retaliated and said it will impose $50 billion on u.s. products back and forth. just last week president trump said he was looking at additional restrictions using a 1977 law against china for what the u.s. -- yvonne: we saw things flaring up. jodi: the tensions have been going like this, now it seems at the treasury secretary is saying

let's take a pause and at least consider talking more. of course this comes as the imf says the trade tensions are one of the risks to global growth. they certainly are. it also seems the white house has been willing to sacrifice some stability, some market stability, even potential growth to open these markets to china much wider, not just the u.s. but to the world. the imf worried about the trade threat. the imf itself and policymakers from around the world. not too big of a surprise because the most believe trade has been an engine of growth. jodi: that's right. this is not a huge surprise. trade has helped with his growth and the imf says it is a risk, you know they are saying things are still good. the other risk is that giant growing pile of growing debt. but perhaps the timing of this is not coincidental. hastreasury secretary

reported to have said we're going to talk now. yvonne: of course we're hearing french president emmanuel macron is heading to washington. d think he can persuade the u.s. to back off of these america first policies? seems like they have developed a report here. does the french president have much sway? jodi: that's the real question. he has a good report, certainly better than a lot of world leaders with president trump. that doesn't always mean anything, and we have seen with prime minister shinzo abe from japan, who has kind of a famously good rapport with president trump. he went to washington last week and came back relatively heavy-handed. said there might be a bilateral trade agreement but he was not able to push the president on trade tariffsget listed against japan, even know they have been exempt it from other countries. so we will have to see. president macron is going to

address congress, he is going to meet with some george washington university students, he will have a big picture meeting with administration officials and obviously the president. so, the optics look good. the question is will he be able to convince president trump of anything on trade. is going think macron to take the syrian airstrikes as a victory, but we will see what we can do on the trade front. jodi, thank you. for more breaking news were ever you are we have teamed up with twitter to launch tictoc. it is the first news network design for twitter -- for social media. if you are on twitter major to tictocus at tictic by -- by bloomberg. ♪ ♪

♪ now for a check of the latest business flash headlines. toshiba is denied reports it is considering dropping the sale of memory chip unit. couldpaper said the sale be canceled if toshiba does not receive approval from chinese antitrust authorities by the end of may. but toshiba says there are no plans to abandon the deal and the transaction will go ahead as soon as possible. >> chinese online healthcare platform is launching an ipo in hong kong that could raise more than one billion u.s. dollars. they are taking orders through thursday and expect to begin trading on may 4. citigroup and jpmorgan are joint sponsors. it is formally known as ping an health care and technology. next, it has been a volatile few weeks for tech stocks. concrete numbers this week on how bad news will affect bottom line.

every the of this week's tech earnings are coming up. reporting first on monday. this is bloomberg. ♪ this is bloomberg. ♪ retail.

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♪ yvonne: 7:30 a.m. monday morning, 30 minutes away from asia's first major market open. day.een: gorgeous the weather has been beautiful across asia. 7:30 in new york where markets closed lower. you can see that beautiful dust --ding towards timeline twilight in manhattan. the markets not so beautiful. the dow losing a must of percent, roughly a across the board, losing 200 points. the s&p down 23 points and 2670, the nasdaq down. three updates last week to down

days, bank earnings that investors unimpressed. they are wondering what is happening next. we have news from the likes of caterpillar, ge and the oil companies, big week of earnings. i am kathleen hays in tokyo come with your to follow all the news in japan, particularly that big bank of japan meeting at the end of the week. so much going on, my eyes will have to go and a lot of directions. [laughter] yvonne: absolutely. bonds yields, the ecb before the boj, plenty on the plate here. you are watching daybreak asia. first word news with ramy inocencio. ramy: thank you and good morning. china says it will cause a potential visit by the u.s. treasury secretary steve mnuchin who is cautiously optimistic the five can reach agreement on trade. the mystery of commerce that it has been told mnuchin is planning to travel to beijing but no dates have been determined yet. the u.s. and china have both been warned a full-blown trade

dispute could derail the global economy. donald trump is tempering the optimism about north korea now as lawmakers sounded skeptical about promises to halt its nuclear testing program. the president had hailed what he called big progress and said he looks forward to meeting kim jong-un at some point. now he has told his twitter followers things are a long way from a conclusion and things will or will not work out. tech and cybersecurity firms fire i says chinese hackers have targeted japanese defense companies, possibly seeking information on tokyo's policy towards resolving the north korean nuclear issue. the subject is the ap 10, china-based espionage group. they target research and development firms to collect information on geopolitics. chinese telco zte has told us

hong kong stock exchange it is now taking steps to resolve the u.s. tech ban the company says threatens its survival. the company is being blocked from buying american components for seven years. that is punishment for exporting equipment to iran and north korea. the company says this could hurt its global business and it is working with relevant authorities to find a solution. global news 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am ramy inocencio. this is bloomberg. ♪ tonne: we are counting down the major market open. let's get to sophie kamaruddin. we are looking at the north ,orea tensions de-escalating trade looking better as well, but focusing on earnings, we have the boj and more. sophie: there is caution in the air. major markets facing a mixed start. the futures board, anticipating a subdued open with the

relatively minor -- mild data calendar. we have singapore inflation and south korean trade. as we have noted geopolitical risks deals are on the back burner, so this could be positive for the korean won. it has been down most of april after asia's most volatile currency posted a gain for the first quarter. check out how it has been faring the past month. debt risk, korean debt risk in the white, that has just fallen over the course of march and april given what we have seen on the geopolitical backdrop. won, it couldrean .e a $10.50 this is a chance to buy in as well as local stocks. check in on the dollar-yen which is at 108. politics is a dryer -- driver as

bulls continued to sink. yvonne: you mentioned we are focusing on 3% yield for the 10 year in the u.s. how is that playing out? sophie: the asian bond market is faring so far, we see a pickup and aussie and kiwi bond yields, up six basis points so far this morning. this after a treasury fell for a third straight session. you want to pay close attention librarychart in the gtv to see the 30% level after the 10 year was at at the 2018 high of 2.9%. that is the highest since january 2014 and when it comes to where treasury yields go, keep an eye on the yen. the focus on japan, we have output and jobs data ahead of the policy meeting friday. thank you so much.

no policy change expected but we will be watching governor kuroda's press conference. watching the week ahead on wall street, another round of earnings including major tech companies which faith tough times. u.s. investors will focus on numbers from manufacturing giants like boeing, lockheed martin, ubs and credit suisse, and big oil companies from exxon just are -- exxon to chevron. take it away. su: we are getting into the peak earnings here. we had the first two weeks of earnings, the market was rocky but we saw stocks post higher. it is expected it will be that kind of impetus this week. let's go into the bloomberg. caterpillar is an area of focus. we have caterpillar sales by region. you can find is that gtv. the purple and latin america has come down. white is asia-pacific and yellow is north america.

the expectation is first quarter results should again beat the consensus which is about $2.08 a the end growth across all sectors should be fairly strong. many years of cost cuts have been aiding margin gains as volumes rebound. margin regain, tariff potential impact and tax are all areas of focus as we look at the company that we are reporting, airbus and lockheed in addition and also boeing. boeing is of interest because caps on particularly and interest here. look at this chart, boeing's flight to volatility, the top u.s. exporter is caught up in the tariff debate. this chart shows changes of more than 1%, green being higher, you read lower -- red being lower. this is just as the tariffs and

metals that they used to put together their jets, this is a big issue and everyone is waiting to hear what the ceo has to say as well as with the outlook might be. yvonne: it is interesting you put that macro thing like a tariff on micro-story like boeing, but growing that's that oil goes to $80 a barrel, oil getting very sexy again. su: we are seeing more money into oil related funds at a pace that has not been seen before. almost a record. let's go into the bloomberg and exxon is one of the big giants that reports. this is deutsche bank now. i should point out deutsche bank is one of the banks that will be reporting. we have talked about the different banks that have reported so far really coming in strong with cost-cutting and trading revenue. deutsche bank will be of particular interest because they have had the recent change at the top, and their u.s. strategy

will be in focus. look at the other companies that are reporting. oil companies are first among the area of focus, shell chevron, and if we go into the recent chart of oil year to date, you can see the trajectory where we are at the highest level of oil prices that we have seen. there should be a chart there possibly. you can see why with oil coming close to $70, there is talk of $80, a lot of rush into oil. a lot of focus on what the ceo's of the companies are seeing in terms of profits ahead. yvonne: and we are also about to hear from more banks and companies, coca-cola and starbucks which has been in the news. both of these have struggled when it comes to turnaround plans. su: yeah, that story is a big one along with the tariffs and the tax reform. let's take a look.

a lot of beverage companies, starbucks, coca-cola, deutsche bank, credit suisse also reporting. a lot of other companies that safe haven play if he will or invoke, barrick gold, halliburton. then there is starbucks. starbucks has come under fire because of their policy for nonpaying customers. apparently there is a view that they pushed some nonpaying customers out why allowing others to stay. there is diversity training taking place at these stores. there is a lot of questions about how terrorists might affect starbucks. a lot of analysts say the key story here is the rebound story. they have had declining sales. there is one analysts that one of 20% downside the next 12 months and of the focus is key. kathleen: su keenan on what to expect this week when it comes to earnings and that recent volatility, and week packed with major earnings should give the

markets some concrete numbers especially when it comes to tech very let's go to ramy inocencio with the charts we need to know. ramy: thank you. i would like to bring these up behind me but i could walk you through them. we are having -- here we are. this is the earnings analysis function. welcome to the screen. if you are a some -- if you are a subscriber, this is the earnings -- board. -- earnings dashboard. this is the 11 sectors of the s&p. this one, information technology, it is a huge week looking ahead. eight major players, companies here looking at the earnings surprise right now. we have only gotten a couple out, nine out of 68. 6.74% to the upside. we past performance is not an indicator of future returns, but this is pretty good. 6.74 percent, not as much is what we see in terms of financials.

26 of 69 have come out already. the big banks. we are looking ahead to see and feel in this nine out of 68 again. .his is the ea dashboard let's dive into that. 500 techetting the s&p sector in white against the s&p 500 index as a whole. you can see everything's to date to the white line is over the blue line. here shows the -- the yellow line shows the spread. it has come off a little bit when we thought high around mid-march, but is doing pretty .ell relative to the s&p 500 if you were in the long with the tech sector, you would be winning against the s&p 500. let's go further in because we want to take a look at what the stocks are doing. best, that ishe netflix.

.0.75% higher year to date this of course but a recent pop because it just clocked in 125 million subscribers globally. it beat the estimate by one million in terms of growth we recently heard from. one of the other ones we are hearing from is apple. it is in red, taking a turn for the worst, especially from tsmc saying the semiconductor chip sector is not going to be doing so well because it is seen as a growth forecast, not getting a knock on effect from the iphone sales. let's flip the screen one more time because i want to show you what we are looking ahead to in terms of this next week. will show all of them. apple, alphabet. quickly filling in the rest of the screen here, facebook and microsoft, 2, then

intel, a very big week ahead. we are just getting started. kathleen: we certainly are. thank you so much. in just a moment president trump accuses opec of inflating oil prices. we will ask if he is right. and where oil prices are going next as well. this is bloomberg. ♪ this is bloomberg. ♪

♪ asia.: this is daybreak i am yvonne man in hong kong. kathleen: and i am kathleen hays in tokyo. russia is rejecting president trump's claim that oil prices are artificially high. the president said looks like opec is at it again with record amounts of oil all over the place including a freely -- a fully loaded ship out at sea. no good and will not be accepted. but the russian energy ministers

said no one is manipulating prices. >> we actually think it is not any organization, and there are many factors which affect this process. one of those is supply and demand. u.s. shale oil which is affected by market dynamics. we have seen price increase over the past few years which have not driven that shale, so if you look at the statistics over the shale.5 years, the u.s. has added up to 1.5 million barrels a day. this is affecting the shale oil industry. ,f you look back at 1.5 years you have to see the state at which the shale industry was in terms of finance. component,ber, the

everybody was rejoicing that they declared cooperation. we helped restore the interior of texas. >> you think he is wrong, prices are not high. >> i would like to say we cannot say somebody is prices up or down. the market is what sets the price based on fundamental factors like supply and demand and other factors. >> do you think this is something the group can talk to rick perry, the u.s. secretary of energy, about? >> we don't. we have no discussions of this topic land and have not discussed it. [indiscernible] i have actually invited him, and with opportunity we can discuss this. no plans at the moment. yvonne: that was the russian energy ministers speaking to our reporter. let's look at the outlook for oil. you -- ubs wealth management head of commodities, dominic.

what did you make of trump's tweets, are the prices artificially too high? >> he has a point that opec is essential in rebounds in the market. if you rebound, you reduce supply, what do you think, prices will go up. so from that says he has a point. opec has been essential in bringing down inventories. if you look at today we are at a five-year average. kathleen: we are seeing gasoline following surging now what we see in oil. is he trying to temper down expectations or bring it down leading up to the november midterms? think there are several issues here. there are higher prices that will affect consumers. maybe americans need to pay almost $200 more for gasoline. that hurts when you think about retail sales anywhere else. on the other side maybe trump wants to, there are still

renegotiations or refinements with the iranian nuclear deal. that is something to look into. trump is not really settled with the deal, so if we lose iran, a supplier of oil, that is adding fuel to the fire. so maybe looking for an escape goat. that is a possibility. interesting is also isn't it that at the same time donald trump is just one aspect of it, maybe a small aspect because we have many forces, demand, global oil glut. we have a trade war pushing up commodity prices. i wanted to bring up a chart from our gtv library on the bloomberg to look at inflation oil and industrial metal. you cover all of these and when you look at this chart you can see a white line that is a 10 year breakeven. inflation has exceeded or inflation's are rising, not as

fast as the turquoise line which is the bloomberg industrial metals index. you can see west texas intermediate crude futures also on the rise, not as quickly. is this going to be inflationary for your clients, or is it deflationary? higher prices of oddities hurt consumers of businesses. >> i think we need to understand the upside first. we do not have -- the market will be balanced. last year you had deficit. supply was essential in the adjustment, but demand is also here. demand is strong. it is growing 1.4, 1.5 million euros. demand is strong. if you ask about inflation, yes, it will affect inflation. so the contribution of energy to the target will be 10% year on year, so there is inflation. one of the reasons on the bank side we tell our clients, you need to be cautious on bonds.

in an inflationary environment where monetary policy is normalizing you might want to stay away from treasuries because here the return dramatically -- particularly in the real term is short. one is commodities. equities look attractive, or you simply look into equities overall which benefit from the solid number of gdp growth you look at this year. so look for it. that is the place you want to be despite the uncertainties trump is producing in the current environment. kathleen: so what does it mean for your investment strategy, because if you see higher inflation, i assume you see central bank, the u.s. could continue to tighten although sometimes central banks look past the underlying forces? >> something to be clear on on the u.s. side, even if energy prices are going up, it is not going to focus on headline

inflation. will remain the course. real rates will go more negative. you probably will have -- investment side is going to look pretty good. i think the most important thing, they are not at the stage where the fed or central bank will say, we need to actually lean against growth. that is the most important thing . inflation is not such a problem right now that we need the slow growth. that is the most important factor is that is normally what stalls a late stage cycle development is central banks going through positive real interest rates, slow the economy, then we are in recession. that is not what we see for 2018. inflation is just analyzing from a very, very low time. yvonne: what does it mean for prices? we were talking about aluminum glut coming now goldman's saying we had 3000 when it comes to aluminum in the near term. is that bullish, and what does

it mean for contagion? we see it with nickel. >> from the energy side if you lose supply, yes, $80 is possible, short-term stability for brent hitting $77 a barrel. with the industrial metals that can still really mid to high single digits, still possible. allie has rallied quite a bit. the glut was already in debt. it is not in surplus. islosing 3.9 million difficult, and the market has to figure out what to do. look at copper, small-market deficits but also here with demand holding off, you will see higher prices. the entire industrial metals space looks attractive. let's come back to another point because it is such a big focus whether in metals or equities or directly in bonds. it is another chart from the bloomberg gtb library, looking

at the 10 year yield and asking the question, is the end of the bull market coming to an end because you can see the trend line, the yellow coming all the mid-1980's.ce the it has been broken with the 10-year yield trading friday up to 2.96%. 3% is the key levels. go above that, big on names after that, it is over. what do you say? >> the majority are right. the interest rates overall are rising. we don't expect the 10 year to really rally. north of 3%, that is not our case. probably u.s. growth in nominal terms is shy worth of 4%. with the rest of the world interest rates still pretty low, i think 3% interest rates around there, it is pretty at the fair level i would consider an environment where i think we are

not at that late stage and the economy can still grow without producing too much inflationary pressure. put aside the one from the commodities in the short run. taking that into consideration where the global economy is, we have to look at spare capacity. 3% is a fair level but probably a structural one it is clearly over. thank you so very much for joining us. this conversation is over. we will have another in the future. ubs wealth management, cio office, head of commodities and asia-pacific foreign-exchange. bloomberg users can interact with the charts we show using gtb go. bloomberge them on television to catch up with the analysis and savior charts for future -- save your charts. now for a look at the business flash headlines, reports of germany say they were descent -- dissenting voices.

the reuters board held a call to vote out ceo john cryan and name a new replacement and to nominate deputy ceo's. there were multiple no votes. bank's one of deutsche biggest shareholders is cutting after two months of saying it wouldn't. the hna group is trying to raise financingdealing with at home. in february they had no plans to reduce holdings, but cut from 8.8% to 7.9%. they are committed to being a major investor in deutsche bank. in the next hour of daybreak asia, more on north korea's pledge to halt nuclear testing. what gordon chang says. lookean darby joins us, a at the market as we head into a new trading week. we have big central banks like the ecb, the boj and the later part of this week. plenty of earnings to talk about as well. market open.

this is bloomberg. ♪

yvonne: 8:00 a.m. in hong kong, live from bloomberg's asian headquarters. i'm yvonne man. the imf warns rising protectionism threatens the global economy. the fund says things are still good but risks are out there. steve mnuchin hints at a trade truth with china. and i'm kathleen hays in tokyo, where it is just past 9:00 a.m. one of deutsche bank's top shareholders cuts its stake. hna said they wouldn't do that. kim jong-un confirmed he will halt his nuclear testing program.

president trump dialed back on the optimism. ♪ yvonne: it is going to be a busy week with plenty of central bank earnings to talk about. we are watching the north korean story as well as china with steve mnuchin saying he's considering visiting beijing. perhaps that is some type of olive branch. the big story is the bond market. the long end getting a bit interesting once again. on then: just knocking 3% yield door, yvonne. many saying you go above that and the end of that bull market is over. it is interesting that in the midst of concerns about a trade war, what is going to happen with north korea, we see that

safe haven bid doesn't seem to be working as much now with oil prices rising, potentially pushing up inflation. yvonne: let's move on now to get to the first word news with our own rainy inocencio. ramy: thank you very much and good morning. the ecb policymakers are said to be waiting until their july meeting to reveal how they will wind up the stimulus program. they want sufficient time to judge if the economy is overcoming its first-quarter slowdown. sources also say no formal discussions have been held on a rate strategy. the euro briefly dropped to its lowest level in two weeks. bloomberg has been told theresa may is fighting to avert a rebellion inside her conservative party with eurosceptics concerned she may break her promise to take the u.k. out of the european union's trading block. an official says the inner circle thinks she may be forced

to stay in the customs union because parliament will reject her plan. iran says it will restart its nuclear program if the u.s. breaks the deal struck with the so-called six hours. president trump campaigned on strong opposition to the 2015 agreement and has threatened to drop it unless what he calls serious flaws are fixed. the iranian foreign minister says that would leave america isolated diplomatically and trigger unpleasant consequences. , buterybody has advice this is not a bilateral agreement between iran and the united states. withdrawing from it would be seen by the international community as an indication that the united states is not a reliable partner. iran has many options. ramy: at least 57 people have been killed by a suicide bomber

in afghanistan. the attacker targeted a voter registration center, with at least half the victims women and children. more than 100 other people were wounded. the so-called islamic state claimed it carried out that attack, saying it targeted shiite apostates. the bombing comes one month after militants killed 31 people who were celebrating persian new year. global news 24 hours a day on air and on twitter powered by more than 2700 journalists and analysts in more than 120 countries. yvonne: thank you. let's get to your market check. getting mixed signals after that down day that we saw on wall street. equity futures in the u.s. bouncing back. let's get the latest with sophie kamaruddin. sophie: mixed signals for asian markets. in tokyo, the nikkei marginally lower, led by health care,

utilities. health care also dragging on the kospi. most segments are gaining ground aside from telcos and real estate. yields, that 3% mark insight for the 10-year mark. we will be interested to hear what jeffrey gundlach may have to say later today. socgen says that while yields could temporarily push beyond 3%, it could not be on a sustained basis. we are watching for a potential breakout for the won. the currency has stayed fairly range bound, but it could move towards 1050 as geopolitical risk wayne. debt risk is also falling and that could help the won break into a stronger range. rise korea saw exports while imports grew 20.8%.

that is something korean investors have to chew on today. the aussie dollar holding near a year-to-date low after iron ore dropped. metal markets have been very much in focus. that is coming off. let's check in on the bond space. want to highlight that drop in aussie and kiwi. nearly adding six basis points earlier in the session. aussie bond traders will have first-quarter cpi on tuesday, followed by ppi on friday. the cba expects prices to have moderated and it doesn't see any impact. yvonne: thank you. president trump is tempering the optimism on north korea despite kim jong-un announcing he will hold tests. the president tweeted, we are a long way from conclusion. stephen engle has the latest on this. we were speaking to shawn king. he mentioned denuclearization

means different things when you talk about the u.s. and north korea, but there is progress. >> what did he say, he's a pessimistic optimist, cautiously pessimistic -- yes. denuclearization in north korean terminology means south and the united states ridding the peninsula of their nukes. if you look at the statement coming friday, is it really new? it isn't. it is a confirmation of the status quo in september, the last time they did a missile test. they have agreed to halt nuclear and icbm tests. they will dismantle its testing site in the northeast, a secretive mountain site where they've conducted tests. experts say they may have already taking care of that themselves with the latest blast. that has been out of action.

no action has been taking place there in september already. denuclearization by the u.s. terminology. it made no pledge to remove the 60 some nuclear bombs that we believe they have, nor have they agreed to remove icbms or missiles. stephen, what are you hearing from your sources in korea,nd japan, even because it seems to me a lot of the conversations are back channel right now. i don't see why north korea would offer anything as important as one nuke without getting anything in return. that would have to be a lot of foreign investment from croatia's like -- from places like china and the u.s. >> we are already hearing from china. the state media organs calling

on south korea and the united states to halt their unilateral sanctions. i don't think this is going to happen anytime soon even if there's a peace deal struck between the president of south korea and kim jong-un. says he is a long way from conclusion. there was an initial optimism on friday, but he's tempered that. maybe things will work out. only time will tell. but the work i'm doing now should have been done a long time ago. japan, a bit of a pessimist. this is the country that has been in the crosshairs. the missile tests have gone over their property in hokkaido. they are much more pessimistic about any kind of north korean promises. china, they've been sidelined a little bit. kim jong-un traveled to beijing, met with xi jinping. xi jinping promised a trip to pyongyang. you have moon jae-in and kim

jong-un meeting bilaterally this week and then you have donald trump meeting with kim jong-un. where is china in this is an mark -- in this? yvonne: good question. we know you will be following it very closely. thanks to stephen engle, our chief asia correspondent. for more on north korea, let's bring in gordon chang. he's the author of "nuclear showdown." that whenu have noted there's one dramatic occurrence after another, that is how we get great events in history. , if he wants to follow some duplicitous route, might be swept along to a different position when it comes to this important question, ending the war, ending conflict with south korea, and maybe moving on to some shift on

nuclear stance. that mayorces in play push north korea in that direction? gordon: there are so many forces right now. president trump has a lot of incentive to disarm north korea and he's got the tools to do it. he can tighten sanctions on north korea. he can also impose sanctions on north korea is backers. we have chinese banks still laundering money for north korea into recent months. president trump could take those banks and unplug them, or he could impose heavy fines on them. there's a lot of stuff that could occur. china is sort of on the sideline. you've now got to korean leaders, moon jae-in of south jong-un, who seem to be at the center of events. a lot can happen when you have major powers involved, and all

of them with great incentive. carrots, so, how about foreign investment? gordon: the big carrot that we have is a simple one. that is diplomatic recognition of north korea. you can also end up doing investment, all sorts of financial assistance, north korea is very concerned about it reliance on china. 2016, the last year we have reliable statistics, over 90% of north korea's trade was with beijing. the north koreans are looking at us and saying, maybe we don't have to be dependent on china. maybe we can establish a relationship with the united states. one of the things beijing is concerned about is being left on the sidelines. right now, kim is saying, i want to change the nature of my

relationship with china and trump is in the center of that conversation. yvonne: before that, we're going to see these conversations between moon jae-in and kim jong-un. how likely do you think we could see a potential united korea? gordon: there is a real possibility of that. moon jae-in wants a loose confederation with north korea and he's willing to do a lot to get it. moon is pressing for changes in south korea's constitution. that is going to be an important step. second step could be a peace treaty. that would eliminate one of those big roadblocks. moon jae-in comes from a generation that are korean nationals. they want to see the korean state put back together again. a lot of south koreans are not exactly on board with that, especially younger ones who see

that their country is south korea, not korea. it will be interesting as this plays out. yvonne: it seems like what has led up to this point has all been on kim jong-un's terms. he's been saying, i'm going to halt these nuclear tests. is pyongyang really going to gain the most of these two summits? gordon: it could be the united states. one of the reasons i think kim wanted to talk with trump is he needs sanctions relief, not only from u.s. sanctions, but you and ones as well. there's a report that office number 39, the kim family/fund, is running out of cash. the south koreans are saying north korea could run out of foreign currency reserves. when kim doesn't have money, he can't launch missiles, he can't

detonate nukes, and he can't engage in gift politics to buy loyalty. kim very well may understand that he hasn't come to terms with president trump. we always say kim won't do this or that and that is true under the current set of incentives, but president trump could change those incentives and we could see events occurring that we thought impossible a few months ago. yvonne: interesting. thank you, appreciate your perspective. it, the north korea breakthrough headlines today's edition of "daybreak." also available on the bloomberg anywhere app. reverses later, hna course and cuts its stake in deutsche bank just months after insisting it wouldn't.

kathleen: next, we ask the chief global equities strategist at jefferies how china's crackdown on shadow banking could affect equities markets. this is bloomberg. ♪

kathleen: this is "daybreak: asia." i'm kathleen hays in tokyo. yvonne: and i'm yvonne man in hong kong. opening pretty much flat. we look at the index right now. investors assessing trade discussions and signs that geopolitical tensions may be easing. joining us now to talk about this, sean darby. happy monday. thanks for joining us. talking about the volatility we ise seen, the mix -- vix

back to slightly normal levels. europe volatility is back below their one year average. given all the talk about north korea, china, steve mnuchin may be going for a visit, have we shaved enough of the geopolitical risk premium to take on more risk? sean: interesting one. over the last two months, equity volatility has risen. a lot of these other measures have been relatively subdued. the spillover from equities into other asset classes has been remarkably be nine. we've been more skittish and worried about other asset classes. the second thing to point out is that economic data has been reasonably good. although q1 is weak for the u.s., elsewhere, the numbers have been reasonably impressive. the natural things to worry about aren't really there at the

moment. these other issues which are intangible, difficult for investors to price in, are let off by the bond markets. yvonne: longer-term rates are getting more interesting. about 3%n, the worry on the 10 year yield -- at what point is this going to be a worry for equities? sean: we actually felt that over the last month and a half, the flattening of the yield curve has put off a lot of equity investors. people have not been buying into risk, not buying into cyclicals. i actually feel that steepening the yield curve is no bad thing. where we are in the cycle, i suspect that should be priced in. for us, i think we will see higher than 3% over the course

of the year. i think steepening of the yield curves. yielden: steepening curves, rising bond yields, often occur when there is demand for capital. i think that is what you are alluding to. what kind of stocks? we've seen the troubled tech stocks. we saw banks doing very well in the u.s. investors weren't impressed. they are wondering what happens next. where are you seeing value right now? the earnings season has been pretty good in the u.s. and the market has been quite lackluster in terms of its response. here are stillks looking for good value in the u.s. the banks have been raising dividend payments. they are very responsive to the u.s. cycle. in a sense, that 10 year bond

has inhibited a lot of the risk-taking. i should add it is quite ironic that credit spreads have been narrowing over the last two to three weeks as the yield curve has started to shift upwards. that presumably says to me that the environment for equities is pretty good. it is not something we should be fearing. maybe there's one or two issues, but overall, the performance, very good for equities. are you looking outside the u.s.? if so, where are you seeing value in that regard? again, even though emerging markets are not necessarily homogeneous, the valuations are up for a lot of asia still. we think parts of europe have

been offering good value. there's much more and inflationary problem building up in parts of scandinavia and germany. ofa sense, the population markets seem to be responding and to a rising yield curve the steepening is not something to be feared. north asia could come out of this well. inflation rates are still very subdued. the dollar is weak. cyclical trends are good in the sense that global trade is still holding up well. that bodes well for e.m. and for parts of europe as well. yvonne: what is going on with china? will we stay above the 3000 level? sean: we've been overweight china. it has been a difficult period. mind,o things to bear in they have a balancing act. this got to win themselves off

some of the fiscal spending. that means keeping monetary policy loose. the second thing is financial reform. get started to go back and d the banks to price in capital much better. yvonne: not really going to equities at the moment. sean: the bonds have been rallying. that has been part of this much lower inflation rate. that is the result of the currency strengthening. it is not a bad environment for equities in china. we haven't given as much credit to the banks. lot of this that a has been going on for nearly two years. we got the headlines because of the opening up of the financial system to foreigners. the previous central-bank leader was also doing quite a bit.

the background at the moment is reasonably good for equities. -- you arere you obviously positive on stocks this year. if we want to go more u.s. centric, are you betting on , to gostimulus, tax cuts further even though selling a lot of bonds to finance it is going to push yields higher? way forgotten one about the tax cuts. it is not so much the headline tax rate. you've got these temporary measures, including the accelerated depreciation, which bodes well for corporate investment. even well before the tax changes came into fruition, the capex intentions in the united states are some of the best ever since

the 1970's, certainly the most elevated in terms of expectations. those events tend to occur once every 15, 20 years. this is one of the strongest in nearly 45 years. there's a tax window for expenditure for the next five years. ,e think the corporate sector that will unfold. that means a fairly broad greece -- broadbase of companies that would tend to do well under that environment. much in forces are very play. it is not just about a headline tax rate change. it is driven by specific issues to encourage companies to spend. sean darby, thank you very much. a positive outlook for global equities. he is jeffries chief global equities strategist. remember, bloomberg users can

interact with the charts shown using g tv . browse recent chart to catch up on key analysis. you can even save your favorite charts for future reference. yvonne: definitely one function to check out. quick check on the business flash headlines. nine reports that it is considering dropping the sale of its -- memory chip unit. the sale could be canceled if toshiba doesn't receive approval from chinese antitrust authorities. kathleen: chinese online health care platform is launching an ipo in hong kong that could raise more than $1 billion. it aims to be in trading on may 4. citigroup and jpmorgan are joint sponsors. yvonne: g.m. korea is close to a deal with workers that could stave off a bankruptcy filing.

the carmaker is expect it to issue a statement soon. plenty more to come here on "daybreak: asia." this is bloomberg. ♪ this wi-fi is fast.

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yvonne: happy monday to you all. we are half an hour away from the open of trading there. i'm yvonne man in hong kong. kathleen: and i'm kathleen hays in tokyo. you are watching "daybreak: asia ." let's get the first word news with remy inocencio. hello again. all right, we've got some issues. going to pick up on this potential truce when it comes to steve mnuchin saying he is considering a trip to beijing. mention is planning to travel to

beijing, although no details and dates have been determined. the u.s. and china have been warned that a trade dispute could derail the global economy. president trump is tempering the optimism about north korea. hailed what head called big progress and said he looked forward to meeting kim jong-un at some point. now he's told his twitter followers that things are a long way from conclusion. cybersecurity firm fireeye says chinese hackers targeted japanese defense companies, possibly seeking information on tokyo's policy toward the north korean nuclear issue. fireeye says it frequently targets research and development organizations to collect information on geopolitics. a chinese telco has told the hong kong stock exchange it has taken steps to resolve the tech

ban that threatens its survival. it is blocked from buying american components as punishment for exporting equipment to iran and north korea. couldmpany says the ban hurt its global business and it is working with authorities to find a solution. global news 24 hours a day on air and on twitter powered by more than 2700 journalists and analysts in more than 120 countries. time to see how your markets are shaping up. let's get the latest with sophie kamaruddin. sophie: not much direction to the head. asian stocks looking mixed while bonds are falling and the u.s. yields edge higher toward that 3% mark. opines that bond yields are a growing risk to stocks. switching it out to check in on currencies, the dollar extends

some of its games after capping the biggest event of the year. the korean won keeping range bound. towards 108dging ahead of the boj policy meeting. the focus this week will be on how the boj deputy governor votes and he is expected to lean toward more stimulus. the aussie dollar is holding near 2018 lows while iron ore prices are below six dollars to eight dollars. oil is on the back foot as the u.s. rig count climbs to a three-year high. brent sneaking below that $74 mark. let's check in on some of the movers. we've been keeping an eye on toshiba. 5.3% amid reports that it is slowing its chip sale. we've heard a spokesman say that is not the case. engineering stocks soaring in

seoul. climbing to an august 2002 high. stocks related to inter-korean businesses climb ahead of that summit. yvonne: thank you. treasury secretary steve mnuchin says he is considering a trip to china to diffuse a trade spat. the hint at a truce comes as the imf ones that an escalation would derail global growth. our senior international editor is here with us. jody, what can we make of this announcement? partly what you mentioned about the imf coming out and saying this is a the global growth, that is not something that the treasury secretary wants to year. thisnk this is part of trying to ratchet down tensions. mettreasury secretary also

with the head of china's central bank. they said they did not talk about trade, yet they did talk about central-bank issues and some other related issues. deciding onu.s. is the side of economic growth. they should be appearing to diffuse the trade tensions. the have been ratcheting up tariffs on steel and aluminum. they said they would impose as much as $150 billion on china products. china said it would retaliate, and the u.s. said it would look at using a 1977 law to further inhibit chinese investment in the u.s. it has been ratcheting up and now i think this is the

opportunity to ratchet them down somewhat. seems like they took it one step further on the trade concerns from what we heard from the g20. it seems like even the countries also sayd to benefit this is bad for growth. >> it is this ratcheting up, this rhetoric and continued talk about tariffs. then the potential effects on consumers, on industries, and the globalization. we saw the tariffs of steel and aluminum in a number of countries the u.s. said they would exempt. they are temporary. the imf also raised concerns about the growing pile of global debt. to have the two things at the same time, and the eye -- the imf six months ago had a rosy

outlook. this is a change. yvonne: i guess french president macron wants to make a change, jodi. how is he going to figure into this very interesting equation? >> he's going to be in washington this week. he's going to meet with president trump administration officials. he's hoping the rapport he has with president trump will allow there to be some talk on trade and perhaps on the iran deal. president trump has not been warm to continuing the deal with iran where president macron and others say iran has been meeting its obligations. they are hoping that will happen. sometimes that translates into things that advance. not always. we saw prime minister shinzo abe in washington. rapporthe has a good

with trump, left relatively empty-handed. could charmnyone anyone, i'm sure it is french president emmanuel macron. thanks to our senior international editor. let's move onto another big story. one of deutsche's biggest shareholders cutting its stake just two months after saying it wouldn't. hna group is trying to raise $16 billion. for more on this, here's our asia conglomerate editor in tokyo. dave, donald trump isn't the only one who can surprise. how much is this a surprise for deutsche? mentioned, hna had said it is committed to deutsche bank and its stake there. a lot of watchers said it needs this banking relationship.

this would be a headline that hna would be clicking on and saying, what is going on here? it comes to 0.9%. if you put that at market value, that is about $265 million. also, this is related to what they call a collar transaction, where they have some derivatives set up. a lot of the borrowing is based on pledged shares. that was the situation here. those have unwound. it is not a great time to be selling deutsche bank shares. they are down 27%. it was a transaction that had closed. not a huge surprise for people that are watching closely. any kind of news is going to get attention. kathleen: tough times for deutsche. let's look at how hna is doing

with its cash raising goal. are they getting closer, dave? >> if you look at what they are committed to selling, the assets that are on the block, they've already hit their target for the first half. these are asset they would like to sell, not assets they have buyers for. there's still a lot more sales coming up and a lot more agreements. generally they've been doing pretty good in terms of raising money, making sales where they show a profit. this particular transaction with deutsche bank probably was not in that category. it doesn't look fantastic for them. this isn't going to be a big boost to them in terms of how much capital they are raising. yuan, that is about

$16 billion. yvonne: dave, thank you, joining us from tokyo. horizon robotics is looking to dominate the market for driverless cars. the company is about to close a new round of financing that will raise several hundred million u.s. dollars. the founder and ceo told us the money will be spent on ramping up its research capabilities. raise severalo hundred million u.s. dollars. new strategicsome investors. have the intel as our strategy. this year we can have another major player.

it is also going to have some oems, global and local, as our investors. that is exciting. compete with the likes of nvidia? a totally new space, the artificial intelligence for automatic driving cars. that means we need to develop the technology, facilitating the competition, low power consumption. this is a totally open space. it is a new space. everyone has the opportunity. have a really challenging traffic situation.

we have a massive market. i think it is hitting all the sectors together. deliverconfidence to the cutting edge technology. >> facebook, alibaba, they are also making moves into the chip sector. how much impact is that likely to have. think, people i really push forwards artificial intelligence. , to need to think about redefine and innovate the processors. that is great. , theba and facebook primary focus is for the consumer type of business. like the small speakers to the customers. >> so this is not a direct threat to you. >> no. i think we are doing something like a moonshot. they are not doing

things in that level. we are not competing. that was the horizon robotics founder and ceo, speaking exclusively to bloomberg's tom mackenzie in beijing. of next, an important week for earnings in the united states. we will look at some of the biggest names set to report. keep it right here. this is bloomberg. ♪

is "daybreak: asia." i'm kathleen hays in tokyo. yvonne: and i'm yvonne man in hong kong. another round of earnings, including major tech companies. investors will focus on manufacturing giant such as boeing and lockheed martin. ubs and credit suisse, and big oil companies. let's go to su keenan with a preview. you a peek ofting

earnings. the first two weeks, we had a rocky market. we did see stocks higher. there's an expectation we will have the same upward boost from these companies as well. first,ook at caterpillar gtd is where you can find these charts. this is caterpillar sales by region. the white line is the caterpillar retail machine. the north american is the yellow. the are quite is latin america. the expectation is that first-quarter results should be consensus, about $2.08 a share. 2018 guidance will likely be raised. also, you've got many years of cost-cutting expected to be added to the marginal gains.

years of cost-cutting, the impact of tax reform, and the impact of potential tariffs, or something investors are focused on as we look at companies like airbus and lockheed. let's go to another rival of airbus, boeing. take a look at this chart. flight to volatility. there it is. this is oneice person changes in the stock. ,ou can just see the volatility especially in recent months. boeing is a major user of all kinds of metals, many of which could be hit with heavy tariffs, impacting their bottom line. tariffs is one thing, and then there's donald trump tweeting at opec. energy firms, that is what i'm getting at. growing bets that oil goes to

$80 a barrel. then there's deutsche bank. su: leadership issues, a recent change at the top, and a rough start to the first quarter. gtd is where you can find these great charts. deutsche bank's downtrend is the title of this one. it has been the worst performer among its european peers. there are questions about what it u.s. prisons is going to be. let's look at some of the other companies. energy companies. royal dutch shell, chevron, exxon, and yes, oil is going to $80 is what a lot of firms are saying. check out the price chart. many of the oil related funds seeing inflows of capital at a pace that is record level. to chart says it is close 70. the expectation it may go to 80 is attracting capital.

the impact of this on the profitability of these companies, also a focus this week. kathleen: $80 a barrel, i think a lot of companies would love to hear that. after the recent volatility, a week packed with major earnings should give the market some concrete numbers. remy inocencio at the wall with the bloomberg terminal chart we need to know. ramy: right behind me is the earnings analysis dashboard. su was just talking about energy, consumer discretionary, as well as industrials. take a look at the earnings of rise. it just gets better and better. looking at consumer 12.57%, looking ahead to see how that changes. . want you to look at this

that is the earnings surprise for information technology. sectors, you can see how well they are doing. right now we can see that only nine of 68 s&p companies have recorded. that is going to fill in with at least eight more including amazon, facebook, twitter, etc. head into my second bloomberg terminal chart. i want you to see how well the tech sector has performed against the s&p 500. if you werethat long for most of this year, you are performing better. the yellow line here is the correlation, the spread, between both of these lines. it is doing pretty well. let's hop even further into this. it is actually the fangs we want

to talk about, the biggest companies here. here in yellow, netflix is stealing the spotlight. it is stealing the show. year-to-date up 70.7%. we can see recently the spike in the share price when the company reported 125 million subscriptions. in red, that is apple. apple has been hugging the flatline. not going anywhere. you can see this little downturn . it is not doing well in terms of those orders because of what happened with the iphone x. let's flip the screen one more time. i want to show you the timeline. alphabet comes in on the u.s. on monday here. we are looking for really good at revenue for apple. those iphone x sales here.

again, those iphone x sales here. inebook and twitter coming on may 2. a lot of folks saying the delete facebook hash tagged hasn't had much effect. finally, a plethora of amazon, samsung, microsoft -- amazon has three cylinders. that includes alexa as well as whole foods. yvonne: busy week. thank you. rainy inocencio with a preview of tech earnings. bloomberg users, you can interact with those charts. g tv , browse the charts. also catch up on some of the key analysis and save those charts for future reference. this is bloomberg. ♪

now for a quick check of the latest headlines. ubs reports later monday and the expectation is for a solid trading quarter. ceo sergio ermotti told investors in london that the first three months of 2018 have been euphoric. analysts are expecting revenue to reach the equivalent of $7.9 billion with pretax profit below $2 billion. yvonne: reports from germany say they were dissenting voices during a board meeting that shook up reuters. the board held a conference call to vote out ceo john cryan and

name christian sewing as his replacement. sources say there were multiple no votes in each decision. chairman of korean airlines has apologized for the behavior of his youngest daughter and says she and her sister are leaving the company. emily was reported to have insulted an advertising executive and thrown water in his face. her sister was jailed briefly after ordering a plane back to the gate when she considered she been served some nuts in the wrong manner. yvonne: now for a look at the next few hours here on bloomberg television, let's go to rish. rish? rishaad: [indiscernible] that is why it is called bloomberg markets. [indiscernible]

we've been talking to him about what he's making of this move to cut some of the reserve ratios in the chinese banks. yvonne: the down day on china as well. rishaad: be careful what you wish for is what our piece is saying, saying this could be the calm before the storm as we head towards another act down on -- crackdown on shadow banking. moving that along and having a look at what is going on with the general fears of trade wars. socgen's global chief economist joining us. kathleen? kathleen: that's it from "daybreak: asia." ♪ welcome to the xfinity store.

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rishaad: the international monetary fund is warning about trade wars and rising protectionism. caps off and even other global economy. at -- motion hinting this is a good unit had importantly no idea. i'm rishaad salamat in hong kong. this is bloomberg markets. lookin