>> 7:00 a.m. here in hong kong. i am yvonne mann. welcome to "daybreak asia." will allowll -- some countries to be exempt from aluminum tariffs, but not all. bloomberg's global headquarters, i am betty little. liu. after -- betty just after 7 p.m. sunday evening in new york.

the t-mobile ceo wants to shake up american wireless. ♪ >> good would not be the word i'd use to describe these industrial protections. south korea industrial production for the month of down is adjusted here, 2.5% month on month, much worse than what economists had estimated. year, down 4.3%. expectations among economists for the month of march forecast -- industrial production to decline by 1.6%.

there are quite a few troubles in the auto sector, including some plants shut down. this is a time we have seen these numbers shrink for the first time since december. any indication as to what we are looking into for the second quarter -- the mantra is that these are going to moderate. seen, globalhave demand is still quite strong. once we getmore those trade numbers out of south korea. >> investors are watching very closely, how the korean market does, given the renewed ties between south korea and north korea, and the u.s. meeting coming up with north korea. this is kind of a mixed session this week. a of eyes on the fed meeting, that 3% yield on the 10 year

treasury note. those big tech shares, doing strongly so far in the past week. yvonne: perhaps this has all been priced in, despite "earnings. -- despite getting buster -- gangbuster earnings. shares are down a third of 1% on the index. we have seen the dollar weakening. treasury yields are falling for a second day. seeing futures here are unchained -- unchanging at the moment. year -- as on the 10 few 80's on the 10 year. peo and president trump saying the u.s. might pull out of the iran deal.

oil hovering around 68. things could be a bit slow going. thefor the yen against dollar. offensiven charm continues, fresh from friday's handholding summit with president moon. leader iskorean bowing to shut down his nuclear test site and will invite the foreign media to witness it. steve, this is all happening so quickly. it almost seems like it is too good to be trail. -- too good to be true. steve: the bear hug summit. now it is up to the north koreans and south koreans to achieve their ends of the bargain. the north koreans are trying to achieve complete denuclearization. we don't know the timetable of what that means.that will pay a

serious a serious point, if and when kim jong-un meets donald trump. --s was the first time >> an impromptu moment. , why notng-un said come to pyongyang now? he took him across the threshold into north korea for 10 seconds. >> we almost a saw kim jong-un in a different light. that is different from the rocket man rhetoric. this guy came across as very statesmanlike. he actually cracked some jokes. what do we make of that? koreans that were there, somewhere in tears, -- some were in tears. by the spectacle

and his eloquence and giving speeches. the north korean leader has never given comments left on television and in the international community. we had no idea how he spoke or how his accent was. is this lasting peace, or orchestrated? promises have been made before and promises have been broken. with some light moments as well. but what has been the u.s. response so far? mike pompeo is coming off of that trip on easter. steve: there was cautious optimism in 2000, when the two leaders had the same kind of post, and over the next -- same the nextose, and over 18 years, things fell apart.

they had to follow through on this. mike pompeo is taking a page from the reagan playbook with the russians. "we can trust, but we must verify." >> we know the history and risks. we will negotiate in a different been we used thatone. way than has been done. we will negotiate with great intention. says he willng-un allow foreign media to come witness the shutting down of his denuclearization site. hearing there will be this meeting between trump and kim jong-un in the next few weeks. besidesmore details what it sounds like is a rough timeline? steve: within the next three to

four weeks is what the white house wants. they don't want to lose momentum. donald trump and president moon have talked and agreed they don't want to lose momentum. we don't know the location yet. everyone i have spoken to says singapore seems to be the favorite. that is speculation, not fact. but i'm sure there is a short list if they are going to come up with a summit in 3-4 weeks. .> thank you so much let's get to the first word news. first, t-mobile is to buy bettingor $20 billion, they can team up to build a next generation wireless network and jump ahead of verizon and at&t. this follows years of will they-won't they talks between

telecom and softbank. to shake up the u.s. wireless sector through innovation. innovationd -- sold to the same academic who obtained facebook users data and later passed it on to cambridge analytica. he was given one day access to random public tweets covering five months from december 2014-april 2015. amperageas removed --lytic and advertisers affiliated cambridge analytica advertisers. critics had been calling for her to step down. prime minister theresa may has accepted secretary rudd's resignation. in was a pro-european voice

the government and an opponent of boris johnson. preserve theher to nuclear deal even if the u.s. walks away. president macron spoke with the leader of-- with the iran for more than an hour on sunday and agreed to protect the 2015 accord. president trump has indicated he may withdraw. tehran has no interest in renegotiating that accord. grexit global news, 24 hours a toc on air and at tic twitter, powered by more than 2700 journalists and analysts in more than 120 countries. countries may receive relief from steely and aluminum when the temporary exemptions expire on tuesday. secretary ross is trying to

determine who might be spared. bloomberg editor is following all of these developments from washington. are there any clues you might be earning this relief? -- who might be earning this relief? the trump administration will just extend belief two countries that already have relief to try and continue on the same track, but secretary ross spoke at the white house correspondents association dinner. he would not be drawn. the trump administration loves a good cliffhanger. he said the announcement would not come out until right before donald -- the deadlines were to expire. there are so many allies and trading partners and other geopolitical balls in the air. it is quite interesting.

there is quite a big push to finish the nafta deal. if canada and mexico were to sign on to a new nafta agreement, they would get these exemptions. steve mnuchin is heading to china this week with a big group of u.s. economic advisers. think it is unlikely china would be at the head of the list to get exemptions from the steel and aluminum tariffs, but you don't know. -- has to states has really negotiate with europe. we had the french president, to whisper into president trump here, and there is no sign they got any kind of concession from him. the three european leaders,

merkel, macron, and may are trying to put together a united front to show the united states aised ontariffs are rea steel and aluminum, they will retaliate. >> chancellor merkel was there on friday. any kindiled to yield of results when it came to trade. what can we see when it comes to success when it comes to tariffs? if not, what countermeasures can we expect? >> having high-profile press conferences with president trump in washington is what you see, what you get for the time being. leaderse tag european were playing this week makes me wonder if they really have their backs to the wall.

one european official said they haven't gotten against their head -- have a gun against their head, kind of disturbing. 3.5 billion int u.s. goods in their sites -- sights, from orange juice to blue jeans. europe could go the china route and talk about how they could clamp down on u.s. exports if they get no relief. we could know something during the day tomorrow, or maybe not until very late at night. it is a critical time. betty: we will leave it there. more on the historic talks between north and south korea. there is still a long way to go. to be a busy week

for bond traders. getting an outlook on the fed meeting and treasury yields. this is bloomberg. ♪

"daybreak asia." >> a big week when it comes to data earnings coming up. alibaba and apple reporting. will find out what we will see in the next couple of days, and also what is going on in the treasury. we have the inflation and jobs data coming out. -- treasury spending announcement and the apple decision on wednesday as well.

ed is here to talk about all of this. of all of those events you are seeing here for the bond market, what is most important in terms of gauging what direction yields are going to go from here? in terms of expectations for core pc, they will get to about 2%. fed, i think the fed statement will remain largely unchanged at this point. it will be struggling with defining the extent to which the economy is overheating and evidence on that front remains quite mixed. the funding announcement will give us a lot of cues in terms of how much demand there is in the market. >> when it comes to supply issues, the treasury itself, they are kind of in a sweet spot

in issuing debt on the belly of the curve, around the five-year. should we worry more about what is going on in the short end? financing will raise to the belly of the curve. in terms of surprises, if they extend that issuance to the long end of the curve, that is what will cash markets offside. from the treasury perspective, the most cost-effective way to remains in the belly. there are handoffs happening from foreign investors, stepping back on the margins from the treasury markets, to domestic investors picking off -- picking up that slack. balance in the next 12-24 months with the larger deficit? will that be taken out by domestic investors? the answer to that is yes?

> -- the answer to that is yes. >> what should we be watching for? >> we have repriced quite aggressively in the front end. we have repriced 100 basis points. i think the room for rates to move higher continues to shrink. for longase to be made and interest rates, you need higher inflation premiums, and a large inflation agreement built into the curve. larger term premiums, which the ecb and boj will have on long end rates. and potentially, you need the fed to say we will allow inflation to overshoot. i think the fed is quite to thatble getting

percent. i don't think we will be seeing inflation at 2.5%. >> where does that leave the dollar? the dollarshows how -- much of what has been going on, you see interest rates rise. it sounds like rates might be cap's. where does the dollar go? been disconnected and from nominal him straight differential's. --has been does disconnecting from pricing for the fed. we are starting to see some reconnection on that front, particularly the breakouts inside raise rates. position in the market is quite crowded.

i think we are starting to see the position being challenged. see a nominalto move in march rates higher in the united states. the dollar?ong on or short on euro? are reducing dollar shorts. >> are you sure treasury? -- short treasury? >> we have been reusing our treasury shorts. if you look at all the risk assets, on volatility adjusted basis, are you getting paid in the long treasury at this point, versus being line height yield -- long high yield. you are being compensated for the duration of risk. are you right now he?

now?ere are you right shift in theng to course of this year to the belly of the curve as prices move higher. >> thank you so much. a big week this week in the treasury markets and the currency markets. bloomberg users can interact with the chart we just showed you on tv . chart helps you catch up on key analysis. we will be talking about more on global markets on tuesday. we will hear from big-name , including the ceo of thrive global and many more. stay tuned. this is bloomberg. ♪

>> this is "daybreak asia." >> a quick check of the latest business flash headlines. this company will hold a special at thelder meeting behest of the senate investor goldilocks. there are also plans to go ahead with a sale on monday. order is materially misleading and demanding clear correction. is of the sizing faster growing new markets over a more mature one. second merge the u.k.'s

and third -- number two and number three supermarket chains. walmart is going to focus on china and india. aramco has made new international board members and -- in what could be a record international public offering. aramco ipo is the cornerstone of saudi arabia's planned a transformation away from reliance on fossil fuels. up next, t-mobile concludes a 26 of merger talks, with billion dollar deal. we will dive into that, next. this is bloomberg. ♪

♪ yvonne: good morning, 7:30 in the city now in hong kong. pretty slow going. this is a holiday on tuesday, labor day, so some slowness with the market today. we are moments away from the open.

doldrums i guess. for those you're not off today. 7:30 p.m. sunday in new york where markets on friday closed pretty much mixed, but you can see the s&p checking higher -- taking higher. i am betty lou in new york. yvonne: i am yvonne man. you are watching daybreak asia. let's get to first word news now. ramy: thank you and good morning. north korea says it will invite international observers to witness of the decommissioning of the nuclear test site. the statement comes after friday's historic summit and the head of an anticipated meeting between kim jong-un and president donald trump, but north korea watchers say the site probably collapse after the latest test and is not workable anymore. >> this industry has advised that have its eyes wide open. we will be very different and negotiate in a different way that has been done before. we will require those steps. the word irreversible. we will require those steps to demonstrate the denuclearization will be achieved. ramy: the trump administration will extend relief on steel and aluminum tariffs to some of its

allies but not all. temporary exemptions expire this tuesday, and commerce secretary wilbur ross said an announcement will be made before the deadline but declined to say who would be spared. nations have been asked to accept import quotas for the tariff free access of metals in the u.s. australia needs to spend half $1 billion australian to spend the great. we are this is the largest entity, which faces challenges and climate change agricultural runoff and the coral eating starfish. this will improve water quality by cutting will either use and to encourage see management and coastal cleanup campaigns. the latest avengers film has kicked off the summer movie season with the biggest global debut ever in history. infinity ward raked in a record $630 million worldwide, of which

$250 million came in the u.s. and canada. the record is more notable because the film has not opened the china. that is the second-biggest box office in the world. it will be in theaters there this may 11. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am ramy inocencio, and this is bloomberg. yvonne: thank you. we are counting down to the open in seoul and sydney. seeing a pretty heavy week with what data. we have china pmi prices. a big focus will be seoul, the big mess on industrial production. how will this go along with the industrial euphoria? sophie: colleagues are pointing out this interest -- the central bank may be on hold given the outcome not running at levels last seen in 2013, and the kospi

was 20% lower than now. that could take a little out of this anticipated rally in creating equities after this summit unless we get more encouraging data when we get trade and inflation numbers later this week for april. we do have the kospi capping a week of gains, and looking at this chart now over the past week. this happened before that korea summit, ending the seven decade war. that does something for korean stocks, political risk taken out of the equation. we are watching for the usual suspects to rally, but there is one company we will not be portrayed on, which is samsung, monday through thursday as it stock sprint.50-1 let's check in on the futures because it looks like we are in for a muted start especially with japan and china offline. betty: in australia the bad news

keeps piling up here the biggest banks of the financial sector ahead of the earnings, so is the ongoing inquiry about wrongdoing, is that going to hurt profits? sophie: if the banks fail to address the concerns, they might struggle to keep investors focused on improved capital ratios and low and stable bad debt. that could lead to slower earnings growth and higher cost as the government is beefing up regulations and penalties are being imposed. what investors will be looking for in the upcoming results is to learn how the banks will seek to drive earnings to offset this tougher environment. in the terminal i want to show you what is going on with share prices of the main aussie lenders. we have been trading at 52 week lows, head of the results. check out the white line. this is macquarrie trading at a record high, and is excited to post a record profit.

looks like that might be the price spot amid the results coming up from the aussie banking space, but anz will be the first bank to report on may 1 followed by macquarie and westpac, so a lot of focus going to be placed on this industry especially from what we saw with amp. we had the chairwoman residing. does resigning. t-mobile set to buy sprint for $26.5 million, to take on at&t and verizon. bloomberg news deal reporter now joins us on the phone from l.a.. this on-again, off-again relationship and the talks that have been going on forever it seems, so why do you think now they were able to get the deal done? reporter: it has been five years in the making as you say, and what has changed now between november last year when the

latest round of talks on the part in april this year is the fact that they have woken up to this world with 5g coming. they realize the next generation of technology is coming faster than they thought, and they at at&t andd, verizon, the number one and two carriers, and these guys are already going to increase around that. they decided this was the last chance to come together or they won't be able to compete. betty: who is getting the better deal here? is it t-mobile? john ledger gets to be king of both companies, or is it sprint? reporter: he does. this is a bit of a bailout. sprint is a company that has not turned a profit in more than 10 years. they are debt has ballooned -- their debt has ballooned. they needed like a life raft which is what t-mobile is providing them, and this is why masayoshi son has been willing

to let go of control. last november this is why talk fell apart, so the deal is towards t-mobile's favor as you say. you have john ledger as the ceo, cfo also from t-mobile, and the chairman gets to be the chairman of the newly merged companies. they get to nominate nine board four.s, softbank's yvonne: what does this mean for regulators? is there a lot of scrutiny behind this merger? how will they sell this to the regulators? reporter: there will be scrutiny. this is hurting the number three and four carriers. the market is not just about four players anymore. there are seven and eight and more interest in the markets. the way they are trying to sell it is this is good for america. they have said this is good for consumers, the economy and the country. that is going to be there line. they talked about synergy, $.3

billion of cost benefits that will come out of this merger. it is a high number, so they will have to prove how they do that. they have talked about job creation as well, so they are positioning it as something that will make america a global leader in this five g race. yvonne: could be worrying for at&t and verizon. our bloomberg news deals reporter joining us there on the phone. so we mentioned earlier a heavy week of data. we are also watching the pmi out of china which is due the next 90 minutes or so. i want to bring in the chief asia economic correspondent joining us now. we are expecting the pmi numbers to slow a bit. what is driving that? reporter: the moderation is driven by the slower pace of credit in the economy. we note they are serious about protecting the debt, so that is bound to have some modest impact on the real economy. the second point is we have seen a little bit of soft side on the

korean exports. this is often a bellwether for china. we are not talking about hardline but the moderation. together,ake it all the feeling is china the mi, it is still expanding but at a slower pace. dash cam we blame the trade tensions for the slowdown? reporter: it is tempting to blame the trade tensions for that, but it is too soon for us to make that call because we are at the stage of trade rhetoric versus trade action. we are heading into a very important week we have the u.s. treasury secretary steve mnuchin arriving in beijing later this week with a delegation. be critical is whether any progress is made on the key issues such as market access, on improving the goods deficit and on generally making it easier for american investment to flow into china. if we make progress,

that will be a boon. if we don't, it will be a clear negative for confidence in sentiment. i will send a signal that we are in for a prolonged trade dispute because u.s. trade secretary going to china and can't get a deal, that is not a great thing. betty: all right, we will leave it there. the current and chief a -- chief asia correspondent. kim jong-un maintaining his charm offensive, says he will shut down his nuclear test site and we will assess the impact of -- the domestic -- the dramatic talks. this is bloomberg. ♪ this is bloomberg. ♪

♪ this is daybreak asia. i am yvonne man in hong kong. betty: i am betty liu. as we discussed, kim jong-un pledging the denuclearization,

maintaining his charm offensive after a dramatic summit. we can assess the implications of the talks with south korea and the possibility of a meeting with president trump and geopolitical futures founder joining us. we know we have been hearing from all of our guest this sort of healthy dose of skepticism about whether kim jong-un is really to hear about nuclearization -- denuclearization. do you have any hopes? >> i am skeptical of him and everybody else. it is not that there is a serious issue, there are fundamental questions. he shut down a nuclear test site. now the question is going to be, what does he want in return? can we give it? i would suspect what he wants in return is a significant reduction of american forces in korea, possibly taking away the defense agreement. the question isn't sincerity, it

is can the deal be made? buty: you mentioned that, it basically be he wants sanctions lifted, right? >> it may be, but i doubt that will be enough for him. when sanctions were lifted, he has a problem that the, that he doesn't have nuclear power and that 30,000 american troops and fighter planes and everything else are arranged around korea. look at it from his point of view. he is surrounded by hostile forces. he built a nuclear capability to deter them. he is prepared to give them up, but he wants those hostile forces reduced. the trade sanctions alone could persuade him, but it is possible , but then he would not have started this game. betty: do you expect much will be eliminated, that much will be done in this upcoming meeting between president trump and kim jong-un? >> i think they will try to

because for one thing, kim knows in the end this deal has to be made with the americans. the united states does not want north korea to have an icbm capability against the united states. the koreans are willing to give that, but they want things in return from the united states. things they want from the united states are not going to make the japanese i -- happy or the south korea's happy. everybody has an interest in peace, but everybody wants a different pay off if they make concessions, and you have a bunch of players, five layers. south korea north korea, china, japan, and finding a basis for all of these to get together will be hard. is the basis of? what will be the base outcome out of these talks between president trump and kim jong-un, and if we have so many views about what denuclearization

means, what is the likely scenario that could come out of it? >> we will wind up in extended negotiations where we accept the idea that ok, we are not going to go to war with each other, and we will wind up with a very long negotiation as we had with .ran in the end there are some people who could be pretty unhappy. south korea's want the americans to stay to guarantee. the japanese insist that that united states are made in the region -- remain in the region. the chinese would rather see us leave. everything cannot be happy, so who will be the most unhappy, and in the end it will be japan and china. yvonne: how did you read into seeing kim jong-un live? it was startling to see the embrace, the handholding, like jokes, very different from what we've seen before. people have described the regime as brutal and isolated. what sort of image do you think

he projected here what we saw friday? stocky,rt man, fairly smile when he has to. in other words let's not -- it is important not to take too much attention to the atmosphere . that is not this again. it is a much more complex and even dangerous thing because we could have a massive breakdown between trump and kim and other players and take us back to's where 1 -- back to square one. yvonne: you think he is not reaching for a settlement? >> he is sincere. it is a question that he needs things others cannot get him. americans need things from him that he might not be able to give. it is like a business deal. everybody is sincere but the price is too high for everyone or too low, and you are not going to get to the deal. i think we spent too much time wondering if he is sincere. he is sincere.

he spent a huge amount of money on nuclear weapons. he has made a historic opening to the south koreans. the issue is not sincerity but what is the deal? so watching trump, he seems to understand that, whether north korea is another question. betty: president trump calls himself a great dealmaker. first story,his this breakthrough from friday, how much you attribute that to president trump? >> i think certainly the united states' threat to stage an attack on north korea sobered the north koreans. but in the end what really is the issues, the north korean regime wants to survive. it is surrounded by enemies. one way for it to survive is to use nuclear weapons as a deterrent. if they can give up that deterrent, they want a high

price. that is where we have to look at is trump prepared to pay a high price? probably not. cam is not prepared to break up negotiations, so i suspect we will drag this out for a long time. who is best positioned ahead of these talks, president trump or kim jong-un? >> at this point, two guys are sitting down. one guy doesn't want the other to have nuclear weapons, the other doesn't want the americans to be in south korea in the numbers they are. both of them have a strong hand, but whether they can shift their positions is doubtful. it is a problem and negotiation. there has to be a willingness to give something. to give something you have to be able to give something. we are in a situation i'm not sure anyone can get with the other wants. yvonne: it is not about sincerity as some type of deal. appreciate your insight,

geopolitical futures founder and chairman, joining us from austin . caps on exclusive interview with the chairman of a high-end electronic vehicle maker trying to knock tesla off its perch in china. william lee the chairman in that interview. this is bloomberg. ♪ w. this is bloomberg. ♪

♪ asia.: this is daybreak i am yvonne man. betty: i am betty liubetty:. china's high-end electric carmaker neo-is playing down the affects of beijing's relaxed ofo policy, making a success operations on the mainland. speaking exclusively to bloomberg, the neo-german william lee said he is not afraid of competition. >> i think people have overestimated the benefits of the joint venture policy change on carmakers.

audi has made huge profits in china from patent usage and sourcing. have good thing -- good links to government. no doubt the new ownership policy will bring benefits to foreign companies. but those who have been foreign players do better in china solo are wrong. international automakers will have more options that it is a huge market that we will need local partners. i don't think china's -- changes will have much impact on the auto industry. tom: another protection is being removed, tariffs on imported cars. they could be reduced to 10%. is that primarily a challenge to the higher-end domestic makers, or is it a broader challenge to the sector in china? brand -- no doubt that this will impact luxury brands, but it will not have too much impact on neo-. we never considered neo-on the same level as international luxury brands. we are very confident when it

comes to our competitive edge that our service and user experience. this will impose challenges. chinese companies are not scared of competition. if you don't run fast, you will fall behind. tom: in theory by the end of this year i'm a we could see tesla setting up its own fully owned company and factory in china. are you ready to take on tesla in your own market? >> you look at neo house and tesla showroom, you will see ideas into different areas. they will find it does we were founded 11 years after tesla be are we want to build community and make neo a commuter -- the difference is mobile versus internet where smart or ordinary phones. amazon entered china in 2004 with 30% of the market after acquiring a website. today it is only 0.6%. alibaba and jd own the game. china and never restricted iphone sales.

unlike what the u.s. does, but chinese to mystic brands account for 86% of the smartphone market here, almost 500 million devices sold in 2017. tom: if the story we saw with of theis an example pressure you can come through, does that -- >> they have a good business model. we did well before this crazy competition started. as you know in china, there is alibaba and tencent and eventually mobile business model was challenged as some players in the market do not charge fees to win customers. in the end shareholders decided to sell them. then't think it was about amount of cash spent. the companies do have a certain overlap in their operations, and i believe this is a good deal. car making is a different story. you cannot fight a price. you are not a winner takes all industry and that is why i enjoy building a startup. yvonne: that was the

neo-chairman speaking exclusively to tom mackenzie in beijing. a second business flash headlines, reports in australia say alinta has made a bid for the the del potro station in new south wales. they are offering $1.2 billion australian or that megawatt plant. they offer services across australia and new zealand and have been included in $900 million for upgrading the plant. fund: abu dhabi investment reaping the rewards with a merger with international petroleum. the revenue rose 14% last year. the company used its combined portfolio to boost investment in existing companies, sell mature asset and enter you sectors at home and overseas. they will eventually manage to hundred $50 billion of assets when it links up with the other day be that's abu dhabi investment counsel. more coming up in the daybreak asia. this is bloomberg. ♪ ♪

>> 8:00 here in hong kong. welcome to "bloomberg daybreak: asia." dialing up a deal, sprint and t-mobile agree to merge, ending years of will they, what they. they want to shake up american wireless to innovation and playing good deals. in new york it is just after 8:00 p.m. north korea going on the charm offensive. historic talks with president trump.

♪ yvonne: we have to talk about the euphoria we are seeing. there will be a lot of questions this week. we are not sure where yields are going to go. are we seeing a little bit of her recount -- a little bit of a rebound? they are thinking yields could go higher. the shortest position ever when it comes to things against the 10 year treasury. that has hit a record level. a lot hanging on when it comes to inflation and jobs. we have the refunding announcement, the fed decision will be on wednesday.

that could weigh on what is going to happen when it comes to yields. as we heard from earlier guests in the last hour, he believed these yields are capped . there is a big inflation premium already and it has to be bigger for those yields to continue to climb higher. we are going to get a better picture of inflation when we get the data out later this week. we will see the refunding announcement coming out from the treasury and that will affect treasury yield as well. betty: inflation -- yvonne: let's get you caught up with the market open so far. sophie: slow going ahead of the asian markets. moderating growth. later in the week we have the fed holding its policy meeting.

investors will be looking for commentary on economic growth. after friday's summit, korean stocks are up .5% and the yuan is jumping after the two sides call for a formal end to the war. fundamentalsonomic can be compelling, we are going to see how stable the positive momentum will be for korean assets. the aussie dollar is resuming the clients, now holding. another 5% drop by year end. the rba is on hold. as the session warms up, let's get a check on the mood. ---ost be is being led

kospi being led. off-linec shares are as the stock split is being completed. of the financials, the ongoing increase but pressure on banks as the government toughened regulation. we have a mixed picture. a b-shares gathering a quarter of a percent. let's check on some other movers. pressure,s under sliding a 10th of a percent. .z tipped i want to highlight macquarie. they are expected to post a

record profit. a heavy focus on the australian banking sector. yvonne: let's get to the first word news with ramy. ramy: the trump administration says they will extend relief on steel and aluminum tariffs, for some of its allies but not all. extensions expire this tuesday and wilbur ross said an announcement would be made before that. who will be spared? nations have been asked to accept import quotas. to the sold information same academic who obtained facebook users data and passed it onto cambridge analytica. alexander cohen was given a to a five-month timeframe.

twitter says they have removed cambridge analytical as an advertisers but offered no other details. rudd has resigned amid claims she misled parliament over targets for removing illegal immigrants. critics have been calling for her to step down. theresa may has accepted her resignation. she was pro-european in the government and was counterpoint to poorest johnson. -- boris johnson. france and a ron say they will work together to preserve the nuclear deal even if the u.s. walks away. they spoke for more than an hour on sunday and agreed to protect the 2015 accord. the truck administration faces a may 12 deadline and the president has indicated he may withdraw. irant says they have -- says they have no interest in

renegotiating. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ yvonne: the kim jong-un charm offensive continues. there was a summit with president mont. let's get to stephen engle, back in the drama, this is happening quickly. optimism.autious patient -- pieces always good. but there has to be some cynicism is a promises made and broken in the past. it seems there was a good faith attempt by the two leaders to have camaraderie. they showed camaraderie. hugging each other, all smiles. usual: it breaks the

pattern that we see with these talks. stephen: i have covered a lot of these over the years. korea andons of north that overtures apiece and back and forth. the warmth between these two men was noticeable. it was palpable. very different than in 2000. that was a lot stiffer. this is going to come down to, is this a lasting peace? kim said hee when is not the type of person to use nuclear weapons and he is no reason to live with all of these difficulties. we will see. betty: as our earlier guest

said, you can question the sincerity, but the devils are in the details. what is being asked to be negotiated between all parties? so far, what have we seen from the u.s. and what do we know? stephen: the devil is in the details. we know they are going to try to achieve a peace deal by the end of the year. they can do that. the more difficult one is the complete denuclearization of the korean peninsula. that is where donald trump comes in to play. donald, step will be, the ball is in your court. will you be holding hands? he has awkward handshakes. this is what the newly sworn in about theo had to say reagan adage.ld we have to trust but we have to verify. going to be different

to we are going to negotiate in a different way than has been done before. steps thatuire the demonstrate the denuclearization is going to be achieved. stephen: we are learning out of washington that the venue for the summit between donald trump and kim, if it happens, has been narrowed down to two locations. singapore orther mongolia. those would be logical choices. singapore would perhaps be better for security. yvonne: i wonder if we will have the diplomacy that we saw between macron and trump we saw last week. they, aill they or want

deal with t-mobile and sprint. t-mobile is going to buy sprint for more than $26 billion. nabil, this five-year deal has finally come together. >> it is a good day. this has been a long time coming. time he is third acting on his longtime desire to combine t-mobile and sprint. wireless environment is changing rapidly. if they did not do something quickly they would be left behind by at&t and verizon. you also have comcast trying to

monopolize the market as well. betty: how good a deal has t-mobile gotten for this? >> t-mobile is the stronger of the two and they will get to andnate nine board members sprint will have four. they get their own management team. sprint has not turned a profit in more than 10 years and is laden with debt. this is a bit of a bailout for them. the deal is skewed towards t-mobile and i think sprint shareholders will be pleased that this deal happens at all. betty: we were talking with john butler earlier and he said this deal is about scale. have they'd gained enough scale to steal market share from at&t and verizon? together, can pull it that will give them a good platform to compete against at&t

and verizon. it will put them in a good position to capitalize on the five g network. this will reduce the cost they talked about. a lot of it will come from the fact that they are saving money by not having to individually invest in five g infrastructure and technologies. the number three and number four players in the market and this deal will be heavily scrutinized. the argument will that this will be good for the economy and the country, they said that today. believed ors to be not is another thing. thank you for joining us on the phone with the latest with the merger. itsext, shake shack opening first home on store. the company's ceo joining us for

a chat. and we will dig into asian .merging market economies this is bloomberg. ♪

yvonne: this is "bloomberg daybreak: asia." we get stronger u.s. job numbers on friday. this comes as friday's fed rate decision, that will be in the pipeline. we discuss this and the implication in the asian .merging markets rob, thank you for joining us. before we get to the fed and talking about the data coming

out this week in the u.s., coming off of those dismal industrial production numbers out of south korea, we know there were some domestic issues in the auto industry. healthier exports on-chip exports. do we know if this will be an indicator for the rest of asia or do we put these side when we look at the emerging markets? >> i think win thing we know in south korea was infantry levels. inventory shipment -- shipment levels. we are getting some payback from that. that signsdication are emerging that after a strong start to the year, the asian economy is starting to come up a little bit.

we see it in korea i.t., and the exports and the march data we have is showing a bit of a softening. betty: it is making investors whether emerging markets in the southeast asian countries, if they can be a safe haven. a lot of money piled into those markets. looking at the geopolitical trade tensions, that seems to be leveling off now. >> it has leveled a bit. the chief thing going forward will be be 10 year treasury yield in the u.s.. if that continues to climb from here. there are reasons that it could. 3.25%.k it will rise to happens, i think how much will rethink

return they are getting in asia for the risk. the thing about asia, over the very -- had had a very low interest rates for a long time. some countries, housing markets have gotten frosty. i think if we start to see the reversal of that in terms of rates going up in the u.s., i think a reassessment of the risk return trade-off in asia could see some capital outflow in the region. there is more to go in that pattern. betty: the dollar is tracking those yields higher and now we are seeing higher oil prices which you said is a potential game changer for em. is em asia at a risk for

runaway inflation? or can a cap be put on these inflationary pressures? >> i think generally across asia, inflation is pretty much under control. there are a few consent -- exceptions. philippines, domestic demand is extremely strong. inflation have seen move above the central bank's target. i think the central bank will have to start to respond to that were risk being behind the curve. also we have to watch india. core inflation has been high. it is also exposed to oil prices. those are the two where we would see upside risks of inflation in the coming months. we have also seen

indonesia which is reporting inflation numbers this week. $6 billion in reserves already to put a supportive floor on that riyadh. nowthese band-aid solutions or is this a potential turning point to start following the fed? >> i do not think they need to follow the fed. , they look across asia have learned partly from the asian crisis a decade ago that they need to have a good buffer of reserves. indonesia has built up reserves and now is the time to use it. but i think they are taking an eclectic approach. not just reserves, if they need to allow the currency to weaken a bit, they will allow that. protection all measures as well and they could potentially raise rates. i think they have a combination of tolls to use, but the key

thing is the fundamentals. if you look at asia balance of payments, they are stronger than they were in 1997, even in indonesia, malaysia, india. they are nowhere near as big as they used to be. the big thing to watch in asia is domestic credit. domestic debt levels are very high and if we see foreign investors start to move out and market liquidity evaporate, we could see a widening of credit spreads, particularly domestic credit spreads and the reason -- region. betty: rob, we appreciate your take on that. coming up, vietnam airlines clears a dedicated cargo unit.

next.l hear the ceo this is bloomberg. ♪

betty: vietnam airlines has been into newing by getting services. the ceo says the carrier is looking to further boost growth i launching a dedicated cargo unit. dedicated -- by launching a dedicated cargo unit. >> the imports and parts are in vietnam for assembling. the cargo unit

and the system. 2017 in the first quarter this year proved to be very good air cargo business for us. reporter: what are your expansion plans into the u.s.? tourism is growing. you seeing a market there? >> the demand of travel between vietnam and the u.s. is huge. size of vietnamese population in the u.s. you just mentioned that more visiting of friends and relatives, which normally would , so in thew price this, which i to

work with our partners as well. try to work with our partners as well. to sell moreplans shares and open this up to foreign ownership? is thee to 5% of shares first step and the next will be vietnam airlines to issue new hope to have more investors. >> shares are currently listed. expect to list on the ho chi minh exchange? >> we plan to list on the ho chi minh stock exchange in quarter to of 2018.

could also be a little bit in the third quarter. betty: coming up, bp says earnings surges have failed to address impacts. this is bloomberg. ♪

yvonne: happy monday. we are 30 minutes away from trading. betty: it is gorgeous they are in singapore. you are watching "bloomberg daybreak: asia." north korea says they will invite national observers to --ness the duke aviation denuclearization. this comes ahead of an anticipated meeting between kim jong-un and trump. >> this administration has its

eyes wide open. we know the history and risks. we are going to be different and negotiate in a different way than has been done before. we're going to require all of the steps, we will require them to demonstrate the denuclearization is going to be achieved. ramy: the trump administration says they will extend relief on steel and aluminum tariffs to sum but not all allies. temporary exemptions expire this tuesday and wilbur ross said in he wouldcement that not say who would be spared. australia is to spend half a billion aussie dollars to save the great barrier reef. the government said it faces challenges from climate change

and a coral eating starfish. the funding will be used to improve water quality and to encourage coastal cleanup campaigns. the latest avengers film has picked off the summer movie season with the biggest global debut in history. in $630 war raked million worldwide, $250 million came in the u.s. and canada. the record is more notable because the film has not yet opened in china, which is the second-biggest box office in the world. it will be in theaters there on may 11. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. yvonne: let's go to the asian markets. let's get an update with sophie.

sophie: the attention is on soul agreedhe north and south to end the war this year. the kospi is extending gains for a third day yard let's check on the big movers. -- third day. let's check on the big movers. there is a laundry list of earnings from korea, including petroleum which is jumping after estimates. a media reports in a class-action lawsuit was filed in the u.s. against the world top three shipping, claiming they colluded on limiting the --ply of various projects products. let's look at the board to check

at the wider action in markets. stocksey, resource leading the drag. this is we get some updates from new crest and other players. gaining,tocks are westpac is among the best performer so far. betty: thank you so much. they look at anp shares as continue to fall for the 11th day after the chairman quit. trouble here at anp. here is emily in singapore. more fallout in the financial sector. how bad is this for anp? emily: it is pretty bad. no other way of saying it. it is a venerable company that has had a great reputation in australia, but it has been shredded by some of the news

that has come out of the royal commission, notably that not only did it charge customers for them,es it did not give and that it try to mislead the corporate regulator over that. so it is a crisis for the wealth manager. they have now lost their chairman and ceo within the last 10 days. betty: are we talking about longer-term concentrations -- consequences for anp? >> it is a possibility here it it will be about what the board does next. taking onrson who is the chair and ceo, it is up to him to steady the ship. they need to reassure regulators that they have changed and are taking things seriously and to customers that this was

an aberration and they are now recovering. this is going to drag for a long while until the company can prove that it has learned unchanged. criminal charges are a possibility. yvonne: what else should we look out for? we were thinking nothing was going to happen and then we saw the shocking news. could we see more fallout with other of the banks? what is being confronted for the entire industry is seeing all of these things laid out. a look at mortgage funding, wealth management, and how banks treat small business customers. australia, small business owners, farmers, they have a special place in the national psyche. more evidence of bad behavior could be very damaging for the banks. ultimately, the fear is that more regulation is coming and it

will crimp the record profits we have talked about some he times. yvonne: thank you, emily. let's talk more about earnings. zte shrugging off a seven-year tech been in the u.s. and reporting a surge in earnings. they delayed the results by a is too soon for an accurate assessment there let's bring in shelly banjo who is bent tracking all of this for us. shelley: they posted one of the best ever net increases. they do not know how it is going to impact. we are going to later release and updated quarterly result. so we do not know what the impact is going to be. yvonne: we will get a better idea when they update the first

quarter results. how will that play out? do not know what is going to happen with the seven-year ban that the u.s. put on the zte. the same thing happened in 2016. and this isbig fine a continuation of that story. from their perspective, they can still hold out hope, thinking maybe there is another settlement in the wings. we have a bunch of u.s. officials coming to china this week for talks. --re is no doubt that the tt zte will be brought up in the conversation. yvonne: mediatech's in taiwan, have they stopped doing business with zte? how is that going to affect things? ceo came outatech and said, we cannot do business, we might not do business with

zte. so this is another roadblock for zte, now mediatech what do business with them, who is going to sell this company chips? if they do not get that, how are they possibly going to continue turning out phones and telecom equipment and be able to run their business? yvonne: much more to come on this story. shelley, thank you. let's talk about food. burgers. -- shake shack ceo is opening up a hong stop -- hong kong store. this is bloomberg. ♪

betty: this is "bloomberg

daybreak: asia." shack opens its first outlook in hong kong on tuesday. they are pushing for fast food in mainline -- mainland china. with the ceo,this randy garutti joining us in hong kong. iconice can remember the the talkquare park, about shake shack. can you transfer that possible -- that popularity to the rest of the world? >> no matter where we have gone, we have eight restaurants in japan, the u.k., the middle east. somehow we have been able to make this global decision earlier in our life than many other companies. there is something about being , we were fine

dining people who just kind of figured something out. whoever wrote the role that the humble hamburger could be done a little bit better. it has resonated with people around the world. yvonne: the burger business is competitive. many have come and gone. hong kong consumers are very picky when it comes to the next food craze. first pizza, then burgers. have you missed the train? >> we did not invent they hamburger and we will not be the last people to make a great one. but we like those kinds of expectations. the new yorkers, we try every day to ask how we can do things a little bit better? we have teamed up with the best local bakers in hong kong and we are using cool products.

we make sure that it still feels tastesake shack but it like it should taste in hong kong. yvonne: some people in wall street have questioned the paste of your -- piece of your plans. you are focusing more on prominent city locations. spreadur restaurants so out, how do you manage or supply chain costs? >> we think that the world is a selection of great cities today. that is different than rate countries. i do not know if our story could have happened a couple decades ago. when you see they press and power we have gained, people know. in the age of social media, you're going to know immediately where everything is all the time, and it will not matter if it is in new york city or hong kong. we spend a lot of time making sure our supply chain is safe, taste great, and is

well-managed. that is why we partner with some good companies. next year we hope to open in shanghai. randy, here in new york, burgers.hake shack it is good to see you on the other side of the world. you mentioned working with maxim in hong kong. -- isr business model is your business model different in the overseas than it is in the u.s.? what is your business model? >> we made a decision a long time ago that if we are not the best people, we want to go find the team that is. example of great that. they have led the starbucks expansion here for years along with incredible work in their own restaurants. it is japan, korea,

the middle east, our goal is to say, when we are not the best operator, let's go find it. this is a great example. them, i donot with not know if we would be opening in one of the greatest real estate locations. that is why we partner. it gives fuel to the partnership. betty: and having some of the local ip to help you along. i am curious if this is the opening shot to going into the chinese market for shake shack? mostat will be one of the important decisions we make is a company. we have taken our time, this decision has taken more than four years. we will launch in shanghai next year and we are really excited. but we will take it slowly. shake shack has never done things too fast. we take an appropriate fast and build a special company. betty: what you find is a consumer in china that has less

spending power. are you going to be able to keep the premium prices or are you going to have to compete more on price in china? >> price is something we are careful with at shake shack. we have always been able to give a premium product but not be that much more expensive than traditional fast food. that is the magic of it. when you look at starbucks and others who have found great success in mainland china, we think there are a lot of people, this will be fun for people to be a part of and it will hopefully be what it is in new york. the community gathering place that you know in your hometown that shake shack is. we will do our best to make that happen here in hong kong and later in shanghai. betty: there are certainly still questions. why you do not focus

domestically when you have enough of the market here to just compete, why spend the money and energy to go all around the world? >> we could. that has been in the playbook before for restaurants and retail. this is the magic of it. when you come here tomorrow to the shake shack and you see how people line up, you can count the number of brands on one hand that can cause something like that to happen. somehow through the magic of a lot of amazing people, that keeps happening and we are going to work hard to earn that trust in this market and everywhere we go. i think we have been fortunate that we have something that resonates with people around the world and we will do our best to hang onto that. yvonne: do you worry about the potential backlash, as a american brand, about protected -- protectionism? to do what weg

do, which is to sincerely take care of human beings who want to gather together and give them what we see as one of the great mass appeal products of the world, the cheeseburger. if we do that as well as we've been known to do it, we will be off to a good start. yvonne: randy, thank you. good luck with the launch this week. do not forget tv , you can watch live interviews. if we talk about cheeseburgers, you can go back and look at the conversation. you can send us instant messages during our shows. this is for bloomberg subscribers only. check it out on tv . this is bloomberg. ♪

yvonne: this is "bloomberg daybreak: asia." let's get a quick check of the headlines. southeast asia's largest lenders saw a rise in the first quarter. net -- net income climbed 26% to , just over 1.1 billion u.s..

return on equity surged to 13%, the highest in a decade. really dollar is reaping the rewards of his merger with international petroleum. they will enter do sectors at home and overseas. eventually manage $250 billion of assets when they link up with abu dhabi. t-mobile is going to be buying team upbetting they can to build the next generation wireless network and jump ahead of verizon and at&t. the deal follows years of will softbankle day between and deutsche telekom. shakeup theaims to u.s. wireless sector through innovation.

the t-mobile and sprint ceos will be joining us later on bloomberg. 11:00 that -- that will be at 11:00 at a new york. betty: big news on the merger front and the tech sector, big news when apple will be reporting the results. there have been so much handwringing over the last several months and it is intensifying as we have heard so much negative news out of the apple suppliers that this quarter be softer than expected on iphone sales. i want to point out this chart which shows you wall street analysts are still bullish. that is the blue line. they've been raising their price targets on apple. optimism continues on wall street but not among investors. the stock has been range bound and now on a decline as more and more use comes out about these

suppliers and the troubles they are seeing. yvonne: we have seen the start off in taiwan. there is perhaps a dark cloud looming when it comes to the iphone x demand. earnings in the second quarter's look iffy when it comes to smartphone demand. we might have read -- reached the pipe -- peak of the cell phone cycle. reporting this week, you can interact with the charts on tv . you can browse the charts featured on television and say charts for future reference. whate meantime, a look at is coming up in the next few hours as we wrap up. had a little hong kong and here for the rest of the week. is here for the

rest of the week. are looking to see how the deleveraging is weighing, and going into these talks, steve mnuchin going into beijing, that will be weighing on the export side of things. we are expecting a moderation when it comes to the reading. we will be joined with our chief china economist. yvonne: is the u.s. going to dial back the rhetoric on trade when it comes to china? have had some shutouts with president trump, getting some of the credit for bringing north korea to the table. so that china trading has taken a little bit of a backseat. at the southooking korea north korea historic meeting. peter brooks says historic

optics the great but what will be the actual takeaways? what happens from here? what happens if we don't get a deal? reforms in hong kong, looking at looking at this $10 billion ipo potentially by the end of june. that could be negative for the markets because it will suck up some of the money. betty: certainly a jampacked show the next few hours. before we handed over him a -- before welook hand it over, let's take a look at the markets. the korean kospi is up running .5%. the s&p asx is climbing. we are seeing peas

dividend -- a peace dividend play out in korea. across theg green board with taiex futures up. pause on thesaw a pace of the rises when it comes to treasury yields. the dollar falling lower. we need a breather in the em space in asia today. that is it for "bloomberg daybreak: asia." market coverage continues. stay tuned for bloomberg markets. this is bloomberg. ♪

♪ kong,d: 9:00 a.m. in hong 11:00 a.m. in sydney. i'm rishaad salamat it. haidi: i'm highlighting noon -- i'm haidi lun. this is bloomberg markets: asia. ♪ rishaad: sprint and t-mobile agreed to merge, sending years of will they won't they talks. haidi: the new owner says he wants to shake it up and new innovation. rishaad: catherine brennan steps