i know. find your phone easily with the xfinity voice remote. one more way comcast is working to fit into your life, not the other way around. ♪ ♪ haidi: wall street falls the most in three weeks as treasury weakens and reaches its highest in 2011. >> upbeat data fuels bets as well. now at a record for 2018. haidi: talking tech, sydney p ulls out stocks. tech accounts for just 3% of the benchmark index. >> hate speech, spam and fake accounts. facebook and forces community standards. we go live to san francisco.

haidi: hello, from sydney. this is daybreak australia. we are two hours away from the open of asia's first major market. rami: it is just past 6 p.m. we will be looking at how the action on wall street will play into your asia-pacific trade a day. we did see a selloff across the board. the dow falling nearly 200 points. you can see the s&p 500 down nearly 7/10 of 1%. the nasdaq down similarly. it was a particularly what was happening in equities. it is what was happening in the bond market, the u.s. 10 year yield rising to 3.09%. that is at its highest since 2011. when those rates go higher, investors are looking for a little bit of yield and pulling money out of equity. it will be interesting to see if we have this knock on effect in the asia-pacific today. haidi: geopolitical uncertainty.

reports that north korea might be pulling out these talks with president trump, fueling the risk aversion we are seeing in these markets. we are seeing this bond drop leading to a stock market rout. let's take a look at this set up in asia. we did have quite a selloff when it came to asian stocks. the psi asia-pacific falling the most in two months. trading falling in new zealand. the kiwi dollar has been extending its slide. hitting the highest for the year. futures in australia, a little bit of a downside. supporting materials and energy stocks in this part of the world. the aussie dollar holding. check across commodities. gold falling below 1300 and out for the first time since december. new york crude shy of the $71 mark. seeing some gains despite

commodities looking a little weaker. let's get the first word news with jessica summers. jessica: thanks. th european unione is calling on israel to exercise maximum restraint and recognize the right of peaceful protest. that is after at least 88 people were killed in the border of gaza. demonstrations erupted after the deaths. they also marked the 70th anniversary of the eviction of hundreds of thousands of people amid the creation of the state of israel. u.k. prime minister theresa may will publish a detailed plans for ties to the eu next month. it will come ahead of the eu summit on june 28 and should give the clearest vision yet of what the u.k. wants post-brexit. may's inner circle met again on tuesday. as expected, there was no breakthrough.

four ministers from the u.k., germany to talk about the iran nuclear deal. the signatories. they said they want it protected despite president trump's decision. washington has posed sanctions ahead of the central iranian bank and rent measures against any ally doing business with tehran. say northom seoul korea's drinking to cancel next months meeting with the u.s. because of wargames. the talks today have been canceled because of the drill. jong-un is scheduled to meet president trump in singapore on june 12. preparations are going ahead despite the latest twist. jong-un is scheduled to>> we ae idea and the notion that the presidents meeting is going forward with chairman kim next month. tencent has slumped

below 400 hong kong dollars. it is citing more cash ahead of quarterly earnings. it was the biggest drag on the hang seng index. it also takes the stock's loss to 95 billion u.s. dollars. analysts think they will report its lowest profitability since at least 2003, after the close of trading later wednesday. global news 24 hours a day on air and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jessica summers. this is bloomberg. haidi: let's go back into the u.s. market close. stocks fell the most in three weeks. treasuries also plunged, sparking the selloff as well. threshold.e the 3% stronger retail sales helped fuel bets, making the hike faster. su keenan is here. is this a case of good news, bad news? positive retail sales but enough

to trigger the bond selloff. su: absolutely because it is definitely a positive to the economy. it looks like people are spending again, but it's first these bets there will be more rate hikes. let's take a look at the bloomberg. you can find it using gtv. better than a coin flip. the dollar surging as the odds of hikes are above the 50% level, helped by this retail sales data. the dollar moving higher. the focus was on the bond yields, as ramy mentioned, 3.09%. that is the number that strikes fear in the hearts of some market watchers because it can sap demand for stocks. interestingly in these uncertain times, we do not really see gold, the yen, the swiss franc which are usually safe haven assets catch a bid. let's go into some of the big movers because tech and health

care were under pressure. nvidia down in a big way. almost 10%. company, redrvices violet, with its first earnings report, heavily shorted and boosted in a very big way by the decent report. that is the latest. a four-day rise. haidi: let's get back to the strong retail sales. the second straight month of gains. after-tax paychecks to be helping loosen the purse strings, right? su: it looks like the after-tax break hx has been fueling the economy. gtv is where you can find this. you are seeing a rebound. quickly, let's look at some of the factors behind this. it was a broad-based game. we will have more details than a minute, but if you look at the stocks rising, a lot of them are the beat up retailers. there were significant gains across the board.

aboutsu, let's talk commodities. i'm taking a look at oil right now. about half adown percent, but there are bearish reports. should we expecting this to fall further? su: normally the strong dollar, late in the day we saw a fall. take a look at the chart, down from its three-year high. chart, you the today can see the intraday drop as investors absorbed the private report there is likely to be a big buildup not just in the regular supplies for the nation, but in the key supply hub. that will be very bearish. very quickly at the bloomberg, if you look at the overall picture for oil, going to 100. we can see we are coming back to the peak. things are different. it might not hurt the economy in the same way it did several years ago. ramy: i was reading, talking about gasoline prices. how potentially people are ok

with higher prices because of the tax cuts. su: personally not ok but economically. ramy: personally not ok. i would rather have a prius. su keenan, thank you. let's have more market talk because there is a lot of fed speak. we weigh the prospects of higher rates. robert kaplan as well as san francisco's john william both backing at least three more hikes this year. the vice chair nominee also told the senate panel there were benefits for qe. >> initially, i would have argued and did at the time think it made sense in the depths of fedperiod in 2008 for the to pursue that option, acknowledging it had not been tried before. at least in my memory, the u.s. had not mrs. early been at zero rates before -- necessarily been at zero rates before. i do think the benefits of qe diminished as more rounds were

added. ramy: there is a little fed speak. let's bring in peter coy, economic editor. after all the things we are hearing, what is the take away? me is the takeaway for the fed is finally me is the fed is finally moving to fill out its core. there are seven seats on the board of governors and only three occupied right now. clarida will give you a fourth. testified today in her confirmation hearing. she, if approved, and it is expected to happen, will be the person in charge of small banks and she has expected to testify two things they are overregulated. and then we have marvin good , carnegie mellon economist, who went to hearings and did not do very well. the chairman of the senate banking committee said after the hearing that he does believe they will try to moveramy: forwn

his confirmation. they got those three, they would be down to only one. i thought that was important. the president of the dallas fed, robert kaplan, came to bloomberg new york's offices today so i sat in on a meeting with an. he is relatively dovish. he is not going to bring more hikes, so much as three hikes total. that is why there are some other governors, bank presidents talking about a total of four. it is kind of says, look, too soon to decide we want to go that far with raising rates this year. ramy: let's unpack what happened in the bond market as well because we have been nudging up up to 3.09%. it was at 3.7% for the yield. was it really the retail numbers that broke the verb ove up to 3. proverbial

camel's back? peter: the retail sales were not exceptionally strong. the february and march numbers were revised upwards. yes, -- ramy: it was more the revision? peter: i believe that was a factor. it is always difficult to tie the markets action to any particular event. we have a variety of factors market. weighing on the one is the higher amount of treasury issuance because of the biggerone is the higher amount f treasury issuance because of the bigger federal deficit, tax cuts. then, there is a general climbed

haidi: it does seem to be settling in and getting comfort around the 3% level. we have seen the march numbers for china's treasury holdings. is that reassuring given the backdrop of trade tensions at the moment? peter: what we saw from the two key numbers is the private flows tend to be outward. there was a net inflow of money. it is hard to read a lot into that because those numbers fluctuate from month to month so much. then't have a lot to add on tic data. haidi: peter, thank you so much for that. something reassuring about the allure of u.s. treasuries despite these concerns over surging demand and trade worries with china. that was economic editor peter coy with us. you can catch up on an exclusive with the st. louis fed president on bloomberg television at 3:30 a.m. thursday. haidi:1:30 a.m. in hong kong.

quite a bit to say of what happens with this yield curve. coming up next, we will speak to the man described as a savior of the british steel industry as he prepares to speak at the bloomberg australia summit. we will see what he has to say about renewable energy, the outlook for metals, and any deals in the works, what he sees post-brexit. ramy: looking forward to that man of steel. later this hour, the former chair and ceo of chrysler and home depot joins us to discuss premier china's vice heads to washington for high-level talks. this is bloomberg. ♪

in new'm ramy inocencio york. haidi: i'm haidi lun in sydney. north korea has canceled wednesday's high-level talks with their south korean

counterparts. now with the meeting with president trump in doubt, blaming annual military exercise. they are calling them a deliberate provocation. let's bring in our editor in washington with the latest. joe, this is quite a twist. those managing expectations, this was always a risk, right? joe: right, this is reverting to some of those managing the rhetd of north korea. calling the military exercises, as you said, long planned an annual exercises, calling them a provocation. the abrupt change seems to take officials by surprise. the state department was simply saying we are planning to go ahead with the summit and we will wait and see. a little while ago, the white house press secretary sarah sanders released officials by s. a statement simply saying we are aware of the south korean media reports.

the united states will look at what they have said independently. it is not clear whether this is perhaps a negotiating tactic or there has been some other breach with the talks going on between the north and south. indeed give at least something of a threat for the summit that president trump and kim were supposed to be holding on june 12 in singapore. that is a crucial part of the president's strategy. it was his big first foreign policy test. we will have to see where it unfolds from here. ramy: before that happens, if that still happens, of course, we have chinese premier coming to the united states on thursday for a four-day trip. i have been looking and looking and looking to try to figure out what he is going to be talking about. i think it is pretty sparse, but you being in d.c., shed some light on this. joe: we don't have a lot of

clarity on to what his specific federal is on the chinese side. we do know he's going to be meeting with treasury secretary steven mnuchin, also commerce department officials, officials with the u.s. trade office, as well as some lawmakers. there is a chance, according to the chamber of commerce, that he could get a drop-in visit with president trump while he is here. he is going to be making the negotiations and should be fairly skilled at making his way in through the u.s. he studied at seton hall university and the kennedy school of government. he has some connections from his desk with u.s. officials left over -- connections with the u.s. officials left over from the financial crisis. he is familiar with players here and how things work. ramy: a lot of people saying he is the economic czar of china

and maybe he will try to learn the landscape in order to bring something home to continue those talk. hopefully with a lot of investors and analysts, the goal is to avoid trade war. bloomberg congress editor joe, thank you so much. let's go more into trade tensions now. ofhave bob nardelli, the ceo xlr-8. it helps companies improve performance. you might know him as the former chairman and ceo of chrysler and home depot. you are not a busy person at all. bob: i enjoy what i am doing. great to be with you. ramy: we were just talking about trade. let's get the 30,000 foot level on your perspective on these tensions. are you generally an optimistic person, negative, especially what is happening with the u.s. andlet's get the 30,000 foot ch? bob: definitely not negative. i think there is a lot of positioning going on, a lot of bantering going on. i'm a little surprised at the

volatility as a result of some of those positioning statements. i think we ought to take a deep breath, let's see where we come out. we have talked about some tough tariffs, we have backed off of that. we talked about ip. we were not going to square the telecommunications business in china. i think there is some positioning taking place here between our administration and there's. irs. your earlier comments a few moments ago, a very smart individual coming over to talk to secretary mnuchin. consistent,, intelligent people will prevail. i'm not pessimistic about this. i'm optimistic and i like to think i am a little realistic about the outcome. i don't think anybody will want to put a finger in somebody's eye. we both have to coexist and i think that is what will happen here. ramy: if i may push you a little bit on those comments you said onal, intelligent

people will not go down that trade war route. i am sure there are some people watching you might say does donald trump fit into those descriptors? bob: he is a negotiator. you talked a little bit earlier on the program about north korea, south korea. i don't know whether that is a positioning statement, whether it is trying to get leverage on the upcoming meeting on june 12. i think we ought to just a calm -- stay calm. let's not overact. let's think about the implications of what might happen. let's not be so volatile about it. haidi: bob, you can see the lack of overreaction by in large in equity markets in terms of steady as she goes. waiting to see if this relationship becomes a more transactional one as we have often seen. in terms of people heading up companies, businesses looking into making business decisions

that have to do with the u.s. or china, how difficult is that in this environment? bob: that is a great question. a couple of points. i have been very pleased with overall corporate performance. if you look at the earnings through the first quarter, i was again surprised that the equity market did not respond more favorably. if you look at it, the highs really have not offset the cumulative lows. we are relatively flat. still get the dow 26.5. as you hear that is good performance, i would have thought the equity markets would have been more responsive to that, but they seem very jittery and pretty volatile relative to external events that may or may not happen, as opposed to solid corporate performance. i think the first quarter, ok, a lot of that could have been but i think we will continue to see a strong second-quarter. we will continue to see people investing in infrastructure. people spending cap, working on

new product innovation. i'm pretty optimistic about performance in the second quarter and beyond. we heard that maybe there may be three more fed rates. that is probably baked into the overall forecast and perception. let's not overreact to what is happening. some of these external events. let's see it play out before we get too volatile on our decisions. haidi: bob, earnings season, the beats, thehe percentage of the estimates is pretty phenomenal, but is there a sense we are just getting past beats,peak earnings? bob: i don't believe so. you were just showing earlier in the program, if you look at some of the consumer sector, they were up today. you look at home depot, i thought while the market reacted negatively to home depot, i think they turned in very good performance. they beat the earnings for section -- earnings projection.

i think that will come back. a little seasonality cut up in that. they had some headwinds. it has been a long winter and that has affected the gardening product which is a big upside for the first quarter and second quarter with planting. a lot of freeze out there. i think they will recover that in the second quarter. they do a great job and i think they deliver to the consumer something amazon can't. that is associate interface, helping them assist with projects. working through the do-it-yourself concept which is a real plus for home improvement, specifically home depot. haidi: we will have to leave it there but always a pressure avenue on --having you you. bob nardelli. we will keep it here on daybreak australia. this is bloomberg. ♪

sitting over the markets

in terms of asian stocks, the biggest decline in two months. equities pointing very much lower. early trading showing negatively in the u.s. this is bloomberg. ♪

haidi: a beautiful winter morning in sydney, 8:30 a.m. markets open in about 90 minutes time. futures not looking too poorly. a little bit of negativity. the api asia-pacific falling the most in two months. assets and stocks and currencies as well. i am haidi lun in sydney. ramy: i'm ramy inocencio in new york. it is just past 6:30 p.m. and you are watching daybreak australia. let's get the first word news with jessica summers. jessica: the dallas fed president robert kaplan has caution against beating up the pace of interest rate rises. he says the fed should not

knowingly invert the yield curve. san francisco john williams says he is very positive about the economic outlook in the u.s. and abroad. he still sees three to four hikes this year as appropriate. >> the distribution has either three to four rate increases as appropriate for this year as a whole and a few more increases over the next few years. i personally view this to be the right direction. jessica: china's holdings of treasury's went to a five-month high, increasing to $11 billion to $1.2 trillion. despite trade tensions. china remains the largest foreign predator to the u.s. -- creditor to the u.s. it is followed by japan whose holdings dropped to $1.04 trillion, the lowest since october 2011. is set to be confirmed as cia director after

the top democrat on the senate intelligence committee declared his support. mark warner says haspel can and will stand up to president trump if order to do something illegal or immoral such as returning to torture. the cia veteran supervised waterboarding of the 9/11 attack but now says the program was a mistake. cook says he spoke out against tariffs on chinese imports. he told bloomberg television's message to trump focused on cooperation between two countries can stimulate the economy's. cook met trump in the oval office in late april. >> i talked about trade and the importance of trade and how i felt. that two countries trading together make the pie larger. and that it is true, undoubtedly true that not everyone has been

advantage from that in either country. we have got to work on that, but not thehat tariffs were right approach there. jessica: you can watch the full interview in the new season of the david rubenstein show, peer-to-peer conversations june only on bloomberg television. global news 24 hours a day online and on twitter, powered by more than 2700 journalists and analysts. i'm jessica summers. this is bloomberg. haidi: thank you for that. let's get a quick update on the market. we are setting up for a bit of a lower open across asia. we have the bond tantrum, if you will, overnight in the u.s. market and treasury markets. that is bringing sentiment to the equity market. futures in australia, setting up with a negative trading already underway in new zealand. sydney futures looking marginally lower. the aussie dollar.

the bloomberg dollar index hitting its highest for 2018. the japanese yen could provide a little bit of a lift when it comes to tokyo trading when that gets underway even we have had the weakness in the yen, and coming ahead of japan's gdp. as well as expected to see a little bit of moderation in that streak of economic growth. the u.s. 10 year yield, a major catalyst. 3.07%. advertising 3.09%. a lot of questions of where we go from here. australia's 10 year yield trading at 10.83%. the aussie yield versus the u.s. fromriple to as much as 70 20 thanks to the policy diversions that the rba has frozen the fed. expected to move around three more times this year. ramy: thank you very much. let's get to 13f filings. it is a little bit wonky, but i

really like this. facebook won the first quarter popularity contest. among all the hedge funds that made $1.37 billion in that purchases. the billionaire managers also put a lot of their faith in gold, even as we are seeing these interest rates rise. here to break down the quarterly 13f filings is our reporter. i am surprised by a couple of these things. one with gold. two, facebook and jusis interesting. let's go to gold. that is the nice glittery thing. >> we did see some of the hedge funds getting into gold. there has been interest in gold over the recent months. we will be continuing to monitor how that plays out. facebook, whatn is interesting about the 13f if

you take a look at what stocks become darlings in the industry in the previous quarter. all of these filings i should note shows how they did in the quarter prior, the first quarter in this case. $1.4 funds in aggregate, billion into facebook. this is the first quarter. even as we did see some concerns over the data privacy scandal that broke in march. we don't know when they exactly got in, each of these funds, but on aggregate, many of them did and it speaks to the interests in this company. , run bythe big managers a big tech manager, he says people really underestimate the long-term earning power of facebook. other ones that really have boosted or got into facebook. ramy: we always say buy the

dipper. analysts say buy the dip. we did see the share price of facebook recouped from the major losses after mark zuckerberg came out and tried to us wage investors. in terms of other customers -- companies out there, what was another surprise? a highlyid cakepper, respected hedge fund owner. he cut his entire holding up apple. about-faceit of an because the last quarter of last year, he tripled his stake in apple. making it the fourth largest holding of the hedge fund. we see in this quarter, cut the whole thing, $707 million. that did come as a bit of a surprise as we look at these. there were concerns in the first quarter about apple's iphone x sales, if they would live up to expectations, if they would disappoint. there were also concerns over

intelligence,cial whether he can stand up to the likes of amazon and google. i think that is one of the things that really stood out as we look at some of these big players in the industry and people who watch very closely if they have fomo, fear of missing out. haidi: what did they sell the of? hema: we looked at the data on aggregate and it looks like etf tracks the s&p intelligence, whether he can stand up to the likes of 500 was one of losers when it came to hedge fund popularity. the s&p 500 etf, hedge funds of dollars of that of dollars of that etf. we asked around and one of the sentiments that we got was maybe these investors were spooked after the s&p sunk 8.5% in the first week of february. some of that selling could have been on the back of that market shift, to say the least.

haidi: all right, really appreciate you giving us an update. hema from bloomberg news, our hedge fund reporter. we are staying on facebook. the company says it suspended leaked datach have on users. it removed 508 million fake losers when it came to hedge fundprofiles. usually within minutes of their creation. sarah frier from san francisco. these are massive numbers. does this encourage you or clearly suggest privacy issues continue for facebook? peopleit shows how much try to take advantage of facebook and how much they do catch -- more than 500 million accounts stopped what they were created in the first quarter. there were more than 600 million in the fourth quarter. there are not that many people in the world. people are creating facing --

fake accounts, sometimes hundreds of millions at a time. the company does stop a lot before their creation, but these were established. this is part of a new transparency report that facebook but out on its initiative to stop terrorist content, nudity, graphic violence, hate speech on the platform and show was how well its ai is doing at flagging things before they become too big of a problem. ramy: i had to smile. you make a really good point. 580 million fake profiles in the first three months of the year. that is almost double the population of the united states in the first three months. to what degree do the number we are talking about reveal about how well facebook's ai, which you just brought up, is working? is it working? sarah: it is working for something. s. with fake accounts, you can kind of tell, they are signals that maybe the email addressed as been used before for an account

or maybe the person is trying to the friend hundreds of people at once. there are some things that are suspicious that a computer can easily look at and say we need to take that down and flag it for one of facebook's human moderators for a closer look. there were other problems like hate speech which is very nuanced. facebook's ai is not very good yet at determining what is and what is not hate speech. ,omeone is using a racial slur is that person using it to attack somebody or tell a story about themselves? it is hard for a computer to know. those things, facebook for the majority of cases, reliant on the users flagging them to the company's attention which is a very slow process and sometimes content stays up. sometimes when it is flagged, the moderators do not speak all the languages of the world that facebook is offered in. so, even then, it is hard for them to make a determination about whether the content is

abusive. they have a long way to go with their ai to make a truly effective for policing the community which is now 2.2 billion mostly real users. deserving -- dizzying array o complicationsf. sarah frier with the update on facebook. pulling out all the stops for tech startups in sydney.the value for tech stocks in the market doubled in the past two years to $68 billion but still just 3% of the benchmark of 25% when you are talking about the s&p. what are they going to do to attract more? >> they are spending a lot of time in airports. u.s., newither in the zealand, singapore, attracting a lot of prospective tech stocks to come down into australia. this is all big part of the push that is happening. the innovation.

they changed a lot of the regulations in australia to build a big startup community, but you also need the investors to understand how to value these things in the public market. tough for a lot of these guys to come in. --y are attracting the small haidi: what is the lack of attraction? the equities market has not exactly been dynamic. >> again, investors just don't know how to value these things. australia, big banks,, $68 billion market cap overall. australia, big banks, miners, about 60% of the aussie market. on the tech side of things, it that is less than 1/10 ofrket apple's market cap really. the larger fund managers do not know how to value these things. actually educatethey needed to

the investors how to value its company. quite ironically, it is the smaller cap managers in australia who know how to value these things, but they are not managing large pools of money that some of the large fund managers are. becausehard one now there is more of a dynamic industry coming through. the australia futures fund, big pension funds are looking at that. they are looking at the smaller startups to go once a much bigger things, getting an earlier rather than the public capital market. baby steps indeed. haidi: we appreciate you coming in. coming up next, he has been called the men of steel. the chairman joins us in a moment to talk about how renewable energy could transform the steelmaking sector, their investments in australia and what a post-brexit world looks like bird dealmaking. ♪

haidi: haidi: bloomberg is hosting some of the most influential names in business of the first ever invest australia event. that has not stopped our next guest from a rapid expansion here. is these negative chairman of the liberty house group and joins us on bloomberg. dyou have invested a couple of billion in australia. what is the opportunity? sanjeev: energy in specific is high, but that has been an opportunity in itself. we are investing heavily to bring down energy prices stub santilli -- substantially. we see an opportunity in energy. haidi: one of the headline projects has been the energy project, to install the biggest australia.e see an

when are we going to see it up and running? sanjeev: probably about two years. it is very small part of the overall equation. all that battery does is provide to can sing -- provide sequencing to the other power sources. haidi: in terms of the australi. push to get more renewables and factory storage, is that something that only feeds your internal operations or do you aim to become a provider for third parties? sanjeev: the first contract we took on after we acquired them -- was take on power requirements. our requirement is a base of that. haidi:haidi: you have been alsos the opportunity in the raetail space or the commodity trading space. in the retail space, do you see

opportunity, specifically in australia? sanjeev: that is not in our space. our spaces industry.we are focused in the push to get moremidmarket. in the $50 million range. we will look for that customer base. that is the customer base which is least served. retailers, there are opportunities in new technology, especially syntax solutions. the real opportunity we see is a limit market. haidi: do you think this is an area that might be right for disruption? sanjeev: absolutely. generally speaking, all industries go through this turnaround where they get -- where new blood is acquired and suddenly financial services, there is banking, insurance, other forms of finance. we see that opportunity in the middle market. haidi: you talked about diamond bank being the post-brexit trade. what gives you confidence or

even reliable optics into what the trading world looks like post-brexit given the government cannot figure out policy? sanjeev: britain has always been a trading nation. we have always traded heavily with the world. over the last 20 to 30 years, we were heading towards europe. now we are heading towards embracing the whole world, our trade with the world will increase. i know, for example, free trade agreements being negotiated as increased by 20 fold. there will be more and more trade with international communities, especially commonwealth countries compared to what was the case in the past. onwill focus primarily other countries. haidi: brexit on that side and you have the tray disagreement, negotiations. onmore optimistic between china and the u.s..

does that give you pause in conservative approach on decisions that rely on decisions of trade? sanjeev: you cannot stop trade. what will stop the policies is trade flows. we were looking to export steel from australia to the u.k. now we're looking at the u.s. more acutely as well because australia is exempt it from tariffs. that will change some of the flows as a result of the policies. it won't change. haidi: you mentioned steel and i am keen to get your steel growth for stability output when it comes to demand. the data out of china has been stable. the question is how long that can continue for. do you see a massive change when it comes to steal demand globally? sanjeev: in australia, we still see a great surge. we are going through that now and it may even intensify. we have risen something about 20% in steel demand annually.

that trend is continuing with the infrastructure boom. globally, assumption of steel continues to rise. the issue is supply balance. china has curtailed some of its less productive supply and that has a fat -- has had a positive effect on the planet. i think it will come back to the planet from china and other parts of the world. what we are hoping for is this time it is more balanced. haidi: does that mean you will more oil assets? sanjeev: no, we have a strategy in australia to get to 10 million tons of steel, which means we need more resource in terms of mining. we are more oil assets? sanjeev: no, continuing to workh that. haidi: you have been on quite the dealmaking spree globally. are you slowing down? sanjeev: it is not a question of slowing down. when he have to -- we have to complete our business plans.

we have specific plans for each place, whether it is deal, aluminum, aerospace industries, energy, banking. each of those has a very deliberate target and those targets acquire organic and inorganic growth. in these markets, maybe eventually in the u.k., we will reach a target position soon. other markets like india, india is the main destination at the moment in terms of investments we are trying to make. haidi: other than straight up deals, what other kind of deals, what other kind of avenues for growth are you seeing? sanjeev: if you want to take australia, we bought -- it was producing about one million tons of steel with poor results. that is being transformed to two million tons with positive results expected. eventually, we want to take additional capacity to 10 million tons.

that is a long and ambitious program of expansion there. in the east coast businesses, we headed about 30% capacity. those organic growth plans in those places in power us -- emporwer us with a new projects. this is australia. in the u.k., we have a lotreachf capacity to use. we are running about 40% capacity and on our plants. we are expanding and growing that. we are looking to build the 5 million ton project. we have one million tons and to 5 millionhat tons using domestic scrap. haidi: what is your plan in india? to 5 million tonshow the you find even doing business there? it is difficult, but remember what india

is going through now in terms of integrity code and initiatives, it is the first time in history. haidi: there are always changes going on. sanjeev: eventually it will be positive. at the moment it is very frustrating. in the medium-term, long-term for sure, but even medium-term is remember what india is going through now in terms of integrity code and positive for. haidi: pleasure to have you on. sanjeev gupta, the executive chairman of the liberty house group. spanning many geographies and industries. we have plenty more ahead on daybreak australia. this is bloomberg. ♪

haidi: that is just about it for daybreak australia this morning. yvonne and ramy up next on daybreak asia. what are you watching? yvonne: we are watching the gdp numbers from japan in the first quarter in the next hour. we are expecting a soft patch, contraction in the economy for the first time in two years, but a lot of economists saying this is down because of weak household spending and some unusual weather we have seen.

we are also going to get a little bit of market reaction from wells fargo asset management global cio kirk hartman. this is bloomberg. ♪ mr. elliot, what's your wifi password?

wifi? wifi's ordinary. basic. do i look basic? nope! which is why i have xfinity xfi. it's super fast and you can control every device in the house. hey! let's basement. [ grunting ] and thanks to these xfi pods, the signal reaches down here too.

so sophie, i have an xfi password. and it's "daditude". simple. easy. awesome. xfinity. the future of awesome. yvonne: 7:00 a.m. here in hong kong. we are live from bloomberg's asian headquarters. i am yvonne man. wall street's biggest fall in three weeks, said the heard asia. yields at the highest since 2011. data, theail bloomberg index at a 2018 record. >> i am ramy inocencio in new york, where it is just have to 7:00 p.m. tuesday evening. north korea cancels talks with the south over new u.s. war gains. and it puts the historic