yvonne: it is 7:00 a.m. here in hong kong. we are live from bloomberg's asian headquarters. the top story this wednesday, asian-pacific markets had for a lower open after wall street fell on north korea. president trump says the kim summit may not happen. surging to the highest since late 2014. betty: from bloomberg's global headquarters i am betty liu in new york, where it is just after 7:00 p.m. tuesday. china lowers import tariffs. china, u.s., france may benefit the most.

zuckerberg apologizes again. it is what he did not say about facebook that annoyed lawmakers in brussels. yesterday was u.s.-china trade. today it is will they or one thing meet, the u.s. and north korean leaders. this comment from president trump sent markets into a tailspin earlier today. pres. trump: the meeting scheduled on june 12 in singapore. whether or not it happens you will be knowing pretty soon, but we are talking right now. betty: things that seemed certain is now uncertain, which sent markets reeling. that is why markets were in the red today. yvonne: it will be interesting if this was noise or whether this has been priced into the market.

this cold water from the president is not helping things today. still a lot of moving parts, whether it is john bolton's libya model, or whether -- some biggest sticking point ahead of june 12. betty: seems to underscore how far apart they may be. let's look at how u.s. markets did close today. that risk off sentiment permeating the market toward the afternoon session. the dow falling almost 200 points. the s&p and nasdaq deep in the red. perhaps setting up for a softer open in asia. yvonne: looks to be a muting start. down 0.5%. futures heading in that direction in australia. japanese futures not looking too good as well. given what we have seen with these developments out of pyongyang in the u.s.

the dollar on the back foot. buying into the havens like the yen. 110.82 for dollar-yen. things -- currencies fell, as did crude. take a look at yields when it comes to the bond market. not a lot of action across the board. we are holding onto losses with the u.s. yield at -- of key events such as the fomc minutes. let's get to the first word news. >> congress has approved a sweeping overhaul of u.s. bank sending president trump legislation that is the most significant change to oversight since dodd-frank in 2010, giving smaller lenders relief that they have criticized as burdensome and costly by

raising fed oversight from $60 billion to $250 billion in asset. facebook boss mark zuckerberg took questions of the european parliament, but left lawmakers irritated by what he avoided saying. he repeated facebook did not take enough responsibility for user data, fake news and foreign interference, and he apologized. however, he batted away many clay's -- questions, such as, is facebook a monopoly that should be broken up? mr. zuckerberg: we have never and will not make decisions about what content is allowed or how we do ranking on the basis of a political orientation. >> venezuela has expelled the top two u.s. diplomats in the country after washington imposed a new tariffs after the election of nicolas maduro.

he said they must leave the country within 48 hours. venezuela has long accused the u.s. of trying to undermine its socialist regime. boris johnson said prime minister theresa may -- sent by mr. theresa may a list of brexit demands, saying she must get on with it as soon as possible. saying, may is responsible for ensuring the u.k. take control of its tariff regime. a compromise that could keep the u.k. tied to e.u. for years. >> the prime minister is the custodian of the plan which is tocome out of the market, get on with at that project with all speed is what we are going to do. >> spacex has carried out its 10th mission of the year so far, launching clients. off,con 9 rocket took

idium satellites. it will monitor changes in the earth. 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 alisa parenti and this is bloomberg. betty: let's take a closer look at the u.s. market close, stocks gave back their gains, accelerated losses after trump casted doubt on the summit with north korea. , oil turningrude lower. su keenan with more on this risk off day. >> the easing of trade concerns has been replaced by concern resurfacing on north korea. let's go to the market snapshot. the dollar lower. you did not see safe haven

assets like gold take a bit. -- bid. crude finished at the best level of a day. let's go into the big stock moves. what you see here are significant moves. jcpenney losing its ceo. another story, retailer woes. the ceo has left. boost, atting a big $10 billion buyback. the ceo says it is the end of the wild rides. cannot be a greater vote of confidence from the top. facebook not moving that much, despite being in the hot seat, or its ceo being in the hot seat in the u.k. hourslet packard after beating quarterly profits and giving a better than expected outlook for the current quarter. uplett-packard enterprise

25% year to date, they had strong performance this year. let's go into the bloomberg. the title, it pays to stay at home. theve the russell 2000, smaller stocks outperforming the s&p 500. this is after election time when the s&p really took off. really outperforming the most since the postelection surge. has a lot to do with the fact domestic tax cut stimulants -- stimulus is better for the homegrown stocks than the internationals, which are heard by a stronger dollar. yvonne: we have been talking about crude, hovering around $73. that should create a huge jet fuel expense for airlines. how big of a hit is it? su: it will be a very big hit. the good news is, it has not hit the consumer yet.

let's go into the oil chart. the one to chart of sanctioning on venezuela's output has already crippled the oil industry. expecting to reduce the oil when we have a dent in the u.s. sending oil close to $73. let's go into the bloomberg. gtv is where you can find our library of charts. the rising jet fuel costs, the highest since 2013. jet fuel almost up 50% since the start of the year for these companies. much of the increase has been coming just in the last three months, as you can see here. let's go to the airline itself. those that stock charts are all under pressure. even a more regional airline. they cannot raise rates as we going to the big holiday season. however, they do not have much wiggle room and hedging did not

take place earlier in the year. they cannot add seats. there will be major changes for the airlines ahead. for right now, they are hurting a bit. they: they are -- yvonne: are in a rock and a hard place. geopolitics, doubts about the trump-kim summit. darcy, thanks so much for speaking with us. it is such a fluid situation. we talk about the definition of thedenuclearization, u.s.-south korea military exercises. how confident are you these talks will go ahead on june 12? darcy: there is a long road ahead of us until the meeting between trump and kim that is scheduled for next month. no cause for is

worry they will be off the table completely, but it does show there is a lot of work to be done behind the scenes. yvonne: what do you make of the change of tone coming from pyongyang? is it political posturing to generate a better deal from the u.s., or is it a shift in pyongyang's intentions? darcie: i definitely think it is the former. if you look at the language north korea is using all along, it is not different. i do not think it is an about-face. as people are making it out to be. yvonne: the president was saying, i do not want to waste a lot of time. delaying this summit ensures both sides could come to the negotiating table. what needs to happen the next three weeks? that is a goode: question. it is a question of sequencing. -- is it better to have

negotiators hammered the details at the middle? a long processis that will be delivering the kinds of results both president trump and kim jong-un and the south koreans will want to be seeing. betty: what if we do not see a summit on june 12? what if it is delayed or canceled? what do you think the consequences are? darcie: a lot depends on which route it is derailed. is delay doest not mean it cannot occur at a later date. it is -- if the rhetoric is elevated to a point it was last year, that is when it gets worrisome. if it is more cautious, we will wait and see. if we can hammer out questions about, what does

denuclearization mean? what are the terms north korea might want to get from the knighted states? then we could -- from the united states? then maybe we could be helpful. we certainly invested a lot of time. south korea invested a lot of time, china, the u.s., it would be a shame to see it all fall apart here at the last stage. seeing all this posturing and meetings back-and-forth, i am curious on the north korean side, how do you grade their negotiating tactics? are they showing themselves to be more crafty than we might have given them credit for? darcie: among diplomatic circles, the north koreans are known as being savvy negotiators. they have definitely been doing their homework this time.

there is the domestic politics in both south korea and the united states. president moon in south korea has worked very hard to make changes with the relationship to north korea. as we have seen right now, president trump is really eager for the deal. the north koreans really latched onto that. there are reports they have been "theng, books on trump, art of the deal." they have been thinking about things to chip away at the united states -- president trump's statements, to get what they want from the united states. on who do you place the blame if the talks fail? pyongyang'srsell negotiation, or is president trump accused of meddling ahead of the talks? darcie: i do not think the blame

should fall on china or the south koreans. they have been doing due diligence to get what they want. a major setback has been misunderstanding of what the goals and the stated objectives are for each of these parties. before,aid denuclearization, having a different meeting, dismantling the nuclear developments -- development facilities, does not necessarily mean denuclearization the way the u.s. hopes. i do not think the blame has to fall on anybody. the messages are being crossed along diplomatic channels. yvonne: long way to go before june 12. darcie, thank you so much. thats over trump and kim,

meeting. subscribers go to dayb on your terminal. ahead, oil trading at its highest since late 2014 on concerns over tightening supply. we take a closer look at what is happening. betty: president trump reconsidering penalties on china as a personal favor to xi jinping. this is bloomberg. ♪ this is bloomberg. ♪

yvonne: we are counting you down to asia's first major market open this morning. futures down 30 points. we see a risk off move holding around 111 this morning. this is "daybreak asia." betty: after that backlash from

some of his supporters, president trump says he is not happy with the result of u.s.-china trade. has more.ays let's start with of the changing of the tune here with zte. what is going on? kathleen: the trade talks the u.s. team goes to china, the chinese team goes to the u.s. alla cuts auto imports, foreign cars into china. beingks like progress is made. president trump says, yes, he is reconsidering those u.s. penalties on telecom giant zte, that shut down the business. violated the iran and north korea sanctions, selling goods to them.

that is what it is about. president trump said, president xi asked me to look at it, it is hurting american companies. now what we may demand is that zte get a new board of directors, we put a big fine on them, up to $1.3 billion. meanwhile, republicans and democrats are pushing back on this. inco rubio tweeted out response to a wall street journal story, suggesting this is in the offing. if this is true, the ministration surrendered to --na on zte, this, steve mnuchin was testifying to the senate appropriations committee. he said the objective has never been to put zte out of business. it is not an offering we are

making to china because they will make concessions on trade. let's listen to what he said. >> i can assure your the national security issues are being addressed. that is of paramount importance to the president. it was merely that president xi asked president trump to look into this, which he has done. mnuchin saysve this important question of national security will be on the table. this is also clearly an important move donald trump is making. it does appear to be part of a step-by-step movement toward better trade relations between the two countries. yvonne: many threads to this trade story. one day we hear we have reached a trade truce or tariff truce, now we find out there are more on the table? kathleen: there is a truce to a certain extent, but there are big things that may go forward, particularly the aluminum-steel

tariffs. part of the trump trade team saying, tariffs are not over, far from it. president trump not set a deadline for up to $150 billion of tariffs on china. the public comment period ending today, may 22. thes it relates to china, steel and aluminum tariffs will remain enforced. they were not part of our discussions. those are not being touched. lunchtime at a press briefing in the oval office with south korean president moon jae-in trump was saying, we are not pleased with the trade talks with china so far, but they are a start. white house officials are blaming warring factions for what appears to be a retreat on trade. maybe we will leave it to wilbur ross, the commerce department

confirming he will be in early june in china to hammer out the details. i do not think anything is set in stone yet, but there is a lot of motion. yvonne: even with north korean-u.s. talks in singapore in jeopardy, what does it mean for trade talks? hays,you, kathleen joining us from new york. a programming note to talk about, a conversation with leader.'s de facto stay tuned. this is bloomberg. ♪ ♪

yvonne: the world's takinglargest miner advantage of a tightening the market for copper and increasing demand. rio tinto told more about plans

to boost production and find foreign markets. >> the copper being produced in exported to china. we are also looking at to export to other countries like japan or south korea. eventually the underground production will make it the biggest underground mine in the world. >> copper price has boosted since 2016. where do you see them heading the next five to 10 years? >> it is very healthy.

when you look at the supply-side, we see not enough investments have been done over the past years. not enough to be able to provide enough copper for the growing demand. we think, like many reserves in the industry, the market for copper will become undersupplied around 2020, 2021. we think the price will increase. >> rio has a strong balance sheet. investors feel confident with m&a. is copper where rio tinto should be looking to make a larger investment? >> we are looking at larger investments to create value for shareholders. in terms of m&a we have a good idea of what would be interesting for us.

there could be an opportunity to buy an asset that would create value for shareholders. yvonne: plenty more to come. this is bloomberg. ♪ rg. ♪

yvonne: 7:30 a.m. wednesday in hong kong. the sun is out. out from a birthday holiday, everyone is back. just minutes away from the region's first major market open. p.m. tuesday7:30 evening in new york. it was a rainy day today. i am betty liu in new york. yvonne: and i am hong kong. this is "daybreak asia." has pouredt trump cold water on rising trade optimism, saying he is not pleased with the way talks are going with china.

the white house strategy, and concerned about harming negotiations with north korean. wilbur ross plans to visit china early next month to continue trade talks. cast doubt on his planned summit with kim jong-un, speaking after talks with south korean leader moon jae-in. he says there is a substantial chance it will not work out. he added, that does not mean a deal will not happen at some point. they are still preparing for singapore on june 12. foreign automakers such as bmw, toyota and ford, are seeing benefits from china's decision to lower tariffs from 25% to 15%, further opening up a market that has been an issue in the u.s.-china trade spat.

they posted the biggest intraday gains in more than a month. nextace to be italy's prime minister is an array about the feasibility of the political by the main party. the five-star movement said it may put its leader luigi di maio back in. 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. yvonne: we are counting down to major market opens in the asia-pacific. let's get the latest with sophie kamaruddin. geopolitics hurt the market sentiment. turkey continues to see more fallout. sophie: it looks like we are staring at a midday hump.

let's see how futures are faring. we anticipate a lower open across the board. not only unsure how worried they should be over trump's pessimism on the meeting with north korea, we do not have much to hang onto today. output from taiwan. nothing major to hang your hat on. front, check out the lira, getting punished. this is after rate concerns about the central bank's independence of the lira. pretty much getting hammered overnight. i want to bring up the kiwi. that is where the 50 day moving average is set to fall below the 200 day line. that signals a steep decline might be beckoning. saying it hasnk significant further room to ease in a conventional way, and that the rates could be lowered into

modest negative territory. yvonne: in terms of tail winds it is -- it is slim pickings today. sophie: some optimism. we are looking at carmakers like toyota, expected to benefit. steelmakers could go along for the ride. i will show you the key metals used in car parts like copper and platinum. copper prices jump to the highest level in over three weeks. platinum did rally 1% in new york. platinum has since given up some of those gains. more of this risk-averse sentiment in the asian session today. betty: thank you so much, checking those markets. facebook ceo mark zuckerberg facing another grilling over the user data scandal.

u.k. lawmakers frustrated by the dodging of questions. targetedescaped advertising -- i asked you six yes or no questions and not a single answer. mr. zuckerberg: i will make sure we follow up and get you answers to those. betty: let's cross over to san francisco to our technology editor sarah frier. an awkward moment for mark zuckerberg. not quite acing that like he did in the u.s. what were the unanswered questions? it preparedok had in such a way where questions were asked for an hour and zuckerberg responded to them in bulk for 26 minutes. you ask questions about content, here is what i think about content. you asked about data, here is

what i think about data. ofdid not get to the heart very specific questions european lawmakers had prepared. especially when it comes to be able tors should opt out of targeted advertising, or whether facebook is a monopoly that should be split up from instagram and whatsapp, for example. these clear and concise questions, zuckerberg was answering them with the general steps. betty: you followed both of these hearings. what were the new takeaways? what did we learn from zuckerberg? was there anything new? sarah: we learned that the faceny is going to potential antitrust scrutiny in europe that we have not seen be a huge topic there in the past. that was a big question from

european lawmakers. these people who were tracked by facebook, even if they were not logged in our have accounts, how facebook will comply with gdpr, if they are tracking everyone? --order to know they are have opted out, you have to scan what they have done on the internet. these are complicated things facebook has not explained. they have tried to make a good-faith effort they are moving forward in these areas. zuckerberg did not say anything today to help us move forward on those questions in a way we have in the past. betty: you mentioned it gdpr. facebook is already facing the impact of these new privacy rules. what is the next threat from this governing body? sarah: the biggest threat is exactly to what extent gdpr is enforced. that is the near term affect.

it is already in law but goes into effect this week. then we will get a ruling on whether facebook is effectively complying. they will face fines for not complying, if that is the case. -- isantitrust issues facebook going to open its books to european lawmakers? will they start scrutinizing of the way they did for google a few years ago? has that era come for facebook? that is one of the lingering questions from today's testimony that lawmakers will follow up on with the company. betty: thank you so much, sarah on the grilling of mark zuckerberg of facebook. let's turn to oil markets. brent and wti sustaining levels last seen 3.5 years ago. both are up 20% this year. rise even higher.

ramy inocencio has a chart. the u.s. sanctions of venezuela is giving support to prices. ramy: definitely giving some support. in my first bloomberg terminal chart you can see where production stands for venezuela in the most recent month of april. that is that 1.55 million barrels. compare that to a year ago. that is almost 2 million barrels. we see that coming off by almost 500,000 barrels. a possiblerecasted decrease further from 1.5 billion barrels to one million barrels. at the same time increasing the price forecast to $73 from its current 70 -- $70. aea director says he is

talking to other oil producing countries, looking to increase production to stave off what is happening here. a little idea he thinks that this will last longer than some people might like. this is one factor supporting the price of oil. another factor, we have to look to the united states and my next bloomberg terminal. look in terms of the baker hughes oil rig count. this has been rising over the past year or so, trying to take advantage of what is happening with the oil price, locking in profits. we have seen over the past two weeks the rig count has paused, 844 rigs that are now active. the reason possibly, prices might be topping out. people are saying, we need to hold back and see if there is a stabilization in the price. looking to the u.s. on

wednesday, you have the latest weekly inventory report. we are expecting that to be a job down of 1.9 million barrels for last week. venezuela as well as u.s. stockpiles giving support to the oil price. betty: data and technical indicators are giving us more insight into oil price trajectory. hedge funds are cutting their long-term provisions? ramy: that is right. let's look at my third bloomberg terminal chart. you are looking at the last five weeks. out 1, in the blue come 2, 3, 4, 5. these have been following the last five consecutive weeks. brent has been rising as well. it is interesting because macro advisors did point out that coming into this year there were a lot of net loans and they are expecting what we are seeing in this pullback from

investors is that they are taking profits. they are telling people you can take your profits now, and if the price falls, you can get in again and try to ride the next wave up if that does indeed happen. those folks are saying, hold on. this is going to come off of the prices we are seeing. flip up the terminal and look at the rsi, this is the relative strength index. the number 70 is what you want to have in your head. that is represented by the red line. the rsi is hitting the 70 level. this does represent overbought, if you are a believer in technical analysis. if you look at the price of brent, that is coming off, pulling back from the $80 a barrel threshold. this is a little of a reason to on as we tryhold to figure out where the prices are.

seem with venezuela and the drawdowns and general global growth, it is more of a demand for oil than it is for any argument otherwise. betty: ramy inocencio on the oil market. u.s.-trade tensions with china dialback, our guest discusses. this is bloomberg. ♪ is bloomberg. ♪

betty: this is "daybreak asia." i am betty liu in new york. duties china has slashed on cars. tom mackenzie joining us from shanghai this morning. we talked about how import restrictions has been a big deal for washington in these trade

talks. what is the significance behind this move? tom:. the chinese would say this is part of a longer-term term plan, but the timing would suggest it is something of a concession to the u.s. when it comes to trade negotiations. we are seeing a reduction in to 15% kicking% and on july 1. policy that has been in place for well over a decade. this cut follows the change in rules around ownership. they will have their own fully owned businesses here in china by 2022. year, end of this electric vehicle makers like tesla will have their own factory. it follows on from that. imports madenowing of all auto sales in

china. about 29 million cars in the chinese market in 2017. it is a relatively small amount, but no doubt it will please the shareholders. companies are likely to be the main beneficiaries of this? it is likely to be the german and japanese automakers. terminal chart that shows the number of imports from those automakers from 2009 to 2017. you will see bmw is number one. 213,000orted about vehicles as of 2017. then you have toyota, 212,000. daimler, 190 8000 vehicles into the chinese market. ford, which to imported just 74,000 vehicles. betweenthe difference

the german automakers in japanese automakers and those in the u.s. it may make less of an impact. 2600.ports just [no audio] build their own factory here and tesla as well is looking for a factory potentially in shanghai. some ofrial impact for these automakers may be slightly less than the headlines suggest. mackenzienk you, tom in shanghai, our china correspondent. for more on trader want to bring in michael hirson. he served three years as the u.s. treasury's chief representative in beijing. is this a step in the right direction?

does it show you we will likely get a deal with china? michael: i think it is too early to say. your correspondent put it well. this is the direction china would have been moving anyway. if we look at what is on the table for the u.s.-china trade deal, it is these measures that are comfortable for beijing. promoting imports is good for leadership and the consumer class. what is difficult is the industrial policies, that were part of a section 301 investigation. we saw the chinese playing skillfully to president trump's desire to have more imports. they have taken the part -- the pressure off of xi to modify these difficult industrial policies. is notdoes that mean it

a positive for u.s. trade talks, that we might be headed toward an actual deal and not a trade war? michael: right now it seems to be working. this comes down to president trump for now. naturally, he will have an affinity for an announcement he is boosting u.s. exports. the technology issues matter less to him. the question is, how much political blowback does he take? brokered this who deal starts to falter in terms of what he gets from beijing, the controversy it creates. you look at the potential these are risks of the trade deal. we could see the pressure come back on whether the u.s. should also be dealing with the section 301 investigation. yvonne: the president is saying he sees it more doubtful the

singapore summit will happen. does that put the trade truce into jeopardy as well? have we established enough goodwill to avoid those tariffs? michael: it does not put it into directed jeopardy yet, but it is a watch point. presidentint is, trump hinted that president xi might be using his influence on north korea, and that might be part of what is changing kim jong-un's position going into the summit. not see any do animosity from president trump to president xi. but if we see the summit fall through, if it does not go well, and president trump concludes that china's influence was not positive, we run the risk of a frustrated president trump, looking at a trade deal many think is a subpar and the risks of this fragile compromise unraveling are increased. yvonne: you mentioned about the

risk to zte. the president proposing easing penalties on the company, changing the penalty to a $1 billion fine. it is gone from a national security issue to a bargaining chip to negotiate a better trade deal. do you think this is the right approach? what message does that send to companies that want to do business in the u.s.? what president trump did is not that unusual in terms of the kinds of trade-offs u.s. leaders have to make. he made the calculation that shutting down zte was not worth it in the broader context of the u.s.-china relationship. the problem was how it was handled. president trump tweeted out and linked it to jobs in china. a company that faces a -- of suspicion in the u.s.,

u.s. national defense and intelligence community. this complicated the politics of it. it is a political football. congress is upset with this deal. that has made it difficult to find a political landing spot for what zte will look like. it fxcm the sphere of these trade talks. yvonne: who do you think has the upper hand, u.s. or china? michael: at this point in time, china has upper hand. one of the issues, by delaying tariffs, we moved negotiations further into the summer. as we go further into the summer we get closer to u.s. midterms. that has to be a concern for president trump. he had something of a window, had he decided to impose tariffs this week, where he could have calibrated the political cost. as we get closer he does not have that wiggle room.

china has more and more leverage as we get closer to elections. itnne: we are going to leave there, michael hirson, appreciate your insight. do not forget, bloomberg users can interactive -- interact with the charts on our program. catch up on key analysis. you can save those charts for future reference. this is bloomberg. ♪

yvonne: a quick check of the latest business flash headlines. the singapore water company forced to provide reorganization, lateraling ballooning debt and last year posted its first annual loss since listing in 2001. the second worst

performer this year, only trailing noble group. $1.6t cap shifted from million to $1.3 million. lender isestors bet finally have a handle on bad loans. sbi reported a shortfall of $1 billion. a similar market reaction was seen when a smaller rival reported worse than expected earnings. sbi says earnings should now improve. yvonne: xiaomi opening a store in paris, and more outlets in italy and spain. u.s.ighs entering the theceo says he thinks about u.s. all the time, but 2018 is all about entering europe. coming up in the next hour of

daybreak asia, we talk more about markets and the geopolitical risks being priced in. market open coming up. this is bloomberg. ♪ this is bloomberg. ♪

♪ kong,: 8:00 a.m. in hong we are in bloomberg's asian headquarters. i'm yvonne man. stories, pacific markets face a lower open after wall street fell. president trump saying the kim summit may not happen. trade relations are back in the headlines. the president is not happy about the way the talks are going with china. betty: from bloomberg's global headquarters, i'm bit of new -- betty liu in new york. ipo astowards $4 billion terry puts himself in the center of tech. the rise of home sharing in china, we meet the public --

company with airbnb. ♪ yvonne: we have seen the fragile markets. the president casting doubt that the summit will happen, it could derail some of the trade talks and optimism on that front. a lot to hang onto, but some ipo news. betty: we are seeing a journal i, this report t saying the company is mulling an ipo, but have not settled on a listing venue. at leasttion would i be $70 billion to $80 billion. highly anticipated along with the other chinese ipos.

a lot of capital coming to the market. yvonne: it will certainly be the case, especially when we look at hong kong and china, they are fighting for the ipo. we will see where the listing venue is going to be. let's get to the first word news with paul allen. approved aess has sweeping overhaul of u.s. bank regulations saying the legislation is the most biggest change since the dodd-frank in 2010. it gives relief from postcrisis rules criticized as burdensome and costly by raising the billion 250om 50 billion in assets. boris johnson said theresa may -- sent theresa may a list of brexit demand saying she must get on it as soon as possible. he said she is responsible for

ensuring the u.k. takes back control of the tariff regime. tied told keep the u.k. eu trade rules for years. is theprime minister custodian of the plan, which is to come out of the market and get on with that with all convenient speed. that is what we are going to do. zuckerbergook's mark made lawmakers irritated by what he avoided saying. he repeated what he is told every audience recently, that facebook didn't take an opera spots ability for use of data, fake, news, and foreign interference and apologized. manytter to wait questions, including whether facebook is a monopoly that should be broken up. today, wecommit to have never and will not make decisions on what content is allowed or how we do ranking on

the basis of political orientation. paul: venezuela has expelled the top two u.s. diplomats in the country after washington imposed new sanctions following the weekend's disputed election. the president declared top leaves, saying they must within 48 hours spread venezuela has long accused the u.s. of trying to undermine its socialist regime. global news 24 hours a day powered by over 2700 journalists and analysts in over 120 countries. i'm paul allen, this is bloomberg. betty: let's get you to your market open. about threethe red, and hong kong coming back online. let's get the latest with sophie. sophie: the session is not looking favorable as geopolitics loom.

asia on the back foot, futures pointing lower. outweighing positive catalysts like china's plan to cut car tariffs. the yen is listed at 110 577 against the greenback, recovering further than the low it hit on monday. change thed can direction for the dollar-yen, one away is possible if rate hike expectations are east. i want to highlight the turkish lira, it is getting hammered after concerns over the central bank's independence. it fell to a fresh record low against the dollar and has eased just a touch. is on the radar. 50 day moving average is set below the 200 day line, keeping further losses. this after it was said there was

significant room for further easing, but it is clawing back some of its earlier decline as it is not projecting a significant cut at the official cash rate. i want to take a look at oil prices, which are holding gains. you have new york crude above 72, and brent above 79. some traders are cautious about how durable the rally will be. opec may reportedly raise oil output as soon as june, given concerns of venezuela production. betty: sophie kamaruddin in isre, president trump cashed out on whether his summit with kim jong-un will go ahead. there is a substantial chance it won't work out. the meeting scheduled on june 12 in singapore, whether or not it happens, you will know pretty soon. we are talking right now.

betty: let's bring in our senior international editor jodie snyder with more. it looks like it may happen, it may not. what is the likelihood that it will happen? >> this seems to be tensing by the hour. the south koreans coming over on the plane to meet with president trump have said there is a 99.9% chance it does take effect. now, after meeting with president moon, president trump said he has some significant doubts about whether this will occur. it looks like the u.s. is working ahead, they are still planning on this, arrangements are still being made. at the same time, they seem to have real doubt. president trump is saying we want to go ahead, but we will be fined if it doesn't. there seems to be some room in case. betty: what do you suppose of the dealbreaker? is it the fact that these

military exercises, the libya model the john bolton has proposed? >> those are part of it, but it is what goes into disarmament. to the americans, they say it is clear, it has to be complete, undone,le, it can't be a real nuclear disarmament. for the north koreans, it seems to be more of a step-by-step approach. that's what the north korean leader favors, and also that the americans start removing some of their nuclear -- their military might from the region and south korea. there seems to be different kinds of definitions of what that would look like. of the what started some back and forth about maybe there won't be a summit because kim jong-un and others in his administration found those words

repugnant and john bolton -- he had gotten a lot of criticism from that. it really does seem to be over the whole issue of what does that look like. betty: let's show the pictures of these commemorative goings. just showing viewers what we are talking about. what is the drama? is a how the leaders have it portrayed? >> it does say supreme leader kim on the coin. saying isthe u.s. are that what we want to portray? it is also a little tacky. here we are going to maybe have a summit, shouldn't we be talking about the bigger issues? instead we have coins. what if this doesn't happen? yvonne: bad timing, i guess. >> they probably have gotten a little bit ahead of themselves. it is proving to be a good distraction.

yvonne: i was reading some reports saying they added more chin to kim jong-un. thank you for wrapping it up for us. jodi schneider joining us in hong kong. the future of the summit leads today's edition of daybreak. you can get a round up of today's top stories. go to the chart on your terminal, it is also available on your mobile in the bloomberg anywhere app. president trump's administration is reconsidering u.s. penalties on how to shut down telecoms makers dte as a personal favor to china's president xi jinping. discord is rising on how to navigate trade negotiations with beijing. tom mackenzie is joining us from shanghai for more. why is president trump coming to their rescue now? tom: he has called on this special relationship with

president xi, saying he wants to do it as a favor to the president. he also said there would be american companies that would be impacted by the decision to ban zte from buying components from u.s. tech firms for seven years as a result of these violations around sanctions on north korea and iran. companies like how come, who supply chips -- qualcomm, who supply chips. he seems to be playing the friends card, but also says the u.s. will not benefit if the ban continues over that period. he is asking the congress department review the punishment and penalties for it. president trump suggested there could be a fine of up to 1.3 billion u.s. dollars, there could be major changes at the board of the company. we will have to see how it plays out. steve mnuchin said they didn't want to, in washington, kill off

the company. it has frozen off its operations until the operations are resolved. that in terms of demands from china to loosen restrictions of exports on technology to the u.s. from china, that was not on the table for negotiation. the democrats and republicans who were concerned by the andntial u turn around zte what it means for the focus on technology and china's role in trying to gain more of the technological expertise from the u.s., they see those restrictions will not be loosened, that is not up to debate. yvonne: does the tariff still linger? tom: apparently it does. we heard from the chief executive advisor to the president saying they remain on the table, they haven't been taken off of the table. what we are hearing is there is

discord between the likes of peter navarro, he takes a hard line on china and, the likes of the directory -- treasury sector, steve mnuchin. withinhat is resolved the team of the white house, there will be all of this uncertainty. there is no deadline around when the u.s. has to impose the friend tariffs. -- the threatened tariffs. they could be up to $150 billion worth of chinese goods. those are being suspended on the leading up tolks the weekend as china committed to increase its imports of agricultural products and energy. we know the commerce secretary is going to be coming here in early june to try to hammer out some of the details. it seems like the debate is how to approach these negotiations, it is ongoing. it will be harder to know exactly what the stance is from the trump administration. they seem unanimous in saying

that tariffs remain in the back pocket. betty: tom mackenzie, our china correspondent in shanghai on tariffs. still ahead, and it was of interview with airbnb's biggest .ompetitor in china the cfo is joining us at the 2010 conference later in the show. yvonne: up next, we speak with ocbc live in singapore about how to navigate the return of your political risk. this is bloomberg. ♪

♪ this is "daybreak asia, i'm betty liu in new york. yvonne: i'm yvonne man in hong kong. when it comes to equities, raleigh hitting lower today.

from theea coming back holiday within about a 10th of 1%. australia seems to be the outlier. dollar strength seems to be trickling, but we are on the back foot. hong kong also coming in, not a good open, according to futures this morning. ocbc bank wealth manager and senior investment strategist joins us. it seems like geopolitical risk is back into the markets. president trump saying it may shouldpen, how worried we be about these types of headlines, or is it all noise? >> i think it is a lot of noise. if you look at history, geopolitics repels markets in the short-term. they may not have a big impact in the medium to long-term, as long as it doesn't have an economic and earnings feedback. in the case of north korea, we

have had so much rhetoric and few yearsthe last from the north koreans, the markets have gotten used to it. the situation is much better than it was one year ago, when president trump and kim were exchanging bouts. we have a better situation now. there is a good likelihood that the summit could still go on. it is not as bad. the markets are feeling nervous because we had a good run. this is an excuse for the markets to take a breather. yvonne: when you take a look at what an impact earnings, is possibly the trade front. we heard about china agreeing to import more u.s. goods. does asia potentially stem to lose out for this? does it mean more u.s. competition when it comes to certain companies, when it comes to collateral damage, with that impact earnings -- would that impact earnings? >> to some extent, it may. it introduces more competition.

chinese companies would probably feel more of the heat. more important is as long as there is no trade war, there is some kind of agreement between the u.s. and china, i'm not convinced about the truce. it is not an agreement. we not sure how much is motivated by the meeting on june 12 in singapore. we are not sure of donald trump is buying time to win china's favor. we have seen this happen before. i think more than just about competition, on the macro front, whether there is a trade war. if that happens, it is bad news for asia. been a big driver of growth in asia. yvonne: what do you think is the biggest worry among markets? is it more about the inflation concern? we saw southeast asian countries, a little pick up when

it comes to prices, also a pickup in yields in the bond market, is that what we should be focusing on? >> without a doubt. the biggest risk is about interest rates, perhaps inflation. bonds have gone past -- bond yields have gone past the 3% level. the fed minutes will give you a better clue of what the federal reserve is thinking about. u.s.utlook for the economy, the risk of inflation overshoot, they may says and -- they may say something, it is a key to the markets had. which inflation will pick up going forward. that is the biggest risk. in the last eight years, global equities and bonds have done well because of easy money. clearly, that will change in the next five years, central banks are going to increase interest rates.

yvonne: speaking about them on investment strategist -- speaking about bond markets, an investment strategist did an analysis. bond yields and smp performance -- s&p 500 index performance. the 10 year yield at 3% meant nothing for the s&p. it continues to rise in the face of a 3% yield. it wasn't until the yields went up to 6% when we saw marks decline. a little bit of interest, certainly an interesting stat. do you buy that? we are safe year until we get something like 6% yields? >> i cannot buy that. i am not sure 6% is the level we are looking at. like a 4% that will seem bit of a stretch.

it., the markets can absorb the reason why yields are going up, or interest rates are going up, is because the economy is getting better. the job market is getting better, wages are likely to pick up, that's the reason interest rates are going up. that is good news. skyrocket, and it goes past the 5% level, that is a different story. it will take shine out of equity, bond markets, we do not see that happening yet. not with yields in the u.k., japan, europe as low as they are right now. europe,peaking about you say europe is one of your stronger conviction calls. why is that? of theou put a chart msci euro index against other regions over the last few years,

what you will see is a big underperformance by euro relative to other regions. europe has room to play catch-up, they have been bogged down by geopolitical concerned, that concerns, but things have improved. the pmi numbers in europe are clearly above 50, economic growth is kicking back. the populace and the right-wing am a left-wing movements are not getting as much traction. the focus is coming back to economy, earnings, i think europe can offer good outside potential -- upside potential because it has been nonperforming -- underperforming. yvonne: ocbc bank welfare manager and senior investment strategist on the market. speaking about the msci, as msci prepares to add more than 200 china shares to its indexes, bloomberg has an exclusive interview with the chairman and

ceo, henry fernandez. that is an "daybreak asia," tomorrow at 7:30 a.m. hong kong time, you don't want to miss this interview. this is bloomberg. ♪

♪ this is "daybreak asia, i'm yvonne man in hong kong. betty: i'm betty liu in new york. mcdonald's is being sued by two u.s. advocacy groups over claims of sexual harassment. it is on behalf of 10 women who worked at the chain in nine cities across the country, including a 15-year-old from st. louis. they allege inappropriate touching and lewd comments by supervisors. mcdonald's holds its shareholder meeting on thursday. yvonne: sent us has rejected what is said to be a final offer from harbor energy, saying it is too low and risky. the oil and gas producer says an

$11 billion bid doesn't reflect the full value of the company and is overly complex. harbor is disappointed with the decision, and criticized them for being insufficiently engaged on valuation. betty: a smart phone maker opening a store in paris and more outlets in plants, -- france, spain, and italy. thinksior vice president about america all the time. he has -- it has an ipo and aims to consolidate its position in asia while expanding elsewhere. ahead, ready to let go in the stake in the world's second largest copper mine, the price tag $3.5 billion. we take a look at the markets fallout and get to david stringer for more, coming up after this break. plenty coming up, this is bloomberg. ♪ mom you called?

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it's a drone! 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. ♪ it is a 30 a.m. in singapore, we are have our -- it is a 30 a.m. in singapore, we are hour away from the market open. geopolitical risks being priced into the market with president trump saying the singapore some it may not happen three weeks from now. i'm yvonne man in hong kong. betty: looks the same in new york. i'm betty liu, you're watching daybreak asia. let's get to the first word news with paul allen. calledresident trump has water on rising trade optimism, saying he is not pleased with the wake talks are going -- the way talks are going. billions of dollars of tariffs

which reports white house discord over strategy and concern about harming potential negotiations with north korea. wilbur ross plans to visit china next month to continue trade talks. cast out his also plan with kim jong-un, speaking after talks with moon jae-in. he says there is a chance it won't work out. however, the president added the meeting -- it doesn't mean the meeting won't happen at some point. the white house is not a knowledge uncertainty, and is still prepared for the talks. -- the white house acknowledges uncertainty, it is to prepare for the talks. mark carney the treasury committee that compared with forecasts made before the historic referendum, more than 1% below expectations. expected global growth, that makes the economy about 2% were soft.

the american civil liberties union has rates concerns about amazon's facial recognition system being used by law enforcement agencies. the recognition software uses artificial intelligence to identify people in photos and videos, enabling individuals to be tracked. amazon says law enforcement is one application of the technology, which can also find that these are lost children -- of that these are lost children. space stations taking the 10th mission so far this year launching satellites. the rocket took off from them berg air base carrying five satellites. iridium shares soared more than 8% for the biggest intraday gain in seven months. it will monitor changes in the earth's ice sheets. global news 24 hours a day powered by over 2700 journalists and analysts in over 120 countries. i'm paul allen, this is bloomberg. ♪ let's see how the asian markets are shaping up.

let's get to sophie with the latest. sophie: it is a mixed bag, asia stocks fluctuating. aussie shares are shaking some of the earlier delays, led by telcos and material stocks. japanese shares slipping as the yen holds onto gains. the cost is swinging to slight gains while the korean won is losing ground .2%. as we wait on fed many minutes do, let's look at the dollar, holding steady after a five-week climb. that is the best run for the greenback. the 60 day correlation is seen between the two assets as the most positive since january 2017. this happened after 2018 indicated an inverse growth relationship. let's take a look at the chart. some traders reckon this

stronger correlation could hurt the rally, as there is less room to price rate hikes. a lifeline could come this week with heavy treasury issuance scheduled. let's look at equity movers in south korea, playing catch-up. stocks moving after the scrapped spinoff plans which as to uncertainty over the group's restructuring. --di motors is climbing hyundai motors is climbing, glove us lost as much as 5%. a last look at korean stocks that link to enter korean businesses falling on trump's comments, although the losses have eased. 16%,rain carmaker lost cement -- ssangyong lost some, but they are calling the losses. betty: some of those movers. thetinto ready to accept 3.5 billion dollars deal with indonesia for its interest in the giant grass berg copper and

gold mine. mining reporter jb -- david stringer joins us. freeform shares surging as it rose in london, what is the reaction in our region? we are seeing it advance in trading at sydney. trading close to seven-year high that it touched earlier in may. we see the response, positive signals for investors. they have been divesting assets. billion, iter $3.5 is the world's number two copper mine. sale that will raise the possibility of further returns to shareholders then i think investors are responding positively to that prospect. yvonne: what is indonesia's goal for grass berg?

why is it asking for an miners to reduce their stake? process, been a, gated particularly -- it has been a complicated process, particularly on grass berg. what indonesia is seeking to do is boost local control, local oversight of its own resources. plan.y it boils down to having majority local ownership of the key assets. ,alks with freeport currently the operator and owner of the asset, also between rio tinto and a local state owned company. they have been dragging on for well more than a year. still plenty to thrash out, not least details between freeport and indonesia. this deal could fall over, but things are advancing nicely. boarding --roup

what we are reporting is the terms seem to be settled. betty: how does this fit into rio's broader strategy? are we expecting more possible exits in real's operation -- rio's operation? >> we are. it has accelerated. the program of getting out of assets that are either small or unwanted, we see them sell a couple of cooperations through this year. they have also been exiting from the smaller aluminum assets, that could continue. there are plenty of things left that they could look to sell for the remainder of this year. if they do get $3.5 billion or the stake in grasberg, that will take the total proceeds to more than $8 billion. ourne: david stringer, asian metals and mining reporter joining us from melbourne. a unit of apple cider --

supplier is set to raise $4 billion in china. china's biggest debut since the 2015 market crashed. foxconn industrial internet will list in shanghai and could be valued at about $43 billion. let's bring in debbie will, -- let's bring in debbie wu. how does this ideal fit into the wider plan? he is looking to upgrade the company's manufacturing technology and try latest technologies, including the fifth generation of wireless technologies. contract in the world. foxconn relies a lot on apple for its business.

gets more than 50% of its revenue from apple. it will be interesting to see what the ipo does to move into technology. they have also tried to gain more revenue other than from apple businesses. yvonne: less dependence on apple. what does this flotation mean for the mainland authorities? have been trying to track tech companies. it hasn't been quite successful in the past. alibaba has come to new york. what foxconn -- they can hopefully see this as a success of their push to the local tech companies to raise funds. yvonne: power for a cross street relationships, power the playing into this?

-- how are they playing into this? >> china and taiwan are seeing a bit of trade tensions due to the taiwanese governments out for and defendant stance. ipo fear that foxconn's could lower funds away from taiwan. chinese authority is not blocking this move. most people still see it as a commercial move. betty: debbie will in taipei, our bloomberg asian tech. , and exquisite interview with the cfo of china's airbnb. this is bloomberg. ♪

♪ find all of our

charts on g tv . this is our library for bloomberg says fibers -- subscribers. you can browse featured, what we have been going through, and key analysis. you can save the charts for future reference. i'm is "daybreak asia," yvonne man in hong kong. betty: i'm betty liu in a new york. the event brings together some of a is emerging technology players. let's go to where chief asia our correspondent is standing by. we are talking competition with airbnb and china. is the main competitor of airbnb, much larger in china. we have the cfo with us at the goldman sachs tech net conference. executivesr and don't like being compared to

airbnb because you are different. how so? >> they are a well-respected competitor in china, but we think we are the number one player in this industry in china. we are not just a pure online company, we have off-line operations. we have a local team in most cities in china to help local house owners to run their business. that is the big difference between us and airbnb in china. >> tell us how the market is different. maybe some of the foreign competitors would have more challenges because of the police registration process and some of the regulations. how does your local knowledge give you benefit? in china to thing do business is how to deal with the relationship with a permit. great, there is no regulations from the government for this industry.

there is no black and white what you can and cannot do. in that case, we need to try to do everything before the government says we cannot do that. >> are you getting indications that the government is looking at ways to regulate? the one thing i have learned from the chinese government is that in new innovations, they let the industry grow and see to it is going then decide do regulation. what signals are you getting that the government may clamp down or allow it to prosper? buthey allow us to grow, now we talked to the national police department, they are trying to set regulations and get help from us to help them select the hotel you need to check in, show your id. scan your face -- >> register with police? all foreigners have to do that.

homeowners -- shoulder.his on our >> how many listings do you have no? the last number -- how many listings do you have now? the last number i read was about 6000. in china and abroad? >> total is about one million. >> that puts you significantly ahead of the airbnb. -- for china. >> of course. offow are you going to fend these other home sharing companies? inwe are the biggest one china. we also have a major shareholder. we have a lot of support from them.

we have all this help from our shareholders. of these competitors in the market. >> as a main investor, how do you leverage that partnership to go abroad and get the chinese traveling abroad in greater numbers? aret of millennials traveling independently. how does your partnership with seatrip branch out your network? >> they are one of our biggest shareholders. abp,an look at the ctrip we have run the main entrance. we have a button called the home state. from them.rt most of the tourists, if they travel in china or go abroad, the book hotels.

some of them will hit the button, lending tujia's apb website. >> japan is one of your key overseas targets. how many listings are you targeting this year in japan? >> we are talking about 100,000. >> 10,000 a couple of years ago? how many now? >> it is about 30,000 now. >> tripling this year, how about in the u.s.? >> we are not that big. >> is it a main target? >> not so far. our main target is mostly in asia. thailand, japan, korea, hong , and othern southeast asian countries. >> china is your main market. there are a lot of empty houses in china, but there are also

crackdowns on property curbs, but there are also proposals for national holding tax, property tax, what would that do to drive owners to get occupants in their homes? >> that is a very good topic. a real estate company in china to see how we can help them. they buy a lot of houses in the markets that they cannot sell because of the regulations. to release the house on our platform and generate income cash before they have the permission to sell them to the market. >> you are a finance guy, how profitable? when will you be profitable? >> unfortunately, we are still losing money this year, but we growth year great over year in 2017. ,e maintained the growth rate

more than 300% gross. as thegmb side, as far revenue side. >> do you have a target when you turn profitable? when you move out of the hypergrowth phase into sustainability? >> we can maintain that growth rate in the next couple of years, hopefully we can break even in the end of next year. 2019, maybe in the fourth quarter. >> are you thinking exit strategy, whether it is an ipo, or what? >> ipo will be the first choice. >> how many years down the road? 2019 arek may be late beginning of 2020. >> thank you so much for your time, cfo of tujia. for lack of a better comparison,

the airbnb of china. back to you. yvonne: great interview, that was warren wang speaking with stephen engle. we will be back in "bloomberg markets," with more of the technique conference. talking about a rally inspired electric supercar, that's at 9:30 a.m. hong kong time this morning. this is bloomberg. ♪

♪ this is "daybreak asia," i'm yvonne man in hong kong. betty: i'm betty liu in a new york. apple supplier holding high position, aiming to raise at least $4 billion in the largest mainland china ipo since the market crashed. foxconn industrial internet will offer almost 2 billion shares in shanghai, valuing the company at about $43 billion. that will place the hon hai boss closer to check that he moves away from assembling phones. betty: the hong kong economic times says an ideal is being considered and could see a valuation of $70 billion. the started -- they started consultations in april and worked with the investment banks on shareholder structure. a good subscription result could

be the date brought forward. betty: singapore water treatment company suspended shares and started a court supervised reorganization. it is battling ballooning debt and posted its first annual losses since 2001. second-worst performer this year, 40% decline is hyflux. market caps on from 1.6 billion u.s. dollars in late 2010 to 123 demand -- $123 million now. yvonne: six week i despite a record loss as investors shares jumped as spi reported a shortfall of $1 billion as well as the doubling in provision for that soured debt. after reaction was seen this minute might die smaller rival reported worse than expected earnings. earnings should now improve. a look at what's coming up on the next two hours, let's bring in a look ahead.

>> there is a lot to be getting onto. what we have is a bit flux. that was still holding on one. yvonne: we have to figure out what is happening in singapore. we are being joined by an economist to look at the dimensions. the moving parts, as it were. we are coming up with a record revenue numbers, profits, but are they sustainable? were they doing about fuel hedging with current oil prices were they are? doinge they going to be when we see the next quarter. whether guidance is like, that's what we will look at. back to the goldman sachs even taking place joining the mobilities director to find a way is going on in that space. yvonne: a lot happening.

thank you so much. before we hand over to you and "bloomberg markets: asia," let's look at how the markets are trading. we have japan's nikkei trending lower, this is after the losses we saw in the u.s., as well. some concerns about the u.s.-north korean summit. is that going to happen. backn cost be index coming online after the buddha's birthday holiday. up about 4/10 of 1% and the s&p a six 200 up come -- asx 200 is up. yvonne: looking better when it comes to what we are seeing in the asian session. here is how we are faring when it comes to singapore, taiwan, and malaysia. it seems to be a mixed picture. futures pointing lower by a third of 1% for sti. trades see how hon hai after we learned about this ipo happening in shanghai. also when it comes to malaysia, a bit of a downside.

we drift lower when it comes to asian stocks. geopolitical risk being priced, given the fact that we are still certain -- uncertain whether this singapore meeting will happen. a lot on that, also just on the geopolitics and the trade front. that is it from us on "daybreak asia," our markets coverage continues next. betty: stand by for "bloomberg markets," this is bloomberg. ♪

rishaad: asia-pacific markets drifting. we still have more geopolitical concerns. president trump sang the north korea summit a not happen. trade relations in the headlines, the president saying he is not happy with the way china talks is going, but china offering concessions. in hong kong, i am rishaad salamat. haidi: i am haidi lun. air asia sees revenue and passenger numbers on the rise. we will be joined by the ceo. this is "bloomberg markets: asia." ♪