>> this is bloomberg daybreak: europe and these are today's stories. north korea says it is open to talks at any time after the u.s. canceled a planned summit. koreaent trump and north left the door open to future meetings. chooses to jong-un engage in constructive dialogue and actions, i'm waiting. >> risk reassessment in asia. yen breaks a three day streak of games. -- gains. >> stay with us for our panel

.ith vladimir putin that is live from st. petersburg at midday. ♪ >> good morning everybody. and it hasy morning just gone 6:00 here in london. we are going to talk strings through -- things through on the risk radar. trump and north korea are not going to meet bubbles trump and north korea leaving the door open to the potential to reinstate that meeting. pyongyang saying they are ready to meet at any time. the yen was higher yesterday but

now it is down. gold was higher but out is down. we see retreat inequities as well. there is some risk coming through. the dollar against the yen, you can see the yen weakness. the dollar stronger by a quarter of 1%. today atus on russia the st. petersburg economic forum. all of those gathered there are close to the oil story. the russian oil minister reiterating that opec and partners will discuss phasing out the so -- supply curves. >> we have to mention emerging markets. number of pundits coming out and saying that the pain for e.m. is not over. what sort of contagion are we seeing? this chart is suggesting not much of the limit. this is normalize from the start

of the year. of april, wenning have seen them lose around the fifth of their value. the emerging markets currency index has only lost 3%. disparity is even bigger if go to the start of the year. why are investors not seeing the issues in argentina and turkey as spreading through the rest? they see them as more idiosyncratic and localized. inflation in the em is at the lowest since 1990. the growth picture is not looking too bad. suggestion that we are not seeing this contagion -- we have seen a lot of accents -- ethics volatility. >> let's talk about more what is coming on in the program. guests inas a trio of st. petersburg. that is the st. petersburg international economic forum.

we are talking to the russian direct investment fund shortly. what will he have to say about vladimir putin's ambition to drive sustained breakthrough in russia? we will have an exclusive interview with christine lagarde of the imf. what will she have to say about the geopolitics in the twist and turns? that is not where the conversation ends in terms of these big headline grabbing names. >> as li na. also coming back, the fed chairman will be speaking along with the bank of england governor and the bank of international settlements general manager. moderated by our head of economics. watch it live on bloomberg tv, radio, and on live go. let's get to bloomberg first word news.

reporter: reporter: thank you -- reporter: thank you. north korea was surprised by donald trump's decision to cancel a summit in singapore. the country remains willing to meet with the u.s. at any time. pyongyang vowed to continue to pursue peace and signaled it would give washington more time we consider talks. -- to reconsider talks. china's official news agency reported that officials book by phone today about plans to negotiate on economic and trade issues during the visit. union has dismissed many of the uk's plans for their post-brexit relationship as little short of fantasy. according to an eu official, three days it of talks wrapped

up with little headway on the most different issues, how to prevent a hard irish border. the u.k. has not come to grips with all the steps needed to avoid frontier ship from the isle of ireland. it has not formally pitched its plan. you can find more stories on the bloomberg website. >> we are in track for a weekly loss. this uncertainty about the summit is sending shockwaves through the stocks in asia. you have seen the cost be off the lows of the day and south korea. it is hong kong that is one of the worst performers there, down by a quarter of 1%. gm's in asia doing quite well today. toyota is down another 1.4%.

samsung hit with a fine from a u.s. court over patent infringement with apple. they are doing quite well in late trade. lenovo, another stop we are watching. analysts remain cautious on the restructuring. they expect topline growth with their latest numbers. >> thank you very much. we are live at the st. petersburg international forum. we are with the ceo of russia's sovereign wealth bank. it is a packed day here at st. petersburg economic forum. we are gearing up for that panel with a star-studded lineup of guests. i'm glad to be joined by the russian director, thank you so much for joining bloomberg.

i know you can from goldman sachs. they say the long listing of sanctions can be relatable to oil and how much it will hit investment. you agree with this? guest: i disagree. we have good russian growth. we have $14 trillion of assets under management with president putin. we invest actively with our partners. we invested $60 billion over the last several years. lots of money going into infrastructure. we have partnerships with middle eastern and asian banks. lots of people continue to invest in russia and the economy is doing great. and large part because of the oil backed by saudi arabia. reporter: that is one of the bright spots of the oil price being higher. how are you coping with the impact of sanctions? guest: frankly, sanctions may have 20% of the total impact.

the other impact was a decline in oil prices couple of years ago. with oil price being up, sanctions do not have that much of an effect. the stock market is back up. pretty much to the level it was before. reporter: without direct impact, business change the framework or mentality of the climate of how people feel about investing in russia? guest: of course. it is better russia and europe in our partners. we met with lots of german executives who are suffering because the revenue is declining and they cannot work too much with russia. they are still finding lots of partners in asia in the middle east. in theour investments private equity investment in russia come from the middle east and asia. reporter: a lot of your partners and investors are other sovereign funds. why not present investing? sovereign wealth funds

and manage large funds of money. billion.bia last $10 to have lots of capital that we can the point jointly and have joint expertise and projects with investors and friends. a goal of yours with to make the economy less dependent on oil. have you been able to move the needle on this? infrastructure, 25% of technology. we are moving in that direction, maybe not fast enough. the president is focused on infrastructure spending. when you wake up in the morning, what is the most important indicator of the russian economy? guest: gross is important.

we are looking at growth by sectors. reporter: is it the ruble? the oil price? guest: the oil price is important. day, inflationhe and interest rates. we are solid right now. we believe in the foundations of a macroeconomy being solid. it is going to be successful because russia has strong macroeconomic fundamentals. reporter: do you think there is a lack of trust towards russia given the current climate? guest: i think there was lack of trust and understanding. we were discussing how we need to reengage with many countries. president macron is here. discuss russia-japan

investments. russia has its view and people who understand this are much more successful. it is not surprising that president clinton and president macron spoke for several hours. putin andnt president macron spoke for several hours. we invest jointly with china a lot. france is a great connection to europe. very important. macron spoke a lot about the historic connection of france and russia before. all of those are very important and we will be working with all of those. we want russia to be really important partners to all of those countries.

>> thank you so much for joining bloomberg here at the think petersburg international forum. >> thank you very much. she is joining us from st. petersburg. lenny coming up on the program. all of the big leaders talking to demetrius and appearing on bloomberg. we have lots coming up. coverage ofloomberg the st. petersburg international economic forum. can russia's president turn his economy around? >> watch that panel live on bloomberg tv, radio, this is bloomberg. ♪

>> it is 6:16 haran london. 1:16 in singapore.

we saw similar thing happen in the u.s. yesterday after the initial selloff but -- following developments after the -- about the trump summit. reporter: fl is yesterday's departure of the ceo and most of the board as the russian aluminum giant tries to play -- get washington to rise -- rid of sanctions. has one of fine from samsung electronics in the final throes of the companies u.s. court struggle over smartphone technology. sought $11 billion -- billion.

sungsome -- sam some -- sam argues it should only play $83,000. says a series of miscues that by alexa resulted in a chat being recorded and set to one of their acquaintances without their knowledge. the company responded to a local saying, unplug your alexa devices. the couple used amazon's voice-activated devices throughout their home to control heat, light, and security. we careful of alexa. that is your bloomberg business flash. >> it seems we are never quite alone. north korea has said it was surprised by president trump's decision to cancel the june 12 summit. he cited tremendous anger and hope in -- open hostility and

results -- in recent statements from pyongyang. joining us now, bloomberg's editor. rewind slightly for us. we have heard rhetoric on both sides. what exactly happens for the summit to be cancel? angry about the comment made by a north korean , she basicallyid called mike pence, the vice president of the united states, a dumb person. something like that. that made a lot of people in the white house angry. it was probably very hard for him to go into negotiations with a country that calls your number two a stupid person. tension had been

building well before then with john bolton suggesting what he called a libya model for north korea. the image of libya is not positive in north korea. they immediately think of the image of qaddafi being manhandled and killed a couple of years after he give up nuclear arms. there is a lot of gulf of expectations here. hope for thek to summit to happen, what can we expect -- there is still hope for the summit to happen, what can we expect? guest: what i found interesting in the north korean statement was that, they were saying that they actually had great hopes for what the white house called the trump model. the north korean diplomat was saying that they were internally having respect and admiration for trump.

written for the cancellation of before the-- right cancellation of the summit. i think there is room. in the statement released by the white house, trump was trying to believe -- be as late as possible. some people see this as a bump. trump calls himself a dealmaker. a very skilled dealmaker. canceling the cancellation of the summit might be something down the line. we don't know for sure. roomnk there is a lot of for further development in this case. >> absolutely. thank you so much for joining us. co-cio of now is the lacing greg. one of the missing links we did not address their was what role china might have had to play in all of this. let me take you to a chart of the market reaction in the u.s.. but then stocks

recuperated a lot of their losses. it is a muted market reaction. is there such a thing as a nuclear war risk premium? is it the trade risk premium? --st: our view is that trump if you look at the market dynamic, we believe that we have seen a lot of noise. if you focus on the facts, mark's love to get work up -- markets love to get worked up when the geopolitical hits. what is actually driving them as economic data and confidence in global growth. look at the fact that china is doing well. there is no talk about a housing disaster over there. europe, people were saying that inflation was never possible. here you have european gdp in line with u.s. gdp. >> that is a long-term view.

you look through all of these twists and turns, say that trump is uninvestable. it is is achieved on the korean chart shows- this certain countries that have been benefiting from the summit. these were companies that had been on the ride recently. there was clear as an end -- evidence of them falling yesterday. do you invest around this kind of thing in asia and north korea? do these keys dividends mean anything? guest: it is interesting that you asked that. if you look at the combination of the trade war debate, the north korea situation, one of the countries that has the most to lose is japan. combine the potential gdp loss of the trade worth with hada and north korea, japan much loss. if you look at what was done,

this tremendous structural change happening over the course of the past three years. 23% growth in the fiscal year. you have buybacks and immigrant -- in dividends. you have seen a tremendous amount of structural changes. is the winner assuming that these exterior factors do not derail the growth trajectory. we are shell is. -- sellers. >> you buy the dollar? guest: we have been dollar bulls for some time. maybe we will take a breather. it depends on if we see followthrough from the fed regarding interest rate hikes. obviously there is a geopolitical link. people by the yen and times of

heightened prices. currenciessafe haven have been disorder. -- in disorder. the yen benefits from that. a response like the equity market. >> the next area that we need to look to in terms of trade tension, some people are saying, if it turns out that china had more of a role in the breakdown of these communications then we think right now, there might be a question of where those u.s. try to -- china trade tension start to rise up. do you see that is a risk? guest: absolutely. china is in china because is germany's biggest trade partner. theirhas snubbed both of trading partners. it would be legible for germany and china to try to team up to keep those bridges and walls

alive. >> this is an index that shows the yen undervalued against the dollar. you have other ways of looking at this? guest: i don't need big macs. however, if you look at the isamic and the fact that abe inflation tong zero, that is part of this narrative. >> do you see equities at risk from other things? guest: we are shrugging off what happened in turkey over the course of the past few days. japanese equities are known as the whipping boys of asian markets overnight when there is risk up. >> thank you very much.

he will stay with us on the program. we are back up to st. petersburg and the st. petersberg international economic forum. this is bloomberg. ♪

>> 6:30 a.m. in london. 2:30 in tokyo. north korea says it still wants to meet the u.s. it is the second day of the st. petersberg international economic forum, let's turn to russia and our editor-in-chief joined by a guess. good morning. -- guest. good morning. reporter: i'm here with madame lagarde of the irs. -- ins. it is a very busy time for you at the moment. turkey, argentina, which are you most read about the moment? guest: we are involved in a different way because argentina

has asked the imf to be involved in the restructuring and reforms , the plans they have to the country. we have been working with the team at the finance ministry level in order to design with them what will settle the situation and stabilize even restore the market. that is our involvement with argentina. that is progressing well. we are moving ahead. inwill do the best we can order to expeditiously and theciently change perception about argentina and the perception that people have about our role. i am very focused on that relationship.

turkey is in a different phase. they are under pressure from the the lira has appreciated significantly over the course of the past two months. nows particularly the case because what is perceived of inconsistency from political leaders. reporter: do you mean -- guest: i think that, in terms of isetary policy, it always letter for the central bank governors do the job that they have to do and to preserve and secure their independence. some of the comments made alert at international community and investors to the fact that the could beank of turkey under directions and instructions.

that has created a sense of uncertainty, lack of confidence. that has found its way into the market. i think that everybody has to do their job where they are. central bank governors are good at their job. they should be left to that. monetary policy in relation to interest rates and currency determination, it is best to let it be handled by the experts. they have a good set of tools. they have strong fundamentals. it is much better to leave it that -- to them. reporter: were you worried about turkey before this particular episode? is it a self-inflicted wound? , back in our say spring meetings, it has been

published, in case anybody doubts, we said that with the dollar strengthening, with monetary policy tightening in the u.s., we would most likely see a throwback of capital from those emerging markets. this is exactly what we are seeing. strengthening of the dollar in the last couple of months. capital flows moving back. 10 year treasuries at 3%. there is a slow back that we are seeing that is going to unsettle some of those emerging markets that have not taken the necessary precautions or that are weak in their fundamentals. expensive was to be -- expected. many emerging market economies are in much better shape today than they were at the time of

the taper tantrum. reporter: what about north korea? we have just had this amazing announcement, donald pulling out of negotiations. there has been a lot said about the political side of this. do you worry about the economic ramifications of that? could that cause instability? in a time when emerging markets feel vulnerable. guest: i'm concerned about any decision or reverse decision that continues to undermine trade. i am glad was where the global economy is at the moment. done a lot of strengthening, restructuring, recapitalizing, you name it. theon economy/the -- economy is much stronger now. trade is seeking out investments.

anything that undermines that isdamental outset of trust putting that at risk. it is not about political decisions. reporter: with the iranian callback, would that be part of it? it is another thing that could destabilize confidence. guest: it does undermine confidence, yes. reporter: world trade is this huge thing. you have always been a defender of globalization. you now have all of these tensions, especially between u.s. and china. take us through the way you see that going. is that something that will resolve itself or are you so worried about it? guest: trade is good. from many perspectives. poverty,eople out of reducing the cost of goods for poor consumers across the world, opening roots that were unknown,

including in political terms. trade has had its downside as well. we have ignored it for a long time. the complete reconstruction of supply chains around the world has led multiple sectors and many regions in many countries damaged. there have been inflicted wounds that we have not focused on healing and helping. that is the one real deficit of international trade as we have celebrated. we should continue to celebrate it. the second thing that needs to a collective way because it concerns all of those involved in trade, basically the compliance with the whole framework and the rules that were decided. respect,e that in some

there are international property rights. in relation to compulsory transit of technology. in relation to sanitary rules and restriction on investments. some players around the world, notably china, -- not only china, have taken justifiable measures that hinder international trade. that needs to be looked into. on a collective property basis because it is in everybody's interest. it cannot be addressed efficiency -- efficiently on a unilateral basis. reporter: you don't really approve of the method of threatening china in the lateral way -- a unilateral way? guest: china is meant credible opening of the last 40 years. it needs to be continued.

the discussions that we have had with the chinese authorities, that is what they want to do. they want to continue opening and continue to welcome investment. they want to reduce the threshold that has been in place. they want to continue that process. all that signals to me that they want to be partners of this landscape. they want to be part of the circle of nations that work economically on the global basis. reporter: what about russia? we are sitting and thinking is for. wants russia to be one of the top five economies in the world. at the moment, russia is growing slower than the world economy.

do you think that is a credible goal? surely russia should be opening up in the same way. is thaty understanding you have a six-year term. he has incredibly ambitious goals for those six years. he wants to increase longevity. he wants research and development investment to reach 15%. he russian companies -- wants to be in the top five. i don't know why he didn't say top six. it is incredibly ambitious. at the same time, it is not economy that has proven to be incredibly resilient. circumstances, sanctions, secondary effect of sanctions and so on. after two years of decline, stabilization and 2017, they are

growing at 1.5%. remarkable that they have been able to achieve that. for mr. putin. guest: russia is the part of the top 10 -- is part of the top 10 for my perspective. reporter: thank you very much for talking with bloomberg again. that was john, bloomberg's editor in chief. later today, he will moderate the st. petersberg international economic forum's presidential plenary. russia's president speaks alongside other leaders. you can watch that live on bloomberg tv and see it on live go. >> let's turn to trade.

scheduled to is visit china from the second to the fourth of june. as he continues trade discussions. china's official news agency reported that officials spoke by phone today about plans to negotiate on economic and trade issues during the visit. our guest is still with us. we talked about the potential link between what has happened between the u.s. and north korea, how that could lead to further trade tensions. in the general spectrum of risk, we were hearing about emerging markets as well from christine lagarde it if you look at argentina and turkey, idiosyncratic stories are risk of contagion? guest: we were discussing this yesterday. the news inore turkey and argentina. it was a very specific in those countries.

turkey with the current account deficit. theirserves versus external funding requirements. if you look across the board, the two factors which would make chinay concerned is if could not reduce interest rates and if the u.s. curve inverted. if those two things happened, than i would say, yen has a problem. >> why the inversion of the yield curve? because what it does to the dollar or what it tells us about the local economy? guest: historically, when the u.s. yield curve declines when you're to tenure and inverts, the stock market was so left within nine months and will go into recession. isand others would counter, it like before?

maybe things are different and things have been engineered this way by the fed. how can we be surprised? guest: give individuals -- individuals that make that argument are absolutely correct. you can make the case that we are well off of an aversion -- inversion. >> you also mentioned china. china as being contagion, any em cosan net, or being separate because it doesn't fit into the emerging-market category? guest: it doesn't fit anymore. i started my business in 1998, china was grouped into that category. today they are no longer grouped in the category. that is one of the reasons why my position is that if we do start to see some stress in

china, they can easily lower it will serve as a cap to secular buffer. >> the trade risk for china is the big one, isn't it? guest: let me stop you right there. nothing will stop the chinese from doing what they want to do. >> was a confident? -- why so confident? guest: look at history. have had a truce in the trade were between the united states and china. it could come back onto the radar. guest: it could come back onto the radar. if they had the ability to prop up their property market, that is one of the main signs investors around the world look at. you will start to see very bad pmi market numbers. that will be the signal that investors will be working for. >> what about leverage in china? guest: i went to visit a few years back. the cheese to economists --

chief economist at one of the big china banks, and we agreed it was impossible to quantify the chinese banking system. that is what the u.s. hedge fund guys got it wrong. they failed to recognize the chinese government had so much power, they could wipe back the speculators like they did in 1988. >> you do see jitters in the market. for example, with the lira. where you step in and take those opportunities? guest: one of the things we're discussing right now with one of the investment committees is whether we want to take a position in mexican two-year government bonds. why? which shares a border, has not been walled just yet, with one of the wealthiest countries in the world. they have a good gdp number. they don't suffer from the same structural issues that countries like turkey and argentina suffer from. the bonds yield 7.5%. >> is structurally difficult

nature -- neighbor, perhaps you -- perhaps. guest: spot on. >> you can hear some more of his thoughts coming back after a short break. >> bloomberg users can interact with the charts using g tv . have a look at that chart. it says we are not getting contagion yet. those charts featured on bloomberg tv. you can use them for your run analysis. up, we will be quick to heads of the fed and the bank .f england fantastic libert -- lineup of names. this is bloomberg. ♪

>> 6:50 a.m. in london. 1:50 in the morning in new york. it looks like the u.s. sg could open higher. a bit of a turnaround, even though we only saw them you to drop yesterday. let's get the bloomberg business flash. >> thank you. ask has to has resigned executive director immediately. and tries to persuade washington to lift sanctions. it has warned it could not maintain operations after october 23. apple has one of fine from samsung electronics in the final throes of the companies court struggle over smartphone technology. the iphone maker sought $1

billion in a retrial of the case that originally produced up burdens that amount in 2012. samsung argued it should only play -- pay $20 million this time. amazon has said a series of miss hughes picked up by one of its voice-activated speakers resulted in a chat being recorded and sent to one of their acquaintances without the knowledge. the company responded to a local news report that the pair got a phone call recently from one of the husband's employees saying, unplug your alexa devices right now. you are being hacked. the couple used amazon's devices throughout their home to control heat, light, and security. that is your bloomberg business flash. >> turns out it is not the walls where fears. it is the devices we put in our home. to missedan union has

the uk's plans for their post-brexit relationship as fantasy. three days of talks in brussels wrapped up with little headway on the most important issues. in particular how to prevent a hard irish border. let's talk about u.k. assets. our guess is still with us. set the politics one side, if that is possible. -- we've already established that you don't need the big mac. this is the big mac measure of undervalued currencies. it shows the pound undervalued. do you think it is going to bounce? what does the future hold? guest: from a political's perspective, we look on what is going to appreciate its appreciated and some people have too much conviction. how can you have so much conviction we don't know the outcome? icad last for a decade.

what have we done about it? from a u.k. investment perspective, we have reduced our commercial property exposure in exchange for more global polyp -- property exposure. that is along the same theme of global growth continuing to do well. it is one of the most important asset classes around the world. that that continue to drive performance. it is a big unknown, what is going to happen in u.k. commercial properties. >> when we spoke to british land they were talking a resilient story about commercial property in the u.k.. guest: you were surprised? they were talking up the wrong book. at the end of the day, we're pretty optimistic. we would assume that we would shave a few basis points off of gdp growth to handle the negotiations during this. of transition. >> if you are still optimistic

on the u.k., you are not reducing your exposure to all u.k. assets. or are you? slightly have rotated out of u.k. in exchange for u.s. yield in japan. -- and japan. >> let's talk about italy. you are very bullish on italy. because, historically, we were there and 2013? guest: italy is an interesting one. people are not paying attention to what is underneath. you have a recovering property market. i see italy like a supertanker. commercial property is like the content. if you see a supertanker going to particular direction, it is hard to change the direction. what is good to us, the commercial property market is recovering. the ecb is in charge of the important banks in italy.

it is no longer the banks italian. rced to clear the credit suisse. -- suites. >> you're not worried about politics? guest: history has shown that if you ignore the politics and focus on the direction of asset prices, you win. >> thank you so much. continuing the conversation with her colleagues on the radio and 7:30 a.m. u.k. time. north korea says it was surprised by trump's decision to cancel the june 12 summit and that it still wants to meet. what is the outlook for he's on the korean peninsula -- for peace on the korean peninsula? we have fantastic panel discussions on bloomberg today.

you don't want to miss that. they will be talking about the korean peninsula and global trade. this is bloomberg. ♪ retail.

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european headquarters in london. >> here at today's top stories. >> desperate need for peace. north korea says it is open to talks at any time after the u.s. canceled the planned summit. president trump and north korea left the door open for meijer meeting. to engage inooses constructive dialogue and actions, i am waiting. >> risk reassessment in asia. the region postmark index dropped following u.s. trends. for ourwith bloomberg

panel with vladimir putin, emmanuel macron, china's vice president, in the imf's christine lagarde. >> good morning everyone. let's take a look at where futures are heading in europe. it looks like we could see some gains when the market opens. u.s. futures are pointing higher after less is -- losses yesterday. it looks like that is not going to follow through the euro. dax features also higher. cac 40 futures up in the moment. more wobbles then risk off. >> wobbles indeed. a day to feeling in terms of what we are seeing feel politically being translated into market effects.

we are weaker in the asian session but not by much. we do have a day to cents. the yen was stronger. gold was stronger and now it isn't. these markets are a little more stable today. we have the dollar up against the yen. we have crude and as well because we are in st. petersburg. the oil story is very crucial to where the russian economy goes. the reason we are seeing a few some ofn the oil price, the comments that were made by the russian oil minister about reiterating that opec and partners will discuss phasing out like that as early as next month. >> you mention the 10 year treasury yield. if it was real response, you might be seeing that coming down. but it has been inching higher in the asian session. still below that 3% psychological level. looking at the futures in europe, you put the u.s. futures

there as well, pretty much unchanged. we may not get a lot of direction. with an ever so slight negative futures, meaning that if anything, yields might edge of higher. everybody what is coming up on the program. we have a great lineup of gas. -- guests. a russian banking flavor is what is coming up on bloomberg. up a conference. we are not just bringing you a list guests. there is an a list panel coming through from the event in russia. we are also talking about what is going on the -- in the riksbank. you can watch that live on

bloomberg tv and listen to it on radio. let's get to bloomberg first word news update. reporter: thank you. north korea has said it was surprised by donald trump's decision to cancel a summit on june 12 in singapore. a statement by the state run said the country remains willing to meet with the u.s. at any time. pyongyang vowed to continue to pursue peace and signaled it would give washington more time to reconsider talks. u.s. commerce secretary is scheduled to visit china in june. that is as he continues trade discussions. china's official new agency reported that officials spoke by phone today about plans to negotiate on economic and trade issues during the visit. in vienna, senior diplomats from a ron and five major powers are

meeting today to prevent their nuclear deal from collapsing. the meeting is the third since donald trump abandoned the agreement last month. the european union has dismissed many of the uk's plans for their ast transit relationship short of fantasy. according to an eu official, three days of talks wrapped up with little headway on the most a barn issues, in particular how to prevent a hard irish border. they say the u.k. has still not come to grips with all the steps needed to -- prevent frontier ship. it has not formally pitched its plan. movie mogul harvey weinstein is expected to surrender to the police in

manhattan today on charges that he raped one woman to force another to perform formal sector -- oral sex on him. the charges would follow numerous accusations against him that let women around the world to come forward with accounts of being sexually harassed and assaulted by powerful men. his lawyer declined to comment. he has said his client denies any allegations of non-conceptual -- nonconsensual sex in the past. you can find more stories on the bloomberg at. asia, staring at her weekly loss as trump canceled that summit. you have the u.k. closing out fairly flat. estoril you also closing flat. have a look at the growth that you are seeing coming through in emerging markets. they have been heavily battered. a lot of analysts telling us

that they quite like malaysia and indonesia. you are seeing risk coming through in the. in terms of stock, japanese have been quite under pressure on this cancellation of the summit. you can see banks in tokyo 2%.ing down percent -- we have been watching this samsung story in san jose. samsung have to pay travel. elsewhere, a lot of buying through coming from chinese and hong kong pharmaceutical stocks today. we have seen a lot of movement coming through on these stocks. >> thank you so much. korea has said that peace efforts with north korea should not be abandoned. the south korean president said

this is a diplomatic issue are to resolve with the current way of communication. he suggested trump and can talk directly rather than by public statements. stephen, the summit might not be happening after all. to communication, or is there something more to it? reporter: absolutely. there are so many angles to the story. this is a high-stakes game of poker and nobody is having a poker face. some people are describing this as megaphone diplomacy. that is what happens when you negotiate through twitter or the propaganda channels like the caseinate does through north korea. get a lot of bluster. both sides are bluffing for concessions. the north is resorting to its old way. this has been an age-old tactic by the north. they want to get more concessions by threatening to pull out and taking offense to

some comments coming from u.s. officials like doubled open and the vice president mike pence. donald trump colin miller bless and saying, if you are going to threaten to call out, we're going to cancel. i have long said that the biggest challenge to the summit was hoping the summit. i was not that surprised when it was called off. keep in mind, these summits need to have deliverable dealt with beforehand. they are not close to agreeing what denuclearization means. this was never going to be a handshake and romance, like happened between moon and kim jong-un. this was going to be a structured and scripted summit. the fact that they pull that was not much of a surprise to me. >> thank you so much. the latest on the geopolitical tensions gripping the north korean -- the korean peninsula.

we will see. are watching the market reactions to geopolitics. watching the market reaction or lack of it in some cases. reporter: it is a great story. it has nothing to do with financial markets of the moment. the dollar korea has not moved to drop. things go up and down. >> let's talk about dollar-yen. reporter: now you -- guest: now you are cooking. >> money show you the chart. when we saw again strength for three days in a row, this broke the channel support. a little biteing of a pullback in the end. market is not as concerned now

that north korea wants to continue the talks. scenario, do you buy the dollar against every currency except the yen? guest: that is a very good question. when the dollar is do well because the u.s. is doing well and interest rates are high and risk premium needs to go up, the dollar-yen gets higher. hints lower and the u.s. dollar is rising, we are getting into risk after toward. we are getting to nervousness time. what i don't like seeing is the u.s. dollar rising in dollar-yen coming down. that is telling you the market is going risk off. we get very nervous.

the yen is the ultimate safe haven in risk off. if you are looking for yield and you are dollar-yen thing, -- dollar loving, but it works. is it risk operas at a dollar run? i have much that are -- much better things to buy against. >> these geopolitics are short-term. where'd you go on that spectrum of risk? how worried are you about -- guest: the dollar is beautiful. i get hated over 2% and i don't have a duration risk. don't have to wait 10 years to get an extra half percent. this is spot fx. interest rates a really high in the u.s.. you have 125 million of the risk is tax players that have ever

walked this earth. it's a thing of beauty. >> is this an interest-rate differential story for you? guest: when you said differential, it is the maximum under i live. it is not good enough that i should succeed. all my friends should fail as well. that is what is happening to the dollar. it is doing fantastically well and everybody else seems to be failing. when people talk about concerns about the yield curve flattening, is that positive for the dollar? guest: i care of the front-end. i don't even know what a yield means. >> urine economist -- you are an economist. stop it. fx, i am not that interested in 10 years time. if i can get high rates right now right here, why want to take them? they're delicious. they are in the united states. >> deal of italy story?

-- do you like the italy story? guest: you have gone from macron actively. we have won the euphoria. in the european economy, it is prepared as well. two things are happening. europe is looking well. >> coming off unsustainable highs? guest: both. >> one has more longevity than the other. guest: when europe grows at 2.5%, it is too fast. slowing toinable -- a more sustainable rate. we were expecting a lot better and now we are not getting it. we are disappointed. when we get disappointed in fx, we sell. and we soak, we sell currency. i'm just giving you trading

ideas. guest: we don't like the swissie. we don't believe it has the safe haven and we think that the it has this fantastic lower. that has been changed substantially. the whole aspect of what the swiss represents. >> we have seen quite a bit of weakness this year in the euro dollar. i'm guessing you see that continue to fall, but to where? guest: the problem is the market is running away with it. >> my chair is running away with me as well. thank you. he will stay with us on the program. coming up, so much from russia. we will bring you our interview with russia central bank governor. >> stick with us from the st.

petersberg international economic forum. later we will be speaking to a group of world leaders who need a little introduction, including vladimir putin. can he turn his country economy around? can he live up to the promises he made for his latest term? that at noon london time. this is bloomberg. ♪

>> 7:19 here in london. we are 40 minutes away from the start of the last european equity cash trading section of the week. let's get your bloomberg business flash. >> thank you.

i man has resigned as a nonexecutive director immediately. it follows yesterday's to partner of the company's and most of the board as they try to persuade washington to lift sanctions. it may not be able to continue operations after october 23. that is the u.s. imposed deadline. one of fines from samsung electronics in the final throes of the countries struggle over smartphone technology. the iphone maker sought $1 billion. payung argued it should only $28 billion this time. the ruling comes seven years after the start of a global patent battle. thank you very much. with crises flaring across emerging markets, there is no shortage of divisive actions from possible -- policymakers.

this is a very ambitious goal that requires action. it is possible. there are times when our economy was grown at a rate of 7% per year. in the early 2000's. time, the growth was largely based on a prolonged. of growing oil prices. today, the growth should be insured by manufacturers. governor central bank speaking from the st. petersberg international economic forum. is still with us. we are going to talk the lira. extending losses again today. you were bullish on the lira.

doesn't have to do with the real rate? guest: it has to do with doing the right thing. it is all very well criticizing people for doing the red thing -- wrong thing. what they need is an intro meeting right now. we ended up being sued -- super bearish on turkey. the market raced beyond our target and we got some of the best people on turkey. basically, they have done the right thing. this has happened three times before. turkey central bank was supposed to raise rates. this is not attempt to be bearish. i was a super bear. i have according to ap. now that they have done the right thing, don't punish them for doing the right thing. punish people for doing the

wrong thing. >> you think that they have done the right thing but they could've done more. previously they did 400 basis points. who is to say this is enough? don't know where the magic line is. the time to be bearish was when you thought they were doing the wrong thing and not acting correctly. maybe you can argue it is not enough. we set 200-300 basis points will be enough. the market has its mindset in the super bearish world. don't punish people for doing the right thing. concerns ise central bank independence. thinkan unpredictable to what the central bank might do to support the country -- currency? guest: unpredictability is something you look within life. idea that the central bank won't be

independent or able to raise rates the lord -- before the election? hammer on that idea. why would you punish the currency when you still have the mindset before? you can't say, they need to raise rates, but when they do it, say, i'm so bearish. let things turn around. we get overshoots and overexcited people in foreign exchange. let's just the way we are. >> isn't that much of a dollar story? you saw the lira weaken in recent days. butjust against the dollar also the yen. it is not just about the dollar, is it? guest: is the lira selling off more than the yen? it is equally vulnerable to equal -- higher oil prices.

turkey, when one of the moves a lot against the other, is it something idiosyncratic? now we think the market has gone too far. it got what it asked for so we are now the other way. >> you have us -- love a strong dollar though. what does that do to other areas of emerging-market risk for you? saying, if youre look last year, you are up 30 basis points over indonesia. that is not enough. i want more. we make the same mistake with greece. bought greek bonds at five basis pace. five. why did i do that? you start saying, i haven't been paid enough for the risk associated with emerging markets. that is what is happening at the

moment. i don't think it is a crisis. >> how to trade the lira against the ruble? guest: i like the ruble. it is doing well. the current account and the budgetary situation is in a good place. politically, i have my doubts. we quite like our forecast for the ruble. it is roughly 61 by the end of the year. we are all right for the ruble. >> think you very much. thanks for your time. a fine way to hold a friday program. that is it for daybreak europe. come from st. petersburg. >> we ended on the ruble. stay tuned from -- for our panel

including a variety of world leaders. that is live at midday u.k. time. this is bloomberg. ♪

guy: friday morning, welcome to "bloomberg markets: european open." we are live from our european headquarters in london. the cash trade less than 30 minutes away. president trump pulls out of the summit with kim jong-un. north korea expresses surprise. .arkets barely blink the chairman of the federal reserve speaking in stockholm. we will take you live.