haidi: standing alone, president trump faces criticism and a cold shoulder with the g7 leaders next weekend. ramy: china issues a blunt warning, all deals off if the terrorists go ahead -- the tariffs go ahead. haidi: job numbers signal the u.s. economy remains strong, but the june rate hike will be the last of 2018. ramy: in it for the long haul, literally airbus sees soaring demands for planes that can fly

from one end of the earth to the other. .aidi: hello i am haidi lun. this is daybreak australia. it is past 6:00 in new york. , ourgood morning to you viewers across asia. if i had to sum up this weekend into the new week, the word would be frustration, taking a look at what is happening for example with the u.s. and its ally, the e.u., mexico, canada and china with the trade talks with wilbur ross, trying to come to something but really people seem to be butting heads and getting lockstep into their own positions. we have a lot to talk about. sense maybe we a have had quite a lot of patience coming from beijing around the

calls of, trade war or not, the posturing that you might see by the u.s. the latest story coming out, the terrace from the u.s. -- if they are applied, talks are off. let's take a look at how the u.s. is setting up for the asian open. ramy: you can see basically green across the board. the s&p 500 up. regardless of what was happening despite the up and down and back and forth of trade tensions, it is surprising that the s&p 500 closed for the week up .5%. that was its biggest weekly rise in a month. we also see positivity from the payroll numbers for the prior month, 200 thrifty -- up 220,000. it is something we have not seen several decades area we will talk about that in a little bit.

as i mentioned, the frustration aspect of things. larry kudlow, the economic advisers saying, don't blame donald trump for all the headaches you have, blame other people. >> don't blame trump. blame china, blame europe, blame nafta, blame those who don't want reciprocal trading tariffs rates and protectionism. trump is responding to several decades of trade abuses here. look: let's take another at the we dominated by trade tensions. look at how we are setting up in asia. new zealand is closed. the markets are closed for the queen's birthday. australian markets are going to start soon. this is how we are shaping up with sydney futures. looking sort of mildly positive as we have the aussie dollar

trading at 75.68. we have a lot of events going into the rba meeting, expected rd low. the right on hol that also getting retail hills numbers and investment data and australian gdp later this week. looking at the tokyo open them of the nikkei a little softer with the yen at 109.52. eight-week that's a big week, given the tensions and tempers over trade and negotiations into that june 12 singapore summit .or trump and jim -- kim new york route seeing continued pressure. this despite u.s. production levels coming through at record highs, still concerns russia and saudi arabia may be easing back on the production curve and creating more supply onto the market. the premium at $11 between crude and brent. a quick look at commodities

index, seeing downside, .3%. that is expected to weigh through the citi open. let's go to first word news. trump's lawyerd said the president's authority to influence investigations into his actions is not unlimited. the legal team wrote that robert mueller said the resident cannot of struck the russian inquiry because he could terminate the probe or terminate -- martin those in it. rudy giuliani said such actions would be dangerous. >> the president of the united states pardoning himself, which is the unthinkable, and it would lead to probably immediate impeachment. you get your house, senate under tremendous pressure. trump did not do anything wrong. haslinda: the u.s. is warning relieverea it will

sanctions only when they see moves towards denuclearization. james mattis met counterparts and japan in singapore ahead of the potential summit next week. he said a bumpy road ahead and that they must maintain a tough stance to the negotiations. stressing the need for cooperation to ensure stable oil supplies in opec area of energy ministers from saudi arabia, uae, kuwait and oman held an unofficial meeting in kuwait. they emphasized the importance of investment and of their -- in the energy sector. crude prices have fallen after the new policy for production. weight discussions and inle -- wage discussions gillette.

it and it was no agreement and the contract wasnd until july 31. the union wants a 5% real wage rise, a bonus of $40,000. global news 24 hours a day, on air an tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am haslinda amin. this is bloomberg. ♪ haidi: commerce secretary wilbur ross says some progress was made in his trade talks in beijing, but china struck a chilly town tone sayingets -- all bets would be off. what do we know about the discussions and the weekend in beijing? mark: secretary ross was trying to put a good face on this that there was progress being made, but there is an ominous statement from the chinese that if the u.s. goes forward with the tariffs as it plans to, any commitment made so far in the three rounds of talks would be

off. you have all these mixed signals from the administration. after the last round, there was the big framework of an agreement -- fake -- vague framework of an agreement. they said there would be no trade war. only a few days later, the white house says it is back on. you have conflicting signals from the administration, and it undercuts the attempts to negotiate some kind of deal. ramy: from strategic competition strategicthe competition in the g7, we are seeing backlash in the tariffs. let's take a listen to this. >> we are going close to 4% which was cruising speed before the crisis, and this of course has the potential of slowing down the recovery because it

hinges on the level of confidence. ramy: what are the responses coming out? mark: there has been a lot of concern. a meeting from the finance ministers of the g7, and the complaints were that the u.s. taking on even its own allies, it could undercut the entire western alliance. the french foreign minister said at one point the g7 should be considered the g six plus one. haidi: it is pretty extraordinary. justin trudeau saying it is an insult to canada as a close u.s. ally. what is the response from the ministry should? mark: they are trying to portray this as a family fight, nothing to get excited about. the u.s. have legitimate concerns about trading issues orh canada, whether lumber

countries trying to ship products through canada. but the problem is you have the prime minister of canada outwardly saying that this is an insult to canada, to say that tariffs are needed for national security. a close ally that has fought side-by-side in every major war, it is insulting as he said. and this has left a ministration officials to say, we have to do this. this is what the president promised to do, and he is doing what he said he would. ramy: he is. we will see what happens, especially when he has two quebec for the meeting with other world leaders. thank you very much. shifting gears and looking domestically in the u.s. economy, it continues to show strength with unemployment at a 49 year low. continuing robust job numbers , andtoking inflation

after all that, where does that lead us for the fed? kathleen hays is here with a look at the payrolls and that week ahead. a strong jobs report. does this mean a slamdunk for june for the fed? kathle: yes. i cannot get away from basketball analogies. slamdunk, that is what it is. it seals the deal. we will not have any doubt. let's look at a bloomberg chart from the library to show you the picture. 223,000 nonfarm payroll increase in may over forecasts. the six-month now 200-2000. the unemployment down. we are looking like japan with that rate. -- you havelow in to go back to 1969 to see that. we got acceleration in average hourly earnings, paychecks. the head of the u.s. labor economics team points out you also have to look at another kind of wages, a bigger group that includes people not the

bosses and supervisory and production. when we look at this chart, it is important. until this number, the aag, average hourly earnings, nonsupervisory and production workers, gets under 3%, you are not going to have enough boost to get inflation, the key number, the core pce, to get it up to 2% and keep it. that is important to watch. hawks will say it will get there, we will hike rates. but of course the fed is meeting the 12th and 13th next week. 100% for the rate hike then. what happens next? ramy: where do we go? are there to more rate hikes because people are saying three or four? that is not as strong a case as it might have been, but people with the report is are they say it and wonder what the hawks are saying as well.

reuters had an interview with john williams, president of san francisco. he said he sees rate hikes continuing gradual over the next two years. the fed is about three rate hikes away from neutral. how does that play out? this meeting every three months, they have the summary of economic projections, so the dot plot will get updated. we will see the longer term. one thing that is important for what you think about the fed is the yield curve. scott flanagan, it is up to 42 basis points. another chart here between the support ishe 10's, 40, but when you get to this vicinity, people are concerned it could invert. phil gross, from janus capital management, he has had a tough time lately, but this is what he told us friday after the report

what he sees for the fed. >> i think the most important number is the average hourly earnings at 43, now annualized at 2.7%. are we making america great again? i guess from the standpoint of jobs and gdp, inflation moving higher in terms of wages. it is the scenario where the fed, the fed hawks basically think they can move forward once, twice, but i say to ms. the last. kathleen: see the curve here, looks like it is not auctioning very well. a little more relationship but many fed officials don't think it is broken. they expect wages to move higher and inflation to get to 2% and stay. there is caution on that expectation. haidi: it is going to be pretty busy going into central bank meetings around the world,

starting right here in sydney. what are we expecting? kathleen: i think it will be interesting to see the policy statement, with the chief of the rba says after the meeting, when it comes to trade and trade tensions. no hikes seen yet. you are right. private investment, no longer feeling like a tailwinds very there are headwinds. you have tame inflation, below target, weak wages. the rba will probably be on hold all of this year and next year. we don't expect a lot, but we have to listen to the language that comes out. we have the reserve bank of india, the fed, the boj, a lot of central-bank activity. i am happy. haidi: [laughter] economichays, global policy editor there for us. we will discuss the probability of the sydney banking sector

getting an overhaul which was long overdue. ramy: perpetual, investment strategy had mac sherwood said that it'll tariffs will not upset markets not yet. this is bloomberg. ♪ ♪

we are counting down to the citi open. look at that beautiful morning with the futures up .6%, getting a tailwind from the u.s. friday close. the s&p 500 was up a tad more than 1%, especially with the great tale numbers are you i am you in new york. -- remy -- haidi: this is what sydney looks like. the u.s. economy shows strength. unemployment at a 49 year low, but tensions continue with wilbur ross in beijing over the weekend for the talks.

take a look at the markets and investors. this is the head of investment strategy joining us now. were talking about the shift from buying everything in is all eurasian. is that the case? do you think investors can relax more? >> they still have a lot to be cautious about with the outlook. we are pass economic growth, peak central-bank support. with very light targets, we are in the classic cycle of growth better than inflation. it is such returns, so i think investors have to play a good defensive game, but the question is, how do i extend my portfolio? traditionally it is bonds. i think it is probably the great unknown at the moment for a lot of investors. haidi: what are the factors that prolong or quicken us into the

end of the cycle? we don't know if the tariffs will be deflationary or inflationary, whether oil will exacerbate. what is the scenario? matt: every cycle since world war ii, the fed has to hike more aggressively than it thinks. there is a buildup of capacity in the u.s. economy, and that combined with higher interest rates since the u.s. economy into recession. there are a couple things which suggests there could be more runway in the cycle and that is the fed has been gradual and cautious in the tightening cycle and also because we have really not had investment in the u.s. economy outside shale for the best part of eight years, we are not getting the buildup of traditional capacity access -- excess. i don't think tried -- trade will be a factor. it is so strong. it comes back to the fed.

it comes back to u.s. inflation, and both of those are fairly benign. ramy: in terms of the tightening cycle -- we were talking with kathleen hays about maybe another one or two rate hikes. wage growth is the most important number when it comes to inflation, let alone the 3.8% unemployment. what is your take? do we get speed to get away from 2%? matt: the strange thing, inflation, despite tight labor markets, has been well contained. earnings in wages growth. there are three economies where unemployment is way below the full employment levels, and that is japan and germany, the u.s. there are no signs of accelerating wages area the u.s. has highlighted the importance of wages growth, and it is not the greatest determinant are --

determinant. the most significant variable in my models is in fact the asia ppi. that has accelerated behind high commodity prices and now starting to come off. at this stage it remains a real ocks economy in the u.s. 1.8.se the core pce is it will grind higher, and the fed said it is pretty well happy to tolerate it going through 2% as long as it is not very fast. so if that is the case, we have got to more this year. we have two more next year, but i am looking at a terminal rate this cycle of 275. ramy: switching to europe, i want to put a bow on what is happening in europe and italy. i want to show you what has been happening with the euro, slightly positive. 0.01 percent up, but you can see

the italian two-year, coming up. tell me your concerns with the new populist government. been in the end, it has stability over the past week, but there is no doubt in the next year the populist government in italy is going to collide head first with the european rulebook. they are intent on fiscal reflection. they are not intent on supply-side reforms, and it will be inevitable that they try to get through a large fiscal stimulus package, which is going rulebook.he european theirou look through words, you say it their words, you say it is five percentage points of gdp. italy is running a circle of 2%, so probably with all the negotiations, four percentage

points of gdp, and that will put their debt on an unsustainable path. italy is already the third biggest bond market, and as a result volatility is going to ramp up once this government settles into its position of running the country and starts to implement election agendas. haidi: i have a dollar chart, another strong week for dollars. the this sustained dollar strength? matt: the dollar has been mixed, so it initially was the growth differential between europe and japan and america. there was a weak start this year, so what the fed hiking, and delayed improvements in europe and japan, the dollar will continue to rise, but that is how far up it will go. -- that is dependent on how far it will go.

you could have a lower currency. the u.s. dollar will start to heads out. -- head south. haidi: thank you so much. more to come. this is bloomberg. ♪ ♪

ramy: a quick check of the business flash headlines, boeing is said to have fought off airbus to win in order of the indian affiliate of singapore airlines. they are taking six dreamliner's with an option for four more, considering whether to buy the 780 79 or the 10 version which could fly to europe. this deal is $3 billion at list price, will though it is traditionally discounting. sprawling hna group has made plans to make a deal with planes200 jets and some

over sometime, but they say no specific order has been placed. the shanghai-based group is pitching the aircraft domestic carriers as part of a grand plan to eventually compete with airbus and boeing.

haidi: it is 8:30 in sydney, the markets open in 90-minutes time. new zealand is closed for the kings does the queen's birthday holiday. futures looking bright. i am haidi lun. ramy: i am ramy inocencio where it is 6:30 in new york. you are watching daybreak australia. let's get to first word news with haslinda amin. haslinda: china said it will end all all trade agreement -- it will anul all trade agreements if they push ahead with tariffs in the u.s. wilbur ross flew to beijing for talks. the two sides made progress in agriculture and industry, and

china repeated willingness to get more products to ease deficits. in canada, the members of the group say they will take retaliatory measures on president trump, unless he abandons his tariffs on steel and aluminum. the white house is ignoring the threat, saying countries are overreacting and the blame for escalations live with them. -- lies with them. they say it will hurt the global economy. more must be done to strengthen the architecture of the eurozone. speaking at the summit at the end of the month, the successful economy depends on the stable common currency. she and president macron have promised a range of reports when they meet in brussels. this includes banking unit and a common e.u. investment fund. the latest star wars spinoff

the northe -- topped american box office, but despite no serious competition, sales plummeted. $29 million, 65% drop from the debut. there have been more than 60% to get declines. -- ticket declines. 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. amin, this is bloomberg. haidi: thank you so much. let's get a quick update on the market this monday morning. new zealand, no trading their today because we have markets closed for the queen's birthday holiday, but there is trading into the open in sydney. this is how we are setting up, positive. the aussie dollar looking good.

the aussie gdp and retail sales numbers coming through and china manufacturing numbers in the fray. looking at the set up into the open in tokyo, the japanese yen at 109.53. still pretty vulnerable with the geopolitical concern still playing out going into talks with china and the leadership summit with north korea and the u.s. on the 12th of june. sterling at 133.46, the u.s. 10 year 2.90. ending the week as it started. we did have that -- robust set of gains. the blowout jobs numbers came through. that is with the president giving a hint at how positive it would be on twitter. let's look at trading in asia with the ethics reporter.

from the fed to the rba, it hike like expectations to are getting pushed down even further. are pricing in 20% chance of a rate hike by december which is virtually nothing. let's look at the chart that correlation with the slump in emerging markets. market volatility is one of the big reasons promising to keep rates on hold. you have political uncertainty in europe weighing on sentiment. add to all of that a threat of on-again, off-again trade wars and meeting in china, you have the study on, study path. -- study -- steady on, steady path. ramy: asia is outshining the rest by some measures. one of the brightest stars you're seeing and why? superstar.sia is the

we are seeing at the top of the list countries like malaysia, china, indonesia and the philippines. that is based on a number of sectors, analysis that sho strong account, surpluses, healthy economies. malaysia in particular is a standout, then at the bottom of the latter, -- the ladder you have south africa. bigger current account deficits and lower foreign reserves. haidi: thank you so much for reporter.fx and rates taking a look at what is expected from the rba into this week. you can check out gtv library for the chart that you saw there , on gtv on the bloomberg terminal. many figures in the airline industry are in sydney for the meeting. a series of headwinds

after almost a decade of strong profits and record traffic. this man what worries him the most. >> in the short-term they are concerned about the rising costs. fuel donald weber, infrastructure. we are concerned about the various trends we see here and there about protectionism, closing borders, limiting immigration, reducing national trade. that is to be concerned because it will impact the economy and the sector. globalizationr of , a sector of international isolation -- internationalization, and this will depend on the fact that borders are open. if you close borders to a passenger, people, trade, it is a problem for us. we see some key areas on the

planet -- protection is rhetoric. it worries us area reporter: we talked about cargo earlier. volumes, is it more likely to be impacted by a trade war? >> for cargo the situation has been exceptional. in 10 years ago has faced terrible situation with decline in price, volumes, because it is a difficult situation. in 2016 and 2017 we had a turnaround. her go traffic has increased by almost 9%. -- cargo traffic has increased by almost 9%. then it stopped in volume, and we have recovered in april with a 4.1% increase in traffic. see aer: and you deterioration in trade volumes globally? isone of the impacts

passengers and traffic. all the things we see on the trade relations between the nations. if it continues, it will have a negative impact. we fight hard for open borders. reporter: do you see disruption and airlines? >> at the moment, it is good enough for the airlines to be health.be in good the digital age is changing relations we have with our passengers. 12 years ago, we did not know the u.s. passenger would discover your face when you are coming at the counter for check-in. because you had bought your truck -- your ticket at the travel agent, so we even didn't know your name. now we know you as soon as you type on your keyboard to book your ticket, so relations

between customers, passengers and airlines are changing. we are able to understand you, to propose you the best services, the customer services. it is a revolution in our distribution and commercial relations with our clients. angie: thoughtful concerns as well as talk of the future of the airline industry. that was haidi lun eking with general general ceo. airbus expects more orders for an ultra long-haul version of the a350 which would be capable of flying nonstop, a long flight from sydney to london. paul allen joins us with more. there is a slight problem because these planes have not been built. paul: that is right. the plane does not exist. this something qantas does want. it has laid down challenges for

the boeing and airbus to build a jet by 2022 that can do that 20 hours we loaded nonstop. there is one from perth to london. the key is to unlock sydney to london. the airbus sales, they say without looking at options, reducing feeding, adding more fuel cells, modifying the engines. if they get this right, they've first see -- they foresee demand. it will open other routes like sydney to new york, sydney to rio de janeiro, flight from asian centers across the latin america. the demand for airbus is there. haidi: a good patch up his relationship with ba, and that will become rich demand for the a3 80. the --a, delays to the the delivery, the narrowbody jet. to be fair to airbus, circumstances beyond their

control. blaming the engine makers with ba ba criticalbut of the price of the a3 80, not eap plane. $446 billion per jet, but you get a discount if you buy in bulk. at the end of the day the relationship with ba is good, but they will not comment on the progress of the superjumbo talks, but those planes have issues. there is a sales drop. so the order from ba would be most welcome. haidi: thank you. later on, kathleen will be joining us 11:30 sydney time, talking about airlines outlook and how the planes -- plans to harness passenger growth in the asia-pacific. ramy: definitely want to hang onto that but australian banks are under pressure at home and abroad. we will discuss that with tim roche. this is bloomberg. ♪

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ramy: i am ramy inocencio in new york. haidi: i am haidi lun. you are watching daybreak australia. the banking industry faces an unprecedented criminal prosecution as deutsche bank and citigroup face cartel charges over a $1.9 billion -- we are joined now. the latest negative headline after what has been evidence that would suggest really a culture of poor behavior. >> the way we look at it is, it is about how widespread, how ingrained these issues are. from a credit perspective, probably two aspects. one is risk management framework of the banks. we recently placed in -- the

bank on negative outlook because of the identification from this finding, but there is a longer-term issue around reputation and how that impacts the broader franchises of these instit. haidi: is this systemic? you mentioned money laundering and antiterrorism. do you think it is systemic? tim: when we look at it, we are not looking at individual cases. we are looking at more broad issues. in the cba case, it was not the money laundering issue itself. it was therudential inquiry report into the framework. those are the aspects we are looking into. we think it is too early, given some of the evidence based on what has come out of the royal commission, but we will look into that royal commission report in september to see if there are indications of systemic filings. haidi: how much of the systemic

failures are coming from mortgage and the? tim: that is as an area where we have seen a lot of typing recently. the regulators themselves, if you go back for five years, they would admit there were certain areas banks had less conservative in the pursuit of competition or growth. but more recently have seen that tighten up. so i think it is probably further tightening to come, but at the moment it is not an area that we think has got systemic problems. angie: good timing with you on the air. we have breaking news. commonwealth bank is said to be paying $700 million australian in terms of suddenly a case. crossing the bloomberg terminal. as we are talking about everything that needs to be done in terms of those banks, what is your first reaction to this news?

tim: obviously i have not had a chance to look at that yet. i think it is in the vicinity of what we have thought maybe in terms of a penalty. our view had always been the financial penalty of this was never really something that was likely to cause a negative drive on the ratings. it is going back to what we were talking about or, the fact there was some systemic issues that led into this case occurring or this issue occurring that is the broader driver from a ratings perspective. that still remains the case. haidi: you talk about the reputation as not just being negative headlines apart from a consumer perspective. when do you start impacting ratings on the outlook? tim: we would need to look at a couple aspects. where there have been failings in the risk management

framework, then that starts to feature more immediately. we are looking at the reputation of the banks. that feeds into the franchise, and that is one of the key drivers for the major banks in australia in terms of their ratings. to the extent that you see t reputation eroded, and that leads to erosion in the franchises of the banks, then you can feed through to a negative rating driver, but that is longer-term issues. have hade lines we through the payments, $700 million to settle that case we have talked about, the money laundering and terrorism regulations, do you think settlement help these banks move past, or is it ongoing? tim: it is a case of taking the pain now that moving past. -- then moving past. it has been dragged down over a

longer time. when you have a bank that is so heavily reliant on the retail market, to the extent that this is now done and out of the way, it is probably more on e positive side from a reputational perspective. angie: interesting, -- ramy: i am curious about investor appetite, anz down 3.8%. that was the biggest fall from february, so you would think it is all going to be better now? a creditn talk from side of things, not so much the equities side. what we are hearing from credit investors is there is still an appetite for the banks. we saw that post results announcements are a number of banks -- number of banks got more ideals, race pricing. it is more with the price will be, so to the extent that we continue to get some of these

negative headlines coming through, that may lead to some pressure on credit pricing going forward for these banks, but at the moment it is not impacting the access to credit. ramy: one major issue of course is the rise in funding costs we have been talking about. hop into the bloomberg terminal. i want to bring this up. this is the gtv library. the white line is local funding costs. it has fallen. it is beyond that the highest e june 2016. thoughts on moving ahead for funding costs, any kind of reprieve for the foreseeable future or not really? especially in the u.s. with rising interest rates? tim: i think the australian banks have given their reliance on optional funding, they will always be tied into what is

happening in the u.s. you can see there is a reasonable level of correlation between the two lines. what we would say is looking at it from a credit perspective, they put pressure on the interest margins, but we are looking at part of the funding of the banks here. we would expect there to be greater impact on managers margins if we would see this into the deposit market. we have not seen that yet, so that is what we are looking towards. you are seeing a few basis once your there in terms of impact on margins in any one half of a year. if we would see competition flowing into deposit, that could be a larger impact are the banks. ramy: jim roche, fitch ratings had of australia, thank you. of australia, thank you. for breaking news wherever you are, we have teamed up with twitter to launch tictoc.

this is the first global news network design for social media. it offers live video coverage and hourly updated top news reports verified by us. if you are on twitter, make sure you follow tictoc. this is bloomberg. ♪ this is bloomberg. ♪

bloomberg users can interact with the charts on gtv . you can catch up on analysis and save those charts for your future reference. that is our charts library gtv , so check it out on the bloomberg. let's get you a quick check of the business flash headlines. microsoft has agreed to acquire a new company and could announce a deal monday. the repository company popular with software developers prefer to selling to going public. this was partially because it was impressed by ceo novella. valued at $20 billion,

but terms have not been revealed. angie: -- is raising money to buy monsanto. it was two years of antitrust reviews and a rights offering existing investors able to buy two new shares for every 23 held at a price of 81 euros, a discount of 22% for the june 1 closing price. plans to upgrade the camera when they launch their new smartphone. the note nine will look similar, but it will include an upgraded cloud compressor. samsung's launches two weeks earlier this year than last and the aim to have the new smartphone on the shelves by the end of august. that is a hosted for daybreak australia, but yvonne and ramy are up next. looking at the next two hours.

yvonne: taking a look at reaction to the strong u.s. drops -- u.s. jobs payroll. seems like our next guest here isn't quite positive what is to come when it comes to -- joining us at 7:30. he said this solidifies the case we could be seeing four rate hikes in 2018. that is their base case right now, and he said there is risk of higher rates than lower when it comes to the bond market. he dove think derailments like trade or the political situation in europe will do much when it comes to risk appetites. we have more later on. ramy: before that we are taking a look at what is happening in terms of tariffs, trade from the u.s.' allies and china with our reporter from the peterson institute. that is coming up in 15 minutes.

we have trade tensions and larry kudlow, the economic advisor, saying don't blame trump, blame everyone else. we will get reaction. china saying we have a red line, don't cross it. haidi: one of the industries that could not be more exposed to trade and geopolitical volatility, aviation and airlines. we have 1000 of the top representatives gathering here in sydney for the annual conference. the one world ceo is one of our guests today. talking about the relevance of the alliance. almost 20 years since one world was started. programs, a lower tier, less costly membership to tier.or the likes -- talking about trade tensions and geopolitical tensions, weighing into travel demand and what it means for the airlines member airlines -- alliance member

airlines. coming up next, looking at the citi open and tokyo as well. the action on days it -- reak asia. is is bloomberg. ♪ rg. ♪ what's a gig of data?

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>> we are live at bloomberg's asian headquarters. welcome to daybreak asia. monday,stories this president trump faces criticism and the cold shoulder. china issued a blunt warning as well. all deals are off the table is the tariffs go ahead. from bloomberg's global headquarters, it is just past 7:00 p.m. on a sunday. bill gross says it will be the last rate hike for 2018. keeping the pressure on. north korea