>> 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 will only release

tension relief when it -- good morning to our asia pacific viewers. it has been a weekend of restoration because of what is happening with the u.s. strategic competitors but also strategic allies. those sanctions coming into effect on steel and aluminum. wilbur ross in china, it looks like they are at impasse there with both sides solidifying on their own positions. that is right. it is interesting what we got. a d6 plus more like

one more than a g7. the japanese finance minister said he felt sorry for steve mnuchin at these meetings are you certainly want to watch. ramy: he was getting the end of it for sure. with that said, all that was happening during the weekend, investors were pretty positive. just remind you where we ended the s&p 500 a little more than 1%. this in large part because of what happened with the numbers falling to a 49 year low. just a littleming better than expected. said, a lot of people are thinking that wage growth should be better than that. we can take a look at the dollar index, coming off just a little bit. it had been up just a little

bit. you can see it floating just a little higher towards the 3% mark. stability in the e the italian government has now been installed. yvonne: the dollar posting its seventh weekly gains. take a look at how we are set up. new zealand is closed for the holiday here. chicago.ok at the ,ints at the open.tle upside u.s.cting these stronger jobs report numbers. s&p futures are pretty flat this morning.

take a look at your currencies. fade aseeing the yen little bit. aussie 10 year yield was picking up. but that discount to treasury holding around 20 basis points. new york create -- crude is one to watch today. levelstill at the most for more than a month. on the outputts coupled with these bottlenecks is paying much leaving domestic oil attract right now. in the meantime, let's get you caught up with the first word news. donald trump's lawyer says his authority to influence the investigation into his actions is not quite unlimited. the legal team wrote to special

counsel robert mueller arguing that the president cannot obstruct the inquiry because he has the power to terminate the probe. rudy giuliani says such action would be dangerous. >> the president of the.s. pardoning himself would be unthinkable. immediateead to an impeachment. tremendous pressure. president trump has no need to do that. he didn't do anything wrong. haslinda: u.s. is warning north korea it will be relieved of sanctions ly when it shows your missable moves towards denuclearization. ines mattis met, parts singapore ahead of next week's potential summit. they must maintain a tough stand to negotiate from a position of strength. opec and its allies are

stressing the need for cooperation to ensure stables -- stable oil supply. meetingd an unofficial in kuwait city. they have decided it is important to maintain adequate investment in the energy sector. crude prices have fallen since discussing a new policy for production. is italian credit considering a merger. a move that would combine two of europe's largest financial institutions. ceo has beenys the developing the idea for several months. the bankers say the two companies would not be ready for at least another year. 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. this is bloomberg. ramy: thank you very much.

trade tensions are squarely in focus after president trump announced sweeping tariffs not only to china but also the eu, canada and mexico. the finance ministers gave america's allies the chance to react. i did not back down, saying they would respond to the white house with retaliatory action, entering one of the biggest crises for the g7 ever since it was formed in the 1970's. yvonne: sunday wilbur ross met the vice premier in beijing. china was not any more accommodating either, saying it would pull out of all the commitments it has made in recent weeks if the u.s. follows through with its tariffs. the are joined by our common -- andespondent tom mackenzie mark. did wilbur ross achieve anything this weekend?

both sides said that they had talks to move things forward and they focused on specifics, but both sides came out of this without a joint statement. you talked about this was a hearted stance from china saying that these agreements, this deal around agricultural and energy imports to china that it signed up to on may 19, this agreement null be nolan floyd if -- not retractthey did the tariffs. i think it is fair to say the lack of decisiveness coming out of the trump administration and unpredictability -- ross had come here for two days of talks with vice premier. following that agreement between the two sides were china said it was eventually increase its imports from the u.s.

following that agreement, you had the trump comments that this deal probably could not stand up, that it might not work. of course, you have the president coming out last week saying that the tariffs he threatened previously on $50 billion worth of imports was still something he was considering. china comes out with this red line. of what flash here with china and frustration that they are not getting more transparency from the trump administration on trade talks. yvonne: it comes down to that unpredictability in the trump administration, using it like a trade weapon at this point with their relationships with many of their allies. how else might china respond? we know that officials have been working on a list of dozens, probably hundreds of products that they were going to cut tariffs on.

those are not going to be announced until they get more clarity from where the trump administration is going to go from here. the ball is very much in the trump administration court at this point. china is very concerned about that. there has been lobbying around easing the sanctions on that company. the flipside is that they can see the deal. we have been reporting that it will not be signed off until they get more clarity on what happened. we have been reporting that chinese officials have been in europe during this period in the last few days. thosegton has imposed sanctions on their european allies. officials have been there trying to conjure up support. many trade experts cited the u.s. has teamed up -- had teamed up with europe on this, they may have made more progress. that is looking less possible.

chinese officials are trying to build on their ties with the europeans. unexpected -- an unexpected shift. you have to bring in the g7 because we are seeing this backlash on the tariffs there. i want to bring in mark marquette from washington. take a listen. 4%.e are growing at has that potential of slowing down the recovery because it hinges on the level of confidence. mark, it is so telling. it is not really the g7. plus one.g6 >> the french finance minister described it as the g6 plus one.

there is concern from the other g7 countries that the entire alliance might be in jeopardy if they cannot cooperate on trade. it will be a destabilizing component for the whole alliance. there is broad frustration as well about the lack of clarity from the trump administration, forargument being used putting tariffs on u.s. allies, particularly canada and mexico, but there are national security risks at stake. just howack has been can you call this a national security question when these are allies who have fought together again wars? justin trudeau said it was insulting to canada to have it u.s. ally react's way. -- react this way. ramy: the are also hearing from white house economic adviser

saying blame everyone except trump. how is that coming across? ,f you are playing the victim not very many people are going to side with you. he was responding to this question of why are you going after canada with tears if your beef is with china? the administration officials just left to argue that this is what the president said he was going to do with the campaign. he is delivering on a promise. there are problems that need to be addressed. one of the talking points on the morning show this morning were that there have been decades of trade abuse and it is time for someone to stand up to deal with them. that is a small comfort to the country faced with the prospect and this uncertainty that they are on again and off-again. true.:

we will leave it there. we want to thank our correspondent tom mackenzie joining us from beijing this one. more on trade ahead. -- full on long trade war might look like. ramy: u.s. labor market is having its goldilocks moment. management tells us whether that can keep the equity markets afloat. this is bloomberg. ♪

ramy: welcome back. this is "daybreak: asia." yvonne: more now on president aheads decision to push with tariffs that has brought backlash from u.s. allies and it running from china. the economic council saying that the president is not the one to blame.

>> do not blame trump. blame china. blame europe. blame nafta. lame those who do not want reciprocal trading and protectionism. trump is responding to several decades of trade abuses here. yvonne: here now joined by peterson institute mary lovely -- peterson institute. how are you feeling about the solidarity among the g7 right now? >> we are moving into uncharted territory. we always said the u.s. is the indispensable nation. you will see how indefensible it really is. there are a lot of good signs that the g6 plus one could move

ahead. with theat trans-pacific partnership and we saw with increasing solidarity thathe trump administration is treating them unfairly. we have seen this retaliation so far from the likes of mexico, canada and eu. do you think they have what it takes to fight a potential trade war? who is likely to fold? >> i thought there might be some folding, but i do not year because every time it looks like the trump administration might make a deal, something changes the deal. a levy tariffs or they ask for the impossible. there does not seem to be a movement to split off in the pack and make a deal with the u.s. we saw that a little bit with south korea. south korea made the changes to the free trade area with the

u.s. that was needed, but i do not think we will see it with the larger countries. ramy: i am still scratching my head over these tariffs. i know the finance ministers are. to what end? cannot believe with these closest allies that donald trump and the white house are trying to hurt them. i feel like they are trying to get leverage with china. what are your thoughts on this? >> we keep trying to find logic in this. we keep trying to find the master plan. the more it is clear that there is no master plan. this is an administration, doeste larry's objections not seem to belie that trade benefits the less -- the u.s. it has an interest in diminishing the global supply chain that american corporations and foreign corporations are doing business here -- the that they depend

on. we have an administration that does nothing to believe in the value of trade. ramy: when you look this from the global perspective, with your expertise with china, what do you think about their strategy, how they have been posturing? i feel they have exerted a lot of patience as they are trying to figure out what to do with washington right now. >> i think they have spent months trying to figure out what is going on. , ready tomake a deal negotiate on a whole bunch of items, not only purchases but other changes to their tariffs changes to regulatory behavior that would have benefited our businesses. those deals seem to be out of reach. how could weying use it hundred billion dollars down?

he has no understanding of how trade and balances are created and what the u.s. role in that is. i can see how the chinese are terribly confused. i think they have reached the end of their rope. editorial heard this from the global times saying the u.s. cannot have their cake and eat it too. what do you think the u.s. is leaning towards now? what is plan b? >> it is hard to figure out what a plan b is when there is no logic to plan a. i would have to say that i do not think they are going to make a plan that works with china because president trump made promises about zte,, which he cannot deliver. the political backlash in his own party was very strong. issue of intellectual property was the key issue.

that is taken off the table and he expects major changes from china while still holding the tariffs at bay. the defensive to be in the room between the parties were this to be resolved in any way. yvonne: right. task, but thathe brings the question of is the president thinking about u.s. china trade relationship for the next 10, 20, 30 years or the next five months? win ahead of for a the november midterm elections? >> it does seem to be the calculus here. one wonders if he has thought behind -- beyond imposing our tariffs. retaliatory tariffs will be imposed. those have been announced by the chinese coming europeans, canadians and mexicans. that will hurt some part of the voting public very badly.

while we might say it will take a few months, in many places it will not take a few months. we have already seen the effect on steel. steel companies are seeing their customers dry up. they are buying fully made goods. businesses do not enjoy uncertainty. they thrive on stability. they can only make the changes they need to to protect themselves. there was a win-win situation for washington and beijing on trade deficit reduction, which is how we got here to begin with. what would be a number in your head that you could does that both people could walk away from? $50 billion i think would be a stretch. beyond that, i really do not think it is feasible. we do not have the supply. it cannot be done in any timeframe that president trump would accept. the focus to say that

on the bilateral trade deficit is one-sided. we should be looking at long-term changes that allow market access. corporations outside of china. ramy:hen you were talking about politics, we know that politics is always long-term. we will leave it there. this you very much for great analysis. mary lovely of the peterson institute talking about what is happening with u.s. allies and competitors. a roundup of the stories that you need to know to get your day going. the verb survivors -- bloomberg dayb . go to this is bloomberg. ♪

yvonne: a quick check of the latest headlines. global airlines are increasingly looking for ultra long-haul planes that can fly from one end of the earth to the other. they see demand for as many as 100 long-range versions that could fly from western europe to eastern australia nonstop. they already operate a london service while singapore airlines are reserving the fights. ramy: boeing has fought off airbus. six threes taking miners with an option for four more. the deal is more -- worth more than $3 billion at list price. playmakers traditionally offer healthy discounts. in a moment, what does friday's strong u.s. job support say about policy at the fed?

next onask advisors what to expect moving ahead, especially what might happen with said rate hikes. rate hikes. this is bloomberg. ♪ two, down, back up!

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in hong kong, pretty gloomy but getting some rain. humidity is in the city. we are 30 minutes away from the first major arc it open. ramy: a little cloudy. 7:30 sunday in new york, the markets closed. in the green, up a little percent. i am ramy inocencio in new york. yvonne: i am yvonne man. you are watching daybreak asia. look at the first word news. that's let's get to first word news. haslinda: the commonwealth has to see a record $700 million australia fine of a systemic

.reach and money laundering they admitted further contraventions and receipts are's death procedures, monitoring and diligence. it will be the largest civil penalty in australian corporate history. all trade anul agreements with the u.s. if the trump administration pushes ahead with tariffs. this game as the wilbur ross flew to beijing for talks. there have been some progress in talks in agriculture and industry and china said it will boost imports from the u.s. the u.s. could be standing alone at the g7 summit and canada. the other groups say they will take retaliatory measures almost trump stopped the tariffs on steel and aluminum. the white house is ignoring the threat, saying countries are eight -- overreacting and the

blame lies with them. the imf said a trade war will hurt the global economy. chancellor merkel said more must be done to strengthen the architecture of the eurozone. summit,ahead of a e.u. she said a successful economy depends on a's table, currency. she of president macron have promised to offer a range of reforms when the leaders meet in brussels june 28 and 29. they include banking unions and investments in the e.u. find. -- fund. 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.aslinda this is bloomberg. ramy: the u.s. labor market guide, even tighter as unemployment fell back to a 49 year low. will this be enough for the fed to signal a faster pace of rate hikes at next week's meeting?

we wait that. kathleen hays is here with more. a stronger than forecast jobs forecast as well as wage growth here. what does it mean? kathleen: there was almost no doubt -- nbt that they would hike in june. if you look at the projections on the bloomberg you see it is 100%. when the fed updates the summary of economic projections which it does every quarter, will the dot plot change? now it is divided between three hikes and for, -- four. so how much will those forecasts be affected? let's look at what was in the report. going into bloomberg, looking at the charts from our library, the may,ll is up 223,000 in previous month's revised lower. the six-month trading averages 200 and thousand, and look at

the unemployment rate. it is 3.8%, not since the year 2000, matching the rate last seen in 1969. that is quite a number. what is interesting is the mark human that is the argument here that progress is being made. the issue is wages and if they are rising enough to boost inflation? target? a few things.ws blue lane -- the blue line is the pce inflator. the white is average hourly earnings for all employees, which includes the bosses. super -- ifout the you only have production workers and nonsupervisory workers, the number is 2.8%. and the head of our economics team says you have to see that sustained at 3% before it is

strong enough to get to the fed's inflation target. that is the question. if i am a hawk, i know it will get there. in the middle, i want to wait and see before i forecast fr rate hikes. yvonne: there is still a lot of divided opinion whether they can sustain that, so what happens next? a couple let me share of things. john williams of san francisco, soon to be in the new york fed, gave an interview on friday. he said he has seen rate hikes continuing over the next couple of years. the fed is three hikes away from neutral, suggesting it is around 2.5%. from janice henderson capital management was on television friday after the jobs report. he does not agree with john williams. let's listen to him. >> i think the most important

number was the average hourly earnings of .3, now annualized at 2.7%. are we making america great again? from the standpoint of jobs and gdp, inflation moving higher in terms of wages and the, you know, it is a scenario where the fed, the fed hawks basically think they can move forward once, twice, some say three times. i say june is the last. kathleen: one of more thing, we did see the yield curve flattening. we also spoke to jim bullard of st. louis who has been pounding the table about a flat yield curve being dangerous. he thinks the fed should be careful about moving to the restrictive policies. he said if you look back at 2007, the staff was kind of dismissing the yield curve as signaling recession because it was not the same as it used to be. that was his message. we will see what happens.

ramy: he told us that is where he learns his lesson. if the yield curve inverts, recession follows. thank you very much. for more on this as well as u.s. jobs, let's bring in crles lieberman, advisors capital management chief investment officer in managing -- and managing partner. in the break we were talking about your biggest concern, rising rates. but will go into the jobs report. charles: my underlying concern is the market is very tight, and that produces higher costs and inflation. kathleen was right in pointing out the average hourly earnings have gone 2.7%. that is not the best major -- measure. the environment cost index, which adjusts changes in the mix, is. you will see all of the hiring is done at the lower wage scale, the less educated workers. the unemployment rate for the most educated workers, those

with college education or more, that is stuck at 2%. the hiring is taking place with lesser skilled workers, because those are the ones most available. they are filling in these jobs, but that brings down the average wage. so if you look at adjusting for inflation is in excess of 3%, so 3% number already, and it is likely to continue to rise. ramy: we were talking about the 2% rate -- wage growth area people say it needs to go higher . you were saying it depends on how you define escape velocity. .harles: it is a scale the higher it goes, the more upward pressure it puts on inflation. there is no magic number. i don't think 3% is magic. you go from 2.6% to 2.8%, that is the same as 2.8% to 3.0.

unemployment is going up. it will produce higher inflation, and the only question is how quickly and how much the fed will allow this to run before they really start to rein it in. angie: where do you stand in terms of fed rate hikes? charles: there will be four. the fed at its last meeting was almost evenly divided between three and four. it would not surprise me if they tilted to for now with this -- four now with his latest meeting. it is possible to differ that decision because they don't have to make it yet. it is either september or december or both. they don't have to make that decision potentially until december because they can hike in september and then wait three months. i don't know we will answer that at this meeting, but there is no question the rate will go up because inflation is what -- is

rising. so do you go long, above 3%, or do you think there is a technical barrier when it comes 3%? charles: i think 3%as much a very are as a piece of paper. i think we have the potential to blow through that number. 3% is not a number that .estrains u.s. economic growth adjusted for taxes and inflation, 3% produces a real rate of return of roughly 0%. so effectively an investor is earning nothing on their money, locked in for 10 years. i don't consider that an investment. i think of it of an annual donation to the u.s. government. interest rates are too low, the structure of rates too low, and ultimately they will normalize to a reasonable level where investors are in a positive rate of return.

yvonne: so looking at the gtv chart that shows the .2 spread that continues to flatten. we see around 40% or so basis points. do you suggest we could see an inflection point, a further curve steepening? charles: it depends on the inflation data. if we start getting worse news, meaning higher inflation, that will hamper the long end of the curve and reduce steepening. but i think the longer term trend is towards flattening, and ultimately maybe an inversion, but that is down the road. i think it is normal at this stage of the business cycle to expect to see flattening. we have been getting it, and expectations continue. yvonne: where are you in terms of risk? do we see populism coming back and trade war fears? in terms of the short term, we could be seeing a lot more drivers when it comes to how strong the u.s. economy is.

we have to separate the politics from the economic very we have been talking about the labor market. that is pure economics and clear-cut in my mind. the politics are messy. this administration is going after trying to reduce the trade imbalance in a very public way. they are sure to enjoy if not anger trading partners -- annoying if not anger trading partners. i think that approach is problematic. it will lead to plenty of nasty headlines periodically over time . i have no doubt every so often the market will puke. that is the technical term, and respond to these noise events. i don't know how that will play out, because at the end of the day the question is, is trump like to get anything on the trade balance?

i think intellectual property is a better target than the pure trade balance for a bunch of technical reasons. but the bottom line is it is to certain to call. there will be a lot of noise between now and angie: who knows how long that will be. for the investors watching, in order of importance for you from investment strategy, what are the biggest risks? do we start with china? charles: i see interest rates, higher rates, and that u.s. equity mt still pretty acted because of what is ahead with corporate earnings. earnings are expected to rise to something like $174 per s&p share next month. that is below 16, so the stock market is not expensive. the bond market is expensive, especially if inflation picks up. so i am short in the fixed income side.

average duration is 1.5 years. we are extremely cautious, very protective and defensie fixed, and on the equity side, we are more balanced, more cyclically sensitive. interestingly enough, some of the safest parts of the equity market, consumer staples, real estate investment, are the most vulnerable and more cyclically sensitive parts are more cheaply priced, more attractive, and have good earnings growth. that is the exposure we want. yvonne: we will leave it there. charles lieberman, chief investment officer from new york . we are counting down to the major market opens in the asia-pacific. let's get to david ingles. chuck was talking about these political factions. [indiscernible] before we talk stocks, look at currencies.

some nausea. david: the catalyst that does make you puke. you want to avoid. , june is pretty much priced in. let's look at the bloomberg. september basically being priced in as well. you look at the meeting at this point, you look at where the rate need to become a basing it on this, now above 50%. we price that out. when you look at the majors now, we could be looking at an eighth week of gains or the dollar. look at the majors area we will get details, but everyone i have seen this morning, hsbc, the news out of her intelligence, short-term the dollar can rally because data is good. we look at dollar against the euro and sterling. yvonne: the president's tweets before the jobs report sent the

balls out. everyone got excited. stock split positive? david: it is looking up. we may be at 3.4% and for japan. an opening up of 6000 for the asx 2000. not a lot of data. retail out of australia, nine minutes after the markets opened, and indonesia also comes out with inflation numbers. this week i will get a chart, have a look at this. i keep going back to this because we saw below the 200-day moving average. we are below that now. zoom in on this. so it isbit above it, over lining in this week, but there is zero momentum as far as equities are concerned. we might have to wait before this comes back. ramy: in terms of other things you might be watching, you are looking at something with msi

waiting -- weighting? david: there was a moat -- a note from nomura. south korea might actually overtake australia has the biggest weighting on the index. hong kong and china together, japan number two, then south korea might overtake australia as far as the waiting -- the weighting is concerned. to give it an indication which way you might want to tailor your portfolio. great stuff. we will look ahead to that, david ingles on the market. up next, the world's defense ministers say the u.s. and china have one troubling trait in common, a willingness to break the rules. we will bring you more from asia's annual security forum in singapore. this is bloomberg. ♪ ♪

ramy: we have breaking news now. guy on a is cutting its global 12%, to2018 profit by $33.8 billion. this as we are looking ahead to our old, to our upcoming ceorview with the iata coming up. the old forecast made in december was $38.4 billion, so that is a cut of $5 billion, a fault of 12% from the earlier forecast in december. looking ahead to the chat with iataion a it all -- the ceo. you don't want to miss that. yvonne: i just of what he said -- a gist of what he said, it is rising costs of fuel. affect thes could

profit significantly. more of that conversation later on, but the united states warning north korea it will give relief from sanctions only when --ngyang shows irreversible david angle following developments relents or with the meeting of defense ministers in shanghai. eight days for that possible trump-kim summit. >> north korea on the top of everyone's mind. there are raising tensions with china and taiwan and the south china sea. the defense ministers talking about north korea ahead of the summit, in the same city. don't know that will be the same venue, but we will talk about that. , the u.s. defense secretary, says we can anticipate a bumpy road to the negotiations. this is what he also said about north korea expecting sanctions relief before giving us nukes.

>> we will continue to implement all the u.n. security council resolutions on north korea. north korea will receive relief only when it demonstrates a verifiable and irreversible step of denuclearization. trumpn: that being said, on friday backing away from his hard-line stance on demanding a complete denuclearization for the talks to go ahead. trump conceded north korea will not agree immediately to give up their arsenal. the maximum pressure campaign, maybe not so maximum. donald trump said i don't want to use that term because we are getting along. this on-again-off-again relationship playing into here. then we are hearing from south korean media that the president will indeed -- it is a media

report, reportedly will attend the summit and they will try to get a piece deal done between the three. ramy: a lot of stuff happening in singapore, but under what is happening with north korea, taiwan, which we don't talk about a lot, actually took a piece of the action in terms of the talks in singapore. stephen: there is a lot of bubbling tension between china and taiwan and the united states , and the united states' moves in support of taiwan. that is on the sideline of north korean issues but not nearly as -- it is still as much of a flashpoint potentially because mattis warning china again at the singapore shangri-la dialogue, they are disrupting, china disrupting the status quote on taiwan. we had u.s. lawmakers who attended the summit or the dialogue in singapore stopping off in taiwan on the way and voicing their continued their

support for taiwan. taking what the president has recently stepped up its military readiness campaign including military exercise and this week will test a new text alert system to warn possibleence of invasion. there is bubbling tension of course, and china has dismissed some of the u.s. -- at least the military has dismissed the u.s. militarytaiwan or the area in the asia-pacific as nothing more than seafoam. ramy: let's leave it there, the chief north asia correspondent, stephen engle. the latest on singapore and north korea as well as taiwan. don't forget our interactive tv function, tv . you can watch us live, catch up on past interviews and dive into any of the security or bloomberg functions we talk about.

this is for bloomberg subscribers. check it out. this is bloomberg. ♪ is is bloomberg. ♪

>> this is "daybreak asia." again, just want to recap some of the headlines who were talking about just now saying they are cutting their global airline 2018 profit forecast by 12% to $33.8 billion. compare that to the $38.4 billion it made in december. that crossing the bloomberg terminal moments ago. we are looking ahead to the ceo who we will be having in 35 minutes time. 85 in hong kong. ceo, and what he has to say about the numbers. yvonne: covering the next hour

of "daybreak asia." " we talk about how the alliance hosted attract more member airlines and still on aviation we had randy to share the playmakers outlook. this is bloomberg. ♪ retail.

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8:00 a.m. in hong kong, we are live in a bloomberg's asian headquarters. welcome to "daybreak asia." stocks gain after strong u.s. payroll numbers all but confirmed a rate hike this month. a fears of a trade war casts shadow on the market. all bets are off if washington pushes ahead with tariffs. ramy: from bloomberg's global headquarters i am ramy inocencio where it is just pass it :00 p.m. in new york on sunday. they agreed a ne to resolve systemic reaches. this would be the biggest settlement in australian in sydney. airline stryches on the horizon and said

the good times may be coming to an end. yvonne: it seems like investors are going to be in a dilemma with a look at the short-term front markets versus the long-term. take a look at my job chart. rates and trade war fears. amidst those we are seeing job numbers hitting every mark. because of the forecast we are rate hikes being priced in, at least for 2018. more people warming up to the idea of this rate hike next week being a done deal. september in the outlook as well. interesting to see fewer rate

hikes being priced in for 2019. a lot of questions and being cautious about how many more could we see this year and could we be done after 2018? ramy: bill gross of being the outlier saying he thinks june might be the one more and done for this year up until at least 2019. at least for investors, looking back on friday, they thought things were good when i saw job markets. ,ut with rising fed hikes inflation, that has its effects on the start targets -- stock markets. yvonne: new shortage of the trade it rhetoric we saw from g7 over the weekend. that could be simmering in the background. let's check on markets. 9/10 of 1%, closer to 2200 on the nikkei 225. we will get the cba in just a moment. big news coming out on the company. 6000 on that.

oh we are trying to avoid in the asia-pacific is a 43 of -- a fourth week of decline. a very interesting note. right after the jobs data came out. before the jobs data came out, the probability of the september rate hike was below 50%. look at the prices and we are now closest to 70%. wirp. a 10, 248. 291 there on the 10. flatter on the five in the 30. we are back below 30 basis points. 29.8 4, 2 and a tent is not moving at the moment. have a look at majors right now. retail sales are due out of australia. you have inflation numbers out of indonesia at noon today. euro-dollar moving up slightly, 1.16. if you look at what a lot of analysts are saying, you have goldman revising their forecast.

our guys a bloomberg intelligence saying when you look at the dollar, it has room to move. just looking at that or adollar, or even dxy, move up to 95 might take euro-dollar because of how large that waiting is. on eurocket up 115 dollar. sterling closer to 133 and dollar-yen, 109 -- 109.67. this is your tv function on your bloomberg. up 2%. more clarity. 700 million bucks is what they are saying they will be paying to settle. have a you look at this. 2% there, no volume coming through. it is a monday. let's wait to see how the stock story progresses throughout this trading session. -- thanks for that check on the market. let's look at the first trading day and get the first word news with paul allen. donald trump's lawyer says

the presidents authority to influence an investigation into his actions abroad is not quite unlimited. in janua white house legal team wrote to robert mueller arguing the prent could not abstract a russia inquiry because he has the power to terminate the probe or part in those caught in it. rudy giuys such action would be dangerous. states, pardoning himself would be unthinkable. it would lead to, probably, immediate impeachment. would be under tremendous pressure. president trump has no need to do that, he did not do anything wrong. paul: the u.s. could find itself standing alone at next weekend's g7's -- g7 summit in canada. others say they will not go ms president trump abandons his tariffs.

white house is ignoring the threat saying countries are overreacting and blame for any escalation lies with them. a trade war will hurt the global economy. commonwealth bank of australia has agreed to pay a record 700 million aussie dollar fine, or 500 $30 million u.s. of the systemic reaches of money laundering and counterterrorism financing laws. they also admitted further contributions, risk, and customer digit legends. if the deal is confirmed by the court, a will be the largest civil penalty in australia corporate history. they have resumed wage makingtions with unions the most ambitious proposal yet. talks failed last year leading to a six-week strike at the world's biggest copper mine. oldgreement and the contract was expended until july the 31st. the union wants a 5% real wage rise plus a when a bonus of up

to $40,000. onbal news, 24 hours a day air and at tick-tock on twitter powered by more than 2700 journalists and analysts in more than 120 countries, i am paul allen and this is bloomberg. yvonne: china has a blunt message for the u.s., all trade bets will be off if the trump administration follows through with tariffs. wass -- wilbur ross is in beijing. more on this this morning. tom, it seems like china stance is heartening -- hardening. you saw is bubbling to the surface. frustration amongst china's policy makers when it comes from the switchbacks they see from the trump administration and the lack of clarity around the straight discussions. if commerce secretary ross came to her for two days of talks as you said what the prime minister, following the agreement that was signed up to

by both sides, the u.s. and china, both sides tout to disagreement, at least to 48 hours and then you had trump say, we do not even know if this agreement will stand. last week, he revisited the idea of imposing the tariffs on chinese imports. initially, this weekend had been about fleshing out that agreement. following those comments from trump was a bit of a full's error. we were not expecting much in terms of deese sales -- details. we do not get a joint statement and we did not get any further movement, at least not publicly on this decision or agreement by china to increase its imports of agricultural and energy products. what we did have over the weekend was what state media says is a redline for china's policymaker, which is, we will not implement these deals or agreements until the threat of tariffs is off the table. ramy: if we push that forward,

how else might china responds. interestingly, as we increase murkiness around the trump administration, we had it bit more clarity on where china was hoping to lead things in terms of talks. we have had moves to open up sectors of the auto sector, reducing tariffs on products. we had expected and heard that officials are drying up new lists of products ranging from agricultural products and health care that they would reduce taxes on. it may still come into force, but it may be down to how the trump administration response from here. what we have not seen is china making any serious moves about changing its industrial policy in its 2025 policy. been wanting to end willing to make progress on increasing imports from the u.s.. there is the question around the the we touched on this and fact that the telecoms company

has been frozen out of the tech or catch -- tech imports, they have oversight of the deal. we have been told that will knock it signed off until they get clarity. we have heard that chinese officials have been in europe trying to put on charm offensives around working with their european counterparts on upholding some of these multilateral processes. it seems like washington and the trump administration is less keen on that. there's lots at play here but it seems a good chinese will be looking to the next move of the trump administration. ramy: as you are talking it seems as if people are trying to feel their way in the darkness without getting bumped but everyone is getting bumped even as they are trying to strategize. looking ahead to the next time we have you on because this is not the end. toma correspondent mackenzie in beijing. still ahead, boeing's vp for theeting joins us to share

company's outlook for aircraft demand in asia. we will speak to one world ceo about why they decide to let smaller carriers finally join the club. this is bloomberg. ♪

yvonne: this is "daybreak asia." i am in new york. a quick check of the latest business flash headlines. global airlines are increasingly looking for ultra low plane second fly from one end to the other. they see demand for as many as 100 long-range versions of the a350 that can fly from western europe to eastern australia nonstop. already offers monday as service while singapore airlines is reviving its new york flight. yvonne: boeing is said to have

thought off airbus to win in order of the singapore airlines. we are told they are taking six dreamliner's with an offer for four more and they are considering whether to buy the 7879 or the 10 version, which could fly to europe. it is worth than $3 billion. playmakers traditionally offered discounts. ramy: china's group has agreed to add main planes to its airline fleet. it signed a deal for 219 jets. of timeover a period but they have no specific order place. they are pitching its to air toft to jim mastech -- domestic carriers to compete with airbus and boeing. meetingthe annual iata is underway in sydney. with thess over

alliance representing around a fifth of total airlines industry. as you can hear and see behind me, the hustle and bustle meeting is iata underway. we have some 390 carriers and 1000 representatives. we ceo of one world here and are about to talk all thing alliances. i will talk about the introduction of the one world membership here. is it all getting a bit too complicated with the different levels of membership? i think we -- -i think -- >> i think we are trying to do the opposite. the contacts around the one connect is if you take a look at the historical and traditional hunting grounds of alliances, it is the larger network carrier.

if you look around the world, it is the 20 larger airlines that have already committed and one of the three global alliances. there is not much happening. we are not expecting much change. there are different operating models. are consumer niche is or geographic niche is or market niche is, that is a fantastic example. we are glad to have them on board. haidi: what other characters -- carriers are you looking to? rob: we are always concerned about who we are talking to. cause our competitors are talking to the same people. we do not name names but we have a very solid pipeline of potential connect learners. what it is about is ensuring that one world delivers values.

gross,ot about gross to it is really, strategically haveng at where we geographic coverage that could be improved in those areas. haidi: china is obviously a major one for carriers. on --hina shionogi hinged your china strategy in sean cafe. you look at the volumes and there is more passenger flow directly from the mainland to the destination. do you see adding chinese character -- a chinese character -- chinese carrier? rob: what i will say is they are amazing partners in a have a high-quality airline and one of the founding members of oneworld . we are anonymously far from our portfolio. the other point i make is that we are very well represented in

china and we have a vast majority of our main characters operate directly into china. another thing to say about oneworld is that we recognize the world is not perfectly rical. have a reasonable amount of flexibility of our member airlines. if you look at our member airlines and the partnership for chinese characters -- chinese carriers as well. a one-stoplways solution. we have to look at multiple options. chineses the entry of a carrier possible with cafe in the mix? rob: i will not comment on anything about specific membership. cafe is hugely important to us. one of the things about oneworld is we have the market share of and we have all business traffic

. a lot of that is due to the quality of our member airlines. fa is an extremely high-quality airline and we are proud to have them in our mix. haidi: beijing said they will have two international airport hubs. one dedicated to skylines. where does that leave oneworld? rob: that is a great question. we are an active dialogue right now. the chairman who was just in , heing a couple of days ago was there but as chairman of oneworld he had a very constructive discussion with the appropriate people. formulating our approach, we will be working for a collaboratively. it may not be a one-size-fits-all solution, but i think the new airport in beijing is a very exciting prospect.

i think very good access, but not just the center, but they are from the airport to other regional cities as well. i think it is a very interesting prospect. question.eat we are in active dialogue at the moment and we are working on what our final position will be. haidi: they just cut their forecast,or global but clearly it is near the end. is there more pressure to provide value? rob: there is always pressure to guide value. most of the alliances are around 20 years old. if you think about what has changed over the last 20 years it is everything. we are on a very, very sharp and innovation, transformation program.

we talked about our new membership. quite a big historical model of oneworld. we are vfocused on how we connect the alliance proposition to the customers digital world. not by using the digital assets of the airlines have. we're reimagining can refreshing our brand. there is quite a lot of activity but you are right. the alliance development has not grown at the same pace. we have had a great board meeting over the last couple of days. tremendously supportive group of mi members that are very engaged. it is not just the management company and the group of people that i work with that are in such a collaborative environment among the member airlines.

the capabilities across the border group are fantastic. about thetty excited rest of the year in 2019. haidi: enjoy the rest of the conference here in sydney at the iata 74th annual meeting. talking about the challenges with oneworld coming up to its 20th anniversary next year. lots of challenges as we have the profit forecast cut just this morning. ramy: haidi with oneworld ceo saying cathay pacific is very important to the alliance moving ahead. also with beijing in active discussion. china's trade figures will be in the spotlight as tensions grow over the trump tariffs. we will look ahead to that next. this is bloomberg. ♪

ramy: china's trade performance

takes on heightened importance is weak as beijing warns that any deal is off if president trump makes good on his threat to impose unitive tariffs. hays is editor kathleen here. what can we expect out of china trade? kathleen: on the numbers basis and if you look at it from that point, more strong numbers aren't exports and imports for the month of may. china's exports are seen rising 11.1% in may year-over-year down from 4.7 but that is a nice number. what country would not want to have that? of 19.6 percent, not as much as the 21 .5% year-over-year seen in april. china's trade surplus is seen point $5 billion in may come just over $28 billion in april. uber economics points out that tariffs and rumblings of trade

war will not affect trade data as well. you could be sure that there will be focused on in the midst of all this discussion. look at the bloomberg chart just to see how the u.s. is going to see this. the u.s. will see this as a referendum, a report as a trade deficit with chithis is what che u.s., it is a very large trade deficit. i would also like to point that our bloomberg insight team talked about how a trip to the textile producers already have problems. arer orders are down, they struggling to boost exports so there is a lot around the china trade report. the: shifting gears to central banks, looking at australia and india, nothing expected there? kathleen: no but we will watch what they say and see with a signal about future rate hikes. policy on hold because had will i wanted to get quick look at australian inflation. another look at the bloomberg

library. it is purely up to target. he gives them plenty of time to sit back and relax. off,ifferent reason, first reserve bank of australia stayed on hold all year, possibly next year. reserve bank of india meets on thursday. also keeping policy on hold. inflation started to rise. a hawkish tone to come out of their post meeting statement. gdp came in shock driven forecast recently so people are thinking there is a small risk of a rate hike but the reserve bank of india is probably ready to sit back. also on friday, when china's numbers come out we will be looking at their trade and current account numbers. buffers quarter gdp was negative , could that possibly show the vision that it will get stronger? ramy: a lot of things to look forward to. kathleen hays, thank you. boeing's plans

to dominate the midsize market. we will be speaking to vice president of commercial planes just ahead. this is bloomberg. ♪

>> it is a: 30 this morning. half an hour from the opening of trading. 8:30 this morning. half an hour from the opening of trading. ramy: you are watching "daybreak asia." paul: all trade agreements with the u.s. and the trump administration pushes ahead with tariffs. the warning came as commerce secretary flew to beijing for talks. made some progress in agriculture and energy and said itsa repeatedly willingness to boost imports from the u.s. and other nations to ease deficits. they will win really from

sanctions only when it is shown in review civil moves towards denuclearization. defense secretary james mattis met sack of -- met counterparts from south korea and singapore ahead of the summit. theaid they rode ahead and west mmaintain a stuff tests -- must maintain a tough stance. chancellor merkel says more must be done to strengthen the architecture of the eurozone. speaking ahead of a summit at the end of the month, she said it depended on a stable common currency. she and president macron have offered a range of reforms when they meet on june 28 and 29th. they include a common eu investment fund. unique creditors are considering a merger with france's general. a move that would combine two of europe's largest financial institutions. the ceo has been developing the

idea for several months. fors french and once worked soft yen. the bankers say two companies were not be ready for at least another year. news, 24 hours a day on air and at to talk on twitter powered by more than 2700 journalists and anas in more than one of your countries, this is bloomberg. yvonne: another check of the markets here with david ingles reacting to the solid jobs report we got on friday. good news is good news. we are up for a second straight day and trying to avoid a fourth week of decline across the asia-pacific. japan is carrying the weight. 1.2% to the upside, 270 points. within that market most stocks are on the way out. petey qe has been up since friday morning. we had a note on stanley. k,ey are now overweighting td 13,000 is the price market for

the stock. that is a big move over in japan. the other big move, i will go through some of these things when you look at the big markets. australia at wamount of 700 million aussie dollars to 2% on a case, up over that stock. when you look at south korea, the steelmaker there, it a lot of analysts have been playing to infrastructure and this being one of them that might benefit in case we do move forward with the north and south korean talks. the one getting a boost on the weekend. dollars weaker today following the data out on friday. have a look at the bond space, nothing much to note there. click look at commodity prices on the back of a weak u.s. dollar. let's this iran and have a quick look at majors.

dollar-yen, sterling is pushing higher until very early. 116.76. pushing towards 95 might drive euro-dollar just because of that relationship. a weighting of the euro on the dollar index. not the bloomberg dollar index. in my drive a to 115. if you go by these notes coming out of hsbc, goldman was out and to 125. the aussie dollar ahead of the rate decision of tomorrow. probability of any move is basically getting priced out all to 2019.ack speaking of the dollar, the next trade is contingent on the weak u.s. dollar. 1400 is what td security is saying could be possible. yellow,your level in which they say would beer average in the fourth quarter.

what is interesting is that no came out about the same time. late may we did get a pop in bullish bets on gold. this is backwards looking as far as that is concerned. predicated mainly on the weak u.s. dollar, which it a lot of ways is counterintuitive when you look of for inflation and what inflation does to the u.s. dollar. have a look at your chart, that is ug -- gtb library. gtv library.ur we are down out of the last eight. during that spine of eight days, markets withup on northbound flows from hong kong to shenzhen and to shanghai actually picked up. you are actually looking at the usage of the daily quarter. chart as you

continue to track msci and the china story. interest coming out of hong kong. ramy: great look as those shards as you look ahead to the -- great look at those charts as we look at the first-day of trading. as go australia because it is sydney.at the iata in they have talked about delivery, sales and how the tariffs we have been talking about could impact the aviation industry. haidi lun is standing by with our next guest at the iata meeting. haidi: in terms of demand, particularly in this section. which is theney, beginning destination for some of the longest flights in the world. we will talk about that with our next guest from bowman. he is the boeing commercial vice president.

about project sunrise, it is all very exciting and the talk up a town. how far away are we from getting this ultralong plane ready to go from sydney to new york and melbourne to london? we saw qantas open up first to london. the next step is what can we do with our triple seven a has a thousand not a call miles of our air they met crew from perth to london. what can we do to open up these 21 our markets? i think we're imminent good place for the triple seven. we have to get the range up a little bit, maybe some advancements in challenging our engineering team. in the next two years we will see 20 and 21 hour-long fights. triple seven a, which will be the longest ranging airplane in the market will enter service in 2020. haidi: a 20 hour direct flight

is not palatable for most people. tweets to the aircraft you make to make the experienore tolerable. we change the flying environment with bigger windows, new architecture, widening in the aircraft. what we have changed is what you can feel in the airplane. there is more oxygen. not only does it take viruses out of the air but we have a smoother right to make sure you have a more comfortable trip. haidi: in terms of the viability of the project, who else will be launching these planes? y: we think airlines of oceana, new zealand, we think about carriers and selfies asia. we also pick about kerry is in northeast asia that may want to open up markets into latin america and south america. thoserst airlines flying omissions or out of the middle east flying into latin america.

those aircrafts are interservice and 2022. haidi: talking about the company's performance with airbus, how much of it heavy seen from the u.s. and the way it structures the impact. randy: it is really equalized othertes compared to markets. frankly, we are a global business, 80% of the airplanes that we sell go outside of the united states. we are in a place where we have taken the advantages we have tax law. the new we are investing in innovation, our people, the community and we are in a very good place. the taxit is not about laws are where we are in terms of trade, it is about having better products in the market. we have had 7% markets here for the last four and a half years, we are doing really well. i want to get information

on a bloomberg report. india up thing for the 787. randy: you have to talk to our customers about that. haidi: are you expecting that competitive edge to continue, and how much further do you go? randy? i don't know who is talking about aggressive pricing we are talking about a more valuable aircraft. the 1360 orders, 71 customers around the world, we are delivering 12 airplanes a month today and we are going up to 14 airplanes a month next year. andave the better family that is why we are winning in the marketplace. how much concern are you hearing about trade wars about u.s. trade policy and whether that will feed into investment? randy: we are a global industry. products that we deliver, we deliver to airlines outside the united states. we have always been proponents

of fair and open trade. we have always been proponents of big red -- big regulation and the market. fair israde is openness the markets deregulate. economic growth, more jobs in a stronger and growing economy. see a benefit for boeing if more planes come out as a result of other countries shining even out the trade deficit? randy: we are focused on our competition and what our customers want and delivering on that. we are in a good place. last year we had record delivery . we are on track to deliver between 810 and 815 aircraft. it is about a growing dynamic growinga market that is significantly over the last 8.5 years. haidi: we spoke to the iata director general cutting that cutic forecasting 2019 will

oil prices. haidi see that going into order volumes? randy: higher field prices means pressure on profitability for our customers. prices,h higher fuel our customers should still have a good margin. frankly, on the good side for us, that means a stronger demand for replacement airplanes. winnick it's over $65 a barrel, we see replacement economics working for our customers. that is good for our new generations. are there greater compensations? randy: it has always been in our industry. at the end of the day whether at $70 or $80 a barrel, or $40 a are there greater mpensations? barrel, volatility and fuel price -- i fuel price is always a challenge. the challenge is to buy the most efficient aircraft you can buy and we think those are boeing aircraft.

yvonne: do think it is -- do think it is something going strong? randy: as we get into the years we see based on previous cycles that the requirements of replacing aircraft could double in that time. we are licking up production rates and looking at the aircraft we are not had march. we think we are well-positioned when that wave comes. had he think he could come out multiple times is a proponent of free trade and trade tensions as aviation. what would you say is the biggest concern. how would you like to see this result. randy: we want to make sure all sides continue to talk. we have to watch and monitor what is going on. we have to tell everyone we can about the benefits of fair and open trade and have to see how it plays out. thank you for joining us here in sydney, enjoy the rest of the conference. that is the boeing commercial airplanes vice president of

marketing. a double-edged sword would it comes to the trade war and demand, but also any potential uptick in demands for boeing as we get both sides working out a middle grounds in this trade war. yvonne: great conversation there. as haidi mentioned during the interview, according to the iata joyride, it may be coming to an end. they have cut their global forecast by 12%, warning that the sector may have reached a peak. director general told bloomberg what is driving the outlook. forecasts that were based on fuel price and some cost estimates that we have to realize. the fuel price is higher then we have forecasted. and it is continuing to increase.

have revised our -- down to $33.8 billion. that is for the year. that represents still 4% of our revenues. it is not a big margin. is $70 a barrel on brent up from $60 a barrel. at $70 thereint is is a lot of factors that could be argued. a conservative enough forecast, particularly if you look ahead to 2019? we should be cautious on any forecast of oil prices. we would not be sitting on the chair. we have revised our forecast from 38 to 33.8. it is not a significant drop.

is when youor that look at what the airlines have for five to 10 years, they have an increase of resilience. we have restructured the activities and reduce the course, we have increased the market presence. a resistance shock has improved. >> do you think global airlines are resilient enough to withstand it, given how fragile the industry has been? results are good, the resilience is improving. is probablyce better than 10 years ago. it depends on the short level of the downturn. confident thatly

it is more confident and more resilient than it was 10 years ago. ,e think that we are able to but they to cope with the down tour -- downturn. the: great insight into airline industry and some of the challenge is moving ahead, including higher oil prices. 's ceo speaking to bloomberg's haidi lun in sydney. up next, australia's largest bank agrees what would be the largest civil penalty in the nation's corporate history? the background to the settlement , coming up next. this is bloomberg. ♪

ramy: welcome back, this is "daybreak asia." yvonne: i am yvonne man in hong kong. the bank of australia has agreed to pay a record find that

settles more than 53,000 breaches of money laundering and terrorism financing laws. once go to our editor frost really a and new zealand. take a look at this price tag here. double what cba was forecasting in terms of the settlement. how will this affect their bottom line? hit their going to bottom line by 700 million this morning, as we said, this is the to bet civil penalty ever paid in australian corporate history. the deal agreed between commonwealth bank and the financial crimes authority is signed up by the federal court, let's wind back and look specifically at what commonwealth bank has a knology. it has -- has egg knowledge.

it has admitted 53,000 breaches and money and terrorism financing laws. these breaches revolve around intelligent deposit machines which cash is paid in anonymously into accounts and then can be funneled offshore. financial crimes alleged that many were being used by criminal offshore.ove money this is been very imbalanced -- embarrassing for the bank and they apologize for letting the community down. ramy: it is not just commonwealth bank under scrutiny teeth -- under scrutiny, is it? this case really has given impetus do a much wider ranging query and australia called a royal commission. that is looking at all of the big four banks and the financial service sector in general. it has been running for a few

months. it is the behavior of the banks ranging from misleading financial lies and lying to the having charges for dead people for services. ramy: managing editor, thank you for that. you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. twomberg subscribers go to tv . easy get the news on the affect -- assets a you care about. this is bloomberg. ♪

ramy: this is "daybreak asia." i am in new york. yvonne: i am yvonne man in hong kong. upe a look at what is coming next few hours here on bloomberg television. funny to watch out for as we saw the u.s. jobs on friday. in the background here is trade tensions in the u.s. and china. mexico and canada, a lot going on for the rest of the week as there is a countdown for the singapore summit. haad: where is it going to

happen? we are not going to go into them. one in santosa. we will not make too many judges. rishaad: mit back to that iata conversation. haidi is there and i will join in on that. they are launching a whole raft of them. what about fuel hedging? soared byeen whipped getting it wrong. what happens in the future? the share price has outperformed the hang seng. i think it is pretty flat so far. we have a of founder, stephen olson will join us to have a tensions.at trade

what will wilbur ross achieve, if anything? that is the question. the auto tariffs of the moment of people holding back from buying vehicles in china as they wait for tariffs to be lowered. taking a look at all that and more with u.s. complaints over china seeing center stage. .ive or six minutes from now taking a look at the energy markets and where go in terms of strategy. is particularly what happening in indonesia and this part of the world and how that follow from turkey and argentina has been affecting things in this part of the world. ramy: of course. good money morning to you. before we head over to you let's take a quick look at how markets are trading right now. at least the ones that are open. nikkei up by one and a third percent. we are looking at session highs. session highs at or near that level.

also a happens in the u.s. on friday with that terrific jobless number. trade tensions a little bit to the back burner because nothing has been conquered ties. right now, in the green for the markets open. had a greatn really start to the asian session. now that we are seeing that bid fading a bit. take a look at asian res for singapore, taiwan and malaysia. we could be seeing weakness when it comes to the city and how it goes today. all of the tech stocks around those record highs on friday. that could bot the taiex here. that is it for "daybreak asia." market covers continues. ♪

rishaad: positivity for asia-pacific markets, getting message from the u.s. payrolls. the fed will be hiking interest rates this month. oil folding losses. she'll rising to the highest production since 2015, hedge cutting bullish bets. all trade grants are off -- trade bets are off to push off the tariffs in hong kong. haidi: i am haidi lun. clouds on the horizon, airlines meeting for their annual meeting. profit forecasts, and the good times are about to come to an