manus: it is 7:00 a.m. in hong kong. i am yvonne man. welcome to "daybreak asia." asia-pacific stocks look set for a mixed open. say nextnside the ecb week's meeting may discuss the end of stimulus. the bond buying runs through september. i am ramy inocencio in new york, where it is past 7:00 p.m. on tuesday. fight me mixed trade messages coming out of the white house. president trump will not jump nafta.

he would prefer bilateral deals. tesla investors back the board. reelecting three directors. all right. to our asia-pacific viewers and of course you, yvonne, as well. looking at the mood on the markets as we handed off to all in the asia-pacific starting your own trading day, it was uncertainty. it was caution, yvonne. the rally we saw coming from the friday jobs report did translate into monday. the markets were pretty much flat aside from the tech shares, but the s&p 500 really did not move at the end of the day. yvonne: it seems like nafta was the big topic. the president urging for some

bilateral trade deals with perhaps these and negotiations pushed back even further. we saw a lot of investors sitting on their hand. the g7 in quebec. trade in the forefront. ramy: no surprise because we will be going through this. let's get a quick check of the market close. as i mentioned, the s&p 500 was barely off of the flat line. the dow was slightly down. it was basically half of the s&p sectors in the green, half negative. tech shares catching a bid. up .4%. it might not sound like a lot, but that's a new record high, and there was also some flight to safety. bips down respectively for the yield. italy, we are seeing folks come out of those italian bonds.

they will pursue a radical policy program. it does not seem like something you want to stick around. it will be an interesting conversation with the cofounder talking about the opportunities in italy. us take a look at how asia is set up as well. pretty lackluster according to what futures are suggesting. new zealand, we are seeing the shares gained. nikkei futures pretty much flat at the moment. taking a look at currencies, watching the haven trade into yen seems to be continuing to ease off. still not have been able to break above the 100 10 handle. we have been watching some of these nafta currencies breaking past 20, the lowest in the past to see thesentinue

nafta headlines. youhe meantime, let's get caught up with the first word news. confirmedte house has the location for next week's summit. hotell be the capello a next tuesday morning. they have a long track record of hosting top level international meetings which offer good security. singapore boasts long-standing ties with north korea. the white house says president trump does not plan to -- presidentow says the would prefer to negotiate separately despite the nafta partners repeating a commitment to a three-way trade accord. negotiators reached agreement on discussion.ssues on

the ecb is said to anticipate a pivotal discussion at next week's meeting which could produce a public announcement. we are told the governing windingwill treat it as down bond buying. it's currently intended to run until at least september. the bank declined to comment. u.s. tech suppliers led higher they signedrt that an agreement that could lift a ban on buying from american companies. the reuters report quotes the commerce department saying no definitive agreement has been signed. the company replaced top executives and president said last month it could resume business if it paid the $1.3 billion fine. news, 24 hours a day, on air and at tictoc on twitter,

powered by more than 2700 journalists and analysts in more than 100 20 countries. i am jessica summers. this is bloomberg. yvonne: jessica think you. recap of the highlights. tech stocks resuming the dominance. a breather and bouncing back after falling below the 50 day average. su: we saw the bounce back come late in the day. the word from one strategist is choppy, slow grind higher because caution remains. let's go to the snapshot. the bonds in focus again. treasuries climbing as italian bonds dropped for the first time in days. derivative index is getting a big push higher. let's get into the big stocks of the day. what's interesting is fang is is now in.

nearing $1 trillion in valuation. this is really the play here. stocks that really plummeted. one you don't want to see because of the justice department pbe. let's into the bloomberg. takes the lead. dtv is where you can find them and it kind of speaks for itself. really showings much wider gains than the rest of the s&p. guy: we definitely got some -- ramy: we definitely got some mixed messaging on news about opec as well as the white house. gold moving. make heads or tails of this for us. su: a midday reversal. let's go right to the chart because you can see it dramatically. i have a two day chart in the

first half of the room. gold came back to life. there is a view that gold would resume its trend later in the year. it has not happened yet. let's go right to the oil chart. we saw midday reversal oil going out and what there is is an anticipation that the big supply data will be somewhat bullish. a very contrary concern that we are increasing production in the u.s. that's the counterbalance. you very much. for more on the markets as well as the u.s. economy, let's bring in our morning roundtable. vincent in new york with me and john silvia, wells fargo securities managing director and chief economist joining us from his ofces in charlotte, north carolina. viewers, as they are starting their day, what do they need to know to get going?

we saw up's and downs. the dow and nasdaq flirting with -- vincent: the markets are taking their cue from italy. there was a lot of positive boost from the jobs market that carried over from friday. now, you have got a populist government in italy and mexico starting to make noise. aree radical talks inconsistent with positive gains through the stock market. people waiting to see what comes out of there. ramy: i want to bring you in here, including the markets. su wassu was to -- as just talking about in terms of commodities. what are your thoughts, especially with all these comments coming out from the trump white house, asking opec members to ante up another one million barrels per day?

john: when you are looking at industrial commodities, they will pretty much paralleled the stronger u.s. economic growth seen. you are looking at 3% growth in the u.s. for this quarter reported in july and probably for the second half of the year. those industrial commodities will probably do pretty well. you saw the ice and reports -- ism reports. as far as those, it's positive. trying tostration is use some moral suasion, just saying, listen, get some production up because we will lose a little bit of venezuela, and it would help us politically. it's an interesting scenario. yvonne: john, we see this inflationary impact in corporate profits. some of the ceo's mentioning oil prices. it take a look at the structural issues dealing with the labor market as well, trigger shortages in the u.s., are you worried about overheating at the moment? john: the challenge will be the

continue numbers which to move upwards. i think the fed will continue to follow that with another rate increase in june next week and another in september. the inflation numbers provides justice for the fed to continue to raise rates in june, september, and possibly in december as well. it really goes to show what happens. i have a chart that shows the spread between the u.s. and german ten-year bund. this is remarkable. 255 basis points. does this white in further before it narrows? are seeing the paid components of individual federal reserve indexes have also been rising, and there hasn't some consistency where manufacturers are able to pass some of these prices along.

that does boost the credibility of the fed raising rates. we could also see german bund yields come lower if we see more asues with italian politics the spread between italian and widening as well. that would put downward pressure on german yields wel ramy: the head of ubs, sergio tvotti, was on bloomberg earlier today, talking about how folks have to stay in the market. let's take a listen to this first. are recommending clients to still be in the market because the underlying profitability is, growth we see, equities supportive of in general terms, but we are also very careful in signaling this may come in. the ramy: geopolitical risk. the -- the geopolitical risk.

ramy: he added that hedging needs to be done. do you see that happening even more as to get into these turbulent waters with global trade and these tariffs happening? john: you have to hedge your position and understand with respect to the tariffs which industries and companies are going to be hit. it's fascinating in the united rates that over 50% of the revenues for the s&p information arenology, i.t. sector, actually earned abroad. fascinating the nasdaq and a lot of high-tech stocks are doing so well if in fact terror star such a real threat. it appears as if the market is saying is tariffs are really not a big issue. do these trade tensions at least get us closer to the end of the cycle? you are watching for signs of recession. what are the prospects on one that actually happens? john: i'm sure vince will chime

in. it may impact supply deliveries which immediately impacts production and increases import for a lot of different industries. you may see a situation where if there are really significant care of problems, you will get less supply of goods so the economy weekends, but also higher prices. that kind of combination really would upset a lot of people and put the fed in a really difficult position of looking at both weaker growth and higher inflation. yvonne: so what is your forecast for recession? you've been watching some metrics. if it is not an inverted yield curve, what do you look at? looking at astill lot of those good fundamentals. we don't see a recession in 2018 or 2019. the financials are turning weinst us a little bit, and worry about the second half of 2019 and the first half of 2020. yvonne: vince, chime in here. vincent: i think john is bang

on. if the fed needs to continue to feel like they need to raise rates to deal with inflation scenarios and you have the uncertainty of trade, which lowers growth, you have that exact situation, as john mentioned. that uncertainty feeds into corporate business decision-making and industrial production. you see this entire income grinding to a halt. the markets are discounting the potential for a trade war, and we saw the capitulation for china saying they would buy up to $70 billion of ag products in the u.s. if the united rates would back off the chair situation. he would ort to say show any signs he will. way, should turn the other it may come in closer than we expect. ramy: a lot of people have been giving their own ideas on when

recession might happen. some say it might be three years. we will have to wait and see. was fargo securities managing director and chief economist in charlotte, north carolina. thank you very much for the analytical conversation. coming up on "daybreak asia," australia takes its most dramatic action yet against bank misconduct, charge and top executives with criminal offenses. details, later this hour. yvonne: president trump sending mixed messages on nafta. separate deals for canada and mexico. we are in d.c., next. this is bloomberg. ♪

yvonne: this is "daybreak asia." i am yvonne man in hong kong. in new am ramy inocencio

york. slightly mixed messaging on trade from the white house. there a kudlow says president trump is not planning to quit nafta, but would prefer a new bilateral approach. >> he is very seriously contemplating a shift in the nafta negotiations. his preference now, and he asked me to convey this, is to negotiate with mexico and canada separately. he prefers bilateral negotiations. ramy: let's assess the implications of that with our washington reporter that is gregg sullivan. how likely is what mr. kudlow said likely to happen? >> it seems kind of unlikely. for one, the u.s. trade partners, canada and mexico, have reiterated that they would like to stick with the trilateral agreement. though kudlow seems to be firming up this idea that trump had earlier floated, i don't see how the u.s. trade partners would take two separate deals.

it just would not be a nafta agreement. i don't think there is strong support for this in congress. we heard a top senator say he would like to see a trilateral agreement remain and to keep the course on renegotiating nafta, not something new. hard to see that happening. guy: especially with what is happening -- ramy: especially with what is happening with mexico putting tariffs on u.s. pork. those sides seem really far apart. no exaggeration. it a deal still possible this year? greg: it kind of looks like it is not anymore. we heard that earlier the white house was trying to wrap up a deal by may because of deadline debatedetting something and approved in congress. we heard from a key house member that the deadline has passed. the window is shut. it does not look like it could

happen this year. any deal struck in the future will be subject to a new congress potentially with stronger democratic presence which would change the dynamics and the mexico presidential election coming up. definitely could be subjected to do dynamics. -- new dynamics. china backing up promises to reduce the trade deficit. do you think it's enough to appease the trump administration? greg: before we'd heard that canada had committed to buying more u.s. goods in a bid to try and keep these negotiations ongoing, these are the first details, the firm numbers. they fall short of what the trump administration was seeking. apparently, the commitment is 25 dollars. the trade deficit between the two countries is even greater than that. i think it's good for the negotiations that there is now affirm number. it means discussions are still happening. talks are ongoing.

it's unclear if that's enough for the trump administration. , oure: greg sullivan washington supporter joining us from bc -- from d.c. elon musk keeping the directors in the chairman role. investors will look at improved outlooks for model three production. more on that, next. this is bloomberg. ♪ is is bloomberg. ♪

ramy: we've got some breaking news on facebook. after all that has been happening with privacy issues, facebook has revealed it has data partnership -- it has had data partnerships with four chinese companies. a facebook spokeswoman confirmed with bloomberg that there is a relationship with chinese firms. off of that, we are seeing facebook shares down .3% after hours. facebook says it had partnerships with four chinese

companies. yvonne: after what we heard from the new york times, the same partnerships with the likes of apple in samsung. let's bring in -- talk more about tesla. require anto independent chairman and approving the reelection of three directors. shareholders cited with the board's recommendations on all agenda items including keeping elon musk as ceo and chairman. that spring in dana hull, and joining us from san francisco. seems like shareholders really overcoming what these credit have said about how tesla failed to reach these reduction targets. how big of a victory is this for mr. musk? dana: a pretty big victory. it's not surprising given the pension funds that match at the campaign which are relatively small. the power of the company is held by large shareholders who own a big state. that's why they are in the stock. it not a surprise that he won. we will not know exactly what

the vote was. musk stays on as the ceo and chairman. yvonne: elon musk commented on the production at the meeting. >> the biggest constraint on output is general assembly. we can probably get to 5000 per week with the current two general's emily lines. the third one, i'm highly confident we can exceed 5000 units per week. yvonne: he's making it sound might they have emerged out of this production hell. how achievable are the targets? dana: this is the first time we have heard tesla say they are building a third general assembly line for the model three. that is news. right now, i believe he said they have 3500 cars per week so if they can get to 5000 per week , that is in line with the most recent guidance they have been getting. delaying things

further. he's optimistic they will reach them. we have about three weeks to go to the end of the quarter. he did sound more optimistic than he had in the past. ramy: everything we talk about has to include wooded involved with further investors. ago, they ares going through so much cash still. what do investors need to know on this? elon reaffirmed what he said recently which is that he does not continue to raise equity or debt anytime soon. once they get to this volume, they will get revenue from cars going out the door, so he is holding to that. shares trading up after market as a result of that optimism. dana hull in san francisco, our bloomberg technology reporter. up next, a date to debates. the ecb says it could start discussing a possible end to quantitative easing as early as

next week. more, just don't. this is bloomberg. ♪ -- more, just ahead. this is bloomberg. ♪

yvonne: 7:30 a.m., wednesday in hong kong. typhoon watch, 30 minutes away from asia's first major market opens. ramy: at least it is clearing up below the clouds. 7:30 p.m. here in new york, where markets closed flat after investors lost some steam from the jobs report from last friday. i want to say -- i have been saying -- i told you so. i am ramy inocencio in new york. yvonne: i am yvonne man in hong kong. you are watching "daybreak asia." first word news with jessica summers. jessica: the world bank is

globalg that growth is set to slow over the next two years as central banks raise rates and fiscal stimulus starts to fade. the world economy will expand 3.1% this year, fighting to exact -- slighting to exactly 3%. approachesconomy fall output, but trade wanes.ment growth saudi arabia and other opec producers asked to increase production. we tell gasoline prices surged to their highest in more than three years. president trump publicly complained about the opec policy that help boost oil prices and drain the glut. sources tell us it is highly unusual for washington to ask for specific output hikes. -- a tentative schedule for boosting production of uranian stock.

the agency says the plan was outlined in a letter submitted on monday. that follows the ayatollahs call. they said last month that you're is sticking-- iran to the deal. spend thewill equivalent of $13.5 billion over three years to stimulate its economy. the crown prince says the government will support new encourage tourism and make it easier to do business. he says officials have been instructed to draw up plans within 90 days. those are provisions for creating new jobs. chinese state media says permission has been given for the country's first private high speed railway project. they approved a route connecting two cities. the group is the lead investor in the project.

china railwaywith and the provincial government. news, 24 hours a day, on air and at tiptop on twitter, powered by more than 2700 in morests and analysts than 120 countries. i am jessica summers. this is bloomberg. we're counting down to some of the major market opens in the asia-pacific. let's bring in sophie kamaruddin. we have a sputtering in this global stock rally. sophie: a breather of sorts. to takerhaps waiting positions before the g7 meeting week,this week and next there is the policy decisions from the ecb and the fed. pulling up the futures in asia, looking fairly subdued. managing lower. ahead of australia's gdp data, the asx 200 could open higher. gdp pick up following the

expansion we saw in the last three months of 2017, supported by net exports and household spending. dollarg in on the aussie ahead of that holding above 76, this after falling overnight against peers on italian politics and trade engines. he can see that get in the aussie overnight. the are seeing a little pick up here perhaps easing after a report that china offered to buy --rgy bids are ramy: we finally got the rba decision, sophie, but the r.b.i. withion is going into it different curves. it seems that there is no relief in sight for em just yet? sophie: nada. jumping into the terminal to

check out this chart to see the bearish technical pattern. this is when the 50 day moving average rates below the 200 day line. you can see that on the far right side of the chart, and this is the first time we have seen this in about 1.5 years. while it is seen as a bearish signal, it does not always lead to losses. similar break in january, 2017. that's our recovery and em. thisnder then whether perhaps will be sustained. we do have some of this optimism being taken out of the picture. ramy: great chart. i love it. i will remember that for reference. thank you very much. a bloomberg exclusive. that's the european central bank may be ready to announce its simplest exit plan in spite of political twists and turns. we have been talking to the continued markets. kathleen hays has the story.

we have been talking about sometime next week. that's really soon. kathleen: it's the june meeting, and bloomberg news has learned from officials inside the european central bank that they may hold a pivotal discussion on having a debate and meeting with a public announcement of the specific date on when they are going to finally start winding down the bond buying purchases. this is of course expected to thatn september thinking maybe mario draghi will want to wait and not really announce his accidental july. one of the reasons you could see from moving the announcement up fears seemt of all, to have calmed down. look at this chart from our bloomberg library, and you can thethat the white line,

euro area inflation rate, up to 1.9%. the target for the ecb is just under bank. german inflation has jumped unexpectedly along with spanish inflation. will that last? that's one question to think about. another question -- can the ecb ignore trade tensions? that can hit confidence in the economy. some of e latest pmi's. one of the co-ceos at carlisle was the summit earlier today. one more gauge of why the ecb can be confident that finds have slowed down and will turn back into signs of strength. let's listen. >> the net takeaway in europe is you have an economy that is being driven by exports and driven by consumption. that results in a much stronger european economy than we have seen a long time.

europe's four years behind the united states in its recovery? that is another very interesting way of looking at what's going on. if they wait until july and the new italian government is in place, and they move forward, conflict be square in with the e.u. budget walls and that might cause new turmoil if the ecb moves now ahead of that. watchingn asia, we are the r.b.i.. with risingked inflation due to oil prices. it seems to be a contentious meeting. hike?en: hike or not to that is the question. for so many central banks, it revolves around inflation. you can see the key metrics are the r.b.i. right now, the reserve bank of india. here is the key rate, repurchase

rate. are they going to move it higher as they see inflation up to 3.6% as they see oil prices rising?/ that can be boosting inflation in the future. economists are saying the head of the reserve bank of india is holding this wildcard at the meeting. is he going to move towards that rate hike? he is ready to remove accommodations. the r.b.i. also moving in this direction. rising oil prices. said rate hikes are all things economists are saying could make them take that move. they will hold steady. that's a significant number saying they will raise the key rate. it the is growing pretty well. pmi numbers a little bit weaker. all this, there is external risk from the

foreign exchange position. things like this. the policy statement will be closely watched. what they say they will do in the future. yvonne: we heard what the external shocks may have been talking about what the article, certainly quite fascinating. kathleen hays, our global economics and policy editor joining us from new york. australian prosecutors laid criminal charges against heads of citibank and deutsche bank. paul allen joining us with more on this. what do these charges relate to? to 2015,s goes back yvonne, when they had a share placement of 20 million shares with $2.5 billion. it all really to how of the 25rs disposed point 5 million shares they needed to soak up as part of a sale. a reported conference call shows anz negotiated how to offload

those into the market. relates toou see this period of time. you can see a dip for 7.5%. that's the australian consumer and competition regulator brought these criminal cartel charges. individuals, stephen roberts, the former -- he was the former australian ceo . the anz group treasurer, all facing charges. all of these folks you mentioned and have denied wrongdoing, so how are they defending themselves? right, and deutsche bank has issued a statement saying it believes all of those are former and current that. they have full support.

city says -- they went back to .n earlier statement there really needs to be some more clarity around the lot here. the penalties are reasonably hefty. they couldividuals, be facing up to 10 years in jail. quite a lot at take in this process, and the trial scheduled to get underway. ramy: looking ahead to that. paul allen, thank you very much for the latest for the cartel case in australia. two bring up purchases. we will dig in with the eurasia group just ahead. this is bloomberg. ♪

yvonne: this is "daybreak asia."

i am yvonne man in hong kong. ramy: i am ramy inocencio in new york. and offered it to boost purchases of american goods by $25 billion this year. to fulfill president trump's desire to shrink the u.s. trade deficit with the country. joining us is todd mariano rajoy. ano.odd mari you think both sides appear to be added towards one round of riff impositions. how would this play out? with you. good to be thanks for having me on. what we looking at here is what youly looking said, the $70 billion offer as well as others moller offers that have been mooted -- other smaller offers that have been mooted now.

-- fully a lay the concerns. it's not only about goods traded. we are looking at investment restrictions and technology transfer and protection of intellectual property, so i do or 25ink 70 billion billion in goods purchases is enough to really withstand not on slots of the trade policy agenda from the u.s. ramy: as a quick reminder, i want to hop into the bloomberg terminal and share with our viewers the current trade deficit with china. to $50 billion at the end of 2017. that's the yellow line. the blue representing u.s. imports and the white representing u.s. exports to china. one thing that is of interest that also developed in the past few hours is a possible breakthrough in zte. criticism so that

donald trump is giving up some leverage and maybe he does not even have the power to do this because the senate actually tried to tie his hands. what are your thoughts in terms of a breakthrough here? todd: i think those have been two very distinct signals china has sent to the united they today, which is that it is not necessarily both sides retreating behind walls and with onein conflict another. and is negotiation that can be had here. for our part, we don't expect it to be very short process. as far as the congress is concerned, different ideas have been floated in legislation and in order to tie the resident's hands a bit on the tv. -- on zte. we think it will get thorny with constitutional authority is as well as the ability to pass the

for otherd that goes things that certain members of congress are looking at for the president trade agenda including steel and aluminum tariffs. yvonne: if you look at the china threats. g7 wasnd of embarrassing the g six -- is the president backed into a corner? is there a sense he has to give in given the international pressure he's getting? or does he have to double down on the trade rhetoric? todd: i don't think the president views himself as backed into a corner. he may have a less pleasant might otherwise be the case for a g7 meeting. the white house has made very plain that it intends to use tariffs as leverage to force negotiations with countries. i don't think it's ready to step away from that in the midst of what might be an act money a summit in canada.

that said, the president places a lot of importance on his personal relationships with leaders. there is always a chance for a one-on-one breakthrough. i think it's very unlikely to come through at lamoni. more likely to come through collaboration and the types of things that president macron highs in particular tried with donald trump. yvonne: briefly to the question stayfta, he still wants to in the deal, but he wants separate deals with mexico in canada -- and canada. how achievable is that? we think that is a very difficult proposition for the remainder of calendar 2018, that something probably will be live window ining at 2019 to really take cold. the negotiations which for the 1.5 months have been racing for its conclusion. the u.s. has been making compromises.

the two sides were making a lot of progress, but certain red lines were crossed that in the end, i think, the u.s. as well as the canadian and mexican governments did not want to cross. and the imposition of the steel and aluminum tariffs was the anvil that broke the camel's back. i don't expect nafta renegotiations to gain that momentum anytime soon. as far as doing separate deals with canada and mexico, a don't think that either the canadian or mexican governments are really motivated to do that in the short-term. for the president, looking ahead to midterm elections in november, that is a less bad outcome than some others that might be imagined. ramy: you left me with the image a camel's back. usually, it's a straw. looking ahead to get back, we donald quebec, we note

trump loves showmanship. is there a possibility he may be waiting to back track by saying when he's in front of those cameras, he will pull back? that a deal might be, so to speak, undone for camaraderie? todd: it's possible. i do not imagine it will be done for camaraderie's sake alone. i think you can tie this back to the issues in the china relationship. the president from the campaign through his first 1.5 years in office have made quite clear one oft only is trade the top priorities of his administration, but dealmaking is the way he's going to reverse what he views as an unfair trading relationship. the quid pro quo has to be more than a nice photo op. that's as much for the president to claim a victory as it is for those who voted for him and those 77,000 votes that really put him over the top 2016.

they were really heavily oriented towards this aggressive trade agenda. i think that what they need to bring home has to be a little bit bigger. push u.s.es this allies closer to china? have we reached to point where countries have to choose sides? todd: it's possible. i think that's one of the dangers of an aggressive trade agenda. the dismantling of this post-world war ii architecture which will result in this sort of island of trade versus a global trading system. i think when you look at the e.u., they are not necessarily of one mind when it comes to china. there are some countries that are much more open to chinese financing and chinese deals than others. what really ought to happen is the transatlantic relationship growing stronger

vis-a-vis china because there is quite an overlap of issues. the best case scenario is that you can use this opportunity to tradingome of these opportunities to bring our allies closer together. that's not where we are right now. ramy: very quickly, and we will let you go. got to talk about north korea looking ahead. what are your prospects for your summit in singapore? it certainly looks as though the summit is going to take place, which has been in question the past couple weeks. but expectations are starting to be tamped down on all sides. summitund softened for a outcome that's probably going to deliver something far short of a finalized, very detailed technical agreement for denuclearization of the korean peninsula. in the first instance, there is still fairly wide disagreement between the sides on what denuclearization means, let

requirementshnical of denuclearization, which are daunting. so i think that if the summit does in fact take place, which we expect, it is certainly an historic opportunity for the united states and north korea. that is merely the beginning of a process that is likely to be protracted. there is some risk for president trump in that north korea plays sorts of in those situations, whereas the political cycle in the u.s. can be very unforgiving. ramy: right. we are going to look ahead to tuesday to see what happens there. 9:00 a.m. local time, singapore. you veryano, thank much for that analysis across the world. more ahead on "daybreak asia." this is bloomberg. ♪

ramy: this is "daybreak asia."

i am ramy inocencio in new york. yvonne: i am yvonne man in hong kong. less than four minutes to go until the market open in asia. korea closed for memorial day. this is how we are set up when it comes to futures. tokluster when it comes japan. stabilization in dollar-yen. still not able to break above the one hundred 10 of course. aussie futures point to solid gains ahead of that gdp number coming through in the next couple of hours. take a look at the g7 in quebec. we will get more clarity perhaps some the president when it comes to the global trade front. we are looking ahead to the fed and ecb meetings, particularly when it comes to europe and whether mario draghi is going to talk a little bit more about stopping qe. mike mccarthy joining us the next hour to talk us through all things markets, where the dollar goes from here. distress, andin that in particular, and it comes

to asia and italy. talking a little bit more about that ahead of that market open, coming up next as well. plenty more to come on "daybreak

♪ konge: 8 a.m. here in hong . i am yvonne man, welcome to daybreak asia. stories this wednesday, asia-pacific stocks look set for a mixed open as a geopolitics stalls of the rally that sent equities to three months highs. and, close to ending the u.s. tech ban, shares remain suspended in hong kong. ramy: and i remy innocence you are in new york, where it is just past eight p.m. on a tuesday. mixed messages from the white house. president trump will not dump nasa but he would prefer less will not dump nafta, but he

would prefer bilateral deals instead. also, we hear from carson block himself on fraud in chinese companies, later this hour. ♪ yvonne: the trade seems to be continuing here, we are seeing treasuryhat u.s. secretary steve mnuchin is urging the president to give exemptions on steel and aluminum tariffs to canada in particular. but it seems like stephen mnuchin and like are losing his year, as compared to trade hawks like peter navarro. toy: we will also be looking play outcome of the primary elections happening in several states across the u.s. it is just past 8 a.m. eastern -- 8 p.m. eastern time and four states have closed their

primaries. we are looking ahead to see what comes out of the. in particular, the state of california. as mentioned, they have this unique to party or two winner system, where the top two vote on.ers move that could be destructive for the democrats especially in a state as blue as california. yvonne: in the meantime, let us look at the market open with sophie kamaruddin. sophie: south korean markets are closed, so will have to see if there is any reaction to the report that china might find samsung and other companies as monopolistic and b find them for their behavior. g7 meeting later this week and next week, and the trump-kim summit as well and decisions from the fed and the ecb. stocks in tokyo has little change, and there is gdp data due from australia. growthp in first quarter

is expected supported by household spending. stoxx,looking at the after sliding overnight, it is easing up some of the losses following a report that china offered to purchase u.s. ferment energy goods. we did get a report from. mnuchinng that stephen is pushing for trump to exempt canada from those steel and aluminum tariffs. we saw a pop in the canadian lee is --obat, but whether it canadian lee on the back of that. we will wait to see of that is done. ahead of the opec meeting this month, the u.s. is said to have asked opec to increase production by about $1 million per day. the ceo of italy's biggest by market cap reckons that crude is trading in the sweet spot, $70 a barrel.

ramy: thank you very much, sophie kamaruddin. ahead to today's openings come of it as get the first word news of paul allen. paul: thanks, remy. the white house has not confirmed the location of this week's summit between president trump and kim jong-un. next will happen at 9 a.m. tuesday morning. the hotel has a long record of hosting important meetings and it also offers great security. singapore also boasts long-standing ties with north korea. the white house says president trump does not plan to dump nafta but is considering bilateral deals with canada and mexico. every card low, the economic adviser, says president trump would prefer to negotiate separately. negotiators have reached agreements on about nine of 30 issues under discussion. the ecb is said to anticipate a

pivotal discussion at next week's meeting, which could produce public announcements on when they plan to wind up kiwi. we are told the council is -- wind up quantitative easing. the ecb's program of bond buying was said to run until october, and e bank has declined to comment. backed the defeat of a proposal approving the reelection of three directors. the board had advice keeping elon musk as ceo and chairman and retaining the three directors. one of the proxy adviser and others wanted it independent chairman after claims that the missed model 3 vehicles showed that the board had failed to oversee musk. huawei has been flagged by u.s. intelligence as a potential national security threat.

the social networks, facebook and others say that they work with chinese firms to integrate their services on their smartphones. facebook says information from its integrations with huawei was not stored on huawei's servers. global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists in over 120 countries. i am paul allen. this is bloomberg. ♪ yvonne: the trump administration u.s.ed its assets to suppliers and officials are said to be putting finishing touches to a deal that could soft and sanctions and allow it to resume work . we now have judicial neither joining us from taipei. jody, what kind of deal army looking at here\ according to people familiar, and it is not yet a deal, they are looking at putting this together. >> there is nothing signed, and

they could still fall apart. we have seen a lot of back and forth with zte in the recent weeks.and this deal if it came to fruition, would allow zte to resume purchases from american suppliers. in april, you may recall that the trump administration blocked zte from doing any business with the u.s.. so this would be a big reversal. and it is controversial. this tweethave coming through from senate minority leader chuck schumer on twitter saying -- if these reports are true, trump put china, and not the u.s. first. getting them off the hook. can congress do now, to try to reverse course? is that even achievable at this ?oin this has gotten >> this has gotten a lot of criticism in congress. some people like chuck schumer on the democratic side, but also

people within the democratic party such as senator marco rubio from florida, have been the wildest critics of this. congress is a concerned about this and they also do not like the executive action part of this. this is part of the things in the trade year that they are really concerned about that the president seems to be taking in their view, unilateral action. they would rather go ahead with legislation from congress, to toughen sanctions and t responses to zte. e esident seems to be going his own way on that, which has really caused this rift with congress. again, both sides of the aisle are unhappy about this. ramy: in terms of the reaction on capitol hill to the latest move. can you go into more detail on what is happening here? is againheir criticism bipartisan. again, -- it is on the waye that this is the

congress wants to push back on the president moving forward on a number of trade fronts, without their consent. on the terrace for instant, the tariffs for instance, many members of congress have been concerned about the president moving forward with the trade tariffs. for steel and aluminum. proposed tariffs against china, and also going ahead with some of the aluminum and steel tariffs that it had not gone ahead with with the eu, mexico.nd this is another trade front but congress is worried about, and we heard that today from chuck schumer and others. yvonne: certainly, we did. thank you so much, judy schneider joining us from type a. ramy, this goes to speak to what china has been doing, keeping a level head and ready to boost purchases of u.s. goods by about 25 billion dollars a year.

we have been getting warner numbers on how they will be doing this, but it is perhaps not enough to stave off a trade war. the u.s., we just had director of the eurasia group on air, and we chatted about whether $70 billion was enough. not.e said, probably i this bloomberg terminal here .ooking at the u.s. trade deficit with china just a reminder, the yellow line is the trade deficit-300 $50 billion in 2017. we can see how even $70 billion does not go far enough to try to equalize this, let alone anything more. that we are also talking about putting on the trade tariffs to $50 billion, maybe $150 billion in total that trump has asked mr. light house or to do. there is a chasm. that is very difficult to bridge. yvonne: we were talking about

this as well, it is not only goods,uying more u.s. there are also structural issues with intellectual property that haven't been hammered out. there was also an interesting story on bloomberg about how the nba is caught up in this u.s.-china trade spat. take a look at this chart, you can see how that you services surplus china had, which had a lot to do with that licensing fees to china. basketball is huge in this part of the world, not to mention when it comes to the number of chinese tourists. and students who study in the u.s. although, it is dwarfed by the trade deficit that you see. this is still very much a significant portion of the whole trade discussion as well. the. yes come by nba is very pervasive when i was living in china a long time ago in the hinterlands, people were playing basketball and saying, will you play? admittedly, i am not a very good player. we keep going. carson block raises the alarm on

fraud in chinese companies. we will hear from the short seller later this hour. yvonne: up, after a day of strong data, we speak to michael mccarthy about what is on his reader. this is bloomberg. ♪ on his radar -- on his radar.

♪ ramy: welcome back, this is ." ybreak asia i am ramy inocencio in new york. yvonne: and i am yvonne man in hong kong. the nasdaq reached another peak, oil and the dollar gained. we are joined by a a couple of guests now. mike, it seems like trade is at the forefront and europe is at the center as well, that we are not seeing that momentum keeping through after the u.s. jobs report. are you still do yo

?e-risking in this environment michael: not at all. it seems to be more like a. the data we have been seeing around the globe, not just u.s. job numbers, it looks like there was a coordinated global economic expansion going on. that should mean better profits, higher share prices and more investment in the weeks and months to come. yvonne: what in particular are you looking at? i know that copper and some of these commodities, seem to be catching your eye these days, given some of the geopolitical tensions? michael: absolutely, copper in particular. gains ineen good copper, jumping up above the $321 level. att is important, because $330, we have a multiyear high. it would indicate an improved

global industrial sentiment. at the moment, the copper markets are talking about negotiations going on between the workers unions there and other companies. the u.s. dollar bonus for all workers, we think that will .esult this occurs in a backdrop of increasing global demand. it is an indication of the health of the global economy, and a push through 330 dollars a pound in copper would confirm that in my eyes. yvonne: how do you view the rest asset class? copper stands out, but when you look at some of the softer commodities, they seem to be getting pummeled by the trade tensions riyadh youannot real look at everything in one stroke? michael: kno you are absolutely right. agricultural commodities have been abolished, -- have been forged, and others are surging, particularly here in australia. ol for example, has broken a

price target for the first time in history. one of the stories for 2018 has been the surgeon aluminum prices, and we are seeing fluctuations in other items. playingand might be catch-up, but the support over all for industrial metals suggests that the outlook remains positive -- aluminum might be playing catch-up. ramy: many people say that the biggest things over there head of the trade tensions. what are your thoughts as to where the hikes should be? some people say two more, some people say for more. granted, we got great numbers regarding the jobs report and inflation, but what are your thoughts? akerael: i think that wee pce that came tc

before the data, has some people held back. wages are down, which i believe confirms that the for rate rises for september and then december, is a more likely scenario. it is a bit of a muddling about. andt of holds below 3.1% the markets remain unconvinced. that being one risk here, and another is trade. we have been looking at what is happening with italy with the new premier saying that they radical agendaa of fiscal expansion. the contingent is contained in there, but with this embarkation in terms of what might happen there, are there any follows that investors in the u.s. and asia should be aware of? risksl: there are real here. the concern is the economics of

trade barriers, tariffs, or are very clear. economically, they are disastrous. we saw that demonstrated in the late 1920's and 1930's, when the global recession was severely prolonged by the trade sanctions. we know the economics of this are very clear, but the problem is that it is being captured by domestic politics in many cases. with populism on the rise, the danger is that politicians will give in to the demands of their domestic political situation, without recognizing the global economic reality. that could happen anywhere, in china, the u.s., italy or brussels. it is something that investors should be aware of. i think, sense will prevail in the long run. there was some surprise at the very strident reactions from canada in particular. lasthat eu's mr. juncker mexico.d also

it is an indication that many countries around the world will not stand for any nonsense when it comes to trade sanctions. yvonne: i asked a recent guest about the spread between the u.s. and german ten-year, it seems remarkable, 256 basis points. is it going to sustain itself given that we are hearing that we could be seeing a special announcement on the ecb next week about the possible halting of these asset purchases? michael: we are certainly looking forward to that. the eu has been pretty clear, the ecb has been pretty clear that it is looking at the removal of accommodation. but so far, the market has doubted that. about0 years rallied by 10 points, and the bone bonds rallied by about five basis points. it suggests that europe continues to expand at a healthy from the weakness

that is being seen and italy. would expect it to reverse, but the markets still doubt the ability of the european economy and therefore, the ecb, to move the needle on accommodation by the end of the year. yvonne: might, we will leave it there. cmc chief market strategist joining us there. ,on't forget, go to g tv where you can catch us live and also see all the other interviews that we have. you can also send us instant messages during our shows for questions, in particular with our next guest coming up in the next hour. this is for bloomberg subscribers only. this is bloomberg. ♪

♪ ."onne: this is "daybreak asia i am yvonne martin in hong kong.

ramy: and i am remy innocence you in new york. this company is said to have received first round in its of its u.s. shale portfolio that could value the unit at about $90 billion. shall it said to have submitted a bid fro through blackstone intimate. as much as $13 billion if it sells its assets piecemeal. yvonne: bloomberg was told that china is considering a trade venue in shanghai that could help keep the most promising companies from going public in hong kong or new york. the new market might wait requirements, chinese domestic markets have been us is worth more than $1 trillion. have show me is said to added six more chinese banks for its upcoming hong kong listing, which is expected to the the the world against ipo in a most four

years --xiaomi. act as global xiaomi isors, and show m seeking about $10 billion from the ipo. yvonne: we are told that this company plans to consolidate and southouth east asian countries under its new singapore subsidiary next year. it's not the asian interest will be captain hong kong, but we are told that the plans are not final, and could change. ramy: the largest player in asia is seeing more opportunities in the region and is rapidly growing its business. speaking at that bloomberg invest summit here in new york, this company's president explained why the investment firm is so focused on asia and whit which countries are more

attractive. >> it is hard to generalize about asia, given the mass geography, there are a lot of different dynamics going on. but if you take a big step back, it is probably the fastest growing part of our business today. andave eight offices now asa, and we arthe largest private equity investor in the region today. one of the really compelling trends i think, is growth,alk about the the emerging market economies, which we are excited about. but some of the less understood opportunities are perhaps occurring in japan. probably among the cheapest valuations among mature economies today. family conglomerates and groups who are ready to shed their core assets. fundamental

improvement from these companies. japan for us, is one of our top parties globally in terms of the. market we are seeing cheap evaluations, lower cost funding, financing for deals, a lot less competition than in western markets, and quite frankly, much more significant improvement potential. yvonne: that was kkr co-president, joseph bae speaking at the bloomberg invest conference in new york. looking at markets in asia, we do see south korea closed for their memorial day, but it is flat on the nikkei 225 in tokyo, the asx 200 just up about .5%. a are about a 10th of percentage after catching up a big rally yesterday for this stock. currencies are also mixed, the aussie dollar gaining some steam ahead of the print. we are also seeing demand

$110., getting closer to oil prices are leading a fire under inflation across southeast asia. we look at what governments are doing to lower the temperature. this is bloomberg. ♪ erature. this is bloomberg. ♪

♪ a.m. in:30 singapore. ramy:. i am yvonne man in hong kong and i am remy innocence you are in new york, you are watching daybreak asia. ramy: let us get the first word news now with paul allen. paul: thanks, ramy. stock early higher. the commerce department says no definitive agreement has been signed for them. chinese company has replaced top executives and president trump

says it could replace business him it pays a 1.3 billion dollar fine for zte. vegas government has asked other opec producers to increase production by about one billion barrels per day -- one million barrels per day as prices for oil surged higher than the have been years. it is highlyus unusual for washington to ask for a specific output hike. the international atomic energy agency says iran has drawn a tentative schedule for boosting production of uranium. the agency says that the plans submitted on monday follow the hamenei's call for that iranian industry preparation to resume work.

abu dhabi will spend the equivalent of $13.5 billion in three years, to stimulate the economy. the print says the government will support new industries, and tourism and make it easier to do business. he says officials have been instructed to draw up lands within 90 days, including provisions for creating at least 10,000 new jobs for ermiratis. a new 227 kilometer route has ,.en approved by shenhua global news, 24 hours a day on air and on tictoc on twitter. powered by more than 2700 journalists in over 120 countries. i am paul allen. this is bloomberg. ♪

yvonne: it looks like asian stocks are lacking a little bit of direction, let us get over to sophie kamaruddin. sophie: tokyo, this bank is sliding, generate -- trading at a january 2013 low. it may need to increase its bad debt provisions. it was reported that the lender plans to pare down his profits for fiscal year 2018, because of the charge related to housing loans. over in sydney, met cash continues to take a hit after announcing an impairment charge on its supermarket assets. the stock has lost about 27%, after heating up week on may 25. the company had repeated great earnings despite its cost cutting efforts, and is continue.that it will

to lose even more contracts the aussie is resuming gains ahead of gdp data, sticking above the 50 day moving average. a positive gdp report could provide a lift for the aussie touristy 77 handle. it is expected to have improved for the first quarter of australia due to net exports and household spending. ramy: let us head into the em space right now. this year in prices is creating a headache for a policymakers across southeast asia. bloomberg southeast asia economy reporter michelle joins us. thhow are rising global prices really hitting economies in the region? >> it is hitting them hard. we already saw the effects of the global tightening cycle lead led by the fed. global oil prices have been rising for the past year and they are not about $75 a barrel. we have central bankers who are

having to move first are on raising interest rates than expected. we saw that in indonesia and in the philippines. as well as governments who are having to respond to consumers who are feeling pinched by the .rices a lo there is a lot to deal with in the region. ramy: where in the region particularly, is where the problem is more complicated? michelle: there are a lot of central banks dealing with it, indonesia is one which is in focus right now. especially because they are under pressure on ne two fronts. there are a net oil importer, and they also have a gaping current account deficit. so it makes it difficult to try to control the rupiah. the year --.2% for 3.23% right now. they raised rates twice in may, which is pretty extraordinary.

you have to wonder whether they are running out of firepower. there are trying to do a lot, with tax incentives and fuel subsidies. . yvonne: we will have to wait and see if it turns the picture around question the be watching out for in terms of events? do you think the governments have the measures to put the lid on prices? michelle: we will see. they have tried a lot so far. one country we are also looking at is malaysia, they tend to surprise us every day. election victory by mahathir forhe example. in terms of bank decisions, one exciting one is philippines in june 21. it will be good to watch because had been reluctant to save raise rates. -- we have a lot coming up to

keep our eyes on. yvonne: yes, we don't even have to wait. r.b.i. will be having a pretty interesting day. it seems like there is a lot of pressure for raising rates, but how is this moving now? the formervering governor of the r.b.i. yesterday and in three different events, he was talking about how we kind of have to get on with this. he had a different view than patel, they have been under pressure to raise rates but there are reluctant to do so. there will have to see how that turns out. worstpee right now is the performer in the here in asia, so it was added rusher on the central bankers there to take action. yvonne: thank you very much, michelle. joining us from singapore. in the moment, the new italian prime minister failed to soothe

the markets with his latest speech. that snap, this is bloomberg.

♪ >> i really believe the blockchain will ultimately create new business models. i think it will be particularly helpful in the developing world where registries are not as established as they are here. >> i am worried about the u.s. equities market, i don't believe it is in good shape. we have less than half the number of listed companies that we had 10 years ago. the ipo market is less than half where it was 10 years ago. companies now would rather stay drive it and go public. partly because brevity equities -- private equities got to be much bolder, and partly because public markets have proven to be such a difficult place to operate in. >> we have been taking a

research oriented approach to go where we would want to be involved in cryptocurrencies, and went my we want to be involved. 've do believe that the construct of a cryptocurrency is something to do something that is starting to become something we may understand. it is that this point though, very much a speculative asset class, if you want to call it that. a doesn't necessarily have foundational purpose in terms of international commerce. >> infrastructure is one of our most exciting areas for future growth. it is obviously an enormous asset class and it is under invested globally. it is where long-term, patient capital can really make a difference. >> it is really in nobody's best interest in having an all out trade war that would have implications on growth, inflation and probably, on

market sentiments. it hasn't really hit market sentiment in a big way which is why you haven't seen volatility spike of pork market perform very poorly. >> their biggest worry despite the volatility is not a market quarter to this quarter, it is what is the risk of we are under invested and asset values keep going up? to miss out on 10 or 15% upside on a still relatively low yield environment would be penal. ramy: those are some of the opinions from key decision-makers in private equity and corporate america, talking right here in our new york headquarters at the bloomberg invest summit. of those speakers was carson block, short seller of muddy waters. blocks investors need to recognize that chinese companies don't play by the rules of the international market. we shall just our chief besteast correspondent

chief northeastern correspondent. >> yes, he made a few short calls on chinese companies, painting with a bit of a broader rush stroke and talking about the risk that western investors perhaps are facing, going forward with chinese listed companies. at us get to him speaking the bloomberg invest summit in new york. he says fraud in the chinese companies pose a risk to investors, and they should weigh on whether to allocate capital to them. he says that western investors should consider many chinese stocks.as sin say.is what he had to >> i don't think there is any parallel in history of capital markets, where you have this systemic issue of again, literally hundreds of frauds going to another country's suckal markets much a sac up capital and expatriate it to their home country.

>> he is also raising the same alarm bells he has in the past, citing corporate governance. also alleging widespread fabrication of profits in many chinese companies that are listed in the united states. he is talking about listed companies. he warns that many chinese companies are not purely private, and that they will do the bidding of the chinese government if necessary. he basically says to western investors, ask yourself this one key question? is it all worth it? of course, fraud is one of the main risks to the chinese and investing in there, but also creditworthiness. we wanted to bring in our next guest to talk about the creditworthiness of chinese listed companies. and also talk about italy. michel is a cofounder of the boutique specialist company. let us talk about china.

i was digging up a story here about a month ago on the bloomberg terminal. it said that four or five issuers in china that have defaulted for the first time in 2018 or companies of public listings. is this something we are seeing in china where we can assume that public listed companies tend to be more credit worthy, better they have corporate governance supposedly? are we seeing a change? michel: in the dynamic? michel: we are certainly seeing a change. but it is not a change that is surprising. we have been saying for years, that the trouble for traditional fixed income investors, they like to see data. they like to be able to analyze cash flow. the capacity of the chinese markets for fixed income investors, is a terrible hurdle that is hard to overcome. it is certainly not surprising, that as a result, now that weity is trying up on shore,

are starting to see a wave of defaults. it could only be the start of a much bigger phenomena. >> what is the distress situation right now as it relates to the kind of business you are doing? interestingher story, china energy reserves and chemicals is one of the company that defaulted, which could be showing some contagion. because they were seeing korean investors come to beijing and try to refinance some of the debt as well, that they had bought into their we had that is an interesting wave, because the defaultingpanies have been arng to tap into uth korean investors. you also bought a stake in the south korean bank in 2013, how do you see that dynamic playing? is there a risk to other investors who are purchasing into chinese debt? michel: there is certainly a risk for offshore investors, they are at less informed that onshore investors. 15t is why you see 10 or

bonds that are have been trading from the high 90's a few weeks ago, and are now trading at really distressed levels. oftotal, 10 or $15 billion paper that is not trading in normal. yvonne: prices looking at global loan portfolios, historically speaking, they haven't focused on europe. but it seems like the tide is turning. if you look at the balance sheets in some of these asian banks, the lord came out with a report saying that they are seeing a lot of mbl's in the balance sheets. do you think the balance is shifting? michel: no, i don't think it is shifting to this part of the world. i simply think that we are now part of theifferent cycle with rates coming up and with liquidity drying up in china. so problems are coming back to the surface, like in other regions. yvonne: sure, but could this be

a major headwind for emerging-market debt, the fact that we are seeing china with conditions,g market and this sentiment toward copper china? michel: yeah, absolutely. that is whether it fear in emerging markets. we have seen is ill and turkey, and -- we have seen this in brazil and turkey? kevin:? stephen: there is a lot of ocular sentiment coming out of italy, and you just completed a transaction to purchase 90% of roma patriotn you just purchased an italian bankia. what is your view of the situation? michel: there are going to be changes and difficult negotiations which are going to take these between the italians

and the european union. as an owner of a bank of italy -- bank in italy, we certainly hope that italy is going to remain inside the eu, which has always been our thesis. ,e are happy that we own a bank and we built a platform that we can use to expand our business into europe, but certainly, this is going to be a lot of ups and downs of the next few months. ramy: i am glad you talked about further access to europe. i would like to bring up this bloomberg terminal chart, this is g tv go. find it on our library at g tv go to look it up. greece is much higher, in the high 30's. further accesso to europe, where are you looking expand? perspective,our

the fact that italy as you said, 17% and pr ratio, but it is also significantly bigger. if you look at greece, anywhere between 3 billion and 4 billion euros, that is certainly attractive for us. the fact that we have a unique platform in a very wealthy region in italy, in the middle a, together with our skills and experience working in this area, puts us in a very unique position as a specialist credit institution. ramy: how is the resuscitation agna going on right now? i was looking at a report saying the italian banks have over $100 billion in debt held by private investors.

are these populist measures coming from the government now, does that hinder you as far as unwinding these mbl's? michel: we don't think so. ultimately, if you look at that has made a few changes in the past 10 years. it has significantly improved, and that is not something that can be unwound. it is in the interest of the italian economy, to have a that workscreditors and operates, and that will reduce the level of npl's for banks, and put banks in a situation where they can lend money again. which at the moment, they cannot react they cannot lend money to mid-caps. which is really an opportunity for us. what we find really exciting about the bank we acquired, is that they are in a region that is economically sound. we saw a lot of great businesses and enterprises that are growing and that can borrow.

we wanted to be in a position where we command to those quality corporate's, while others are still licking their wounds. >> do you see peril with what you want to do in italy, and the with south korea, with stake you have taken there, at a time when south korea is having issues? are this week, there are different markets. but when he think about it, five years ago, south korea had many of the problems that are plaguing italy today. you had a very fragmented banking market, you had a lot of banks that were really too small to exist and be profitable. yvonne: thank you very much for y,ining us, michel low joining us for the discussion. go to dayb on your terminal

for more on the interviews that we have here. this is bloomberg. ♪

♪ the quick check on the latest business flash headlines. when rupert murdoch, he appears u.k. approvals from 21st century fox to acquire

skype. deal.t is not yet a done comcast has submitted a 16% higher bid for sky. authorities want fox to divest sky news if they complete the takeover. . ramy: making it harder is murdoch's plan to sell sky to disney along with its entertainment assets, which buy.st may also try to ramy: conservative billionaire david koke is stepping away from the family business and political empire because of health problems. his elder brother charles said he is saddened by the news and will miss david's insight and contributions. charles koch has been the primary leader of the operation, a vast network that rivals the republican party in terms of conservative influence. here on bloomberg television, that is bring in rishaad salamat for a look of what is goin comig up in the next hour. we are expecting a

pickup, is there a bias towards tightening in the future? we will be asking paul blocks from that. and, global commodities managed futures executive, he will be along to talk about what is happening in this space, particularly looking at the oil prices, and the impact it is having on emerging markets. and australia, a massive player in the commodities complex. our next guest is coming to join us after a few months of a hiatus, and getting his take on where we are at the moment with this stock rally? is it all about passive investing, is it about active investment? so there you go. that is the flavor of the next hour or two. ramy: thank you, rishaad. we look forward to that. let us do a quick look at how markets are trading right now.

you can see that the nikkei is just about flat. flirting with the flatline. basically echoing what has been happening over at the s&p 500, a well. flat close there as in the meantime, looking at that .46%.x 200, up especially after rbs decided to stay at 1.5% for its target cash rate. yvonne: yes, we seeing a breather on the oil slides, it .s perhaps helping australia here today futures in singapore, taipei and malaysia, they show a mixed picture. but when it comes to shares in alliance, you can see that. that does it for us here at "daybreak asia." ia."

rishaad: asia-pacific stocks ,ixed, the risk rally stalling traders nervous about protectionism and geopolitics. zte back in the spotlight, shares remain suspended in hong kong. newborn in china. we will be hearing from muddy waters carson block later this hour. in hong kong, i am rishaad salamat. said: standard chartered to be planning a strategy change in asia. we will examine plans for new hubs in hong kong and