♪ haidi: a quiet session turns sour in wall street at new signs of emerging market distress since people to safety. ramy: a weeklong tech rally stalled. the 10 year yield tumbles five basis points in a matter of minutes. haidi: zte moves closer to a deal that critics say does not deserve a second chance and the president is firing blanks on china. the: ben bernanke fears

u.s. economy could be heading off a cliff. he says the recent tax cuts will trigger a wily coyote moment. hello from new york where it is past 6 p.m. on thursday. i'm ramy inocencio and this is daybreak australia. we are two hours away from the open of asia's first major market. haidi: it is just past 8 a.m. in sydney. happy friday from the asian markets getting underway. i'm haidi lun. we will take a look at how the action and wall street will play into the final trading day for the asia-pacific region. a weekend separates us from potential history be made. all looking ahead to this trump-kim summit. ahead of that, we have the bilateral meeting between the japanese prime minister and president trump. in president spoke about, the joint conference at the rose garden, spoke about wanting to sign an agreement with north

meeting,that tuesday potentially to put a formal end to the korean war. you think that will happen but it will probably be the easy time. the hardware comes after that. as we go into the weekend, the g7, g six plus one talks, a lot of talk when it comes to trade and tariffs. he spoke about the trade relationship america wants to have with japan and its allies. president trump: the united states seeks a bilateral deal japan that is based on the principle of fairness and reciprocity. we are working hard to reduce our trade imbalance which is very substantial, remove and tos to u.s. exports, achieve a fair and mutually beneficial economic partnership. while some of these

age-old american alliances are railing against the president for being protectionist, threatening to put out these tariffs, his domestic lawmakers are saying he is too soft maybe. ramy: that is right. too soft at least on china because we got developments out of china. basically, donald trump, not so much congress, throwing a huge lifeline to zte. details include a details incld $1.4 billion, 400 million of which is to be held in escrow. $1 billion for this fine. zte also agreed to a change in their board over the next 30 days. they also agreed to have a u.s. selected compliance team actually inside the company to make sure that anything they ran afoul of in the past will not happen again. with all this, this agreement had a huge impact on at least

one u.s. telecom company and that is qualcomm. the company not only sells semiconductors to zt e, it is waiting on chinese approval to acquire a dutch telecom firm to compete even more aggressively. let's get more on this with su keenan. what are the details? su: it looks like it has the clearance and some analysts are saying perhaps it was a quick pro-quo. let's take a look at the stock charts. what you see is pretty much consistent with what an analyst beacon policy advisers are saying -- globalists are likely pushing a quid pro quo to gain approval for the qualcomm and xpi merger. it looks like that is on its way. gets 30%ttom, oclaro of the revenues of light zte -- supplying zte. a lot of the markets have access

to those doing well. in theyou had swings markets, stocks. basically, the nasdaq ending lower after its record rise. perhaps the big rally was too fast.oo let's go into the tech decline. you had apple that was down. also, netflix. these were down in a big way. facebook falling to 2.5% at one point. let's take a look at some of the software and chip stocks for what i call a tech tank chart. they you see the size of the decline. you can find these on gtv. pain,s called a world of trade tensions have coincided with a slowdown in equity

growth.here is the story . haidi: we had a little bit of -- counting down to the latest opec meeting. what are investors looking at in terms of signaling? su: haidi, i guess i need glasses. let's go into the chart. the opec meeting will happen in about two fridays. siaking to a saudi-rus soccer meeting for clues. viewise as there is a showing the opec meeting may actually fail to come to a consensus on an official output increase. will there be in increase? let's go quickly to the economic pulse, the latest chart, where you can find these copper advancing versus gold as a lot of investors betting on the global expansion. it is the most expensive so far this year.

signs investors are bullish on the global economic growth and souring on haven assets. gold going for its first quarterly loss in a year. haidi: thank you so much for that. let's take a look at how we are setting up in asia. the final trading day of the week. new zealand trading just getting underway. this is how the kiwi market is shaping up at the moment, as well as the kiwi dollar. we will take a look at how the u.s. dollar is performing. mostly a lower u.s. dollar haven, the kiwi dollar holding at .7027. futures looking a little weaker into the futures open. it is pretty much flat looking at the aussie dollar. trade numbers for the next guidance for were the aussie goes after they had a pretty big largely positive week. look in the emerging markets story, we are still seeing these points of weakness along the em. policyicular, majory

action from the turkish and brazilian bank. billionwith a second $2 fx swaps this week which did very little to support the stock market or the currency. we have a third rate hike from the turkish central bank in two months. that seems to have stemmed to some of the bleeding when it comes to the lira and turkish bond market. let's get the first word news with jenna. tech is facing a grilling in congress about links to china. the senate intelligence committee will call public hearings into tieups between facebook, google, twitter and others with chinese firms. there is a possibility of chinese vendors with documented links to the communist party having access to user data. that raises serious national concern concerns -- security concerns. the justice department will allow lawmakers more access to secret documents.

as the defensive investigation into russian contact with the trump presidential campaign. a closed-door meeting expected next week which will include leaders of the house and senate intelligence committees. a briefing last month -- trupm assertions of the fbi spying on its campaign are incorrect. president putin has acknowledged russia's economic disconnect and sees people struggling. country ishe moving in the right direction. it was marked by the contract of his usual upbeat report and sometimes desperate tone of his questioners. when they asked him how they are expected to survive on shrinking income. >> speaking in terms of black-and-white, i would say we are moving in the direction of sustainable white color. even in nature, you never see anything purely black and white. this is what we have.

on the whole, we are moving in the right direction. jenna: china is tried to globalize its $11 trillion bond market but hitting bull headwinds. costs are climbing as beijing works to reduce financial leverage. that is exhibited to default by 12 bond issuers this year compared to 18 for the whole of 2017. 11 of those have been private company, with one with a state owned enterprises. global news 24 hours a day on , powered byic-toc more than 2700 journalists and analysts. this is bloomberg. ramy: thank you very much. some lines crossing the bloomberg terminal coming from donald trump, saying that trudeau and macron are charging the u.s. massive tariffs, lashing out at the heads of state of both france and canada on the eve of the g7

summit in canada. for reaction, let's bring in our ingress editor, joe, washington. initial reaction to these lines breaking right now. it was like donald trump is not going to make it in easy as word leaders had to canada for this g six plus one. joe: he is definitely going in with both barrels blazing. this is part of a pattern he has even stated himself, he punches back. over the last couple of days, there has been harsh words from prime minister trudeau, talking about the tariffs the u.s. wants to impose as being insulted. macron saying he might not sign a g7 communique because of the differences. willa merkel saying she confront trump. trump is coming back out and punching back. there is not going to be apparently anything going in softly. hoping to find some comedy.

haidi: just looking at this latest tweet. seven minutes ago, tell prime minister trudeau and president billion in canada keeps the farmers and others out. look forward to seeing them tomorrow. that sets up nicely. in the meantime come the president -- i am wondering if he is talking tough ahead of the g7 talks because he is getting so much backlash over this zte d eal. joe: they are actually quite tied to the u.s. among lawmakers. zte deal, the u.s. is going to collect a fine, get a change of board members and impose its own compliance officers, but there is a wide in bipartisan backlash against this. marco rubio, a republican, actually drew the parallel that

zte is a much bigger security risk then from argentina or canada or the eu.. these two things are getting tangled up in terms of u.s. politics. haidi: thank you so much for that. always interesting and a lot of event risk in the next few days. joe in washington. still ahead on this hour, trump says his meeting with kim jong-un will be all about attitude. we will have more on what to expect with the next week's historic summit with north korea. why the s&p 500 could be on its way to retesting its all-time high. this is bloomberg. ♪ ♪

haidi: i'm haidi lun in sydney. ramy: i'm ramy inocencio in new

york and you are watching daybreak australia. a quiet thursday in june turned turbulent as a rally and treasury bonds snowballed, a sudden flurry of volume and a weeklong rally in tech stocks was snuffed out. let's get analysis from matt maley who joins us from newton, massachusetts. when i woke up this morning, i saw the market heading for its 50 day for the s&p 500, i thought i would be saying that today. it didn't happen to be the case. walk us through the risk and the head when you saw most important navigating today that investors need to do as they set up the trading day in the asia-pacific. matt: we have this great rally over a while anyway. the fact the tech stocks are on the chill a little bit is not a big deal with how nicely they have rallied recently. problems came up with brazil. fhe brazilian market, the et

was down 9% at one point and finished down 5%. wehave another issue where have turkey, argentina, venezuela and now brazil. it has been going on a long time but now coming to the forefront. impact the big rally in the bond market which took yields down. i don't know if that will be the biggest deal in the world over the near-term as there is a certain amount of upside, but longer term it creates problems in the second half of the year. ramy: you think the s&p 500 will retest its highs but that is more towards the near-term, explained that. matt: what i will be watching specifically is the technology group, number one. and to watch the semiconductor stocks. they have been a clear leader for the technology group. not quite made a new high get. the nasdaq have made new highs. if the semiconductor can make a new high and confirmed that

move, i think we have a lot of upside. we also see in this consumer discretionary area, the retail area. are bumping up against multiyear or all-time highs. if they can break out, that is another area that can confront -- that can propel us to the near term. in the emerging markets, italy, some of the european banks, some of these cracks that are happening that happen every time we see once we get a year into a fed tightening cycle. ande cracks start to emerge spill over into the stock market eventually. haidi: you talk about europe. ramy: deutsche bank not doing well, nearly 50% down or so. do you think that is a systemic risk everyone needs to be wary as we move ahead? it is not seen it will get any better anytime soon. matt: exactly. i don't think this is another

lehman type moment. the last two big bear markets we disastrous, down 50% or more. the next one, whenever it comes, will be more 25% to 25% variety. a stock like deutsche bank drops 45% in six months, you cannot talk enough that the equity division is not doing well. cannot talk enough that the equity division is not doing well. the are more problems. we see what is going on in italy. the italian banks index is down over 20%. european bank index is down 16%. we are seeing more things go on. when i say systemic i don't want to be quite it to do to have -- to 2008, but we could and will have some problems later in the year. haidi: there is a lot going on and bubbling to the surface. i want to throw out this chart which makes my head scratch a little bit as how the market is dealing with risk as we have had the february selloff driven by the rise in treasury yields.

this is gold ratio. the cheapest to copper this year, heading for the first quarterly loss this year. volatility is like a four-month copper gold, whereas continues to excel. is this confidence in the global economic growth cycle? is this a resilient in the market? or is it investors being a little foolish? matt: to be honest with you, i think it is too much complacency. every single time we go through a fed tightening cycle, it starts off where it has no impact. everybody says it is not going to be a bad deal but it takes time for him to go out and expose some of the mel investments and other problems that were created. in this case, they were artificially low for a long time so they are out there. once we first see the corrections, we saw in the village -- the volatility market, emerging market, the dollar rose in response. now we are seeing it in some of

the emerging markets and italy and spain. i think that other shoes will drop because higher interest rates will have an impact on cost. my big candidate for another shoe will be corporate debt which we will see $4 trillion that will be rolled over in the next three or four years. that will cause some problems. haidi: you have seen emerging central bankers coming up on the defense. tokyo central bankers coming up on the defense. tokyo overnight, as well as brazil, india, indonesia. this side of the world, mixed. -- are some we will of these emerging markets being unfairly penalized maybe because of dollar strength? matt: i think that is part of it. are some of these emerging marketsnothint line, but the correlation with the dollar has been unavailable. it started right after the

election in the beginning of 2016 -- 2017. it has been almost a perfect inverse correlation with the dollar. if the dollar great -- regain strength again, that will cause some problems. that will also create opportunities. certain people will rightly get hit harder let's are -- certain countries, and others will be the baby thrown out with the bathwater which will create opportunity. you have to watch the emerging market etf. it is not far from the double bottom, the lowest in february and may. if you break below that, a lot of the momentum will come out of that asset class and caused some problems. keep an eye on that dollar. haidi: always watching the u.s. dollar. great to have you with us, matt maley. you saw on some of the charts, got a closer look using gtv go. it is featured on bloomberg tv to catch up on key analysis for future reference as well.

this is bloomberg. ♪

ramy: a quick check of the latest business flash headlines. itgle is pledging not to use powerful artificial intelligence for weapons in surveillance or technologies that cause harm. it says it will work with the military in other areas in order to give its cloud business a chance to pursue lucrative government deals. top: broadcom reported estimates and reaffirmed its forecast for the current quarter. chips andust sales of data center networks are upsetting lackluster demand in the smartphone business. revenue will slightly the above $5 billion between july, just below analyst expectations. the senate intelligence committee wants the ceos of facebook, google and twitter to

answer questions about the security of the platform, including relationships in china. senator john thune spoke earlier ion bloomberg. sen. thune: it seems like the only time they are disclosing information if there is a story that breaks that forces them and that is wrong. we did follow up after the hearing with a series of record which the are written questions. they have not responded yet. haidi: bloomberg technology reporter sarah frier has been following this. record which are written questions. not a great week when it comes to headlines on facebook, but what are the senators concerned about? sarah: facebook said earlier this week that these deals with chinese manufacturers are commonplace in the industry and now they have proved that google and twitter also have relationships. this is just bringing another example of how the ways that things worked in the past, we

may be were not that aware. even if these are public arrangements, even if we were not aware how they affected user data. now we are much more conscious about what could happen when user data gets into the wrong hands. senators are taking this very seriously. they are calling potentially for another hearing for executives from all three companies to come talk. in terms in terms of response,t have we heard from these companies? sarah: facebook has said they needed to have these deals with because thereies is such a large portion of the world using these devices.

world using these devices. to be shut out of them, they would be shut out of each devices. google and twitter, it is a similar argument. this is prettygoogle and twittea similar argument. this is pretty much cable space for growing their products around the world. but it is something -- we are in this moment that we have to reevaluate all these things we thought were fair in the way the industry operating. ramy: thank you very much. we have to leave it there, sarah frier, in san francisco. areng up, turkey and brazil stepping up currency measures as emerging markets face the biggest test since the taper tantrum. this is bloomberg. ♪ this is bloomberg. ♪

haidi: it is a 30 a.m. in sydney. markets open in 90 minutes. futures looking a little on the downside. a pretty risk obsession from wall street overnight. ramy: it is 6:30 p.m. in new york and you are watching daybreak australia. let's get the first word news with jenna. jenna: president trump has set the stage for potentially tense g7 meeting this weekend, tweeting get ready to fight for our country on trade. we have the worst deals ever made. continually isolated from its closest allies that will say it

will address the issues of tariffs face-to-face. the president laid out the gravels when he met with the japanese prime minister. president trump: the united states seeks a bilateral deal with japan that is based on the principle of fairness and reciprocity. we are working hard to reduce our trade imbalance, which is very substantial, remove toriers to u.s. exports, and achieve a fair and mutually beneficial economic partnership. says heresident trump could envision signing a treaty with kim jong-un next week to formally end the korean war and raise the possibility of inviting came to the white house. trump predictedtrump predicted t the top which would be the first time a sittinng president met with the north korean leader. he says that things do not go well, he has a list of tariffs to impose. a deal to lift sanctions on zte

shows that he is firing blanks on china. democratic leader chuck schumer says there is no reason for giving the chinese company a second chance. and news that a deal is close with a 180 degree turn by the white house, zte is said to be paying $1 billion and facing another $400 million in escrow and face a seven-year ban on u.s. tech purchases. in malaysia, ready to arrest joe lowell and two other people. they anticorruption commission has yet to issue charges and has not sure why the warrants are being prepared. malaysia says of the $7 billion went missing. low asosecutors protray a central figure in the embezzlement scheme. global news 24 hours a day, on air and on twitter, powered by

more than 2700 journalists and analysts. this is bloomberg. ramy: thank you very much. let's head to the emerging-markets now, because turkey is the latest to hike its key rate with a bigger than expected move, intended to tackle inflation and protect its beleaguered lira. kathleen hays is here. this was a huge step by ankara. 125 basis points. it worked but for how long? kathleen: that is as much as we thought the reserve would be hiking rates. turkey getting it done. they have a tough time because president erdogan has been pushing back. they hiked for key rate by 125 basis points. here it is. up to 17.75%. the rate has more than doubled. april 3.

over the month of may, that rate has more than doubled. why are they doing this? it is because the lira has been collapsing. this has been a big problem for them. the other line we are seeing is cpi which is higher. the u.s. dollar is rising. their deficit, budget and trade deficit are widening. let's take a look at that so we can understand why they are doing this move they have done. you can see the rate moving up, that is the key rate, the yellow line from our bloomberg library. you can see how the lira has pulled back for now. you can say they made a step but people are still saying they may have to do more. bond investors may want more to compensate for the big rise in inflation. another question is president erdogan, who has been pushing back against the independent he accepting, is you have to follow global monetary policy rules? investors need this to feel

reinsured it is safe to invest in turkey. it is the june 24 presidential election. the question of the efficacy of the central bank intervention in the em world. you see the downside, the brazilian almost immune to the government fx intervention. is there criticism their need -- they need to be more aggressive? kathlleen: the latest thing they have been doing is buying foreign exchange options -- swap options to help shore up their currency. now is are looking for to see what they do next. let's think about what has been going on. there was that big brazilian trucker strike that froze everything across the country. people standing in line for gas. everybody finally agreed they had to let the gas price premium be pulled back for the truckers. they set some other rules regarding freight rates.

the problem is there are still things going on. you have the presidential election in october. fed raising rates. hascan see the way it been suffering. it doubled for a third straight day even as the government sold $2 billion of foreign exchange swap. more swaps, sell dollars directly, they could boost their interest rate but they are not expected to hike rates now. i think it is a big question when and if the central bank decides have to get more in the act in terms of taking a bigger step of moving up that key rate. haidi: whether that will convince investors. thank you so much for that, kathleen hays, with all the em action overnight. let's take a look at how it is playing through what it comes to the asian markets getting underway. trade in new zealand is getting started pretty flat at the moment when it comes to kiwi stocks. .7072.

mostly a lower u.s. dollar overnight. quite a bit of haven demand. sydney futures lower going into the citi open this morning. the aussie dollar, .7626, i had of a heavy -- ahead. imports expected to ease in may. the yen holding below the 110 122.e and at the u.s. 10 year moving as much .s nine basis points u.s. stocks mostly lower, turning risks off as we have a great deal of macro risk and geopolitical risk, g-7, and that trump-kim summit. let's get more with james thornhill. pretty big day today. james: yes, that is true. chinese trade will be the key

focus. we are expecting a slight slowdown in export growth. i think the markets are looking after thatumber rampant 12.7% we saw on april. imports likely to come up a little bit. seeing, theeally u.s. trade tensions feeding through just yet. economists are watching very closely to see if that does have an effect. from the fact, aside iron and steel tariffs that have been applied globally with a few notable exceptions, china is not really any scene specific sanctions imposed on it yet. that is why it is not really feeding through to the data. that is not to say the trump administration will not follow through on its threats. the overall surplus in china is looking to expand to nearly four $34 billion. that is quite a big increase that is not information that

will not be lost on the trade hawks in the trump administration. otherwise, we will look at the japanese gdp, the final revision is due today. the market is expecting the contraction that was initially to 4.4%. note -- 4.6% i don't think that will change the zero growth in the japanese economy. ramy: there is positivity looking ahead that might turn positive sometime in the next quarter or so but that remains to be seen. let's go to china because it's bond market is something of a question right now. it is already the world's third biggest. there are some risks involved. can you talk us through those? james: that is right.

the interesting thing about this year and the chinese bond market, a very important market already, a rising amount of defaults. that is partly a reflection of thethe interesting thing chineso take a more rigorous approach and take some of that habit out of the market and force these borrowers to become more prudent and responsible in their borrowing programs. this is coming at the same time as global headwinds are affecting the market. we have borrowing costs being tightened and a lot of the major developed world. we also have the reduced leverage drive domestically which is having an impact on these borrowers. we have seen the rise in the default but the chances are that will likely continue. ofhave a very big amount maturities coming up in the market in the next 12 months. 8.2 trillion is the number that has been given. 8.2 trillion it is a hefty maturity profile coming up in that period.

almost certainly, we will get more defaults. the key question is how much more of those default with the chinese authorities tolerate? they are keen to get global investors more involved, but if there is a growing risk of default, that will cast some doubt. that being said, global investors cannot afford to ignore this market anymore. it is huge and it is developing. it is an interesting imbalance that they will have to address. the one thing that the foreign investors are looking for are more developed derivatives market so they can better hedge that default risk. they don't have that outlet there. they willer hand, welcome increased amount of default because it increases transparency of the market. borrowers are being

punished, that is probably a good thing in the long run. ramy: it keeps it healthy, so to speak. trrowersgeorge hormel -- james hornhill, thank you very much. do not forget to check out our library for some of the charts you just saw. you have to be a bloomberg terminal subscriber. next, president trump says his meeting with kim jong-un next week will not be a simple photo op. really, can we expect anything concrete? we will ask federation of american scientists korean expert adam mount next. this is bloomberg. ♪

>> he has indicated to me that he is prepared to denuclearize. he understands the current model does not work.

two, he understands that we cannot do it the way we have done it before. >> my worry is the administration is going for broke, a total denuclearization. that is not going to happen. the north koreans aren't going to do that. i think there are other human rights steps like family reunification between north and south, economic development of north korea, the poorest nation honors. -- on earth. >> if north korea is willing to take steps towards the right direction, north korea could see a bright future for its health -- for itself. japan is prepared to settle the unfortunate past to normalize our relations and provide economic innovation. haidi: looking ahead at what to expect for the trump-kim meeting next week. mount, us now is adam

federation of american scientists korea expert. he directed the council on the u.s. task force mount, federation of american scientists korea on u.s. policy towards north korea. it is hard to believe this is actually happening. you hear that from a lot of long-term korea watchers. what are your expectations, if any? adam: you are right, it is a dramatic development. it is not the first time we have met with the north koreans and embarked on negotiations related to denuclearization, but it is the first time a u.s. sitting president has met with a leader of north korea. expectations have been soaring washington. you heard the president and other administration officials say that denuclearization is likely. experts remain skeptical, as you heard from ambassador richardson. denuclearization is unlikely at this point, certainly not on the timetable the trump administration is hoping for in office.t term in

the north koreans value these weapons intensely, for regime legitimacy, office. as a guarantee against attack from the u.s. and other external powers. earlier this year, they declared their program complete. they said it was sophisticated. they are nuclear weapons power and they argue they would move towards mass production of these systems. that does that sound like they are prepared to denuclearize. haidi: we have been looking and discussing this issue from just about every angle. what you think we are may be missing here? what should we be talking about that you have not heard enough conversations about? adam: there are several things they are nuclear weapons rush to a summit. the summit was arranged hastily. the policy process has been messy. that's we move towards the summit, the real question is what will donald trump offer in exchange for what i expect will be vague language on denuclearization?

will the president pilon concessions in an attempt to try to ratchet up the optics of a summit to make it appear like it is a major breakthrough? that is a real question at this point. at times, there have been reports that the president is interested in a drawdown of u.s. forces in south korea. that he is moving towards a peace declaration to end the korean war. both of those things would be premature at this point without the north koreans having taking concrete steps towards denuclearization. ramy: hold on for a second. i want to break some lines coming across the bloomberg terminal. heading into the em space, argentina has reached a standby agreement with the imf or 36 months. argentina has reached a standby agreement with the international monetary fund for the next three years. as we digest that, let's get back to adam. talking about what is happening as we do the countdown. four days to singapore.

orking at the machinations the strategy for kim jong-un, some folks say he really relies on deception. that he might play publicly nicely but then privately he might do something else. adam: the north koreans will look for ambiguities at any summit declaration. they will look for ways to wriggle out. they have done it time and time again before. they will deploy euphemistic language. language in formulations that they used to refer to denuclearization. for the north koreans, that carries a slightly different meeting than it would for a casual observer. they will strike to set some traps that the north koreans plan tofor the north deploy. as we heard the president say, he feels he does not need to prepare. that a lot of this is about attitude. that position will not help him well in singapore.

ramy: with all the questions you have been barraged with, is there something that has not been asked yet as we had towards singapore? adam: there are a lot of things being left off the agenda. one is will the president talk about human rights in north korea? at the singapore summit. off the-in left this declaration, by and large, not present during those talks in the dmz. the president in his first year as office has used human rights as a bludgeon against north korea to delegitimize the regime. from my perspective, if north korea is not going to denuclearize and we are looking at a protracted process of interaction, we should put issues like that on thefrom my . conventional arms control, can we do something about the artillery pieces facing seoul? these are the kinds of limited objectives the president should be speaking, if he finds that we

should push denuclearization as far as we are willing to get it. if it is not forthcoming, we need to have these fallback positions. ramy: one interesting thing you said if they have not come to an agreement yet, they are not actually for negotiating. federation of american scientists korea expert in d.c. bloomberg tv will be live in singapore for the historic summit next week. we will have full coverage, plus commentary from the likes of former u.s. ambassador to south korea christopher hill. we will also be speaking with the former south korean foreign minister and paul haenle. ♪ haidi: in the meantime, you can always get the latest on twitter, including a quick look at the big numbers separating the north and south korean economy. ♪

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haidi: i am haidi lun in sydney. ramy: i'm ramy inocencio in new york and you are watching daybreak australia. australia's economy has shifted to another gear with the latest gdp beating expectations. for treasurer scott morrison, one national icon may be a better indicator of economic health. he says more aussies know with this mean -- utility vehicles is a positive sign. that's go to michael.

is there any basis to morison's statement or is he trying to ingratiate himself with aussie trade people or am i supposed to say tradies? michael yes. :i think there is a bit of both going on. australia is 70% in the economy. these are really quite significant. he likes to style himself as the average australian so i think there is a bit of ingratiate and. ion. a lot of these guys a former working-class people. inin many respects, because they have gone out on their own, , theng a bit of enterprise contenders say there is a natural, the contenders say there is a natural content -- constituency they can build on.

haidi: it has only been a services economy in australia. what is the trade aspect adding to the economy? michael: star a few areas. the first is these guys have done well in the mining boom, the construction and all that stuff. they have done well when interest rates were cap. not a lot of them are doing well because of state infrastructure projects going on. it can be quite a lucrative moreess, but you do see around. haidi: free conception? michael: i was going to tell you the story of my mom. i think it has become quite a lucrative and attractive field for people, for some people in australia anyway. i know our correspondent came to be a tradie. there is a bit of independence, free spirit. in fairness, a lot of them do a great job and some grease monkeys as well.

haidi: thank you so much for that, michael heath. our daily dose of australia. that is almost it for daybreak australia but yvonna and ramy up next with daybreak asia. not utes. yvonne: english is still pretty tough on my vocabulary. we are seeing this turbulence in em right now. great time to talk to our guest. what it means for thailand -- the new stock exchange. the president and ceo joining us at 8:40 here. he is the new president there, speaking about what is the the outflows from this market of foreign investors, the most in asia after taiwan. ramy: before that, we have to do more analysis on north korea with angela state university department of security studies professor of political science. a lot to come.

haidi: a lot to come as we get into a very busy week ahead. busy day ahead looking at the revised final japanese gdp and china trade on tap. this is bloomberg. ♪

>> it's 7:00 a.m. in hong kong. where live from bloomberg's asian headquarters. i'm yvonne man. asia." to "daybreak late declines on wall street indicate a lower open in the asia-pacific, futures pointing to a slide in hong kong, japan, and australia. in new york.d the 10-year yield tumbled nine basis point in the matter of minutes. >> i'm ramy inocencio in new york where it is just past 7:00 p.m. on a thursday. z te is moving closer to a deal. aitics say it doesn't deserve