yvonne: we're a day away from the summit between trump and kim jong-un. history,rge of president trump is here in singapore. he said he will know in a few seconds if the summit will succeed. kim jong-un is also here. ahead.n exciting day i'm in new york where it is just past 7:00 p.m. on sunday night. canada is says dishonest and weak.

if that weren't enough, three top central banks say this is the most important week of the year for investors. ♪ yvonne: good morning. what a week it will be. you mention the events this week. up betweens building president trump in conjunction on tuesday -- kim jong-un on tuesday. we have to talk about what is happening today. president trump will be meeting with the prime minister of singapore. a lot is on the plate. will president trump's bet pay

off? he put the onus back on kim jong-un. ramy: you never know what could happen with both of the leaders here. they have been described as unpredictable and volatile. maybe something might be spoken about before they officially meet on tuesday at 9:00 a.m. your time. quick recap of how the u.s. market closed on friday. green across the board. up dow and s&p 500 closed 3/10 of a percent. that was their highest in three months. the nasdaq not pushing to another record, but floating close. let's take a look at the currencies. we can see the bloomberg dollar index is flat. the euro dollar is moving a little, flipping back and forth.

1.1 seventh of a dollar. the canadian dollar losing ground against the u.s. dollar. the mexican peso, as things go with nafta and the u.s. trade relations with mexico and canada, the mexican peso falls. looking at other currencies, these are how the asian pacific standard right now the u.s. dollar against the japanese yen. zealand also flipping back-and-forth across the flat line. looking ahead to asian markets, it looks like it will be a mixed open based on the numbers. the new zealand index is down one quarter of 1%. nikkei futures are down. seoul is looking positive. a little hope as they look ahead

to singapore. yvonne: certainly. ,et's bring in stephen engle who is here with me in singapore for the summit. the meeting will take place tuesday at 9:00. is no opportunity for the leaders to back away now. stephen: not a lot happening yet, but today is the warm-up to tomorrow. the schedules have not been released other than there will betweenateral visit president trump and the premised are of singapore. other than that, it will be a lot of prep time. -- the the philippines u.s. abbasid or to the philippines will be leading a conference with northern counter

-- northern korea counterparts today. the summit will be held here at the capello hotel. we're at the southernmost part of the asian continent. 9:00 tomorrowd at morning. beaches, peacocks squawking. the police presence will be in full force. it has already started. singapore is saying they are spending 20 million singapore dollars to host this. half of that is coming in the form of security. talk more about the security side of things. stephen: so far this morning,

there was not a lot of visible security but there will be a lot of courts tomorrow. a lot of roadblocks have been set up along the shangri-la hotel where donald trump and his entourage are staying, as well as at the saint regis hotel. big barricades and policed checkpoints where kim jong-un is. there is no schedule for him today. there have been no statements on his movements or news of rose block -- roadblocks today. perhaps he is just staying in, preparing for tomorrow. ramy: why so secretive so far on the two men, when we are so close to the meeting? stephen: they want to keep some flexibility. they showed up more than one day in advance. there are last-minute preparations to go.

there will be negotiations between the north korean sub teens and the u.s. team. there is still jockeying going on. main event will be after 9:00 tomorrow morning. we do not know what will be put forward and accepted by the two men if this will be a successful summit. will there be a framework agreement on a peace deal between the united states and north korea, and the south koreans to end the korean war? will there be in agreement on denuclearization? which plan will the united states put forward? the libyan model did not go over well. there are also two u.s. senators , former u.s. senators, who have

met with donald trump proposing the context on model. -- kazakhstan model. securedel was they security concessions before handing over their nuclear arsenal. there are different models being discussed and it will be interesting to hear what the north koreans will be receptive to. ramy: the countdown is 26 hours until the two men meet. the other big story today is the fallout from the most acrimonious g7 summit in years. president trump broadsided american allies by refusing to sign the joint communique and lashing out at host justin trudeau.

host justin trudeau. peter navarro blames canada for worsening trade relations. >> there is a place in hell for any foreign leader who tries to staff trump in the back out the door. did is what justin trudeau with that press conference. roz, what does the president hope to gain i going after some of america's closest -- by going after america's closest allies? roz: it is hard to know what he hopes to gain. --y just want to protect project the strongest possible face while going into the summit. these big events are going on simultaneously and there is a sense that trump wants to look as strong as possible. i think at the same time, there

is a continuum with other policy endeavors by the trump administration to blow up the and tog world order, show that he is not taking no as an answer from anybody. i think president trump and his reliess see that canada so much on the u.s. for trade, imports and exports. that gives president trump a lot of leverage over trudeau and if he can get canada to follow line, -- to fall in line, other nations might fall like dominoes. being one ofitical them, we heard larry kudlow

saying about candida that they used a proverbial knife. >> he really stabbed us in the back. dis-service to the whole g7. they were united. they came together. ramy: roz, what does this mean for nafta? hold.afta has been on there has been some question as to whether an agreement could be struck or improved. causedlready in a situation.- paused as always with the trump administration, there are different factions on trade.

you have free traders like steve .nuchin and larry kudlow heard from the canada minister of foreign affairs. she said she spoke with light either at the g7 meeting and ll speak with him again. it looks like she is trying to keep things going. sometimes there are pronouncements from the trump administration that might not always square with what is going on behind the scenes. i think it is too early to say that nafta is dead, but this is another roadblock on the way to a deal that is tricky to finalize. another headline that came out of g7, the president wanting russia back in the group to revise the g8.

it seems like everyone except italy is against this. roz: it is interesting. one thing that happened today is that merkel came out and said she would support a u.s. russia summit. not -- it is not about idea. the idea of getting russia act in the g7, or making it the g8 had fallen flat among domestic politicians in the u.s. and in the g7 countries. do not expect to see much movement on that anytime soon. another provocative comment by president trump, he is trying to stir the pot a little bit when he says things like this. it seems like you got a phone call, so i will leave it there.

let's join haidi lun with first word news. china has reaffirmed its claim to be a free-trade leader, criticizing what the president says selfish policies. speaking in shanghai, his message was in contrast to the disarray at the g7 summit in quebec. he said the world must maintain the rule and support multinational trade. inflation accelerated in chinese factories last month, driven by higher prices for crude oil. indexs consumer price climbed 2% last month. that matched forecasts. italy has confirmed it has no intention of leaving the eurozone. the new government said there

has been no conversation about dumping the common current the and that ministers will do everything possible to maintain normal relations. the coalition said they want to boost growth through investments, rather than increasing spending. bitcoin sold the most in three months after corey graham admitted it had been hacked -- coinrail admitted they had been hacked. they say they are reviewing their systems and cryptocurrencies are now being stored in a cold wallet. it is the only information available on their homepage. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. yvonne: much more ahead on north korea and ahead of the summit.

says tuesday's summit will mark a turning point. my: and raymond young tells us why he thinks nothing will change in u.s. china relations, even after this historic summit. this is bloomberg. ♪

ramy: welcome back. for once, it might be true. the eyes of the world are focused on singapore as president trump and kim jong-un prepare for their summit.

so young, thank you for joining us. president trump has shifted the onus to kim jong-un. they are expecting this will be a getting to know you type of meeting. anythingkely to see tangible come out of this? posturing on both sides. president trump has said this is a single, one-shot opportunity for north korea to change things. he said if you talk do not proceed, he will get up and leave. you see the north koreans play the game at a higher level. kim jong-un reportedly has a 2:00 p.m. flighto catch on the day of the summit, which starts at 9:00 a.m. so he is saying he will give you three hours and then head to the airport. i doubt either party will get up

to leave in the middle of the talks. they could continue into the next day. on monday local time, there is a good chance that kim will reach out to trump. north korea is very good at putting on highly choreographed but impromptu looking stunts. do not be surprised if kim jong-un says, let's do lunch or play golf. and president trump will have to oblige. he cannot say no, i do not have the time, i am too busy prepping on my meeting with you. and kim jong-un will see is the momentum. yvonne: what could come out of such an impromptu meeting? i know president trump said he wants to have a one-on-one meeting with kim jong-un. what should we be looking up for in a meeting like that? >> both of them are show men. they know how to put on a face.

even though kim jong-un is young, he looks confident and relaxed. he is accompanied by his sister, who, i flashing smiles -- by flashing smiles, became a global celebrity. she is a new weapon for this regime. she is a softer, more humane image. i expect her to play a major role in these talks. president trump should not forget to ask her what she does. she is the head of the department of political propaganda and agitation. her job is to systematically seor the north korean people so that her family can stay in power forever. ramy: the goal of the summit is

denuclearization. some say it is a long way off. i understand that the definition of denuclearization itself might be a stumbling block. do you agree? what definitions to both sides have? >> north koreans will tell you what they mean by it. the formulation phrase used in statements and un security council resolutions. not do negara -- denuclearization of north korean, but by the korean peninsula. there are no nukes in the south. that means dislodging the united states from the peninsula and also the region. japan as well. so when you have polar opposite which is-- meanings

the crux and the reason for being there, you have a problem. if i could challenge you to point out a strength that donald trump brings to the summit, what would it be? approach is's unconventional. kim jong-un's is unique. so there is an element of brashness and unpredictability. when things are so often unpredictable emma there is an element of predict -- unpredictable, there is an element of predictability. snowpresident trump sent a in late may, canceling the meeting, i do not think the north koreans saw that coming.

that increased leverage for the u.s., giving north korea a chance to chase the united states. ramy: we will leave it there as we count down to the summit. thank you very much. you can get a run-up of the stories you need to know to get your day going in today's edition of daybreak. it is also available on mobile in the bloomberg app. this is bloomberg. ♪

yvonne: the sun is out in singapore and the city is waking up one day before the summit. there is a cooling breeze.

we are going to be talking about high politics for the next couple of days. i am yvonne man in singapore. the sunshine policy is possibly working. a quick check at the latest headlines. it is one of approval from the u.s. national security and all for a $2.7 billion buyout by china and the two companies have agreed to use a third-party provider to help protect consumer data. they still need to win approval from other regulators. indiana state owned oil is bleeding money and has seen cash reserves shrink by 90% in the last year. it was ordered to by the administration straight --

stake. to $150 million from $2 billion a year earlier. the singapore summit is not the only big event this week. more, coming up. this is bloomberg. ♪

7:30 a.m. monday in singapore. the sun is up. we are close to the first major market open. a little over 24 hours for that face-off between trump and kim jong-un. ramy: looking ahead to that. it is 7:30 in new york. markets closed up a third of a percent. that is a three-month high. we did get a risk on move friday as investors were shortening off trade and secretary of tensions, tarifft was -- and tensions. i'm ramy inocencio.

yvonne: i am yvonne man. you are watching daybreak asia. let's get the first word news. president trump and kim .ong-un are in singapore they flew in amid heavy security emil meet at the capello hotel on tuesday. nuclear weapons are a top the agenda. trump will insist the north dismantle its program while kim will demand the u.s. remove their rep and from the region -- their weapons from the region. ,rime minister justin trudeau the u.s. says, is heading to help for crossing president trump. they think they could have made an agreement if canada had spent less time lobbying congress. trump left with a stream of tweets attacking trudeau and tariffs on automobiles.

>> there is a special place in hell for any foreign leader that engages in bad faith democracy with donald trump the tries to stab him in the back on the way out the door. that is what justin trudeau did with that stunt press conference. switzerland has rejected a plan to change the way banks lend money in what is seen as a victory for the central bank governor. he has been a prominent critic of proposals opponents said would make switzerland was attractive for investors. this option would have ended the system, allowing only the bank to create money and allow assets to be backed by direct claims on the monetary authority. the stock exchanges of singapore -- threatens their long-running relationship. the hearings began saturday and will continue throughout this week. thense is trying to stop

change that could replace their contracts. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am haidi lun. this is bloomberg. thank you. we are counting down to the major market opens in the asia-pacific. it is not just singapore we will talk about. the latest with david ingles. david: other things happening in the world. we will talk about the markets as we shift away from geopolitics and central banks, but big week but quiet start. wei on your bloomberg terminal gives you the pricing. the nikkei 225, the second you see here, flat, higher start as far as the market is concerned. we are looking ahead to the chinese market later today. we will talk about that in a moment, but carefully -- coming off a carefully decent week. some more momentum than usual.

mention, thing i will this tells you the macro picture we are looking at. as price treasuries were concerned, massive week, a lot of options. looking at give or take over $150 billion in terms of the debt auction. will the market demand more yield as it tries to absorb more and more of the debt? also looking at the yen to give an indication which we are -- which way we are tilting. dollar-yen here, machine orders are due, but more importantly we are looking at risk appetite into what some are coming -- calling the most important week for global markets. not just with singapore and what play out here but also the fed, ecb and boj. what will be important?

: we have machine orders do out of japan. ppi or inflation numbers out of china, consumer prices, ware in. we are calling this may be the most important macro indicator. and tends to leave context the sort of nature of the data reducing. .e had the did he price indices the 10 still leads by a few months. what we have seen recently is a pickup for a seven straight month on that number due out on friday. comparing the average people are expected for this year to last year, last year was about 6.3% the average. this year maybe we get a moderation towards the lower 3%, but we will look at that chart as well. as far as the trump-kim

summit is concerned, we have been talking about geopolitics, and investors seem to shrug off these events, but what is in focus this time around? david: if you judge by what we saw during the last summit or the one between the south korean , therent and kim jong-un will be times or moments when we get headlines and emotion drives with these things. what i would watch is that ms. pricing you get because of that. we tend to revert back to the days after the big summits. that is something to watch, and this is one of the charts that tracks implied flow on the class b -- on the kospi index. currently we are a little below the five-year average. you.e: all right, thank let's look at ramy now because the big story is the summit in singapore. we have major central bank meetings, a delusion of ego data

david mentioned to offer clues, growth, inflation when it comes to the world's top three economies. this is the week that changes some of the important week of the year for many investors what are you watching? ramy: let's do 30,000 foot level in terms of the three things we are wanting to watch. the site from the central banks. june 11, june 12, june 14, machinery orders coming out in 12 minutes' time. we are expecting a pickup to the upside. u.s. consumer pricing june 12. we are expecting a rise, but with china's industrial production, we are expecting something muddy and murky. let's flip up the board for japan's machinery orders, and this is my first gtv library function. you can check this out on your own library. that is gtv .

the month on month japanese machine orders came in at 3.9% for the past month. we are expecting this to flip pointhe positive to two 4%. similar for the year on year, 2.4% in the negative, 3.8%. you can see it had been in contraction mode over the past year, but this number, if it comes to fruition, would be some support to what analysts are saying in terms of a second quarter gdp number that would be better than the first quarter contraction. that is the first charge i want to show you. -- chart i want to show you. inflation number. 0.2%. we are expecting this to stay unchanged for the month of may. bloomberg economics is saying it could be 0.3%, a little hotter than what consensus puts. regardless of the number, the

fomc probably is not going to change in strategy when they meet later this weekend. we know it is expected another rate hike will come out of that. and to last terminal charge, we go over to china. this is labeled tracking china's growth. over the last 12 years, you can see growth as we know to be true has been moderating. taking a look at the number this week, industrial output, that is 7% now. we are expecting that to come in also 7% for the most recent quarter. sex asset investments also come in unchanged from the past month, but retail sales to the upside, 9.4% is where this is at . we are expecting about nine point percent or so, so an uptake of 0.2 percentage points. an update for japan in 10 minutes' time, core machine

numbers. a gauge of what is happening with china nearly at the end of this week. yvonne: that is right, inflation and growth as you mentioned. that is what the central banks have on their radar as they prepare for the crucial policy decisions. let's bring in kathleen hays now with a bit of a preview of what is to come. start with the fed. we know the june rate hike is a done deal. can we get more consensus among the fomc meeting -- members? kathleen: yes. this hike on wednesday, the conclusion of a two day meeting is a done deal. inflation up to target, retail sales have rebounded. employment fell again. the bottom line is the fed is expected to single a cautious gradual approach because they want to make sure inflation stays at the 2% target. let's look at a gtv charge on --

chart. the green line is 2%. you can the this white line, the main number, the headline pce deflator. but if you look back over six years, only one time have they gone above 2% and state there. the fed is likely to signal caution. how will they do this? they update their summary of economic projections. when people talk about the steps, that is what they are talking about to signal their forecast. bloomberg economics says they expect an even split to remain on the number of hikes, evenly split between one more or two more this year. if it goes to that larger number, if more on that side of the fence, markets will react. ramy: let's move across the pond and look at the ecb. we were sitting and looking at the word mario draghi might be talking about the wind down of qe. kathleen: the latest is we are

on the edge of our chairs. peter made this declaration. we will look at this area the tostion is, are they ready make the announcement? people expect a slowdown to reverse. inflation has hit the target for the ecb, so why not enough the exit? -- why not announce the exit? here is something. the pmi has slowed down. the purchasing manager indices. people who are bullish say it will pick up. business confidence and on this chart, has been rising. and probably the ecb hawks are saying, the economy is doing better. let's decide we will start tapering in december -- september, finish by december. mario draghi doesn't know. he is probably going to say it is press conference. signal something will happen, but wait for the next meeting.

ramy: we have a hike at the fed, tapering in europe, but bank of japan, we are not expecting anything. kathleen: we want to hear what they say on inflation. governor kuroda could say maybe inflation is not going to hit the 2% target for longer than i thought. look at one more chart. there is governor kuroda. you see the core cpi. that got down to 0.7%. gdp in the first quarter weekend before it will pick up. this is a cool line. it is a nonaccelerating inflation -- inflation rate. go below this, you could push up inflation. look where japan's unemployment is. it is 2.5 percent. that is why people think they will see an acceleration in wages and inflation overtime. bloomberg economics says japan's inflation will top 1% in the third quarter. it is not what they will do but what they say, particularly

governor kuroda, a sense of where we go next. ramy: a big week for you and us. kathleen hays, our global we will ask anz's raymond young if the latest inflation numbers out of china will move the dial for the pboc. more central bank action. this is bloomberg. ♪ is is bloomberg. ♪

asia.: this is daybreak i am yvonne man in singapore. in new am ramy inocencio york. china's factory inflation rose faster than expected in may on rising prices for commodities including oil and metals. joining us is the anz banking group economist raymond young. the numbers, 4.1% versus the consensus 3.9%, though this means china is out of the woods

in terms of any concerns for growth? >> i think the first half china will be outperforming at least with the official target of 6.5% in terms of gdp. the rebound of the pbi is a good sign. we know china has come through 4.5 years of deflation, starting from 2016 and the rebound of the ppi basically helped revive the economic momentum. we had some concern whether there will be a drop of the ppi, but the number released over the weekend is welcoming, and we think the number will go around 4% this year. ramy: continuing the rest of this year, but in terms of the knock on effect for cpi, that is 1.8% unchanged area but what are your thoughts on the domino effect? i don't think the chinese

authorities are looking at cpi as a target at the moment, even though they talked about the forecast. 1.8% cpi is basically driven by pricing.urn of that has dropped by 3% month on month basis. we think the decline of the cpi is nothing to be worried. how long do you expect ppi prices to hold up? a lot of this is driven by the surge in commodity prices. later on we will see these base effect come into play, slower growth as well. when does that start to weigh on the pressures? raymond: i think this commodity driven rebound can continue at least for a couple while until we have seen a major slowdown of

the chinese and growth momentum. but eventually we talk about the slowdown in the second half of the year. we talk about a gdp number of 6.1%. 6.4% or that will not have a major impact of commodity price. we know the ppi of 4.1% last month was primarily boosted by oil price and also guess price on thed risen by 7.5% quarterly -- monthly basis. this will continue unless we see a drop of the oil price in the second half of the year. and we may have some knock on impact. can lastxpect the ppi for around 4% over the next four months. does this put the pboc in a sweet spot?

we are seeing a lot of em nations have to force the high rates to stem the bleeding when it comes to their currencies. is the pboc in a better spot? raymond: it is interesting to see what the pboc is again trying to follow, action of the fed. if the fomc is going to raise rates based on what they did the past two times in less december and march that we saw the pboc follow 5%, five basis point increase in the u.s. repo rate as a jester -- gesture and signal that they will not the monetary policy. at the same time we know the pboc is trying to can use the market by cutting the reserve employment to support liquidities, condition of the bank markets and show they are stable in the bank market, liquidity, not to trigger any major financial risk.

this is a kind of package the pboc's engineering. we are not talking about a major monetary policy using of china. we talk about the leveraging, the monetary policy and authorities that still consider financial risks and banking the priority they need to crack over the next two or three years. sticking with the pboc, do you see any impact with the forecast for another triple archive? raymond: we are expecting they will do more. the rate is too high compared with 10 years ago, compared with other countries as well. countries,or some single-digit number. we still see large room for the pboc to lower the number. the major consideration here is

by lowering the reserve requirement ratio, they can improve efficiency by increasing the money multiplier. that will be hopeful -- helpful to strengthen. it is a kind of normalization of the bunch is right now. they are following the fed and ,rying to strike in order to and at the same time, increase efficiency of the monetary policy. got a wrap in the information from the g7 and trade and tariffs here. in terms of the biggest headwind investors into china and the region need to know, what do you make of what is happening, and where do people need to be cautious? raymond: you know the global trade is currently still highly uncertain. every weekend, we see donald trump's tweets with different basices, even where the

agreement, china versus the u.s. then one or two messages by president trump, we basically see the policy stance of the thatis very firm, and also the problem is the u.s., not pointing to china but also pointing to other countries. the second half outlook otrade in asia will continue to face the highly uncertain involvement. anz banking group chief china economist, thank you. don't forget our interactive tv function. catchn watch us live and up on past interviews as well as dive into the securities or bloomberg functions that we talk about. become part of the conversation by sending us instant messages during our shows. this is for bloomberg subscribers only. this is bloomberg. ♪ ♪

very good morning to you from the lion city. beautiful backdrop in singapore as we continue our coverage. our special coverage of this trump-kim summit. we have been talking about the high politics. it is not about trade but whether this is a turning point for pyongyang's nuclear program, and this meeting just unthinkable if you think about the past year after the rhetoric of fire and fury, rocket man, .on't are dotard now we see these leaders on equal footing. ramy: hopes are truly high. the latest quinnipiac study said 75% americans are hopeful of this summit actually happening, but in terms of expectations, one in five people expected .nything would come and it

kim jong-un and trump have been described as unpredictable, and they will be sizing each other up. trump will be doing that of kim jong-un, but no doubt the other will be trying to figure out what makes him tick and what he can get out of it. will do a quick count down. do a quick count down and pick us up on the other side of the market -- that our. the nikkei futures have paired their earlier gains. the kospi futures, those are where we left them, up a little more than .1% as we await for what is happening in singapore to start to see the action. much more on the summit as well, joined by roundtable calm joy and john park from john -- hartford kennedy school.

what could really come out, any tangible outcomes or if it is a meet and greet, how do you do sort of meeting. the chief aipac economist joins to give us a verdict on the messy g7 summit. this is bloomberg. ♪ loomberg. ♪

>> hours away from the historic meeting between donald trump kim jong-un. yvonne man. welcome to daybreak asia. the top stories this monday, history makers. president trump prepares for the summit. he says he will know within seconds if the meeting will succeed. kim jong-un is also here. he must balance the potential of western investments by giving up his nuclear bargaining chip. and from bloomberg's global headquarters, i'm ramy inocencio. the g7 ends in disarray with host canada under attack. washington says justin trudeau

is dishonest and weak. and as if all of that wasn't enough, the three top central banks are due to meet. bank of america says it's the most important week of the year for investors. yvonne: good morning from the lion city. the spotlight here in singapore as we count down to the historic meeting between president trump and kim jong-un. a lot on the place here. is this a week that changes history? with talked about how this is a one-time shot, according to the president. for kim jong-un, with the deliver? a lot hanging here, a lot of distractions for the market as we count down to the fed and all that g7 drama. ramy: a huge week ahead but all

eyes are on the poor. we are trying to figure out what is going to happen in the first minute -- the first day if they happen to get that far. denuclearization is on the table the we are talking about different definitions on each side, sort of like how the china-taiwan agreement, each side has their own definition. they will have to get through so many things to get to the next level. there is a lot of hope hanging on this but not a lot of expectations. we wait for more information to drop. let's take a look at the markets and head over to david ingles. what is happening on the markets right now? david: as far as sentiment is concerned, tomorrow is important. theto downplay tomorrow, importance for the markets is what happens wednesday and

thursday. we are coming off the best week for asian equities going back to the start of february. the best week in four months. he was futures are opening lower. we are moving higher. we are basically flat. the two major benchmarks opening up lower on the kospi index. to our point earlier on what is more important for markets, first two days, the trump-kim summit tomorrow. what is also taking place is a massive debt auction coming out of the treasury, under $200 billion. a lot of it is t bills. have a look at what we are seeing at the moment. whether or not wall street wants to absorb a knowledge of it -- a lot of it. back about 2.5% here on the two-year. we are looking at the loonie and

the dollar-yen not doing a lot every machine orders are out -- not doing a lot. machine orders are out. best month for machine orders in a month going public that to 2016. we are looking at this quite closely, beating expectations. perhaps how it folds into the bigger picture, look at this chart. the producer price index were down for five straight months. we've rebounded for two straight already, 4.1%. that does tend to lead a lot of the macro indicators we get, not just from g10, but also emerging markets, especially the cyclical markets. it hasn't been good recently it might speak to the narrative that the first quarter is soft and we might get a rebound. have a look at that as well. as far as marketscope, we are on hold and we will see what

happens in the next 24 hours. yvonne? yvonne: let's get more on this. our very ownphen engle is on location very close to where the hotel is where two leaders are going to be meeting on tuesday. set the scene for us a little bit of it final preparations -- a bit. final preparations are underway. final preparations are definitely underway. we are not used to getting details of his daily movements but no special security arrangements around the saint regis hotel for kim jong-un according to police, but all eyes will be on the building behind me. that is the capello hotel and that will be the site of the trump-kim summit tomorrow morning at 9:00 a.m. for that

anticipated handshake and the optics of how the two gentlemen will get along it so far -- along. today, the u.s. am philippines an keep korean -- key korean negotiator for the united states will be meeting with his counterparts to get a last-minute arrangements for the optics and what the two gentlemen in their brief face-to-face one-on-one time that we are hearing they are going to have in the opening minutes of the summit tomorrow or it what will -- tomorrow. what will be discussed? we know denuclearization will be discussed. we know north korean want sanctions relief. and what can donald trump offer in concession? that's something the japanese and the south koreans and the chinese will be wondering from afar. how far these two german will get along -- these two gentlemen will get along? yvonne: we talked about the

connection they have with singapore. politically, they have embassies in singapore, also strong ties with china. we know who singapore would pick. it's been around here before. what does this mean for security? security, they had the sugar law dialogue desk -- shangri-la dialogue. is staying at the shangri-la hotel and security is tight as can be. just down the road, down orange grove road, take a right at the mall and you have the saint regis and that's where kim jong-un is. there's a concentrated area of tight security. he motor kids are not moving, i have to say the security has been pretty easy. just when the motorcades come through they stop everybody and check everybody. singapore is footing the bill for this summit to the tune of

about 20 million singapore dollars, $50 million u.s., half of which being spent on security. 5000 journalists have been accredited for this summit. there is about 5000 police officers, as well. ramy: that's an interesting way to look at it. you talk about not getting information from donald trump or kim jong-un. how can we don't know about what is happening there? stephen: well, one reason the white house has said is because they want to keep some flexibility. this is unlike any other summit. summits are usually arranged months in advance. the two sides get together and

they figure out what they are going to accomplish, they agree upon it and then they do all the work and the two leaders fly in and sign the declarations and do the handshakes and all the optics. however, we don't know what the outcome will be. donald trump has said he will know in the first two minutes the sincerity from kim jong-un. they are keeping for stability. today there is time for donald trump to get over jet lag and for kim jong-un, we simply don't know what his daily routine is. maybe he wakes up at noon. we really don't know. staying at the five start result -- five star resort at the hotel. and the tropical weather he's not used to. stephen engle in singapore, thank you very much. let's get the first word news now with haidi lun. the trump administration is stepping up its attack on canada, saying justin trudeau is "headed for hell" for crossing

president trump. a deal could have been agreed by now if canada spent last time -- less time lobbying congress. trump said a series of tweets attacking trudeau. >> there's a special place in hell for any foreign leader that diplomacy bad face with donald j. trump and then tries to staff him and the back on the way out the door. and that's what bad faith justin trudeau did with that stunned press conference. -- stunt press conference. china reaffirmed its claim to be a free trade leader. speaking at the shanghai cooperation organization, his message was in contrast to the disarray at the g7 summit in quebec. he said the rules must make in the rules of the wto's to support international trade and

a global open economy. italy confirmed it has no intention of leaving the eurozone. there hao discussion about dumping the common currency and ministers will do everything to maintain normal relations. tolition says it wants boost growth by investment rather than increase spending. bitcoin sold the most in three months after south korean crypto admitted it had been hacked. more than 50%, four times bigger than the others. they are reviewing its systems and cryptocurrencies are now being stored in a code wallet. global news 24 hours a day on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm haidi lun. this is bloombg. yvonne? yvonne: thank you.

coming up, still more on the singapore summit. john park on what a good deal would actually look like for the u.s. and north korea. ramy: later, the fallout from the g7 summit with economists alicia garcia herrero, who says president trump's america first policy is actually good news for this is bloomberg. ♪

ramy: welcome back. this is daybreak asia. i'm ramy inocencio in new york. yvonne: on yvonne man in singapore. president trump and kim jong-un are right here in the lion city repairing for their historic summit.

-- repairing for their historic summit. park, to welcome john director of the korea working group, joining us here. we talked about how quick the summit came to life in the first place in the on-again off-again leading up to this meeting. how well prepared are both sides? tht says it doesn't require preparation. it's about attitude. >> it seems both sides work so well but they have not able to agree on the details yet. it seems to me each site is demanding its own request from their own perspective. that's why they will meet today and a higher level meeting could be possible to iron out the differences between the two parties. the south korean side has taken a step aside because after they see this nuclear issue between north korea and the united states, south korea wants any

kind of deal to come out of this meeting. and john, we talked about how we've seen a change of tone from the white house. there were saying it was going to be a breakthrough. but it seems this is not a one-off anymore. they are saying it will take multiple ones. what will we see on tuesday for that to happen to see a second or third meeting? >> a couple of things. one is an aspect of a joint statement. a very basic statement with the two sides lay out these goals and some aspects of technicals. that would lead -- of principles. that would lead to a denuclearization mechanism. president trump refer to it as a process but it's an indication pompeo'sall, now meetings with kim jong-un and

actions have to be ironed out. but much better than it was months ago. ramy: talk about denuclearization here. the definition of it is very different if you look at it from both sides. is this something that can actually be overcome? >> earlier on, secretary pompeo rred to something called a dignity section mechanism -- denuclearization mechanism. but within this type of mechanism, it provides this space the two sides to work on who does what where, when, and how. but it has to be framed within the context of the two leaders. kang, you have looked tremendously into sanctions and how that has helped here. to what degree should sanctions continue on, and what would you

say ok, now we could maybe take some off? or do you think it's just sanctions all the way through the end of whatever this is? >> actually, it depends on the progress and the pace we can make into their native -- in denuclearization aspects. sanctionst up the step-by-step, not all at once. but there are other sanction mechanisms taken by the united states unilaterally. for example, a state sponsoring terrorism or the enemy trade act, such as the patriot act. all those three things can be applied in addition to you and resolutions. so it's actually possible to lift of sanctions gradually. administrations. has been emphasizing will keep maximum pressure until the completion of denuclearization

but there is a gradual lift off of sanctions depending on the progress we can make on the nuclear side. john, there is an issue of goodwill. i have to wonder. questioninue this here. what is the st pyongyang? if it is complete denuclearization, that's taking a light a bargaining chip, the only deterrent to have on the international stage. what happens when that fear is, in fact, gone? have a long way to go. with respect to what the two leaders are trying to do here, with this mechanism, trying to create a venue where the two sides can meet these steps. the steps moon jae-in has been advocating, but

here are some concrete steps. we are looking at dismantlement of some of the north korean facilities, but for the united states there is a priority focus before jy of last year before they conducted the ballistic missiles thut theomeland at risk. these are the steps that will build confidence, but the expectation that the broader and more specific denuclearization movements will happen later in the process. kang, we've been talking about this drama at g7 and once again, the president pulling out of a big institution or communique this time around but after the teat -- the tpp and iran deal, is there still trust their for kim jong-un to make any kind of concession? trust. not a matter of it's a matter of pressure coming from the united states. can jim longwhen

made a statement that provoked the american side very much and trump decided to terminate the summit. that changed minds. north korea is under pressure. they know the international coalition against north korea working against their own interests. butt seems to be not trust, pressure sides have been working very effective to me. so it seems how we can maintain on the north korean issue and how we can have a good division of labor among the parties is going to be a key factor and kept north korea on the right track. surious, aang, i'm lot of critics have says doll trump is giving away -- donald trump is giving away too many concessions. looking at the positive, if there is one thing donald trump brings to the table that has been to the upside, what would

that be? >> for example, maybe the human rights issue and the other issue mentioned by john was icbm. focused much on the nuclear front but if we are able to put the human rights issue and of the agenda for later phase and also the icbm, but all other relevant missile capabilities, there could be two more. that could be an issue. the other element we have to think about is time framework of denuclearization. all previous agreements we made with north korea doesn't have any timeframe at all. very abstract in timeframe of implementation. but if we are able to have a time frame work, it would be a good point we could say. ramy: at the end of this week,

what would be the best case scenario for a win for south korea? what would they be happy about that's realistic? if -- maybe if there's any agreement that can contain guidelines for denuclearization. that would be the minimum level of satisfaction south korea could have. if there's a word like cbiz or time bound from work or +erification, that could be a for south korean governments to on of these agreement between the united states and north korea. john, one last question. we were talking to some other guests of this morning, saying given the downside we are seeing the twin the two leaders on monday, perhaps kim jong-un might reach out for an impromptu meeting with president trump. how likely is that going to

happen, do you think? what does that mean for the ml to the negotiating strategy for north korea? how do they operate in these negotiations? front, i don't think that's likely right now with the security details. they have preparations for that and it would have been in the works for the while now. kangcreating dynamics, mentioned some came from the u.s. side, some came from the korean side. they are set to meet at 10:00 korea time. you also have come pao and the foreign ministry, as well. there is a possibility to do the final prep work. that's going to be the key use of the time leading up to the summit between the two leaders on tuesday morning. ramy: looking forward to that. we will have to leave it there. choi and john park.

thank you for your time. you can turn to your number for more on the meeting -- your bloomberg for more on the meeting going on. go to tv life go. ♪

yvonne: this is daybreak asia. i'm yvonne man in singapore. ramy: i'm ramy inocencio in new york. let's get a check of where markets are trading in the asia-pacific. japan's nikkei is giving us gains we saw earlier, down .1%. without those core machine orders for the prior month, definitely beating expectations. the kospi is rising at its highest in the early part of the trading day, up by about .3%.

currencies on the region, as well. 109.41 there. not much movement for the aussie dollar. this is bloomberg. ♪

yvonne: 8:30 in singapore, a day away from the summit to train president trump and kim jong-un and minutes away from the singapore open here. plenty of action in the markets here, not just geopolitically, but also central banks meeting this week and plenty of data to sift through. i'm yvonne man in singapore. ramy: i'm ramy inocencio in new york and you are watching daybreak asia. let's get first word news now with haidi lun. haidi: president trump and kim jong-un are in singapore for their historic summit. they flew in amid heavy security and will meet at the cup hello

hotel on t island on tuesday. nuclear weapons atop the agenda. president trump will consist to agree to dismantle the nuclear weapon program. inflation accelerated more than expected in china last month, driven higher by prices for crude oil and metals. slides to 3.3% this year, more than half of last year's entries. they climbed to 2% last month, matching medium forecast. switzerland rejected a plan to change the way banks lend money in a victory for central bank governor thomas jordan. he's been a critic of proposals opponents said makes the plant look less attractive for investors. it would end the system of allowing the s&p to create money and require checking accounts to be back to my assets -- backed by assets.

begun -- threatens a long-running relationship. the stock exchange said the hearing began saturday and will continue to this week. they are trying to stop the singapore exchange by launching derivative products. global news 24 hours a day on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. yvonne? yvonne: asian markets are shaping up. let's get an update with david ingles. pretty good going so far. week, buts a big frankly not very interesting. nothing is happening when you look at some of the major benchmarks. t of the week, as far as g7, did get a good news out of

there. we are flat on the benchmark. we opened lower on the u.s. futures. as you can see, it's a tight range so far. the cost the index is on the way up. that's a very acute story. the nikkei 225 essentially flat right now on the index. 295, a lot ofd, supply coming online. massive debt auctions here, just under $200 billion as far as treasuries are concerned. you have a massive supply coming to the market on a week for the fed is expected to raise rates and we have the ecb and the boj as well later in the week. what a market absorb that and will they absorb that dictating higher yields? take a look at the two and the 10. so far, what is standing out to the downside is the loonie across g10 currencies and given the news coming out from the g7

over the weekend. mliv will give you a sense of what is moving up and down. , two hundred 39 down, unchanged 101. the usual names for you. that's one of the upsides that tends to benefit when you get better sentiment or improved relations between the perception as far as market is concerned. just look at the south korea board, if you will. ball at thelied bottom and the currency at the far end. no, that's the yen one. if echoes of you get a sense of which were the markets are tilting -- if that goes up, you get a sense of what way the markets are tilting. it's quiet and we are

in a holding pattern with the g7 on the weekend. ramy: quiet for now but that can definitely turn on a dime. given in glass, thank you very much. let's turn to trade and the fallout. acrimony is meeting has implications for nafta with talk of tariffs on imported autos. our policy editor kathleen hays is here and the g7 ends in disarray with tenet under attack. justin trudeau is dishonest and week. so many headlines going on. kathleen: i have to say, i've covered g5 meetings, i've covered g7 meetings. i'll think anybody has seen anything like this in history. another first for president trump, which seems to have upended the unity. it was so difficult they put together in quebec. in fact, the statement itself put together a joint statement and part of the reason they put together is to prevent trump

climate pledges and it looked like it would be fine. justin trudeau came out of the meetings and said canada had been insulted the threat of tariffs on u.s. autos coming into the united states. that's a big deal for canada. and that they would proceed with retaliatory tariffs if trump went ahead with these tariffs on them. president trump is on air force one heading to singapore or his big summit with kim jong-un and he tweeted out he's ordering his staff not to find the g7 statement due to trudeau's false statements. the reactions from foreign leaders starts with the press picking up news that macron of france was critical of trump, saying international steps cannot be dictated by insult and anger. lori kudlow, the chief economic advisor, said this about what trudeau had to say on cnn on

sunday. >> stabbed us in the back. he did the great disservice to the whole g7. >>? trudeau did >> yes, he did. because they were united in the g7. they came together. kathleen: and basically larry kudlow also said president trump had to strike out because of what trudeau said was undermining president trump ahead of this very important senate. -- very important summit. yvonne: what is at stake here? re: going back to a trade war? kathleen: we were on the verge waiting for some kind of statement on the latest agreements moving ahead. that seems and out now. but it's pretty clear. it's so clear that trade between the u.s. and canada is important for both countries. you can call it up on your bloomberg. ,hese white lines show canada

the percent of exports sent to the u.s. 71%, nearly three quarters. it's not an insignificant amount for the u.s. exports --ou. 15.5% of exports go to canada. both nations have industries and farmers that depend on these exports and imports going back and forth. ramy: hold that thought because i want to bring in alicia garcia herrero, chief asia-pacific economist at -- let's continue this conversation on trade tensions and the tariffs happening on the g7, as well as how this translates and plays out with asia-pacific, specifically china. i know what you said with trumps america first agenda is good for china. explain that further. u.s. very good because the

is only isolating itself further, most importantly after the technological arms race that the u.s. has basically launched against china, which is only --ng to accelerate china's the last thing the u.s. should do and have actually done in the g7 meeting is to isolate itself from its western allies. so if you think about everything else, from g5 to anything china is europe this very instant, europe is going to say, do i have an ally to basically say no to the chinese in this alliance on g5? and the answer is not really, not anymore. in a nutshell, no matter how unwillingly both canada and europe are versus china in terms of feeling they don't have power, access, you name it, but it's further apart from them.

they have no choice but they are getting closer to china. yvonne: let's look at one thing, very disruptive, unexpected, president trump said let's make the g7 a trade free zone. let's of everybody's tariffs. is this economic history with so many -- is that so far fetched to say, what does the anybody have tariffs anyway? >> sure. this is the approach europe has been pushing for for so many years. why do we have even tariffs? but the reality is, we are not there. we are at a point in history where we have two sites. and who has enough weight to push that battle for -- further? we are not in an environment anymore. it starts to make sense you have -- that's where the

u.s. stands now. , do believe that putting aside putting away from the u.s., allies that have been there since the second world war is really not the right way to go. yvonne: does this have any impact on the dynamics of the big central-bank meetings this week, delete for the u.s. and european central banks? >> well, of course it only adds more uncertainty to their environment. the environment is uncertain in two ways. the most obvious issue is politics. after what we've seen with trump lately, we can only expect to have a bigger fiscal deficit. how big, we don't know. on the revenue side. i think that is what is really off the table in this point in time with full employment, inflation impressions moving up,

and this fiscal stimulus. but there is a counter risk from italy and a much weaker economy than what we were expecting at the beginning of the year. i would argue that if anything, monetary policy divergence between europe and the u.s. is going toe. we were talking about in terms of the market impact. we've seen this rush to safety in terms of treasuriesiving the life we've seen in italy, the em turmoil, as well, and we are about to get another treasury debt sale here. what do you think the direction of yields goes from here? >> well, short-term, because too much is happening. you are right, the north korea summit. i just imagine it will move up. but down the road, everybody

knows it will be so much favor out there. retaliation but the number one retaliation that europe could take is on the regulatory side. the u.s. dollar is benefited massively. u.s. treasuries, of course, based on the liquidity regulations. this could change. we opened a pandora's box here, not only for the u.s. but for the dollar and that's u.s. treasuries. that needs to be taken into account, let alone the fiscal deficit coming forward. ramy: we'll have to leave it there. alicia garcia herrero joining us. go and somehours to investors are already looking at theeconomic opportunities summit could bring to them. more from singapore in a moment. this is bloomberg. ♪

yvonne: this is daybreak asia. i'm if a man in singapore. ramy: i'm ramy inocencio in new york. the stage is set between president trump and kim jong-un. optimists are imagining the opportunities that might open up if sanctions are ease. this is how north korea could be plugged into the regional economy. else linkingomic the careers with china and russia. that's how president moon once to transform -- wants to transform his northern neighbor. railroads with one belt on the east coast, one in the west, and a third in the peninsula. the infrastructure could help north korea realize the value of

its vast mineral reserves. roughly 200 essential resources are estimated to be under the ground in the north, today -- together it worth in excess of $6 trillion. among them, gold, oil, and deposits crucial for high-tech gadgets. a word of caution the for investors become giddy with expectation. -- says electricity shortages, outdated facilities and other info structure obstacles put rates below 30%. the labor force is a bright spot. high literacy rates, low wages, and basic computer education from elementary school macy north korea become a new asian tiger one-day. yvonne: let's talk more about that daniel ten kate, leading our coverage here for bloomberg.

we talked about the divergences between the two koreas. the larger of what we saw between east and west germany when the berlin wall came down, what would it take for us to see reunificatiohe two koreas? >> it would take quite a bit. sorry, i've gome audio in my ear. ramy: all right, let's go in and try to fix that. meantime, let's go to our next guest and take a look at this summit from another angle. singapore is abuzz with the meeting expecting in 24 hours time and that could be a boon for local economies, not just regional economies as we saw. let's bring in someone who leads our asia equities team.

what sectors do you see the most as gaining from this? think consumer stocks in particular are going to get a bit of a lift from this big historical summit that's happening in singapore this week. to be precise, there are hotel companies here that are fully booked and completely blocked out. ,here are local restaurants iconic seafood you can only get in singapore. there's also transportation companies that are going to be impacted by this in a good way and if you were to look at it like last week, investors and traders were waiting to see the balance sheets of these companies. they started trading on the likes of shangri-la, which was up last week. that's so interesting, that knee-jerk reaction. given the summit is only going to last a day or so, will it

have an impact on these companies moving ahead? >> yes and no. there are quite a few people on the street that seemed to think this will boost revenues and andits for some companies the likes of, if someone were to come in for the senate and stay on for a couple of -- for the summit and stay on for a couple of days and eat the local food, that would impact stocks, as well. on the other hand, some have said they are not sure if it will make a big impact. it depends on the fact that it's a one-day summit. they were saying it's not going to be a big deal. this could be a boon even what the summit is over -- when the summit is over. >> yes, de. the fact that this historical event is happening in singapore is a big deal. the fact that this could look good for the country itself is

another great thing. people will be coming in to say they been to singapore, they were here for the event, but also for future perspectives as well could more of these events be held in singapore. it's highly possible. ramy: good stuff. looking ahead to see what economic benefit boon to singapore. thank you very much. you can get around up of the stories you need to note get your date going in today's edition of daybreak. so travis can go to dayb on their terminals. this is also available on mobile on the bloomberg anywhere app. you can also customize your settings as you can only get news you care about. this is bloomberg. ♪

yvonne: this is daybreak asia. i'm yvonne man in singapore. ramy: i'm ramy inocencio in new york. let's get tech on the business flash headlines. amazon is under pressure to improve factory conditions for workers in china who make the echo speaker and kindle e-reader. china labor watch released conditions of the labor factory. it says employees had to work more than 100 hours of monthly overtime, in violation of chinese law and tories lack adequate fire safety precautions.

the former head of icici bank is facing investigation in america and what are described as "lapses." ofwas toppled on a coat conduct and conflict of interest. e sec has become involved. icici has said it retains complete confidence in kochar, but she eventually stepped down. german regulator is stepping -- the motor switch to a higher admission mode after running for 30 minutes. this is the latest low to the german car industry and the paper says it could affect one million vehicles. they have declined to comment. executives are to meet the transport ministry later monday. yvonne: for a look at what's coming up in the next few hours

on bloomberg, special coverage in singapore continues. haslinda ammann joining us from bloomberg markets. a lot to watch out for. haslinda: talk about great expectations. that leads the way to great disappointment. it's hard to say what the expectations are. we've heard from trump, pretty much muted to what he's expecting at the end of this meeting. we will be speaking to someone from krugman university and get his perspective. yvonne: not a lot of details. we know where there are meeting. but how all is going to play out -- haslinda: they will be meeting at about 10:00. to discuss what will transpire tomorrow. the two leaders will be meeting at 9:00 a.m. but they will be soing their way to kapela, brace yourself for congestion. we will be speaking to an independent consultant. this is not the first time the

two sides have come together for denuclearization. it happened 18 years ago. that fell apart. what are some of the lessons we can learn? that was led by kim jong-un's father and of course, great expectations fell apart. the same thing could happen here . we are looking at the market implications. so far, muted market reactions. hasoes seem like the market factored in the risks. it doesn't matter. it looks like the tensions on the korean peninsula have eased somewhat. yvonne: we talked about how singapore is more of a distraction for markets more so than anything that can be actionable because you have these central bank meetings and data coming through and g7 drama. president trump needs a win in singapore. haslinda: this is already a win, the fact that the two leaders

have come together, in the same space, and they are about to to some people. yvonne: plenty more to come in the next hour. ramy, back to you. ramy: we've never been here before. let's do a quick look at how markets are trading. the japan's nikkei has flipped to the upside. it had been negative for most of the morning, up .33%. take a look at singapore, taipei and futures. mixed here. singapore down 1%. yvonne: our markets and special coverage continues with rish and heidi next. ♪

haslinda: history in the making in singapore and president trump says he would know immediately if the meeting would be a success. must balancen western investment with giving up his nuclear bargaining chip. waiting,watching and optimism in singapore. they expect a list from this week's event. haidi: and the g7 ends in disarray host canada under attack. washington says justin trudeau is dishonest and weak. this is bloomberg markets asia.